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Special: In the News Election Edition
How 2024 Elections May Affect Retirement Plans
It’s 2024, and the coming election cycle is going to play a pivotal role in American life this year. Retirement is no different, especially because elections and changes in leadership can have a major impact on critical federal programs such as Social Security and Medicare.
That’s why Silvur is making things easier for you. We’re cutting through the noise to find the key, unbiased election takeaways that matter to your retirement. Check back monthly to keep a pulse on the election news that could have an impact on your retirement plans.
Social Security
Social Security is in flux. As the retirement fund faces the potential of running out in the near future1, many candidates are discussing potential changes to the system, including everything from raising the retirement age2, to increasing taxable earning amounts, trimming benefits for younger Americans3 and more. These changes recently came up at the GOP Presidential debate, and may increase the amount of Social Security benefits that people receive in retirement.4 In particular, Republican candidate Nikki Haley “has called for several changes to the nation’s safety net programs, including increasing the age at which today’s younger workers would become eligible for Social Security retirement benefits and limiting the growth of benefits the wealthy receive.”5
The Democrats, for their part, are also looking to make changes to Social Security in order to preserve funds for the program and prevent future benefit cuts.6 President Biden has suggested adding a new payroll tax for those with incomes over $400,000, changing the way that Cost-of-Living Adjustments are calculated, increasing the Primary Insurance Amount for older retirees (when healthcare expenses are likely to be higher), and increasing the special minimum benefit for lower-wage workers to boost their monthly benefits.
At the same time, the Social Security Administration also recently announced a 3.2% benefit increase for 2024 in order to keep up with the cost of living. 7As a result the average monthly benefit is now up to $1,907 from $1,848 last year, with those who receive the maximum now seeing monthly checks of $4,873.
Medicare
Medicare is another hot button issue right now since politics and electoral shifts can affect Medicare even more than Social Security.
Among the 2024 candidates,8 President Joe Biden has taken steps to address "misleading" Medicare Advantage advertisements and wants to require insurers to be more transparent in communicating benefits to retirees. The White House also announced in August that “10 prescription drugs that will be subject to the first-ever Medicare price negotiations,” a landmark for the Medicare system.9 Former president Donald Trump has opposed Congressional efforts to his own party to make changes to Medicare. 10 Haley favors expanding add-on packages for Medicare Advantage plans in order to increase competition.
Amid all this, Medicare Part B, which relates mostly to preventative care, premiums and deductibles will be rising around 6% in 2024.11
Retirement Accounts
Further underscoring the importance of elections on retirement accounts, a recent poll found that nearly half of investors believe that the 2024 election will have a bigger impact on their portfolios than general market performance.12 However, wealth management experts are more pragmatic, suggesting that while the election may impact the stock market, “economic growth, interest rates and inflation remain more critical factors than election results.” 13
Whatever happens, your 401(k) will survive. 14
In the meantime, the IRS has boosted the annual individual contribution limits for 401(k), 403(b), most 457 plans and the government’s Thrift Savings Plan by $500, to $23,000, citing the rising cost of living. 15
2 https://www.pbs.org/newshour/politics/at-3rd-debate-gop-candidates-support-raising-retirement-age
5 https://www.cnn.com/2023/12/05/politics/nikki-haley-social-security-medicare-reform/index.html
6 https://finance.yahoo.com/news/4-social-security-shakeups-biden-185124733.html
7 https://www.ssa.gov/news/press/releases/2023/#10-2023-2
11 https://www.forbes.com/health/medicare/medicare-changes-2024/
12 https://www.cnbc.com/2023/11/13/investors-fear-the-2024-elections-may-hurt-retirement-savings.html
14 https://www.washingtonpost.com/business/2020/11/02/election-401k-retirement-plan/
