As a candidate, Donald Trump barely mentioned America’s retirement crisis. As president, he will have enormous power over the issue, bolstered by Republican control of the U.S. Senate and House of Representatives.
Here are a few ways Trump’s presidency could influence your retirement.
Trump made clear that he doesn’t plan to cut Social Security benefits, but he didn’t sound enthusiastic about plans to expand the federal program, as more and more Democrats have proposed. Trump has also proposed large tax cuts. If they create wide deficits, as analysts have predicted, that could put long-term financial pressure on the Social Security program, which faces a shortfall in 18 years when the baby boomer generation is fully retired.
It has long troubled consumer groups that there are essentially two types of people who call themselves financial advisers. The first are “fiduciaries,” required to put their clients’ interests first. The second operate more like salespeople, often selling complicated financial products with high fees.
President Barack Obama’s Department of Labor proposed a rule that will require all financial advisers handling retirement accounts to put their clients’ interests first. The White House said the rule, finalized in April, would prevent conflicts of interest that cost Americans about $17 billion a year.
It’s not clear how Trump feels about such a rule, but he or Congress could try to scrap it before it goes fully into effect in 2018. Republicans have already tried to block the rule, and a Trump economic adviser compared it to the Supreme Court’s Dred Scott decision supporting slavery.
Members of Congress have proposed bipartisan fixes to current 401(k) flaws, some of which could be enacted under the new president. (Photo: iStock)
One reason workers aren’t saving for retirement is that they don’t have an easy way to do it. Less than 60 percent of U.S. private-sector workers have access to a retirement plan through their employers. Obama said he supported ways to sign up employees automatically for 401(k)s or other retirement accounts, but Congress never acted on his proposals.