If you’re a boomer, here’s something you should know: Biden’s second term could’ve had a major impact on your finances!
Some people appreciate how President Biden represented the country during his term and would have loved to vote for him again. However, they were shocked when the current president announced on July 21st that he would withdraw from the presidential campaign. He added that he endorses Kamala Harris, mentioning his faith in her. While some people quickly supported Biden’s decision, others were glad that Donald Trump had an advantage in the political campaign. Will he come to the rescue and make America great again?
Regardless of which politician you’d like to rule the country in the following four years, financial experts analyzed the current situation and discovered that Biden’s second term could’ve had a major impact on your finances. Is that true? What would’ve happened to your hard-earned money? Or how can your finances be impacted now that Ms. Harris has a chance of ruling the country? Read this article to find out!
1. Social Security
During an interview, Donald Trump once said that if he were president, Social Security benefits would never be reduced. So what about Trump’s rival? According to financial analysts, even with two large increases in monthly benefits, Social Security benefits are still falling behind inflation and the rising costs of housing, food, healthcare, and other necessities.
Since several baby boomers rely on their Social Security benefits to have a comfortable and happy retirement, the increases are not enough to meet all of their needs. As a result, several seniors think about relying on aid programs, credit cards, and savings.
What are your thoughts on this one? Let us know in the comments below!
2. Inflation
According to experts, the Fed aims for a 2% inflation rate, and all indicators show price increases well above that mark. Many boomers don’t think Biden’s second term could’ve reversed the current situation since he wasn’t able to control inflation. But aside from all critics and affinities, can someone fully control inflation when the entire world suffers from it?
Most boomers who earn fixed incomes worry about the cost of everything, from groceries and utilities to gasoline. Moreover, experts say that inflation will not exceed 3% until 2025. However, if the future president cannot address the issue of rising costs, many seniors might need to worry about how to pay for expenses unless they have substantial savings.
…Has America the best economy globally?
Even though we went through a tough period with prices that kept skyrocketing for months and with salaries and Social Security checks that didn’t grow as much as we needed, the current president made a statement that shocked the nation and made people fear a potential Biden’s second term. (But that’s not a problem anymore, is it?)
Joe Biden said that, as hard as the situation might be, America has the best economy in the world. Even with inflation messing with your wallets big time in 2022, the United States’ gross domestic product expanded by 2.5% in 2023, much faster than that of other developed economies. Even though financial analysts expect a decline in the rate to 2.1%, they predict that the United States will maintain its dominance in 2024.
On the other hand, America is still a victim of inflation. As we’ve already addressed in this article, people, especially retirees, need to have multiple sources of income to keep up with their expenses. But could Biden’s second term have been a threat to our finances? Read on to find out!
3. Housing and interest rates
As you probably know already, the challenging situation in the housing market is made worse by high loan rates. According to different media publications, many people feared Biden’s second term because they expected interest rates to remain high.
To save as much as possible and ensure a comfortable retirement life, seniors frequently downsize. They sell their family homes and choose to move into smaller ones to pay less on mortgages, rent, and utilities.
Since mortgage rates cause home prices to drop, younger baby boomers who are currently getting ready for their golden years will probably see a decrease in their real estate gains over the next few years due to high interest rates.
Things are also tough for people who want to purchase a home due to the high rates. This issue also stretched to rent prices for apartments, which more and more people are seeking.
4. Medicare
One reason many people considered Joe Biden a good president was his priority of strengthening the Medicare program. By putting restrictions on deceptive or predatory Medicare Advantage marketing and ensuring that brokers and agents always work at their best, the Biden-Harris Administration aimed to safeguard beneficiaries and reduce prescription medication costs.
However, as you can imagine, not many people agreed with this decision, which is why they feared the possibility of Biden’s second term. According to media sources, Biden’s payment reductions would’ve resulted in increased patient costs and fewer benefits for baby boomers enrolled in Medicare Advantage plans.
Since these plans frequently have lower out-of-pocket expenses than Medicare’s fee-for-service model, many Americans with lower incomes love them. As you already know, these plans are privately run by government-funded insurers. Due to the aforementioned predatory practices and ineffective administration, Biden doesn’t agree with Medicare Advantage. Biden’s second term could’ve meant the end of a project like this, which many seniors appreciate.
What are your thoughts on this project? What do you think Ms. Harris will do now that she has a chance of becoming the leader of the country? Let us know in the comments below, because we’d love to chat with you about it!
5. Required distributions
Joe Biden wanted to maintain a favorable tax status, and for that to happen, he suggested different changes to retirement savings. These modifications would’ve called for mandatory distributions from IRAs holding balances above $10 million.
Moreover, this plan wouldn’t have allowed “backdoor” Roth conversions, which allow individuals and couples to avoid a Roth IRA’s income limit and make indirect contributions. This was available for those who earn more than $400,000 and $450,000 for married couples.
The advantage of this project is that it would allow wealth to increase tax-free. Only those who make more than $161,000 or $240,000, respectively, but less than the suggested cap, as individuals or couples, would’ve been able to do so. Biden’s second term was seen negatively by wealthy boomers. Which side are you on? Share your thoughts with us!
Joe Biden vs. Donald Trump
Since the next president of the United States will make several decisions and sign different documents that will impact your life, financial resources, and overall cost of living, you have to put everything in balance when deciding who you should vote for.
While some analysts say that Biden’s second term could’ve had a big impact on baby boomers’ finances, other experts say that Trump’s election could also have a negative impact on citizens’ cost of living. We want our readers to be informed, make smart financial decisions, and have a happy and fulfilled retirement, which is why we like to present different sides of the story.
Speaking of that, if you’d like to read more about how Trump’s second term could impact seniors’ finances, let us know in the comments, and we’ll take care of it ASAP.
…Will Ms. Harris continue Biden’s projects, or will she come up with new ones? How will Americans’ lives be?
Until next time…
If you want to be a happy retiree regardless of the political world, here’s a great book that will give you useful tips on how to save money and make the most of your Social Security checks. Check it out; it’s a life-changer!
Do you think Biden’s second term could’ve negatively impacted retirees’ finances? Let’s chat in the comments! If you’d like to see how a potential Kamala Harris’ term could influence your financial gains, leave a comment below, and we’ll tell you everything you need to know.
If you find this article useful and you’d like to check out something else from Retirement in USA, here’s a good post for you: 8 Important Things That Cost More In Retirement
