How will a Trump win impact 401(k) plans? Retirement experts weigh in

Now that President-elect Donald Trump has secured another term as president and Republicans have secured control of the Senate, what will another Trump administration mean for employer-sponsored retirement plans? Wall Street seems to have responded with record highs last week, signaling a positive return on investments. However, we asked industry leaders for their expert analysis of what lies ahead for 401(k)s and other retirement plans in 2025 and in the years ahead.

“Given there was a first Trump administration, it does offer leading indicators to what the second term might bring regarding retirement savings and retirement income. In the first administration, there were explicit statements of support for the 401(k) system and its pre-tax savings benefits. Also, the passage of the first SECURE Act and its significant favorable policies to expand retirement savings access, promote in-plan retirement income options, and recognize longevity trends highlights the administration’s support of workplace retirement savings programs. Executive Orders also promoted broader access to retirement plans for small businesses. I would expect that general support to continue in a second administration.

“The first administration supported more restrictive regulations for using ESG investments in retirement plans and fiduciary standards for retirement advice. I would expect those general positions to continue in a second administration.

“It will be interesting to see if the Trump administration takes on the issue of Social Security solvency, given the impending 10-year window to bring solvency to the system, or if not addressed, benefits will be reduced. Will the Administration include significant reforms for Social Security in future tax reform? Given the need in 2025 to address the expiring tax cuts from the first administration.”

—Kevin Crain, Executive Director, Institutional Retirement Income Council

“Generally speaking, election years can introduce uncertainty for employees, but that should not affect their long-term retirement savings strategy. This is an opportune time to discuss the importance of staying the course and the educational resources that you, as employers, might have available to help.

“The good news is we haven’t seen a large shift in participant retirement sentiment post-election thus far. In fact, the week prior to the election 69% of participants had a positive retirement sentiment, and since the election, we’ve seen 75% of participants express positive retirement sentiment, which may be an early encouraging sign — one that we will be tracking carefully in the coming days and weeks ahead.”

—Tom Armstrong, VP, customer analytics & insights, Voya Financial

“If the surge in major indices following the Presidential election is any indicator, we may be in for a sustained bull market. We saw new all-time highs in the weeks before the election, and the momentum appears to be continuing. This could encourage more employees to invest in their companies’ retirement plans and prompt employers to support these contributions. President-elect Trump has advocated for tax cuts, which may incentivize investment from the top down, potentially benefiting corporations and their employees.

“So far, the short-term effects of Trump’s victory appear to have positively impacted the stock market. This may not be so much a partisan celebration as it is a relief from the uncertainty that markets typically dislike. Another common belief is that markets generally ‘like gridlock.’ With the Senate turning red, Wall Street might even root for the House to flip blue. We’ll need to wait and see if the current setup in Congress will streamline the process of confirming new cabinet picks.
“It seems that Chair [Jerome] Powell and the Federal Reserve are determined not to let politics influence the upcoming rate decision. Individual stocks like DJT and TSLA have risen for clear reasons. However, once the initial effects of the Trump/Vance victory are absorbed, Mark Cuban’s congratulatory post may reflect the broader sentiment among other business leaders: that, as a nation and an economy, we should work together for the greater good.”

—Stephen Callahan, Trading Behavior Analyst at Firstrade