Introduction
Election season is in full swing, and it’s more than just policy debates and political promises – it’s about the real changes that could affect your personal finances. While voters focus on the economy, it’s not just the large-scale policies but the microeconomic shifts that matter most. With issues ranging from Social Security to tax changes, here’s what’s at stake for the money in your wallet.
Social Security: Will Benefits Be Cut?
Social Security is a crucial program for millions of Americans, yet it’s struggling financially. According to the 2024 Trustee Report, Social Security is set to pay full benefits only until 2033. After that, only 79% of scheduled benefits can be covered without intervention.
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Why this matters: Congress needs to address this issue soon to avoid hasty, potentially harmful solutions. Options include:
- Reducing benefits
- Raising the retirement age for younger workers
- Removing the income cap on taxable Social Security earnings
With 2033 creeping closer, this election could determine whether your future retirement remains secure. Think about which candidates are likely to pursue a bipartisan fix or phase in changes slowly so beneficiaries can adjust.
Tip: If you’re planning your retirement, keep an eye on proposals affecting Social Security reform. The program’s sustainability could directly impact your retirement strategy and financial future.
Taxes: Are Big Changes Coming?
The Tax Cuts and Jobs Act (TCJA), passed in 2017, transformed the tax landscape by altering rates and brackets, while eliminating certain deductions. However, many of these provisions expire in 2025, and that could mean big shifts for taxpayers.
- What could change:
- Standard deductions may decrease, impacting what you owe each year
- Caps on deductions, like the one for state and local taxes (SALT), could be revisited
- Potential expansions of the Child Tax Credit and Earned Income Tax Credit are on the table
Why this matters: The tax landscape impacts nearly every American household, especially with the potential tax burdens involved if the current tax rules change. Some candidates advocate for further tax reform, while others support scaling back the TCJA’s provisions, particularly for middle-income households.
Tip: The election’s outcome could impact your tax strategy over the next few years. Stay informed on how each candidate plans to address tax changes, and consider whether this could influence your financial planning.
Inflation: Will Prices Stabilize?
In 2022, inflation hit a staggering 9.1%, the highest in 40 years, affecting everything from grocery prices to housing costs. While inflation has since dropped to 2.4%, there are still potential policies on the horizon that could shake things up.
- Potential policies to watch:
- Former president Donald Trump suggests replacing the current tax system with tariffs, which could increase costs for households.
- Inflation-sensitive policies from both parties could impact Federal Reserve strategies, potentially reversing the progress made on reducing inflation.
Why this matters: Any policy changes that disrupt the Federal Reserve’s efforts to stabilize inflation could mean rising costs in everyday essentials. If inflation spikes again, households could face significant increases in food, energy, and housing expenses.
Tip: Evaluate where each candidate stands on economic policy. Inflationary pressure could easily return if extreme fiscal policies are enacted.
Student Loan Forgiveness: What’s the Future?
The political fight over student loan forgiveness rages on, with candidates split on the issue. Vice President Kamala Harris has supported debt relief, while Donald Trump and other Republican leaders oppose it.
- What’s at stake:
- Continued efforts to expand forgiveness for federal borrowers
- Potential changes in repayment structures or interest rates
- Limits on relief programs for borrowers based on income and financial need
Why this matters: For those carrying education debt, this election could determine whether relief is in sight or if repayment terms change unfavorably. Many borrowers pursued higher education to secure well-paying jobs but ended up with significant debt. This election could be pivotal for their financial freedom.
Tip: If you or a loved one is facing student loan debt, follow each candidate’s stance on forgiveness policies. This election could impact repayment options and available relief programs.
Final Thoughts: Make an Informed Vote
With November 5 approaching, it’s essential to consider how Social Security, taxes, inflation, and student loan policies could impact your finances. The choices made in this election could reshape key financial areas for years to come, directly affecting your household’s economic health.
