Understanding the Impact of Elections on Your Finances
As the 2024 presidential election approaches, Americans face political and financial uncertainties. Michele Martin, president of Prosperity, an EisnerAmper Company, provides insights on how to navigate these changes effectively.
Martin emphasizes that the election should not be a "game changer" for investors. She advises sticking to your financial plan and focusing on your overall asset allocation. For instance, if you hold too many stocks, it might be a good time to reassess and potentially reduce your holdings, especially in IRAs, since these adjustments won't trigger taxes.
Tax Cuts and Jobs Act: What You Need to Know
The Tax Cuts and Jobs Act (TCJA), which brought significant tax changes, is set to expire at the end of 2025. This expiration could lead to changes in estate tax exemptions and other tax-related aspects.
Martin suggests consulting with an estate planning attorney to prepare for these changes. For example, understanding how your estate will be taxed after 2025 can help you make informed decisions that protect your family's financial future.
Investment Strategies During Political Uncertainty
Martin advises that investors, especially those with a long-term outlook, should not let political events drastically alter their investment strategies. For young investors with a long time horizon, the election may have minimal impact on their overall financial plan.
For those nearing retirement, it's advisable to reassess risk levels. Working with a financial advisor can help tailor a strategy that aligns with your risk tolerance and retirement goals.
Proactive Financial Planning
Proactive planning is crucial in times of change. Taking time now to review your financial situation can provide peace of mind. Whether it's adjusting your investment portfolio or preparing for tax changes, having a plan ensures you're prepared for whatever the future holds.
Consulting with professionals—whether financial advisors or estate attorneys—can provide tailored advice and strategies to manage the changes ahead effectively.
