Its finally election day in the United States. I personally am happy that its over for better or for worse. I live in a swing state and I’m pretty sure that I can recite some of the ads verbatim. That said I have been musing about how this election cycle and the eventual outcome can and likely will impact our Early Retirement goals. I’m not going to get into politics or my vote, just some thoughts on potential impacts to our Mission.
Health Care – One thing I think both parties agree on is that the Affordable Care Act (ACA) has issues. It has not slowed the rise in health care costs as hoped. What it has done though is provide some level of certainty to Early Retirement in a key way. As someone with a healthy income and savings for retirement, my major worry is a serious medical condition. The ACA removed the concept non-coverage of pre-existing conditions or rejection for coverage due to a condition. The way I’ve always thought about it, I don’t need insurance for when I ding my bumper in my garage, I need coverage from when I take out a Porsche. In other words I can afford the small stuff out of pocket. I need my health insurance plan to cover a disaster. There will certainly be attempted changes from either party. Will be interested to see how any changes to health care are implemented over the coming years.
Taxes – I separate taxes into 2 buckets, pre-retirement and early retirement. Obviously the less I can pay the better for both categories. That said, I would take stability for the early retirement portion over paying less taxes in my working life now. Both parties have some serious suggestions for how to change the tax code. Neither of these appear to have a serious impact. Based on history I would guess that any changes will be incremental but small changes can make substantial differences in the best ways to structure early retirement draws.
The Stock Market/Economy – With large amounts currently invested in the stock market and the need for those saving to continue to compound, the direction of the market will have a huge impact on early retirement. Not only will the market results directly impact when we can retire but also after we do retire how stressful that early retirement feels. The market has been on a wild ride lately primarily due to uncertainty. Regardless of the outcome of the election I hope that the certainty factor calms the markets somewhat. Then again, a temporary dip in the market could be a nice buying opportunity.
Whatever the result of the election, I continue to appreciate living in a democracy, having the right to vote, and with all luck, retiring in 1,566 days.
Leave your thoughts about the election in the comments.
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