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Created: August 19, 2020
Modified: June 19, 2023

How Legislation Changes and the 2020 Presidential Election Can Impact Your Retirement

Here at Johnson Brunetti, we are doing everything we can to guide our clients towards a successful outcome as they either plan for or enjoy retirement. With the 2020 Presidential Election on the horizon, I want to address two things regarding retirement:

  1. RMD Changes with the CARES Act
  2. The 2020 Presidential Election and its Impact on the Stock Market

How Do the RMD Changes in the CARES Act Affect My Retirement?

First, there was a change in required minimum distributions (RMD). Due to the CARES Act, you do not have to take a required minimum distribution this year. Therefore, if you were required to take a required minimum distribution in 2020, that is waived for this year.

If your distributions are set on automatic and you do not wish to take that distribution this year, please call your advisor and let them know.

How Will the 2020 Election Affect the Stock Market?

Second, we’re getting a lot of questions:

The answer is: We don’t know.

“How is the election going to affect the stock market?”

“How will the election affect your investments?”

I want to be straight with you on that. We just don’t know. Statistically, we can look back and guess that the market will go one way or the other, based on either Democrats or Republicans taking the house and the Senate.

Typically, people are looking for an answer or a statistical significance to something that is usually very random. Please ignore what you’re hearing about when people say, “Every time the Democrats win, the market goes down” or “Every time the Republicans win, the market goes up”.

Either way, there is no way of knowing exactly how this election will affect your retirement or the stock market.

Here is What’s Important

There will probably be some changes if Joe Biden and Kamala Harris take the White House. Some of the taxes that were passed during the Trump administration will probably be repealed. We’re keeping an eye on that for our clients. Your financial advisor should be paying attention to that for you.

Some regulations will probably come back a little stronger than they have been for the last four years. You might see a slowdown in business. However, that doesn’t mean those two things are necessarily good or bad. It’s just the reality.

Possible Stock Market Changes

You could see a little dip in the market. But again, we do not know. Some people might think this is going to be a more stable or more certain administration than the Trump administration. Although the market has done very well over the last four years and the economy recovered stronger than we could have expected after COVID-19, we just don’t know.

Keep a Long-Term Perspective on The Economy

I would encourage everyone to keep a long-term perspective on the economy, and not act on emotion or fear right now. At Johnson Brunetti, we are positioning our clients’ portfolios and keeping an eye on how the election will change their investment outlook. However, I want to make this very clear: we will not time the market.

We are doing everything we can to help make sure our clients’ retirement plans remain on track after the 2020 election. Hopefully, your financial advisor is keeping the lines of communication open with you as we prepare for changes. They should be ready to adjust your custom investment plan as necessary.

Joel Johnson, CFP®
Managing Partner at Johnson Brunetti
Joel Johnson, CFP®
Joel Johnson, the Managing Partner of Johnson Brunetti, has been in the financial services industry since 1989. As a CERTIFIED FINANCIAL PLANNER™ professional, Joel and his team have helped thousands of families develop their own individualized retirement plans based on the unique needs of those approaching the second phase of their lives. Starting from humble beginnings but developing a strong work ethic early on, Joel’s grandfather taught him by serving others first and creating value for someone else, you will never have to worry about money. These important life lessons were the driving…
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