How Will the 2024 Election Affect Your Retirement?
Investors should expect volatility but also try not to overreact to news. To prepare, focus now on tax minimization, protecting your portfolio and more.


In times of great change, it is only natural for people to wonder and worry. Without perspective, it morphs into wondering and worrisome-driven decisions or indecision. A general election surfaces this quandary every four years, but even more so this year as we head into what appears to be the most contentious election in modern history.
Even still, today’s candidates aren’t dueling like Alexander Hamilton and Aaron Burr did in 1804. Most articles and commentaries about the financial impact of an election year are focused on investment returns. Predictions are being made based on history — the months and quarters that are most likely to be positive and negative, as well as the likelihood of a positive market. Some are showing likely upside and downside based on which party is elected in each branch of government.
As usual, some in the financial media have investors focused on investment returns. And in the process, they are implying that the ups and downs of a volatile year in the market can be timed to the benefit of the investor, in spite of the overwhelming evidence that shows market-timing produces lackluster returns compared to simply staying invested.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
So, what is an investor nearing or in retirement to do?
- Expect volatility
- Don’t fall prey to the emotional whipsaw of the financial media
- Recognize other forces at play beyond the elections
Simply looking at returns based on it being a general election year is overly simplistic. Keeping it simple, stupid, as the saying goes, is good, but overly simplistic can lead to misguided decisions and conclusions.
The economy and markets are still responding to the highest inflation numbers since 1981. Interest rates have risen faster than any period in our modern history. The U.S. is also involved in at least two wars, depending on how you count the U.S. military engagement at the border and abroad. U.S. debt by household is as high as it’s been in decades.
The tax impact: A history lesson
Weighing even more than all these factors is this: The government spends way more than it brings in with taxes. It is now spending more on interest on debt than it is on national defense. When the government is spending too much, it can either spend less money or make more. As Ronald Reagan said, “To say the government spends like drunken sailors is an insult to drunken sailors.”
So what do they do when they need to raise revenues? Increase taxes and reduce deductions. The lie is this is only on “the rich.” This approach to increasing taxes — introduce a tax “targeted at the rich,” then after it gains acceptance, roll it out on the masses — has a long history. The federal income tax — made possible in 1913 with ratification of the 16th Amendment — was originally introduced as a way to make the wealthy pay their fair share.
When the income tax was first enacted, the top tax rate was only 7% and affected only 1% of workers, which would be the equivalent today of people making in the ballpark of $15 million. And there were seven simple income tax brackets. But it took only three short years for the top rate to jump to 67% in 1917 with 21 brackets. Then it leaped to 77% in 1918 with 56 brackets, with even the first of every dollar taxed at 6%.
Today’s politicians are much more sneaky, with both parties of career politicians doing it. In a speech at the 1988 Republican National Convention, when he accepted the party’s presidential nomination, George H.W. Bush said, “Read my lips: no new taxes.” Yet, the very next year, he signed a bill that increased taxes.
In 1982, after reducing the top income tax rate from 70% to 50%, Reagan joined Republicans and Democrats alike, making Social Security taxable just two years later. But at that time, only up to 50% was taxable. Now it’s up to 85%.
Expect tax increases. In the near term, maybe tax increases aren’t significant, but in the longer term, they will be looking at retirement accounts, Social Security, Medicare premiums and capital gains.
If you have at least $500,000 or more, and your retirement requires $100,000 a year to maintain your lifestyle, $65,000 to $80,000 of your retirement is under attack. The good news is that there is a preferential tax code now. Investment assets are near all-time highs, and inflation has been tamed somewhat for the moment.
Here are some tips for election year 2024
- Now’s the time to make tax minimization moves on your retirement money while tax rates are at all-time lows
- Insulate your investments from market crashes, before they come, whether it happens this year or a later year
- Set up retirement income layers that are protected from economic and market volatility so your lifestyle doesn’t go on a stock market roller coaster ride
- And certainly don’t wait in the hopes the market will be higher just before or after the election in November, or that your chosen party will all of a sudden start lowering taxes to benefit you
You can’t control the election outcomes or what the market may or may not do. But you can build your own retirement economy and your own desired market experience that revolves around your lifestyle and what you want.
Dan Dunkin contributed to this article.
The appearances in Kiplinger were obtained through a public relations program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
These materials are for informational purposes only. It is not intended to provide, and should not be relied on for, any tax or legal advice. Please consult a qualified professional before making decisions about your financial situation. The specific tax consequences of any investment or strategy will depend on your specific tax situation.
The sources are provided strictly as a courtesy. We make no representation as to the completeness or accuracy of information provided at these websites. When you access one of these websites, you assume total responsibility and risk for your use of the website.
Related Content
- How Trump and Harris Might Handle Expiring TCJA Tax Cuts
- A Look at Kamala Harris's Tax Plans Ahead of the Election
- A Look at Donald Trump's Tax Plans Ahead of the Election
- What the Election Could Mean for Student Loans: Harris vs Trump
- Red vs Blue: Staying the Financial Course During an Election
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Barry H. Spencer is a financial educator, author, speaker, industry thought leader, financial advisor, retirement planner and wealth manager who has appeared in Forbes, Kiplinger and other publications. He has also appeared on affiliates of NBC, ABC and CBS and was interviewed by Kevin Harrington, an original panelist on ABC’s hit show Shark Tank. Spencer’s latest books include Build Wealth Like a Shark, The Secret of Wealth With No Regrets and Retire Abundantly. As Creator/CEO of Wealth With No Regrets®, he and his team help financially successful people create a Retirement Built for Confidence™.
-
What Boomers and Gen Xers Can Learn from Younger Colleagues
Whether you're Gen X or a baby boomer, your younger colleagues' opinions on work may help you find a new job or be happier in the one you've got.
-
Hurricane Season 2025: What Travelers Need to Know This Summer
A stormy season is brewing. NOAA is forecasting an active hurricane season. Here’s how to protect your trip and avoid costly disruptions.
-
Over 50 and Still Paying Student Loans? Here's Some Help
It's the club no one wants to join. But if you are over 50 and still paying student loans, there are ways to tackle both debt and retirement savings.
-
Eight Estate Planning Steps to Protect Your Loved Ones (and Your Legacy)
Two-thirds of Americans don't have an estate plan. If you're one of them, these are the essential steps to take now to prevent problems for your family later.
-
The Six Pros This Adviser Says You Need to Sell Your Business
Selling your business isn't as simple as getting the best price and walking away. These are the six professionals you'll need to get a deal across the finish line.
-
AI Is Missing the Wisdom of Older Adults
AI will increasingly affect your healthcare and finances, but young workers are primarily designing the systems and getting most of the jobs.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build Wealth
Consistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key Pieces
If retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
Baby Boomers vs Gen X: Who Spends More?
Baby Boomers and Gen X are guilty of spending a lot of money. Here's a look at where their money goes.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?
If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.