Trump Won. How will it impact your financial future? A CFP explains. #Finance

as you know we have a new president elect and that raises a lot of questions for people because elections have consequences as a general rule the data and research shows that ultimately presidential elections or administrations don’t have a big impact on long-term market returns

href="https://cashnews.co/markets" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Markets go up under Democrats and Markets go up under Republicans but as I said

elections have consequences and the policies of various administrations will have an impact on your financial life so today I want to talk about how a trump Administration may impact Taxes Inflation and specifically for those in retirement how it could impact your

Social Security and Medicare and how you can use this moment to your advantage as you’re preparing for retirement but first my name is Kevin Lum I’m a certified financial planner and this channel is dedicated to helping a million people retire without worry now before I dive in I should

give you a little bit of a caveat and let you know I’m recording this much later in the week and so I won’t have time to send this off to an editor so I won’t have any great b-roll with people sitting there counting piles of money I don’t know where the editor finds all

those clips but there won’t be any b-roll or nice subtitles at the bottom to help you follow this content but hopefully you’ll still be able to follow along I want to first talk about the economic impact of a trump Administration particularly around Taxes and

Inflation one of the big unknown variables as I’ve been planning for people’s retirement is what happens when the 2017 tax and jobs cut act ends at the end of 2025 well now that we know that Trump is returning to office and it looks like Republicans are going to control

both the house and the Senate it is highly likely that those tax cuts are going to be extended and so that provides a bit of clarity as you’re planning for the future now we still don’t know for sure what’s going to happen right they still have to either reauthorize the 2017 tax

cuts or come up with a new tax bill but it’s highly likely that we will see tax cuts continue and that leads me into the second topic that I want to talk about and that’s Inflation the day after Trump was elected we saw something really interesting the Stock

Market seemed thrilled it exploded to the upside because tax cuts are great for spurring economic growth and ultimately for businesses but at the same time the Stock Market was celebrating the bond market was sounding alarm bells and the Yield on the

30-year Treasury spite even though the Fed was about ready to cut rates more so what does this tell us why is the Stock Market up and the bond market down well bond none;">Markets are concerned that economic growth and potential tariffs could cause Inflation because tax cuts at least in the short term can spur economic growth because more money is in the financial system more money in the financial system also has the ability to put upward

pressure on prices and if you combine that with tariffs there’s a real chance that we could see Inflation and so that’s why you saw the fear in the bond market while at the same time you had celebration in the Stock Market now it is still too early to

know the impact of any of these policies but that’s what we are seeing that’s why we’re seeing the Stock Market up and the bond market down one One Financial paper I read said that they expect Trump to spend money and cut Taxes without restraint

and their belief was that tax cuts and spending by a trump Administration will drive Inflation expectations up and bond prices down and if you think I’m wrong about spending just look at the previous Trump Administration they they approved 8.4 trillion of new 10year borrowing

during his first term now that number is only 4.8 trillion if you exclude the cares act and other covid relief on the other hand President Biden is first three and a half years in office approved 4.3 trillion in new 10-year borrowing or about 2.2 trillion if you exclude the American Rescue at now

to be fair I’m concerned about Inflation no matter who is in office uh for a number of macroeconomic reasons and not the least of which is a skyrocketing Debt that I think may eventually end up causing a Debt crisis and if you face a

Debt crisis the easiest and the best way to get out of that is by devaluing your Debt and how do you devalue Debt you inflate your way out out of it and so I think Inflation is a real concern as we look into the future so as

you’re preparing for retirement or as you’re preparing for your financial future I think Rising Inflation needs to be a part of the calculation now just as an aside and I’ll talk about this more in just a moment but if you are preparing for retirement or you want

a chance to rebalance your Portfolio spiking bond Yields and a skyrocketing Stock Market are a great opportunity for you and I’ll talk about that just a bit more in a moment so first of all on Taxes I think it is highly

likely that the Trump Administration and Republican Congress will keep the current tax cuts enacted and maybe even cut Taxes more but I also think that it may potentially cause future Inflation the next issue is Social Security and Medicare A lot of people have had

questions about this Trump has said that he will protect Social Security he said he won’t cut benefits and that he won’t raise the retirement age his most specific proposal about social security during the campaign was he proposed eliminating the Income tax on social

