While some millennials are out marching against President Trump every weekend, many are actually excited about how the Trump administration will perk up their portfolios. Approximately 55 percent of millennial investors believe the new administration’s policies will benefit their retirement savings.
Trump’s proposed tax cuts are key to this trend. Nearly 70 percent of millennials are thrilled about the prospect of personal tax cuts. As Mike Loewengart, vice president of investment strategy at E*Trade Financial, notes: “We know that politics and passion go hand in hand, and are seeing that these factors are influencing investing decisions.”
The Senate’s confirmation of Treasury Secretary Steven Mnuchin last week gives millennials renewed hope that the Trump administration will finally roll up their sleeves on some aggressive tax reform measures.
According to Rep. Kevin Brady (R-TX), Chairman of the House Ways and Means Committee, the federal government is “on track to accomplish tax reform for the first time in thirty years this year.” Millennials can’t wait for a simpler tax code that puts more money back in their pockets.
Moreover, Trump’s promises to reform the finance industry is bound to have a major impact on investments. The phenomenal growth we’ve seen in the stock market after Trump’s election is a window into Wall Street’s optimism. Trump’s decision to review the fiduciary rule, a major part of Dodd-Frank, is an important first step. According to the U.S. Chamber of Commerce, this rule would have made it harder for financial advisers to provide advice and for small businesses to offer retirement plans.
Millennials are often criticized for spending more money on vacation than retirement, but statistically, they are not ignorant to the importance of saving. According to the Natixis 2016 Retirement Plan Participant Study, the average millennial with access to a defined contribution plan (most commonly a 401(k)) started saving in a retirement plan at the age of 23. By contrast, Generation X’ers waited until age 27, and Baby Boomers waited until they were 31.
Yes, percentage-wise, they haven’t been putting away as much, but wage growth among millennials was not exactly booming under the Obama administration. Many are burdened with student debt. Young people realize that collecting Social Security in their old age is probably a pipe dream, and that they’ll need to start setting aside funds to ensure a comfortable retirement.
Still, millennials have their eyes set on the future, and if the current administration moves on its promises, they will finally find the recovery they’ve been promised for the last eight years.