With the U.S. presidential election now just weeks away, Americans are bracing for the impact it could cost to their retirement portfolios.
Research from Wealth Enhancement, an independent wealth management firm with over $90 billion in total client assets, found that 80% of respondents in its survey are concerned over the effect political outcomes could have on their retirement plans. Wealth Enhancement surveyed a total of 1,000 U.S. adults.
Respondents also cited fears to immediate economic concerns like inflation and the cost of goods and services (49%), and how much they will pay in taxes (39%). Nineteen percent believe election outcomes will impact their retirement savings—a concern that is most prevalent among Gen Zers (29%). Americans also worry about how the election could sway their ability to rely on Social Security or Medicare benefits (31%, including 38% of Baby Boomers).
Despite the concern, Wealth Enhancement argues that U.S. markets generally rise during election years. According to research from Fidelity Investments, U.S. stocks have averaged returns of 9.1% in election years since 1950.
Instead, the research urges participants to work with professionals in discussing their long-term strategies. According to Wealth Enhancement, just 19% of Americans regularly meet with a financial advisor to discuss their retirement plan.
“Historically, the outcomes of elections have had very little long-term impact on market performance,” says Ayako Yoshioka, a portfolio consulting director at Wealth Enhancement. “For those feeling concerned about the election, I’d encourage them to talk with their advisor to ensure their financial plan is built to last, regardless of who’s in office.”
Regardless of their short-term worries, respondents to the survey noted a long-term optimism with their finances. Seventy-seven percent of Americans expressed positive emotions about their retirement, while 90% of those in retirement shared having zero regrets and 33% adding that it is “even better than expected.”
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
