The 2020 presidential election will soon become a factor in financial markets, but retirement investors are more concerned about other areas of their finances as the election approaches.
Here are the top three concerns, according to Wells Fargo Investment Institute's Head of Global Asset Allocation Strategy Tracie McMillion.
"The number one concern that investors expressed is around healthcare," McMillion said.
"They're worried about the amount that they may have to spend [on healthcare] because it's an unknown for many investors," she said. She noted that a recent studied showed a couple of 65 years or older could spend roughly $300,000 per year on health care in retirement. "That's a number that scares a lot of people, so healthcare is really a top concern," McMillion said.
Fortunately for retirees, President Trump has been working to lower healthcare costs, recently signing an executive order requiring hospitals to be more transparent with patients on costs, among several other initiatives. Still, investors will need to find the right target rate of return on investment to comfortably pay their costs.
"And then the number two is social security," McMillion said.
President Trump has cut the government's social security and medicaid budget, leading some retirement investors to be concerned about their checks. Investors will have to decide, considering his policies, what the net affect is on their financial situation, and will carefully consider the policy proposals of the slate of 2020 candidates.Related. Your Single Most Important Financial Decision
The Economy, Stupid
"Right behind that [social security] was the economy" McMillion said.
GDP growth has slowed from 4% in the second half of 2018 to under 3% in 2019, as JPMorgan economists are looking for growth of below 2%. Still, a study Wells Fargo participated in showed retirement investors see the economy as on strong footing. But the stock market is near all-time highs, and the S&P 500 is up more than 16% year-to-date.
Meanwhile, the ten-year treasury yield is down to 2.03%, signaling one of the longest expansions in U.S. history may have little juice left in it. Retirement investors are watching economic growth.
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