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Yahoo
24-05-2025
- Business
- Yahoo
6 Mistakes Boomers Are Making With Their Money in the Trump Economy
As economic uncertainty grows months into President Donald Trump's second term, many baby boomers are making money moves that could jeopardize their retirement. Consider This: Find Out: From overreacting to market volatility to underestimating healthcare costs, these financial missteps are often fueled by short-term thinking or outdated advice. Here are six mistakes boomers are making with their money in the Trump economy. Christopher Stroup, the founder and CEO of Silicon Beach Planning, said outdated investment strategies could cause some boomers to make financial missteps. 'Boomers must shift from a 'set it and forget it' mindset to proactive financial planning,' Stroup said. 'The next decade will bring market fluctuations, tax policy changes and shifting retirement landscapes.' He explained, 'Many boomers are holding too much cash, assuming it's 'safe,' while inflation erodes their purchasing power. Others are clinging to outdated investment strategies, such as relying on bonds or dividends without adjusting for market volatility.' Experts said not saving enough for retirement and depending on alternative payment methods could hurt boomers. 'They have higher credit card debt than previous generations,' explained Chad Gammon, owner of Custom Fit Financial. Read Next: Recent stock market fluctuations in response to Trump's tariffs have unsettled many investors, particularly baby boomers who hold substantial equity. Some boomer investors are shifting towards conservative investments. While caution is understandable, it's crucial to avoid panic-driven decisions that could cost boomer investors long-term growth. 'It's easy to get caught up in near-term uncertainty and market volatility,' said Tom Buckingham, chief growth officer at Nassau Financial Group. 'But it is risky to make significant changes to your long-term financial plan and investment strategy based on the latest headlines.' According to recent research by Indeed Flex, an online marketplace for flexible and temporary work, over one-third of older adults are unsure whether they will retire this year due to the current economy and inflation. Researchers said, 'With only 10% retired, the three highs — the cost of living, housing prices and healthcare costs — may force the aging population to rethink retirement. Factor in economic uncertainty with Trump's proposed new tariffs on imports; boomers may need to delay retirement even longer.' For some boomers, delaying retirement is the smart move. However, older adults should consider whether delaying retirement aligns with their health and personal goals. Prices for everyday items could increase this year due to Trump's tariffs. 'Some near-term measures of inflation have recently moved up,' said Federal Reserve Chairman Jeremy Powell at a recent press conference. 'We see this in both market- and survey-based measures, and survey respondents, both consumers and businesses, are mentioning tariffs as a driving factor.' Erika Kullberg, a personal finance expert, said boomers should reassess their budgets to account for inflation. She also suggested delaying Social Security to maximize benefits and exploring tax-efficient investment strategies. 'Beyond that, things like downsizing to reduce housing costs, cutting unnecessary expenses and diversifying investments to include assets that tend to perform well in different economic conditions can help,' Kullberg said. Trump's proposal to eliminate federal taxes on Social Security benefits would primarily benefit wealthy older adults, since most middle-class taxpayers don't pay taxes on Social Security. Experts predict eliminating the Social Security tax could deplete the trust fund that pays for benefits and lead to a 30% decrease in benefits overall. 'Take a deep breath, stay calm and remain disciplined and well-diversified,' Buckingham said. 'Consider including low-risk investments and products as part of a well-rounded investment portfolio. Consider supplementing Social Security and pension benefits with annuities that guarantee income benefits for life.' The Trump administration said the Department of Government Efficiency (DOGE) proposals to eliminate 'waste and fraud in entitlement spending' would not reduce Social Security, Medicare or Medicaid benefits. However, experts said retirees should plan for emergency savings or explore supplemental insurance options to buffer against unforeseen events. 'Boomers are not taking sufficient notice of alternative funding strategies for healthcare,' said Neal Shah, CEO of CareYaya, an online caregiving platform serving older adults with dementia. 