Democrats won control of both the House and the Senate in the 2026 midterms, with a Republican in the White House. So what does that mean for your retirement?
Your plan works the same way it did last week. What could change over the next two years are the policies behind it. With Congress and the White House split between the parties, many proposals will face challenges, though some could pass where the parties have worked together before. Here are seven areas to watch and what to consider as you plan.
Social Security Reform Could Get More Attention
Social Security’s funding gap is getting harder to ignore, whichever party controls Congress. The 2026 Social Security Trustees Report projects that the trust fund behind retirement and survivor benefits will run out of reserves in 2032. Without changes, continuing income would cover about 78% of scheduled benefits from that point.
Social Security isn’t going away. Congress will have to decide how to fund it, and the main options include:
- Raising or eliminating the cap on earnings subject to payroll taxes
- Raising payroll tax rates
- Adjusting the retirement age or future benefit formulas
- Combining revenue increases with benefit changes
With Democrats in control of Congress, proposals that raise revenue from higher earners may get more attention.
How Boldin members are planning for reform
When Boldin members ask Boldin AI about the trust fund, the cut they plan around varies a lot. Some test a 10% cut. Others assume 20%, 22%, or even 28%.
The member examples in this article are composites, with details changed. Here’s a typical case: someone a few years from retirement would rather not work an extra year but might have to if Congress doesn’t fix Social Security soon.
What this means for your plan
Plan for Social Security to keep paying, and test what happens if your benefit shrinks. If you’re several years from retirement, modeling a smaller benefit shows how much of a cut your plan can absorb. The age you claim changes your benefit for life, so base that decision on your own health, income, and household and leave the headlines out of it.
Retirement Savings Could Be Common Ground
In March 2026, 72% of private industry workers had access to a retirement plan at work, according to the Bureau of Labor Statistics. That leaves more than a quarter without one, which makes saving harder. Two bills already in Congress aim at that gap.
- Retirement Savings for Americans Act. The bipartisan Retirement Savings for Americans Act would create a portable, tax-advantaged account for workers without a plan at work. It would include federal matching contributions for low- and middle-income savers.
- Automatic IRA Act of 2025. The Automatic IRA Act of 2025 would require businesses with 10 or more employees to offer a workplace plan or enroll workers in an automatic IRA. It would also cover gig workers and independent contractors.
Both bills are still in committee.
Retirement savings has drawn support from both parties before. The SECURE 2.0 Act passed in 2022, and one of its provisions, the Saver’s Match, starts in 2027. Eligible lower- and middle-income savers can get a federal match of up to $1,000 a year, deposited into a retirement account.
What this means for your plan
If you don’t have a plan at work, watch for new options. If you have a 401(k), IRA, or similar account, the tax breaks work the same as before, and an employer match adds money you’d otherwise miss. Waiting on Congress is no reason to pause your savings.
Major Federal Tax Changes Are Less Likely, but Tax Planning Still Matters
The 2025 federal tax law settled many individual income tax rules, including tax brackets and the standard deduction. Several temporary provisions expire in the next few years, and two matter for retirement planning:
- The senior deduction: Taxpayers 65 and older can claim an additional deduction of up to $6,000 per person through 2028, subject to income limits.
- The SALT deduction: The higher cap on state and local tax deductions drops back to $10,000 after 2029, which could hit taxpayers in high-tax states.
The election didn’t change the rules for Roth conversions, capital gains, required minimum distributions, or retirement account withdrawals.
How Boldin members are thinking about it
Consider a common example: a married couple in their late 60s notices that the senior deduction creates extra room to convert pre-tax savings to a Roth at a lower tax cost, through 2028. They size their conversions to fill that room each year and watch the income limits so they don’t phase the deduction out.
A question that comes up often is whether a new Congress means rethinking an annual conversion plan. It’s a fair question. The rules in effect now are the ones that apply to this year’s return.
What this means for your plan
Plan under current law. A few questions to ask:
- Would converting traditional savings to a Roth lower your lifetime taxes?
- Could you realize capital gains in a lower-income year?
- How will expiring deductions change your taxable income later?
- Are your withdrawals pushing you into higher tax brackets or higher Medicare premiums?
Even when the tax code stays put, timing can make a big difference.
Inflation and High Prices Will Stay in Focus
The cost of living drove much of the 2026 election, from groceries and housing to energy. Consumer prices rose 3.7% over the 12 months ending in September, according to the Bureau of Labor Statistics.
