Potential Effect of A Trump Presidency on Personal Finances
Donald Trump will become the 45th president of the United States. Along with any new presidency comes new changes. Whether you support Trump or not, give thought to how his presidency will affect you.
Below are some ways we may see some shake up.
The stock market
The night of the election, the markets went haywire when it became clear that Donald Trump won the election. We saw the Dow Jones Industrial Average futures drop lower than they did after 9/11!
In the coming days, we would see the markets quickly get back on track. Historically, with a Republican controlled congress we can expect to see policy changes that will be in favor of businesses. Furthermore, when there is also a Republican president, you can expect the S&P 500 to produce substantial gains.
Paying for higher education
We can all agree that the cost of college has skyrocketed and the looming idea of student debt is top of the list for many Americans. Trump has acknowledged that this is an issue and plans to put another $20 billion toward education. He is also encouraging a boost in education expenditure at the state level.
There is a plan in place to work with colleges and universities on the issue of rising tuition costs and student debt.
Those that cooperate will be offered tax incentives.
Whether this will all come to fruition remains to be seen but you should still be planning ahead and saving for future college expenses.
A 529 Savings Plan or any other prepaid college plan will help your family invest in higher education ahead of time.
Your personal income taxes
Another place we will see changes is in Trump’s tax plan. He is proposing to cut down the current seven tax brackets to 3 with those tax rates being 12%, 25%, and 33%. He also further plans to increase the standard deduction to $15,000 and $30,000, for single and married taxpayers, respectively.
With this, he will also be doing away with the head-of-household filing status and personal exemption. We are also expecting to see the child-care deduction increase, and of course the repealing and replacing of the Affordable Care Act.
If this all takes place, we will see see one of the biggest changes to the tax code in 3 decades. It has been said that Trump expects the wealthier Americans to pay their share. However, not at the risk of destroying jobs and hurting their ability to compete.
There are no guarantees and some or all of these proposed changes may not even take place. Americans need to become more tax efficient. Some ways to do this is by including what is called tax-loss harvesting. This refers to selling securities that are losing at a loss in order to offset gains. You also may want to look at assigning higher-yielding assets to retirement accounts that are tax-advantaged.
In conclusion, we do not have a crystal ball that will tell us what a Trump presidency will mean to your personal finances. Regardless of what the political climate will be, you can certainly start engaging in some of the above-mentioned financial practices.
Keep an Eye on Your Credit
Having good credit is key when it comes time to taking out loans of any kind. If you are finding yourself in a situation where your credit score is not where you need it to be, consider hiring a credit repair company.
They are beneficial in locating mistakes, getting rid of negative reporting and monitoring suspicious activity on your credit report. By enlisting a good credit repair company, you will gain better understanding of your credit report and come up with a plan to get your credit back on track.