As a financial advisor with over 26 years of experience, I’ve seen many clients experience anxiety over market fluctuations—especially during election years. It’s understandable. With political campaigns ramping up and media coverage amplifying uncertainties, emotions often run high. But here’s what I know: Your financial journey is a marathon, not a sprint. Acting out of fear can have long-lasting negative effects on your investments, and keeping a steady, disciplined approach is key to long-term success.
Let’s explore why election-year emotions spike, the common financial mistakes people make during this time, and how to focus on what you can control to safeguard your future.
Why Election Years Trigger Financial Anxiety
During an election year, key issues like tax laws, healthcare reform, and national debt often dominate the headlines. It’s no surprise that these topics can ignite anxiety about how new policies might affect your personal finances. You might start worrying about how changes in leadership could alter the economic landscape—concerns about rising taxes or shifting healthcare benefits are common fears I hear from my clients.
Fear of the Unknown
One of the most significant drivers of financial anxiety during election years is the fear of the unknown. Since the outcome of an upcoming election is uncertain, it’s natural to wonder what new policies could mean for your income, investments, or even your taxes. It’s easy to feel like your personal finances might be at risk. This uncertainty can create urgency, leading to impulsive and uninformed decisions—something I always caution against.
Common Financial Mistakes Made During Election Years
In my years of practice, I’ve seen how election-year emotions can cloud judgment and lead to decisions that derail long-term financial strategies. Here are some of the most common mistakes people make during these periods.
Making Impulsive Financial Moves
People often react to fear by trying to anticipate potential changes in the economy. They may stop contributing to retirement accounts or delay important financial decisions out of concern for “what might happen.” These short-term reactions can jeopardize long-term financial stability.
Making Decisions Based on Political News
Election headlines can be overwhelming. But making changes based on sensationalized news coverage, such as shifting assets unnecessarily, can hurt more than help. Speculating on potential political outcomes rarely leads to financial success.
Overreacting to Tax Concerns
Tax laws are often hotly debated during election cycles, leading many to make rash financial decisions. Prematurely withdrawing from retirement accounts because of possible future tax hikes can do more harm than good. It’s essential to focus on long-term tax strategies rather than reacting to short-term political rhetoric.
Taking Control of Your Personal Economy
In an election year, it’s more important than ever to take control of what you can: your personal financial strategy and retirement planning. Rather than trying to predict market movements or changes in tax policies, focus on building a solid, long-term plan that can weather any political climate. Here are strategies you can implement to protect your financial future, regardless of election outcomes:
1. Create Lifetime Guaranteed Income with Fixed-Indexed Annuities
One of the best ways to protect your future is to secure guaranteed income, no matter what happens in the broader economy. Fixed-indexed annuities offer a way to create income you can’t outlive, providing peace of mind during uncertain times. These annuities are linked to market indexes, allowing you to capture some growth potential without risking loss due to market downturns.
2. Protect Your Wealth with Cash-Value Life Insurance
Cash-value life insurance offers another layer of financial security. Not only does it provide a death benefit, but it also grows a cash reserve over time that you can access tax-free. This makes it an excellent tool for emergencies, supplementing income, or even funding future investments. In election years when uncertainty reigns, having accessible and tax-free money can be invaluable.
3. Stick to a Long-Term Strategy
Your financial success isn’t determined by one election cycle. A well-designed financial plan accounts for multiple political and economic changes over the years. By creating a strategy that includes guaranteed income streams, such as fixed-indexed annuities, and protective measures like cash-value life insurance, you’re focusing on building a resilient personal economy that can withstand election-year noise and stock market swings.
Strategies for Managing Election-Year Financial Anxiety
Here are additional tips to avoid letting election-year anxiety derail your financial goals:
Avoid Media Overload
Election coverage is everywhere, but constantly absorbing sensationalized news only adds to your anxiety. Instead, take breaks from the media and shift your focus to your long-term financial goals. Remember that the news is designed to get your attention, not necessarily to guide you toward the best financial decisions.
Consult a Financial Advisor
If you’re feeling uneasy, it’s a good idea to speak with an experienced fiduciary financial advisor who can provide you with an objective perspective. A trusted advisor can help you reassess your plan and ensure you’re still on track without making emotional decisions that could jeopardize your future. I’m always here to provide guidance and help you make decisions aligned with your long-term goals.
Map Out Your Future Guaranteed Income
Mapping out your future income streams can help you gain clarity on your financial direction. By clearly identifying where your guaranteed income will come from—whether through Social Security, pensions, investments, fixed-indexed annuities, or other sources—you can see the full picture of your financial future. This allows you to spot any gaps in your plan, such as areas where your income may not be sufficient to cover your needs.
With this knowledge, you can make necessary adjustments to ensure a more secure and predictable future, whether that means increasing contributions to certain accounts, adjusting your investment strategy, or incorporating new tools like cash-value life insurance to provide added flexibility. Ultimately, this proactive approach helps you take control of your financial path, reducing uncertainty and setting you up for long-term success.
Reassess Your Risk Tolerance
If market volatility during election years makes you uncomfortable, it might be a good time to reassess your risk tolerance. Adjusting the risk exposure within your retirement savings and other accounts to better align with your comfort level can give you peace of mind without compromising your overall strategy.
Final Thoughts
Election years often bring uncertainty, but reacting based on fear or political speculation won’t safeguard your financial future. The many clients I’ve guided through volatile times have consistently seen the best outcomes by focusing on strategies like creating guaranteed lifetime income with fixed-indexed annuities and protecting wealth with cash-value life insurance. These tools allow you to control your personal economy, ensuring that you are financially secure no matter the outcome of any election.
Are you feeling overwhelmed by election-year uncertainty? At COPIA, we’re here to help you create a personalized financial strategy that provides peace of mind and long-term security tailored to your unique needs. Schedule your FREE consultation today, and discover how we can empower you with the knowledge and tools to achieve financial freedom. Remember, your financial future is shaped by your discipline and commitment to your plan—not by the outcome of a single election. Call us at 619.640.2622 to get started.
