As President Joe Biden gets to work in the White House, so Americans should get to thinking about how a new presidency could impact their finances. While Biden’s policies won’t take effect until they are signed into law, his agenda (opens in new tab) has been established, and with a Democrat controlled House and Senate, much of it could soon become a reality.
With this in mind, here are the money moves that Americans everywhere should start to consider if they want to be ready for the financial changes that are likely to come under a Biden Presidency.
Buying a new home
Just because President Biden has a new home, it doesn’t necessarily mean you’ll want to move as well. But with interest rates from the best refinance mortgage companies (opens in new tab) either still at (or near to) record lows, the opportunity is there for those who might have seen their work/home life balance change during the pandemic to make a move to a more suitable home. First time home buyers will find similarly low rates are available from mortgage lenders (opens in new tab) too, and in addition, will have noted Biden’s proposal for a $15,000 credit to help them on their way. If Congress approves the idea, the home buying dreams of many could become a far more affordable reality overnight, particularly if you get your credit score (opens in new tab) up to scratch in advance.
Check your health insurance
Checking your health insurance (opens in new tab) cover should be on most people’s to-do list each year, but becomes even more important if the Oval Office has a new incumbent. President Biden has already revealed (opens in new tab) his intention to spend big bolstering Obamacare - which was introduced under his Vice Presidency - to help Americans with pre-existing conditions access cover. Reducing the qualifying age for Medicare to 60 is also on the cards, and if it comes to fruition could widen access to the best medicare Part D plans (opens in new tab) to an additional 20 million Americans.
Tax is another area where new Presidents like to make their mark, and Biden has already outlined some of the ideas he has in mind. The good news for those households who report an annual income of under $400,000 is that your tax bracket won’t expand if President Biden is good to his word. Those who earn more than $400,000, however, should probably prepare to see a rise in their contributions to the IRS, while corporate taxes could also increase as part of plans to row back on some of the cuts afforded to businesses under the previous administration.
Circumstances might be pushing Biden’s hand with this one, but for millions of Americans the delivery of a third stimulus check (opens in new tab) - potentially worth up to $1,400 - can’t come a moment too soon. Coronavirus and its impact on workers has inevitably pushed many towards payday loans (opens in new tab) and credit cards just to make ends meet, so the quicker more financial assistance comes their way the better. If you’ve not yet received funds you’re due in relation to the latest check, you can use the Get My Payment tool (opens in new tab) on the IRS website to see if it’s on the way. Some people might also be entitled to money under the original stimulus payment, which should find its way to you once you’ve filed your taxes in 2021 (opens in new tab).
If you’re out of work, the approval of President Biden’s proposal to increase supplementary unemployment benefits to $400 a week will certainly be something to look out for, too. The intention is to extend the scheme through September 2021 as well, a move that could prove pivotal in preventing jobless Americans from falling into debt as they wait for a return to work.
The environment is a big deal for President Biden, who wants to spend billions of dollars pushing clean energy technology to the fore. So if you’re mulling over where to invest in the coming years, perhaps checking out the greener options on your online stock trading (opens in new tab) platforms is a good idea. In an attempt to help clean up America’s roads, proposals are also in place to award additional credits to those who buy electric vehicles. And with electric cars recently being shown (opens in new tab) to have the lowest maintenance, repair and tire costs of any vehicle you can buy today, you might be able to save money on them too.
While millions of borrowers have seen their student loan payments suspended (opens in new tab) during the pandemic, one day you’ll still need to pay back what you owe. However, if President Biden proves successful in his quest to forgive up to $10,000 in student loans (opens in new tab) per borrower, the weight of debt that hangs around many American’s necks will suddenly feel much lighter.
Keeping a close eye on your retirement plan benefits is always a good idea, and if President Biden’s plans for this crucial area of personal finance become a reality, many might need to reassess how they save for their future, and their tax situation. Worth monitoring in particular is the suggestion that the tax deduction on retirement plan contributions should be replaced with a direct tax credit into retirement accounts instead. If it happens, those who might currently look to write off $10,000 in 401(k) contributions and maybe earn a tax break of $2,500 would no longer enjoy such an option, with the $2,500 being deposited straight into your account instead.