Love him or hate him, the Trump presidency has already made big changes and is likely to make more. Most people are concerned how new laws and regulations may affect them.
New financial regulations and laws impact retirees harder than other age groups, because income tends to be fixed. It’s important to plan to ensure you can afford to live comfortably for the rest of your life.
How Will the Trump Administration Affect Seniors?
- Trump wants to change income taxes. He proposes reducing the number of income brackets to 3 and eliminating personal, dependent and head-of-household exemptions and more than doubling the standard deduction. That’s likely to help middle- and upper-income seniors.
- Seniors making less than $25,000, or $50,000 for a couple, would qualify for Trump’s proposed zero income tax rate. This means your Social Security benefits may not be taxed. On the other hand, it will reduce income going into Social Security, which may contribute to its demise.
- Social Security has had a bullseye on it for years. Although it’s unlikely to be transformed, the government may raise the retirement age, as happened during Jimmy Carter’s presidency, or change the cost-of-living index. President Trump has maintained that he plans to keep Social Security intact, but that’s difficult to believe in light of its financial difficulties and Republican opposition.
- Medicare is another target of Congressional Republicans. Again, Trump has stated his support, but he’s not yet presented a plan to keep it funded, especially considering the increase in retirees as baby boomers age.
- The Medicare surtax on investment income and the alternative minimum tax will be cut if Trump has his way, which is good news for upper income earners.
- No one’s quite sure what’s going on with capital gains tax yet. Trump has not specifically mentioned the capital gains tax, so the future is uncertain. The more you earn though, the more likely you are to be a winner.
- Gift and estate taxes are on Trump’s chopping block, which is good news for most seniors.
- The Older Americans Act supports Meals on Wheels, some senior centers, mental health and other federal programs that improve the lives of seniors. However, it’s likely to be on the chopping block, according to MSN.
- Medicaid for low-income seniors may be shifted to the states. The result is likely to be denial of benefits and implementation of co-pays.
- Affordable Care Act repeal will most likely affect seniors covered under the expansion of Medicare and the Part D prescription drug program. The ACA offered prescription drug coverage to those caught in the donut hole after spending more than $2,800 a year on medication. On the other hand, people with higher income—$85,000 for singles and $170,000 for couples—had to pay the Medicare premium surcharge, so if the ACA is repealed, they won’t have to pay. Wealthier individuals won’t have to pay the premium drug coverage surcharge either.
- Trump’s Penny Plan would reduce discretionary spending by one percent on all programs except Medicare, Medicaid, Social Security and defense. One result may be that if you volunteer for a nonprofit, it’s likely they’ll need a little more help.
- The Fiduciary Rule requires financial advisors to act in their clients’ best interest, including reporting conflicts of interest. When President Trump was talking about rules that make it harder for financial agencies to serve their customers, he may have been targeting the fiduciary rule. It’s supposed to go into effect in April 2017.
- Medical research cuts disproportionately affect seniors, because they focus on many of the diseases that affect older adults, such as diabetes, Alzheimer’s and Parkinson’s. If the Penny Plan reduces funding, it could put research behind by years.
- Low-income housing may be affected if President Trump’s Penny Plan goes into effect, leaving low-income seniors without sufficient housing.
- The economy, or at least the stock market, loves Trump. If you’ve got investments, you may be doing very well, at least for now.
Play It Safe
With all the financial uncertainty resulting from a new administration, shouldn’t you play it safe? A continuing care retirement community (CCRC) is designed to meet your needs, no matter how little or how much care you may require. Here at The Esquiline, we ensure the intellectual, physical, social, and spiritual wellness of our residents. Find out more by contacting us or calling 800-533-6279.