WFCN – Comparing President Biden’s economic management to that of his former and current challenger, Donald Trump, polls show that many Americans are dissatisfied.
A second Biden term could indicate ongoing financial difficulties, akin to inflation, for senior folks, many of whom are baby boomers (born between 1946 and 1964), if historical trends are to be believed.
Here are five reasons why a second term for Biden would be disastrous for baby boomers’ finances.
- State-by-State: Best Places to Live on a $100,000 Income
- Illinois Winner of $552M Mega Millions Jackpot Revealed as Chicagoland Local
- Reality Check: Is the IRS Actually Issuing $8700 Stimulus Checks?
- 2024 Stimulus Check Update: $1400 One-time Payment Details, Including Eligibility & Payment Schedule
- Master the Market: Billionaire Strategies for Investing in Hawaii’s Hottest Real Estate
See how winning for Biden can affect your retirement funds as well.
1. Inflation
“All of the indicators showed price increases running well ahead of that mark,” as stated in a CNBC report on the Federal Reserve minutes. “The Fed targets a 2% inflation rate.”
Boomers now doubt Biden’s ability to reverse the current situation since his attempts to control inflation have not been very successful. Most boomers on fixed incomes are concerned about the cost of everything, including food and petrol.
According to Wells Fargo, until 2025, inflation will remain at roughly 3%. If Biden fails to address growing prices, boomers have good reason to worry about how they will pay for things.
2. Medicare and Social Security
The improvements to Social Security are falling short of inflation and the rising costs of housing, food, healthcare, and other essentials, even after two sizable increases to monthly payments.
Because Social Security benefits are inadequate for the large number of boomers who depend on it, they are forced to use credit cards, savings accounts, and assistance programs.
3. Health Insurance
For the Biden-Harris administration, bolstering the Medicare program is a top goal. They are trying to cut prescription medication costs while also protecting beneficiaries by putting restrictions on deceptive or predatory Medicare Advantage marketing and making sure that brokers and agents act in the best interests of their clients.
SEE MORE –
How to Select 401(k) Investments Like a Pro: Dave Ramsey’s Advice
However, not everybody agrees. The Wall Street Journal claims that as a result of Biden’s payment reductions, Boomers enrolling in Medicare Advantage plans will experience less benefits and increased patient expenditures.
Due to their frequently cheaper out-of-pocket expenses than Medicare’s fee-for-service model, these privately run programs, which are supported by the government, have gained popularity among Americans with lower incomes. With its exploitative practices and inefficient bureaucracy, Medicare Advantage is something that Biden opposes. Even further disruption to a program that has garnered great reception could come from Biden’s reelection.
4. Mortgage Interest Rates and Housing
One factor contributing to the unsettling situation of the housing market is high interest rates. According to The New York Times, a lot of people worry that interest rates would stay high if Biden is re-elected.
Seniors who sell their family homes and move into smaller ones are said as downsize. Younger boomers are currently starting to retire, and with high interest rates in the coming years, they might make less money when they sell their homes because mortgage rates drive down the selling price.
A further drawback of the high rates will be difficulty for boomers wishing to buy new homes. The issue also extends to residential rent, which goes up as demand rises.
Required Distributions
Biden’s proposed reforms to retirement savings would impose a new cap on favorable tax treatment—$10 million—and mandate mandatory distributions from IRAs with balances over that amount. In addition, the proposal would prohibit “backdoor” Roth conversions, which allow individuals or couples earning over $400,000 ($450,000 for married couples) to avoid the Roth IRA income restriction and make indirect contributions.
This would have the advantage of allowing wealth to increase tax-free. Only those who earn more than $161,000 or $240,000, respectively, but less than the suggested cap, would be eligible to do so, as individuals and couples. Prosperous baby boomers view this endeavor as detrimental to a second Biden term.