As election day approaches, I frequently receive this question. My response might seem unsatisfactory because, in financial planning, the answer to almost every question is, “It depends.” The outcome of the election will affect your financial plan differently based on your individual goals and time horizon. This is just one more reason to consult with an experienced fiduciary financial planner. If you’d like to schedule a time to speak with me, please click this [LINK].
During election season, you’ll hear many “proposals” from candidates and their supporters. However, these proposals are not binding. The financial media often amplifies these statements to generate excitement, which helps them sell more advertisements. But that doesn’t mean these proposals are significant or likely to be seriously considered in the future.
One tax and investment policy issue that will likely be addressed is the future of the Tax Cuts and Jobs Act (TCJA). As the law currently stands, the TCJA will expire for the 2026 tax season, making it probable that some action will be taken on this matter in the next calendar year.
Currently, corporate and personal tax rates are at historic lows, as demonstrated in the following chart.
And Federal debt is also at historical highs. As shown in this chart.
Tax rates are currently at historically low levels, while deficits have reached historically high levels. Even if tax rates remain unchanged in the next presidential term, the ongoing expansion of federal debt has led many economists to speculate that taxes will need to rise in the future to bridge the gap.
So, which party is better for your financial plan? Historically, it may not matter much. The chart below illustrates that the U.S. economy has shown consistent growth regardless of which political party occupies the White House.
For a president to enact significant changes, support from both houses of Congress is essential. Therefore, it's unlikely we'll see major shifts in policy anytime soon.
Your financial plan should be guided by your values and priorities. As the saying goes, “there are a million ways to build a swing set,” and the same is true for financial planning. There are countless ways to achieve your important financial goals.
Maybe you would benefit from a visit with an experienced, highly-trained, CERTIFIED FINANCIAL PLANNER™ professional and Behavioral Financial Advisor in West Saint Paul, Minnesota to help better understand your options. I love to meet new people. So, follow this LINK to find a time for us to have a get-acquainted visit.
I am a financial planner who is an advocate for my clients ALL THE TIME – a fiduciary financial planner. I provide guidance based on clients’ best interests, not commissions or sales quotas. I think it’s the best way to serve clients and I am thrilled to work this way all the time.
And yes, I’m still taking on a few great families to be part of my financial planning practice in West Saint Paul, Minnesota and, thanks to Zoom, across the country.
Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.