2020 is a big year. Not only do we get a whole extra day, but we will also elect who will lead our country. We must decide who to entrust with the responsibility to make decisions that will affect us all.
Elections bring a time of potential economic change. Overall, the S&P 500 has made gains in 78% of election years, and the average gain is around 6%, no matter which party holds office, since WWII.1 An example would be the 37% decline in the S&P 500 during 2008.2
Current and future retirees are among those who are most affected by the economic change of elections. No one wants to put their portfolio at risk when they are preparing for retirement. The good news is that with a properly structured retirement plan, you could help preserve your savings and mitigate risk.
Another important factor to consider is how a candidate could impact your financial future once elected. You’ve probably heard candidates discuss their position on the retirement platform including wanting to increase Social Security benefits and reversing cuts to retirement benefits.3
We’ve recently seen big changes made to our retirement system with the passing of the SECURE Act —an example of how voting can have a widespread affect. Because of the SECURE Act, we have experienced changes to IRA contribution limits and expanded 401(k) plan options — all a part of our retirement infrastructure.
While no one can predict your financial future, having the assistance of a financial professional is a valuable resource. They can help you create a solid retirement strategy that accounts for times of uncertainty. If more people had a plan, there is a chance that election periods would have less impact on current and future retirees.
Despite the uncertainty that an election cycle can bring, it’s important to stick to your retirement plan. Having a financial professional on your side is a great tool to help navigate times of uncertainty and bring added peace of mind. Before you cast your vote in November, you should also consider what each candidate could mean for your financial future. Remember that no matter who is elected into office, you are the president of your own retirement plan.