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20 Years of Helping You Live Richer

Reviewed by experts and trusted by millions of readers, GOBankingRates is here to guide you through the economic landscape. In President-elect Donald Trump's 20-point Agenda 47, his official platform for his second term in the White House, No. 14 promises to protect Social Security. However, there are other agenda items that could have a significant impact on those close to or in retirement.Here are some proactive moves baby boomers might consider before Trump takes office again. Also, discover three potential changes that could shape the economy in the next four years.

Stick With Certain Types of Stocks

Stocks are not inherently tied to a particular political party. However, certain stocks and sectors tend to benefit more from Republican policies. With Trump retaking the White House and an all-Republican Congress, there is a potential for shifting fiscal policies that could affect the stock market."Given his history of deregulation and tax cuts, it is likely to have a positive impact on sectors like energy and healthcare," said Paul Carlson, managing partner at Law Firm Velocity. "I would recommend reallocating some of your portfolio into sectors that typically thrive under Republican leadership, such as energy, financials, and infrastructure."Furthermore, if your portfolio is heavily weighted in tech stocks, now might be a good time to take some profits and diversify into more stable sectors.

Diversify

Typically, those in retirement age are well-diversified to manage risk. But for baby boomers approaching or in retirement, it might be wise to adopt an even more cautious approach with the change in leadership."Your portfolio of stocks and bonds may not be sufficient on its own," said Stuart Schiffman, founder and managing partner of Compound Wealth Advisors. "Consider adding positions in alternative assets like real estate, commodities, and cryptocurrency, but don't overdo it. Keep alternative assets to no more than 10% of your portfolio."Carlson added that diversifying into more stable sectors can provide a buffer against market volatility.

Watch Inflation

Inflation was a prominent issue during the presidential race. Although inflation is currently below 3%, it is not guaranteed to stay that way. Many economists, including Carlson, believe Trump's tariff policies, if implemented, could lead to inflationary pressures."To be on the safe side, it is advisable to budget for higher living costs and consider locking in fixed expenses where possible, such as refinancing your mortgage or securing long-term care insurance before rates rise," Carlson said.

Make Your Money Work for You

Stay informed with our free newsletter, which provides the latest news on investing, money, and more. By subscribing, you agree to our Terms of Use and Privacy Policy and can unsubscribe at any time.When it comes to investments, consider inflation-protected securities like TIPS. "They are designed to safeguard against inflation and offer a reliable income stream while preserving your purchasing power over time," Carlson said. "Don't forget about your grocery bills either. Stocking up on essentials when prices are low can save you a significant amount in the long run."Schiffman also advised remaining vigilant against inflation by insulating your portfolio from potential rising bond yields and prices. "For your stock portfolio, consider increasing defensive positions with blue chip dividend-paying stocks to reduce volatility. Consider dividend growth exchange-traded funds like VIG and DGRO. In the bond portfolio, stick to short-duration maturities."

Have Reserves

In a time of constant change and uncertainty, having a liquid reserve fund for emergencies is crucial. "You should have between three to six months of cash or near-cash reserves readily available," Schiffman explained. "Avoid selling assets during down markets to avoid what is known as sequence of returns risk."

Create Bucket Lists

Regardless of political leadership, Carlson advocated creating a "retirement bucket list" focused on experiences rather than material possessions. "With the help of a flexible retirement plan, you can work towards achieving each goal on that list," he said. "It essentially involves having a mix of savings and investments that can adapt to changing circumstances."Schiffman also suggested creating a financial bucket list to organize your finances. "Use a three-bucket strategy to divide your assets between short-, intermediate-, and long-term needs. This will help you stay on track and refill buckets as needed from longer-dated assets."Editor's note on political coverage: GOBankingRates is nonpartisan and aims to cover all aspects of the economy objectively, presenting balanced reports on politically focused finance stories. You can find more coverage on this topic at GOBankingRates.com.