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Your money under President Trump

·Editor

President-elect Donald Trump’s election win hinged, to a large extent, on his economic promises. He had more to say on some issues (growing GDP by 4%, slashing federal regulations, Obamacare, trade) than others (Social Security benefits, student debt). Here’s a look at some of Trump’s policies and how they might affect everyday Americans’ pocketbooks.

Student loans and college costs

In a speech in October in Ohio, Trump addressed the high costs of college, in perhaps the most elaborate comments he has made about higher education during the campaign. In it now President-elect Trump said “we will lower the cost of college and solve the student loan crisis.” Americans owe nearly $1.3 trillion in student loan debt — a figure he cited — spread out among about 44 million borrowers.

First, Trump would cap repayments at 12.5% of a borrower’s income for a maximum of 15 years. “The debt should not be an albatross around their necks for the rest of their lives,” he said.

Currently, federal student loan borrowers have the option to have their loan payments capped as a percentage of their income (10% to 15%) through income-driven repayment plans. The most generous of these plans allows borrowers to put 10% of their income toward their loans for 20 years and then have the remainder forgiven.

Trump also said he will take steps to get colleges to “cut the skyrocketing cost of tuition,” and wants to incentivize colleges — which he said are suffering from administration “bloat” — to reduce tuition.

“If the federal government is going to subsidize student loans, it has a right to expect that colleges work hard to control costs and invest their resources in their students,” Trump said. Universities with big endowments might lose their tax-exempt status if they “refuse to take this responsibility seriously,” he said.

It’s also quite possible Trump will make cuts to the Department of Education, which he has targeted as a federal agency he dislikes; he has said that “we want to bring education local.”

Healthcare

Of course, Trump, along with most of the GOP, wants to gut Obamacare, though full repeal of the law is unlikely (because the Senate Republicans — though holding on to their majority — won’t have the 60 votes to overcome a Democratic filibuster). What a replacement would look like is not fleshed out. So far, the details of his plan include allowing insurers to sell plans across state lines, which would, he says, drive up competition; making healthcare premiums tax-deductible (right now health insurance payments are tax advantageous only if you purchase your insurance through an employer or if you are self-employed). Trump has also proposed a block-grant system for Medicaid, in which the federal government would give states a fixed amount to fund their programs — and some reports have found this system would result in millions more uninsured.

“Trumpcare” would also include the use of health savings accounts, or HSAs, which is a tax-advantaged savings account, with money used toward healthcare expenses. Read our story for more details on Trumpcare.

Your retirement portfolio

You’ve heard it before: When there’s a heavy air of uncertainty weighing on the markets, they usually go down and in alarming fashion. Markets — like people — don’t like uncertainty, so it’s normal at least in the short term for markets and investors to freak out a little (as stocks did, but then roared back).

People are sensitive to surprising, unexpected events, which often leads them to take action. But for long-term investors, the guidance is simply: sit tight. Wealth management firm Francis Financial had this to say to clients the morning after the election: “The market will continue to move forward, albeit with continued volatility. This leads us back to the most important lesson we can take away from this unexpected event. Long-term investors that maintain their ideal asset allocation in good times and bad win.”

One area Trump’s win makes less certain is the Department of Labor’s fiduciary rule, set to take effect in April 2017. The rule requires financial advisors and broker-dealers to act in the best interests of their clients in 401(k), IRAs and other qualified accounts, and eliminate conflicts of interest (which costs Americans about $17 billion in foregone retirements savings each year, according to the Council of Economic Advisors). An advisor to Trump has called the rule an example of government overreach and said a Trump administration would repeal it. The rule has already faced a number of lawsuits from the financial industry, which is concerned with higher costs of doing business. Recently a federal judge rejected a request from the National Association for Fixed Annuities, which asked for a court order to put a hold on the rule’s implementation.

Consumer protections

As we wrote Wednesday, Trump has said he wants to get of Dodd-Frank, the banking-reform legislation passed after the 2008 financial crisis, and that created the Consumer Financial Protection Bureau. The Republican Party isn’t a fan, either. Trump has vowed to cut back government regulations and a weaker CFPB is something he can get behind. It’s likely Republican lawmakers or Trump will oust the agency’s head, Richard Cordray; a recent federal appeals court ruled that the CFPB’s structure — with a single director — was unconstitutional. If that ruling is upheld the president would be able to fire the CFPB director at will (whereas before the director could only be removed with cause). The CFPB has proposed a handful of rules on debt collectors, payday loans and mandatory arbitration; these rules haven’t been finalized yet, so don’t be surprised if President-elect Trump and the Republican Congress take aim at them.

Social Security

Social Security won’t have enough money to pay full benefits beginning in 2034, according to the latest Social Security trustees’ report. Trump hasn’t said much during the campaign on this vital safety net for millions of Americans, but he said he has no plans to cut the program. In an outline of his and Hillary Clinton’s positions on Social Security in the July/August issue of AARP magazine, Trump pointed to his plans for comprehensive tax reform and sustained GDP growth as ways to help “secure Social Security for the future.”

When asked about Social Security in the vice presidential debate in October, Trump’s running mate Mike Pence responded: “All Donald Trump and I have said about Social Security is we’re going to meet our obligations to our seniors. That’s it.” Same for Medicare.

Taxes

Trump would replace the seven individual tax rates (ranging from 10% to 39.6%) with three rates of 12%, 25%, and 33%. He would also repeal the individual alternative minimum tax. His proposal would cut taxes at all income levels, although the largest benefits, in dollar and percentage terms, would go to the highest-income households.

Overall the plan would slash the average tax bill in 2017 by $2,940, increasing after-tax income by 4.1%, according to the Tax Policy Center. The highest-income taxpayers (those with incomes over $3.7 million) would see an average tax cut of nearly $1.1 million, or over 14% of after-tax income. Households in the middle fifth of income distribution would get an average tax cut of $1,010 or 1.8% of after-tax income, and the poorest fifth would see their taxes drop an average of $110, or 0.8% of after-tax income.

Under Trump’s plan, say goodbye to the federal estate, gift and generation-skipping transfer taxes. Lots more More details on Trump’s tax plan here and here.