Retirees advised caution with Trump’s policies

President-elect Donald Trump’s policies could bring a mixture of uncertainty, anxiety, and hope for retirees. It’s tempting to make big money moves in anticipation of a new president, but hasty decisions can do more harm than good. One common mistake retirees make during times of uncertainty is reacting hastily to market downturns to prevent losses. While occasional rebalancing is a good idea, making major changes to your investment portfolio is typically not. Portfolios should be developed with an understanding of expected potential volatility. Retirees should also be cautious about withdrawing large sums or making major financial moves before understanding any new policies. It’s often better to stick to a well-diversified, long-term strategy rather than making decisions based on speculative shifts in economic conditions.

Retirement strategy amidst policy changes

While cash provides safety, it may not keep up with inflation. A diversified portfolio is crucial for maintaining long-term purchasing power. Taking on big debt during times of economic uncertainty can put unnecessary stress on your finances. Whether it’s financing a new car or renovating your kitchen, mounting obligations during uncertain times can limit your options later, especially if there are unexpected expenses such as healthcare or home repairs. It’s also important not to abandon your estate plan or stop the planning process in the belief that estate taxes don’t matter anymore. What matters is what the law is when you die. Political power and policies often change, so it’s important to lock in today’s liberal gifting and estate tax environment. You do estate planning for life.