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Michigan is a battleground state that attracts a lot of attention in the presidential election. With about a month left until the election, no one knows whether the Democratic Party or the Republican Party will win the state’s 15 electoral votes. This means that either Vice President Kamala Harris or former President Donald Trump, the leading candidates in this year’s election, could take office.
Find out: I’m an economist: Here are my predictions for Social Security if Kamala Harris wins the election
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If you live in Michigan and are preparing to retire or are already retired, the president-elect’s policies can directly or indirectly impact your retirement finances. If Harris wins, there are several possibilities of what could happen.
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rising inflation
Both retirees and non-retirees are wondering what inflation (the rate of increase in the prices of everyday goods and services) will be in the coming years. After all, rising costs can affect anyone’s budget, especially those on fixed or low incomes.
The average annual inflation rate from 2017 to 2021, when Trump was president, was 1.9%. The average rate during Biden’s term is about 5%, but there are extenuating circumstances.
Harris proposes addressing inflation through rising costs for food, housing and health care. The housing subsidy ($25,000 given to first-time buyers) may not affect Michigan retirees, but the rest could work in their favor.
In August 2024, a Moody’s Analytics report showed the macroeconomic impact of President Harris and President Trump. The report predicts that if Trump wins and the Republicans win an overwhelming majority, the average annual inflation rate in 2025 will be 3.5%. If Harris wins in a divided Congress, he predicts inflation will be 2% a year.
But not everyone agrees.
“Based on inflation alone, fixed-income households will be negatively impacted by a Harris presidency,” said Kevin A. Jerry, a nationally recognized tax reform expert and owner of MST & Associates. Kevin Gerry said.
Learn more: I’m an economist: Here are my predictions for Social Security if Trump wins the 2024 election
Changes to Social Security and Medicare
Harris announced her intention to strengthen and protect Social Security and Medicare.
“She will strengthen Social Security and Medicare over the long term by making millionaires and billionaires pay their fair share of taxes,” according to Harris Waltz’s official campaign website. “She will always fight to make sure the American people receive the benefits they have earned.”
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The Trustees of the Social Security and Medicare Trust Fund predict that the Social Security Old Age and Survivors Insurance (OASI) fund will go bankrupt in 2033, at which point only 79% of scheduled benefits will be paid. Medicare is scheduled to pay the full benefit until 2036.
Given that about half of all retirees (or those over 65) rely on Social Security for financial support in retirement, Harris’ promise could prove beneficial if realized. There is.
Changes to healthcare
On Harris Walz’s campaign website, Harris also said, “We will expand and strengthen the Affordable Care Act and make permanent the expansion of the Biden-Harris Tax Credit, which lowers health insurance premiums by one year. “We will make affordable medical care a right, not a privilege.” That averages about $800 a year for millions of Americans. ”
In addition, she proposed a $35 cap on insulin and a $2,000 cap on out-of-pocket medical expenses for everyone, not just seniors on Medicare. There is. He also said he would work to accelerate negotiations to lower prices and make prescription drugs more affordable for Americans.
While vice president, Harris also cast the deciding vote on Biden’s American Rescue Plan, which improves both child care and long-term care.
Her campaign website says, “As president, she will fight to reduce the cost of care for American families, including expanding quality home care services for seniors and people with disabilities.”
Expiration of TCJA and tax increase
The Tax Cuts and Jobs Act of 2017 brought significant tax reform, including tax credits and credits that provided much-needed relief to many Americans. However, this scheme is scheduled to expire at the beginning of 2026. If Harris is elected, individuals who previously benefited from the TCJA, including Michigan retirees, will no longer receive the same benefits.
This could result in higher taxes for retirees and others with large assets, with an overall ripple effect on their public finances.
“On a total basis, I estimate that Harris’ proposal would increase taxes by approximately $4.1 trillion from 2025 to 2034,” Gerry said. “Everyone in Michigan will feel this increase. Harris has said she will only raise taxes on people making more than $400,000 a year, but the large increase in government spending will not be absorbed by the top 5% of taxpayers.” .”
For now, this is all just speculation based on campaign suggestions and past patterns. It remains to be seen what will happen with a potential Harris presidency and how it will affect Michigan retirees.
Editor’s Note on Election Coverage: GOBankingRates is nonpartisan and strives to objectively cover all aspects of the economy and provide balanced reporting on politically focused financial stories. More information on this topic can be found at GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: If you live in Michigan, learn how Kamala Harris’ presidential inauguration will affect your retirement
