Will The 2024 Election Impact My Retirement Investing?

Trying to predict the future is a lot like timing the market. Those who do it frequently are more often wrong than right. So trying to guess whether the 2024 U.S. election impacts your retirement plan is more likely to put your retirement at risk than the outcome of the election.

That said, if you do have concerns about the election hurting your retirement plan, you’re not alone. Nationwide’s ninth annual Advisor’s Authority survey, powered by the Nationwide Retirement Institute, found in October that 45% of investors believe U.S. federal elections for president and congress will impact their retirement more than market performance.

In particular, one in three investors from either of the major political parties predicts doom and gloom for the economy within 12 months of the party they don’t align with taking power. While predicting the impact of the 2024 election might have no direct practical application to your retirement investing and saving, who lands in the White House and on Capitol Hill can create financial uncertainty and affect economic growth.

A Goldman Sachs report from January discussed how the uncertainty created by elections could cause a modest headwind for investments and growth. Those effects would be short-lived.

Follow the Fundamentals of Investing for Retirement

Are you an investor who is worried about the impact of this year’s election on your retirement plan? If so, the Nationwide report on its study suggests you talk to an advisor, such as Ty Young, CEO of Ty J. Young Wealth Management.

According to Young, investing successfully for your retirement means that you should follow the fundamentals of financial planning. Here are his tips for investment success:

• Know Your Retirement Goals: How much you need to retire and the target date
• Know Your Strategy: Have a clearly defined strategy
• Stick to Your Strategy: Consistency is the key, even with uncertainty
• Protect Your Portfolio: Consider adding an annuity to your strategy

A Fixed Index Annuity added to an investment portfolio is considered to be a defensive move to protect you from a range of losses. However, it also helps you grow your investments.

“[O]ne of the best products to protect and grow your money is a Fixed Index Annuity,” Young said. “It’ll grow with the market as the market goes up, and you don’t lose money when the market goes down. It’s a fantastic balance for the average investor.”

Retirement Saving Remains in the Spotlight

There is no direct impact on your retirement investments. However, you can expect the U.S. Congress to remain focused on trying to help Americans increase their retirement saving and investments. However, don’t expect any big policy changes to go into effect before the general presidential election in November.

Remember that retirement reform is a bipartisan position. You can expect it to survive the general election and continue in the next Congress.

What Is Worth Watching in the 2024 Election?

Many investors have expressed concerns about how the presidential election might have an impact on their retirement accounts. Despite these misgivings, the history books tell a different story for the months leading up to presidential elections. The markets typically continue on without any problems and often win more than they lose.

In a Business Insider article in January, iCapital Chief Investment Officer Anastasia Amoroso said the S&P 500 posted median returns of 7.5% in the 12 months and 4.2% in the 9 months leading up to election day in the last eight federal elections. They also had positive outcomes 85% and 75% of the time, respectively. The market results slow as the election draws nearer but remain on the positive side.

This means it’s time to stop worrying about how the 2024 election will impact your retirement account. Instead, you should begin to focus on policy matters from the Federal Reserve that could impact investments. Whether the Fed continues to leave rates alone or decides to cut interest rates will have a much more direct effect on investment instruments and the markets.

There are other areas to watch out for, too, that might be dependent on the outcome of the presidential and congressional elections. These include taxes, tariffs, and technology. Policy approaches from the two major party candidates diverge greatly, but these issues will not become apparent until after the election.

Talk to a Financial Advisor

Are you considering retiring in 2024 and are worrying about how the presidential and congressional elections will affect your retirement accounts? If so, remember that sticking to your plan gives you the best chance of having the retirement you’ve always dreamed about.

A talk with your financial advisor is suggested before you begin to make any changes based on predictions of the outcome of the November 2024 elections.