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6 Moves You Should Make If You Think Harris Will Win the Election
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Americans will elect a new president in November — and it could be Kamala Harris. Since she’s currently the vice president, a Harris victory might not shake things up as much as a Trump victory, but any new leader inevitably brings some level of change.
It is also inevitable the impact that a new president can have on your finances. Now is the time to start preparing for the transition and protecting your assets.
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“A lot of proactive planning will focus on the Tax Cuts and Jobs Act, which is set to expire at the end of 2025,” said Steven Calio, CFP, co-founder and financial planner at CSG Finance. “It is likely that if Harris is elected, she will take a similar position to Biden and not renew most of the TCJA.”
He said this would increase tax exposure for most families, especially high-income families with annual incomes of more than $300,000. Even if you don’t fall into that category, it’s still a good idea to get your finances in order before Biden leaves the White House.
There is no way to know who will win the presidency until November 5th. However, if you think Harris will become the first female presidentHere are six financial steps you can start taking now.
Retirement Planning: Whether you’re planning for retirement, dealing with a significant life event, or simply looking to make smarter financial decisions, a financial advisor can provide the expertise and guidance you need. Here are some Compelling Reasons Why You Should Consider a Financial Advisor – Even If You’re Not Rich.
Review tax strategies
“Harris may propose tax changes, potentially increasing rates for higher-income earners,” Calio said. “Revising tax strategies now can help mitigate future tax liabilities, such as maximizing contributions to tax-advantaged accounts, considering Roth conversions, RMD planning, or strategically planning to sell highly valued nonqualified assets — investments, businesses, rental properties, etc.”
If you’re a high-income earner, it might be a good idea to create a tax plan now that aligns with the Harris administration’s potential tax changes. That way, if she wins the election, you’ll already have a plan in place to keep your tax liabilities to a minimum.
To know more: I’m an economist: Here’s my prediction for the housing market if Trump wins the election
Evaluate healthcare options
“Harris has supported expanding access to health care, which could impact insurance markets and costs,” he said. “Evaluating current health care plans and considering options like Health Savings Accounts (HSAs) may be beneficial.”
The story continues
During her 2019 presidential run, Harris proposed a Medicare for All system that would give all Americans the option to buy into Medicare outright. She also planned to expand the Medicare system over a 10-year phase-in period.
It is currently unknown what her plans are for healthcare if she is elected president. Stay tuned as she announces more about her healthcare platform for this campaign.
Consider estate planning
When she ran for president in 2019, Harris proposed a more progressive income, payroll, and estate tax on corporations and the top 1 percent to help fund her Medicare for All plan. It’s unclear whether her current campaign will adopt this approach, and even if it does, 99 percent of Americans wouldn’t be affected.
However, it may still be a good idea to focus your attention on estate planning since the future estate tax situation is unknown. This can provide peace of mind and the potential to maximize your wealth.
““Potential changes to estate tax laws could impact inheritance strategies,” Calio said. “Consider accelerating your gift-giving strategies now — e.g., transferring assets out of the estate using irrevocable trusts, estate freezing techniques, cash gifts to your heirs, etc. — while your estate/gift tax exemption threshold is higher.”
Evaluate the use of real estate equity as a financing method
“After the sunset provision, interest tied to home equity debt will be deductible — subject to limits — even if it was not used to purchase, build or improve your home — meaning that deductible interest will no longer need to be tied to ‘acquisition debt,'” Calio said.
Given this, it may be a good idea to use your home as equity if you are looking for financing.
“These moves are speculative and based on potential policy directions,” he said. “Consulting with a financial advisor for personalized advice is recommended.”
Evaluate Investment Portfolios
“Changes in administration often lead to changes in market sectors,” Calio said. “Revising and possibly reallocating investments to sectors likely to benefit from Harris’ policies — e.g., renewable energy, technology, ESG — could optimize returns.”
Additionally, you need to consider the tax implications of your returns.
“You should also determine the extent to which your nonqualified portfolio income could increase your overall tax liability after the sunset provision,” he said. “Consider whether it may be appropriate to shift more of your allocations to holdings that have favorable tax treatment — e.g., municipal bonds, qualified dividends, long-term capital gains, etc. — or funds with lower turnover — e.g., fewer capital gains distributions — in 2026, but be mindful of the potential tax implications of rebalancing.”
Buy tech stocks
Further emphasizing Calio’s advice to evaluate your investment portfolio, Noah Damsky, director of Marina Wealth Consultantsagreed that focusing on the technology sector could be a profitable move.
“If [Harris] win the election, tech stocks are a buy,” he said.
So far, signs point to Harris maintaining the Biden administration’s China policy if she is elected president, according to Politico. That could be important for tech stocks.
“She won’t be as tough as Trump on China, so a less contentious relationship between the U.S. and China will be good news for tech companies doing business in China,” he said. “She will be less likely to rock the boat and cause issues that could lead to a trade war.”
So investing in tech stocks might be a good idea if you’re confident Harris will be elected president in November.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reporting on politically focused financial stories. For more coverage on this topic, check out I’m a Financial Advisor: 4 Moves I’ll Make If I Think Trump Will Win the Election.
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This article was originally published in GOBankingRates.com: I’m a Financial Advisor: 6 Moves You Should Make If You Think Harris Will Win the Election