How Trump’s 2025 Policies Could Reshape Your 2026 Retirement Plan
If you’re retiring soon—or just trying to keep your nest egg growing—2026 is shaping up to be a pivotal year. Policy moves under President Trump in 2025 have centered on trade, taxes, and the social safety net. Together, they could alter inflation, market returns, take-home income, and how you use 401(k)s, IRAs, Social Security, and Medicare next year. Here’s what’s changing, why it matters, and what to do about it—grounded in the latest reporting and official guidance.
1) Trade policy is a swing factor for inflation and markets
The administration has advanced broad tariff plans (variously discussed as universal or sweeping increases). Major banks and media analyses warn such tariffs would likely lift consumer prices in the near term and could weigh on equity markets if trading partners retaliate. That combination matters to retirees whose spending is sensitive to inflation and whose portfolios are market-linked. JPMorgan Chase+1
Why you should care for 2026:
Higher prices erode real purchasing power of fixed pensions and annuities.
Volatility risk rises for stock-heavy portfolios; bonds can help but aren’t immune if inflation pressure persists. JPMorgan Chase+1
2) Social Security and Medicare pressures are intensifying
The 2025 trustees outlook highlighted earlier-than-expected strain on both programs, underscoring the likelihood of reform debates that could affect future benefit formulas, eligibility, or cost sharing. While the administration has publicly resisted “cuts,” policy blueprints circulating in Washington (e.g., Project 2025–linked proposals) include significant changes to the safety net that seniors rely on. None of this is settled policy yet—but the direction of travel matters for planning. AP News+1
Why you should care for 2026:
Expect ongoing debate over solvency fixes (benefits, taxes, retirement ages).
Build a plan that doesn’t hinge on optimistic assumptions about future COLAs or unchanged Medicare costs. AP News
3) Taxes: what to watch as 2026 approaches
A key backdrop for 2026 is the scheduled sunset of individual provisions from the 2017 Tax Cuts and Jobs Act (TCJA). Unless extended again, brackets, deductions, and estate thresholds would revert to pre-2018 law in 2026—potentially increasing many households’ tax bills. Independent analysts have mapped out what reversion would look like if Congress doesn’t act. Keep an eye on whether the White House and Congress move in 2025–2026 to extend parts of TCJA, replace them, or let them expire. Tax Foundation
Why you should care for 2026:
Your marginal rate could rise in 2026 if sunsets proceed.
Roth vs. traditional contribution decisions in late-2025/2026 may need a rethink. Tax Foundation
4) Retirement accounts: SECURE 2.0 features continue to phase in
Separate from any new 2025 legislation, SECURE 2.0 (enacted 2022) keeps rolling out changes through 2027. Highlights relevant into 2026 include: automatic enrollment for many new 401(k)s (beginning in 2025 for eligible plans), higher catch-ups for ages 60–63 (starting 2025), and Roth-basis requirements for certain high-earner catch-ups (beginning 2026). RMD rules already shifted to age 73 (and 75 in 2033), with Roth 401(k) RMDs eliminated. These mechanics influence when and how you draw or add money. Kiplinger+2National Society of Tax Professionals+2
Why you should care for 2026:
If you’re 60–63, you may be eligible for bigger catch-ups, but some must be Roth in 2026 if your wages exceed the threshold—changing your after-tax cash flow.
Later RMDs can be a tax-planning opportunity (or a future tax-bomb). Kiplinger+1
5) Capital gains and investment taxes: keep an ear to the ground
There’s periodic talk about capital-gains tweaks (e.g., indexing gains to inflation). Nothing concrete has been enacted, but any change could affect taxable brokerage strategies, harvest timing, and estate planning. Stay tuned for 2026; if proposals advance, you may need to adjust. Congress.gov
Practical moves to consider before and during 2026
Rebalance for tariff-risk inflation.
Tilt toward a balanced mix that can weather price spikes (short-to-intermediate bonds, value/quality equities, and selective real-asset exposure). Revisit your cash bucket so 1–2 years of withdrawals aren’t market-dependent. JPMorgan Chase+1Run “sunset scenarios” for 2026 taxes.
Model your 2026 taxable income under both outcomes: TCJA extended vs. expired. Use that to decide on Roth conversions in late-2025/2026, charitable bunching, or realizing gains in a potentially lower-tax window. Tax FoundationOptimize around SECURE 2.0 timelines.
If 60–63 in 2026, plan for catch-ups (and the Roth rule for high earners).
Confirm your RMD age and start date; coordinate with Social Security claiming to manage brackets and IRMAA surcharges. Kiplinger+2National Society of Tax Professionals+2
Stress-test Social Security and Medicare.
Build a plan that works with imperfect COLAs and potential premium increases. Consider a later Social Security claim for longevity insurance if your health and cash flow allow. AP NewsStay policy-nimble.
Watch for final tariff implementations, any TCJA deal, and safety-net bills. Small timing differences (e.g., when to realize income or gains) can meaningfully change lifetime taxes and cash flow. The Washington Post+2Tax Foundation+2
Bottom line for 2026
Trump-era priorities—especially tariffs, tax-sunset brinkmanship, and renewed debates over Social Security/Medicare—create a higher-dispersion outlook for retirees. Use 2025’s remaining months to lock in easy wins (rebalancing, Roth conversions where sensible, catch-ups) and go into 2026 with a plan that can absorb inflation surprises, tax shifts, and benefit uncertainty. Keep your advisor on speed dial and your plan flexible.
Schedule your appontment with me by clicking here. Together we will evaluate your personal circumstances.
Warm regards,
Sharon, Your Safe Money Lady™
Sharon Ben-David
Phone: (954) 261-5200
Licensed Mortgage Broker, Certified Professional Retirement Planning Adviser, and Financial Advocate
Protecting Your Nest Egg, Inc.
