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Investors should stick to long-term plans no matter who is president: advisors

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What a second Trump presidency could mean for your finances

A version of this article first appeared in CNBC’s Money 101 newsletter with Sharon Epperson, an eight-week series to improve your financial wellness with monthly updates. Sign up to receive these editions, straight to your inbox. 

Stocks soared in the days after President-elect Donald Trump won the 2024 election, and the Federal Reserve announced another interest rate cut less than two days later.

The Dow Jones Industrial Average, S&P 500 and Nasdaq markets reached record highs and their best week in a year. 

Yet, Wall Street’s reaction to the election outcome does not reflect how many Americans feel about the state of their personal finances, some financial experts say. “Vibecession,” or the disconnect between the markets, the economy and people’s feelings about their financial standing, continues. 

Feelings, however, should not overshadow anyone’s focus when assessing the potential impact of a second Trump presidency when it comes to finances, advisors say. 

“While a new presidency may bring changes to the economic environment, it’s crucial to focus on financial strategies within our control,” said certified financial planner Rianka Dorsainvil, founder and senior wealth advisor at YGC Wealth and a member of the CNBC Financial Advisor Council. “Stick to your long-term financial plan, adjusting only when your personal circumstances or goals change.”

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Here’s a look at more stories on how to manage, grow and protect your money for the years ahead.

Consumers and investors have little or no control over government policies on tariffs, taxes, interest rates or the state of the economy. However, improving your personal economy is possible by taking better control of your money, experts say. 

Here are five ways to improve your finances:

1. Build an emergency fund

Build up your emergency funds in a high-yield savings account. “Aim for three to six months of living expenses,” Dorsainvil said. “This financial buffer provides peace of mind and stability, regardless of broader economic conditions. It ensures you’re prepared for unexpected expenses or income disruptions.” 

2. Increase savings goals

Boost savings goals in accounts that also offer tax breaks. Compare tax advantages of traditional and Roth 401(k) plans and other workplace retirement savings accounts — and Roth IRAs, too.

“If you’ve got a 401(k) plan with a matching contribution, if you put it in the stable value fund or the cash option and you put in $100 with each paycheck, you’re ahead of the game,” said CFP Lee Baker, founder of Claris Financial Advisors in Atlanta.

Combination picture showing former U.S. President Donald Trump and U.S. President Joe Biden.

Reuters

3. Review benefits from employers

During open enrollment, thoroughly review health insurance coverage options and other benefits, including flexible spending accounts and health savings accounts.

FSAs and HSAs are tax-advantaged accounts for health expenses. Unlike FSAs that are “use it or lose it” savings vehicles generally for the calendar years, HSA funds roll over from year to year.

The account comes with you if you change jobs and HSA money can be invested. HSAs also offer three ways to save on taxes: funds go in pretax, grow tax-free and you can withdraw money to pay for qualified medical expenses without paying taxes on it. 

“They’re the perfect investment vehicle,” said Baker, who is also a member of the CNBC Financial Advisor Council. “Turbocharging it or putting as much money into as possible has always been our advice to the vast majority of clients.”

4. Pay down debts

If you’re dealing with credit card debt, experts say to take a break from using cards and work with a nonprofit credit counselor to develop a strategy to pay down your debt. You can find one through the National Foundation for Credit Counseling.

“By reducing debt, you’re better positioned to adapt to potential changes in interest rates or economic policies,” Dorsainvil said.

5. Look for ‘missing money’

Another option is finding “missing money” or unclaimed assets from accounts you may have forgotten.

Search for your “unclaimed property” on the National Association of State Treasurers’ missingmoney.com website or go directly to the state’s unclaimed property office. It may only take a few minutes to fill out a form to claim funds from an old bank or brokerage account. 

The bottom line: don’t let short-term market reactions or speculative headlines scare you into decisions that may adversely affect your portfolio or wallet, Dorsainvil said.

Instead, focus on fundamental financial practices that “provide a solid foundation to navigate any economic environment, regardless of who’s in the White House,” she added.

JOIN the CNBC Financial Advisor Summit on Dec. 10 where we will bring together industry thought leaders and experts to discuss the latest trends, emerging risks and strategic insights that can help advisors better serve their clients. Grab your colleague and get your ticket today!

 

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Trump plan to freeze funding stymies Biden-era energy rebates for consumers

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Some states have stopped disbursing funds to consumers via Biden-era rebate programs tied to home energy efficiency, due to a Trump administration freeze on federal funding enacted in January.

The Inflation Reduction Act, passed in 2022, had earmarked $8.8 billion of federal funds for consumers through two home energy rebate programs, to be administered by states, territories and the District of Columbia.

Arizona, Colorado, Georgia and Rhode Island — which are in various phases of rollout — have paused or delayed their fledgling programs, citing Trump administration policy.

The White House on Jan. 27 put a freeze on the disbursement of federal funds that conflict with President Trump’s agenda — including initiatives related to green energy and climate change — as a reason for halting the disbursement of rebate funds to consumers.

That fate of that freeze is still up in the air. A federal judge issued an order Tuesday that continued to block the policy, for example. However, it appears agencies had been withholding funding in some cases in defiance of earlier court rulings, according to ProPublica reporting.

In any event, the freeze — or the threat of it — appears to be impacting state rebate programs.

“Coloradans who would receive the Home Energy Rebate savings are still locked out by the Trump administration in the dead of winter,” Ari Rosenblum, a spokesperson for the Colorado Energy Office, said in an e-mailed statement.

The U.S. Department of Energy and the White House didn’t return a request for comment from CNBC on the funding freeze.

In some states, rebates are ‘currently unavailable’

Consumers are eligible for up to $8,000 of Home Efficiency Rebates and up to $14,000 of Home Electrification and Appliance Rebates, per federal law.