security benefits now the tax planner side of me that is working with clients trying to plan around tax and Social Security I love the idea of getting rid of tax and Social Security but I’m also a bit concerned because the nonpartisan committee for responsible federal budget say that three

times quickly they’ve said that cutting the tax and Social Security could deplete the Social Security trust fund earlier than originally projected because the Taxes you pay on your social security benefit they go directly into the Social Security trust fund and they help the

prop up that trust fund now Trump’s defense against this and he said this in various interviews has been to say that economic growth during his term will take care of these funding issues now I’m not smart enough to know whether that’s true or not but that is kind of his

assumption one of the other interesting things that came out during the campaign that I think is going to be a benefit to retirees is both the Trump campaign and the Harris campaign really pledged to prioritize home care benefits and so I think we’re going to start to see a bipartisan shift

to allowing more home care benefits which for some may help reduce the need for long-term care Trump has specifically said he would provide a tax Credit to help offset the cost of home care for people who are caring for an aging family member and this could be really helpful

because according to the ARP family members spend more than $7,200 a year to care for loved ones and so a tax Credit that helps offset some of those expenses could be really helpful now Trump hasn’t said a lot about Medicare so I don’t have a lot to say on this

particular issue but what I do know is that Trump and his previous administration and Congressional Republicans have long been proponents of Medicare Advantage plans which is the Private health Insurance alternative to traditional Medicare and when he was in office before his

administration really helped to broaden these plans now some people are worried that putting a lot of support behind Medicare Advantage plans is going to accelerate the privatization of Medicare under a trump Administration but right now is just speculation I’ve seen nothing concrete that

says that there is any risk of the privatization of Medicare in the near future so how does this impact you and how does this impact your financial plan I think first of all you have a bit more clarity as you’re planning for Roth conversion some people were trying to really hurry up and get

their conversions done before the current tax cuts expired I don’t think there’s a rush to do that anymore in that window was closing anyway but I don’t think there’s a rush to do that the one question that’s out there is whether the salt cap which is the state and

local tax deduction whether that cap will be lifted or at least raised now for those of you who don’t know before 2017 you could deduct federally what you paid to your state so what you paid for property tax what you paid in state Income tax so what you paid your state you

could deduct from your Income when you went to file your federal Taxes so it really helped benefit people in high tax states like New York and California but in the 2017 tax cuts one of the ways that they helped fund it is they put a cap and says you can only

deduct the first $10,000 that you pay to your state and local government but there’s been some pressure from inside the Republican Party particularly as some Republicans have been elected in high tax states like New York we have a very tight margin in Congress and they’re going to have

a lot of influence and so I think we could potentially see the salt cap lifted or raised now that could impact your Roth conversion positively if you’re in a high tax state now right now we have no idea and we won’t know for a while but that is something you want to keep an eye on now

the other thing practically you should think about if you are preparing for retirement or you want to rebalance your Portfolio you have unique opportunity because stock prices are at at an all-time high but also bond Yields are way higher than they’ve been

for a long time and so if you want to rebalance your Portfolio and sell some stocks and buy some Bonds bond prices are down meaning you can lock in a higher Yield and stock prices are really high so this is a really great time if you want to go

from 100% Equity to an 80 20 Portfolio or 6040 Portfolio you’re able to lock in higher long-term bond Yields which is really helpful in your retirement planning also if you want to have Inflation protected

Bonds tips in your Portfolio those Yields are higher right now and so it’s a really great time to evaluate your Portfolio maybe take some risk off the table rebalance some things as you’re planning for retirement so if

you need to rebalance your Portfolio As you move into retirement or you just want to rebalance in general this is a great time to be able to do that because you have higher B Yields and you have a skyrocketing Stock Market and so it could be a

great time to rebalance that Portfolio Okay I’m going to leave it there I could keep going but the longer I talk the more I Verge into speculation because honestly we just don’t know exactly what’s going to happen but I want to give you a few issues to keep your

eye on over the next few months and few years that are going to impact your long-term retirement planning now I don’t talk a lot about Bonds and bond prices are really confusing but I did a CashNews.co probably 6 to8 months ago on bond prices and it’s a bit dated but I

think there’s some information that might be useful to you so you can watch that next