Episode 23: Will the Election Affect My Retirement?

Published: October 29, 2020 | Updated on: October 26, 2020

Thank you for joining us for Episode 23 of our Money Wisdom Question Series, where we answer common financial and retirement investment questions. Today’s question is, “Will the election affect my retirement?”

Election Reactions

Let’s talk about how the election may or may not impact your retirement and investments. If we go back through history, there are always reactions to elections. Sometimes in the stock market and sometimes in other ways.

There are obviously consequences to different economic policies that administrations have. That goes with not only the Executive branch, the President but also Congress, the House of Representatives, and the Senate. A lot of people are worried. Especially since it’s a time in our country where it’s divided and there’s so much bickering on both sides. What will happen if one party or the other wins the election? Will the election affect people’s retirement savings?

Short-Term Stock Market Reactions

Let’s talk about short-term reactions in the stock market. There are always people that can look back and draw patterns. If you look at it whether the market goes up or down as a pattern in the last year of a presidential term or right after an election, we are in it for the long-term. So it really doesn’t matter.

I don’t care what’s going to happen in the next 2-3 months with the stock market. What I care about is what’s going to happen in the next 3-5 years with the market.  That’s how I’m invested. This is how Johnson Brunetti invests our clients’ money.

Disregard the pundits that say, “Oh the market always goes up if the Democrats win the White House or if the Republicans win the White House.”

Economic Policy Reactions

From an economic policy standpoint, that’s a little bit more of a big deal. Reduced regulations and economic policies that favor business are typically better for the stock market performance, which affects our 401(k)’s and IRA’s.

However, that said, it doesn’t mean that we should just have all bets off in the country. It shouldn’t be a complete free for all from a regulatory and pro-business standpoint.

Takeaways

There’s always this balance that’s being struck and from time to time.  If we go too far one way or the other, that can cause a temporary drag on the economy and in the market.

“Will the election affect my retirement?” If you’re focused on very short-term issues, the election could affect your retirement. If you take a 3-5 year or longer view, which most of us are going to be retired for a very long time, then I don’t think you need to worry quite as much. I would suggest you don’t pay attention to the short-term.

Thanks for joining me and I hope you found this information helpful!

P.S. If you enjoyed this topic and want to learn more, download our free guide, “Will the Election Rattle Your Retirement?

P.P.S. Feel free to submit questions here for a chance to have them answered!