The rebates defray the cost of retrofitting homes and upgrading appliances to be more energy efficient. Such tweaks aim to cut consumers’ utility bills while also reducing planet-warming carbon emissions.

California, the District of Columbia, Maine, Michigan, New Mexico, New York, North Carolina and Wisconsin had also launched phases of their rebate programs in recent months, according to data on an archived federal website.

All states and territories (except for South Dakota) had applied for the federal rebate funding and the U.S. Department of Energy had approved funding for each of them.

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The Arizona Governor’s Office of Resiliency said its Home Energy Rebates programs would be paused until federal funds are freed up.

“Due to the current federal Executive Orders, memorandums from the White House Office of Management and Budget, and communications from the U.S. Department of Energy, funding for all Efficiency Arizona programs is currently unavailable,” it said in an announcement Friday.

Rhode Island paused new applications as of Jan. 27 due to “current uncertainty” with Inflation Reduction Act funding and executive orders, according to its Office of Energy Resources.

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The Georgia Environmental Finance Authority launched a pilot program for the rebates in fall 2024. That program is ongoing, a spokesperson confirmed Monday.

However, the timeline for a full program launch initially planned for 2025 “is delayed until we receive more information from the U.S. Department of Energy,” the Georgia spokesperson explained in an e-mail.

However, not all states have pressed the pause button: It appears Maine is still moving forward, for example.

“The program remains open to those who are eligible,” Afton Vigue, a spokesperson for the Maine Governor’s Energy Office, said in an e-mail.

The status of rebates in the eight other states and districts to have launched their programs is unclear. Their respective energy departments or governor’s offices didn’t return requests for comment.

‘Signs of an interest’

While the Trump administration on Jan. 29 rescinded its memo ordering a freeze on federal grants and loans — two days after its initial release — the White House said the freeze nonetheless remained in full force.

Democratic attorneys general in 22 states and the District of Columbia filed a lawsuit against the Trump administration, claiming the freeze is unlawful. The White House has claimed it is necessary to ensure spending aligns with Trump’s presidential agenda.

David Terry, president of the National Association of State Energy Officials, said he is optimistic the rebate funding will be released to states soon.

“For these two particular programs, I do not think [the freeze] will stymie the programs,” Terry said. “I see signs of an interest in moving them forward and working with the states to implement them.”

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Social Security Fairness Act benefit increases to arrive this spring

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Lump sum payments to begin arriving in February

In a new update released on Tuesday, the SSA said it will begin issuing retroactive payments in February. Most people will receive the one-time payment by the end of March, according to the agency.

The SSA plans to process the increase to monthly benefits starting in April.

The new timeline “supports President Trump’s priority to implement the Social Security Fairness Act as quickly as possible,” Social Security acting commissioner Lee Dudek said in a statement.

“The agency’s original estimate of taking a year or more now will only apply to complex cases that cannot be processed by automation,” Dudek said. “The American people deserve to get their due benefits as quickly as possible.”

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Among those affected include some teachers, firefighters and police officers in certain states; federal employees who are covered by the Civil Service Retirement System and people who worked under foreign social security systems, according to the Social Security Administration.

What affected beneficiaries should know

Retroactive payments, which most people should receive by the end of March, will be deposited directly into bank accounts on file with the Social Security Administration.

All affected beneficiaries should receive a notice by mail from the Social Security Administration with details about their retroactive payment and new benefit amount. Those notices should come two to three weeks after the retroactive payments, according to the agency.

If your direct deposit information or current mailing address are up to date with the agency, no action is needed, according to the agency. If you want to double check the information the agency has on file, you may sign into your personal online account or call the agency.

If you want to ask about the status of your retroactive payment, the Social Security Administration urges you to hold off until April.

Beneficiaries should also wait until after they have received their April monthly check before contacting the agency to ask about their new benefit amount.

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The average IRS tax refund is 32.4% lower this season. Here’s why

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The average tax refund is 10.4% lower than last year according to the latest Internal Revenue Service data, and inflation is taking more of those dollars.

Bill Oxford | E+ | Getty Images

The average tax refund this year is down 32.4% compared to last year, according to early filing data from the IRS. 

Tax season opened on Jan. 27, and the average refund amount was $2,169 as of Feb. 14, down from $3,207 about one year prior, the IRS reported on Friday. That figure reflects current-year refunds only.

However, the Feb. 14 filing data doesn’t include refunds receiving the earned income tax credit or additional child tax credit, which aren’t issued before mid-February, the IRS noted. The previous year’s filing data included tax returns claiming these credits. The value of these tax breaks can be substantial, even resulting in five-figure refunds, in some cases.

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Typically, you can expect a refund when you overpay taxes throughout the year via paycheck withholdings or quarterly estimated payments. By comparison, there’s generally a tax bill when you haven’t paid enough.

Filing season numbers will ‘even out’

‘Don’t call the IRS’ for refund updates

The latest filing statistics come amid mass layoffs for the agency as Elon Musk’s so-called Department of Government Efficiency, or DOGE, continues to cull the federal workforce

It’s unclear exactly how the staffing reduction could impact future taxpayer service. But experts recommend double-checking returns for accuracy to avoid extra touch points with the agency.

“Don’t call the IRS looking for your refund,” said Tom O’Saben, an enrolled agent and director of tax content and government relations at the National Association of Tax Professionals. 

You can check the status of your refund via the agency’s “Where’s My Refund?” tool or the IRS2Go app, which is “available 24 hours a day,” O’Saben said.

Typically, the agency issues refunds within 21 days of a return’s receipt. But some returns require “additional review,” which can extend the timeline, according to the IRS.

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