Hold on to your budget lists, because the U.S. economy in 2026 presents a unique set of challenges for retirees and those nearing retirement. President Trump and the White House administration’s shifts in economic policy, inflation trends, interest rates and market volatility can have an outsized impact on seniors living on fixed incomes or drawing from long-term savings.
As the Trump 2.0 economy begins to take shape, many retirees are wondering how new and proposed policies could affect everything from Social Security to healthcare costs. Financial experts suggested issues that retirees should pay attention to as the second Trump economy.
Cutting Government Spending on Retirement Accounts
Reduced government spending, in the way that Trump is planning, could be beneficial to the economy over time, according to Barry Spencer, financial advisor at Wealth With No Regrets, as government spending “is out of control” and needs some significant changes.
That said, if the Trump administration takes an approach he likens to “ripping off a bandaid” — making a lot of swift, dramatic changes — that could hurt the economy. Though retirees don’t need to react to every headline, certain economic factors deserve close attention.
Unemployment has already gone up, and according to Spencer, “It could send productivity of the economy down and it could take the stock market in uncertain directions and drive it really low. So you could have a reversal of all the gains we’ve had,” Spencer said.
This could hit soon-to-be retirees hard, forcing them to delay retirement. He suggested that if your retirement is in good shape now, and you were planning to wait to retire, it might be time to “lock in some gains” by retiring sooner rather than later.
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The Impacts of Deregulation
If Trump continues to reduce governmental red tape, which Paul S. Stanley, CFP and managing partner at Granite Bay Wealth Management, thinks will likely be a priority in his second term, deregulation could potentially benefit many stock market sectors, leading to increased business spending and investment in new technologies.
“However, be wary of unintended consequences that may have a long-term impact on the economy,” Stanley said. “For instance, some experts say the 2007 housing crisis began with deregulation in the ’70s and ’80s.”
Understanding Estate Tax Changes
Before Trump’s election win, many families were trying to optimize their estate plans ahead of the scheduled sunset (2025) of the tax cuts that were part of the 2017 Tax Cuts and Jobs Act, Stanley said.
“The sunsetting of that plan is now ambiguous, meaning people will, once again, need to revisit their estate plans,” he said.
However, Trump has signaled that he wants to reinstate or maintain his tax cuts, which may keep things as they are.
The Effects of Tariffs on Costs
Probably one of the most talked about Trump policy proposals is increased tariffs on goods imported into the U.S., which is likely to drive up the prices of those goods and services.
Spencer said there can be some upsides to increased tariffs, too. He said, “Your productivity goes up as companies are forced to be more productive because competition goes up. And so when they do that, the people can do more, the business can produce more, which drives costs down.”
However, he did say there’s no way to gauge the timetable of when the benefits of tariff-induced productivity would be seen.
Additionally, Stanley said that Trump’s implementation of tariffs could help boost other market segments. “Expect to see a broadening out of stock returns with mid-cap and smaller-cap stock benefiting from Trump’s ‘America First’ policies.”
Social Security Changes
Social Security is a big concern for retirees. However, Spencer said that anyone currently receiving benefits — largely boomers — should not worry. “There’s no way on God’s green Earth a Republican or a Democrat are going to take away Social Security benefits from a baby boom generation of over 80 million voters that actually votes. That’s insanity.”
Comforting to some, but despite Spencer’s attempt at comfort, Social Security’s combined trust funds are projected to be depleted in 2033. If Congress does not intervene, the system will not completely run out of money but will only be able to pay approximately 77% of promised benefits to retirees. It is a solvency issue, not a total disappearance of the program.
Caitlyn Moorhead contributed to the reporting for this article.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: 5 Things Retirees Should Be Paying Attention to in the Trump Economy