'With potential modifications to Medicare on the horizon, many aren't preparing for the costs of healthcare.' Shah explained, 'Health savings accounts (HSAs) and long-term care insurance should be priority considerations, as out-of-pocket healthcare expenses rise faster than general inflation.' Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates Mark Cuban Says Trump's Executive Order To Lower Medication Costs Has a 'Real Shot' -- Here's Why 10 Genius Things Warren Buffett Says To Do With Your Money Sources PR Newswire, Boomers Are Forced to Rethink Retirement The White House, FACT CHECK: President Trump Will Always Protect Social Security, Medicare This article originally appeared on 6 Mistakes Boomers Are Making With Their Money in the Trump Economy Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
08-02-2025
- Business
- Yahoo
4 Moves Retirees Should Make To Build Their Retirement Savings in 2025
After years of hard work, retirees deserve financial security — but staying ahead requires strategic money moves. Be Aware: Try This: 4 Unusual Ways To Make Extra Money That Actually Work Whether retirees want to grow their savings or protect what they've built, careful financial planning can make all the difference, said Melissa Murphy Pavone, the founder of Mindful Financial Partners. 'No matter where you are on your financial journey, it's never too late to build a strong retirement foundation.' Here are four smart moves retirees should make to build their retirement savings in 2025. One of the best moves retirees can make is to take advantage of tax-advantaged accounts like Roth IRAs or Health Savings Accounts. 'Investing in dividend-generating assets and exploring low-risk, long-term investments will help grow their savings steadily well beyond 2025,' said Christopher Stroup, CEO and founder of Silicon Beach Planning. 'Roth conversions, tax-loss harvesting and utilizing deductions can help reduce taxable income and keep more money in their pocket.' Christine Mueller Coley, a wealth advisor at SteelPeak Wealth Management, advised retirees to capitalize on today's high interest rates. 'Utilize a high-yield savings account, and consider locking in rates on bonds or fixed annuities,' Coley said. 'Understand that Social Security payments could change. There is talk of reducing COLAs (cost-of-living adjustments) and delaying or reducing Social Security benefits.' Consider This: Tom Buckingham, the chief growth officer at Nassau Financial Group, said retirees should consider waiting to withdraw money from their retirement savings accounts if they are no longer working full-time. 'That will allow you to stay invested and continue to grow your retirement assets, whether you own stocks and bonds or purchase other products, like CDs or fixed annuities.' If retirees must withdraw from their retirement savings, they should calculate their tax bracket first, said Melanie Musson of Clearsurance. 'If you're just over a tax bracket, try to reduce your retirement savings withdrawals, so you stay in the lower tax bracket,' Musson explained. Retirees could see a wealth of new investment opportunities this year, especially as President Donald Trump recently launched business deregulations and, Financial Times reported, the private equity industry plans to advocate for its inclusion in 401(k) plans. While these developments may create new opportunities, retirees should focus on protecting their savings by rebalancing their portfolios. 'In practice, this means diversifying their portfolio with stocks and bonds,' Stroup said. 'Retirees may benefit from inflation-hedged investments like Treasury Inflation-Protected Securities (TIPS) or real estate to diversify and stabilize their portfolio.' According to research from the Employee Benefit Research Institute (EBRI), 68% of retirees reported having outstanding credit card debt, 31% said their spending exceeds what they can afford and half saved less than they needed for retirement. However, retirees can regain control of their financial health by streamlining their spending and weighing the pros and cons of downsizing. 'Retirees could commit to making meals at home,' Musson said. 'YouTube has a lot of helpful content to learn how to cook. Homemade meals cost a lot less than the same meal eaten out.' Stroup suggested retirees periodically review and cut unnecessary subscriptions, which can free up a few hundred dollars each month. 'Ultimately, it's important for retirees to focus on essential expenses while maintaining an emergency fund to cover unforeseen costs that could come in the future,' Stroup said. More From GOBankingRates 4 Low-Risk Ways To Build Your Savings in 2025 3 Things You Must Do When Your Savings Reach $50,000 This article originally appeared on 4 Moves Retirees Should Make To Build Their Retirement Savings in 2025