The new Congress will face pressure to act on affordability, from tariffs to housing, though it’s unclear what can pass or how much it would move prices.
Inflation hits retirees hard. Prices seldom fall back after they rise, and the costs that matter most in retirement can climb faster than average. Those include healthcare, insurance, and housing. At 3% inflation, something that costs $5,000 today would cost about $9,000 in 20 years.
Social Security adjusts for inflation each year. Not every income source does.
Debt-free households can still worry about inflation
Picture a household with no debt, two paid-off homes, the kids’ college nearly paid for, and paid-off cars. They’ve done almost everything right and still worry about inflation, a possible AI market bubble, and everything else they can’t control.
That feeling deserves attention, and the fix starts with your own numbers. Test your plan against higher inflation and separate what you must spend from what you’d like to spend, so you know how much flexibility you have.
What this means for your plan
Plan for rising costs, since lower prices from Washington may never arrive. Small changes in your inflation assumption add up over a retirement that could last 20 or 30 years, so test a few. Check how much of your income adjusts for inflation and whether your investments can keep up with growing expenses. The Detailed Budgeter lets you set Must Spend and Like to Spend budgets and see how your plan does at each level.
If you’re weighing downsizing, paying off a mortgage, or renting, compare the long-term costs of each, including property taxes, insurance, and maintenance.
Healthcare Costs Remain a Critical Retirement Planning Issue
For people retiring before 65, health insurance can drive the whole plan. Take an early retiree who keeps income low enough to pay about $150 a month for ACA coverage. Large Roth conversions could push that bill to around $2,000 a month. In another common case, a COBRA premium jumps from about $1,600 to $2,600 a month, and the retiree plans withdrawals to qualify for marketplace subsidies.
One reason those numbers swing so hard: the enhanced ACA premium tax credits expired at the end of 2025. Households with incomes above about 400% of the federal poverty level no longer qualify for help, so one large conversion can wipe out a subsidy. The new Congress could take up restoring the enhanced credits, along with Medicaid funding, prescription drug prices, and Medicare Advantage oversight.
Medicare faces its own funding problem. The 2026 Medicare Trustees Report projects that Medicare’s Hospital Insurance Trust Fund will run out of reserves in 2033 without changes.
What this means for your plan
If you’re thinking about retiring before Medicare eligibility, pay close attention to insurance costs. Compare different retirement dates and check how your taxable income could affect your ACA subsidies.
If you’re already on Medicare, open enrollment runs through December 7, and a plan’s premiums and drug coverage can change from one year to the next. Reviewing yours is a decision you can make now, whatever happens in Washington.
State Election Results Could Hit Your Taxes Sooner
State results can reach your tax bill faster than federal ones. Voters in several states decided measures on income taxes, wealth taxes, and limits on future taxes:
- California: Voters approved Proposition 3, making higher income tax rates on high earners permanent. They rejected Proposition 40, a one-time 5% tax on the net worth of residents worth more than $1 billion.
- Washington: Voters rejected Initiative 645, which would have repealed the state’s new 9.9% tax on household income above $1 million. The tax takes effect in 2028 but still faces a court challenge.
- North Carolina: Voters approved a constitutional amendment lowering the maximum state income tax rate from 7% to 3.5%.
What this means for your plan
Where you live, and when you move, can change your retirement finances. Consider this example: A couple in Maryland pays about 8% in combined state and county income tax. North Carolina’s rate is about half that, and it’s scheduled to drop to 3.49% in 2027. If they’re planning that move, should they do big Roth conversions now or wait?
Converting before the move locks in Maryland’s rate on every converted dollar. Converting after the move costs less in state tax, but only once they’ve established residency in North Carolina. A conversion done while they still count as Maryland residents is taxed there, so the timing of the move and the timing of the conversions need to line up.
State income taxes, taxes on retirement distributions, property taxes, and estate taxes all shape your long-term picture. If you’re thinking about relocating, compare the total cost of each place rather than focusing on one tax.
Don’t Make Investment Decisions Based on Election Results Alone
Elections can rattle markets as investors weigh changes to taxes, regulation, and spending. Over the long run, other forces tend to matter more: interest rates, inflation, corporate earnings, economic growth, and global events. Historical market patterns around elections are interesting, but they don’t predict returns.
The bigger risk is behavioral. When an election doesn’t go the way you hoped, the future can feel shakier. That anxiety can push people to move to cash, claim Social Security early, or drop a strategy that was working. Most policy changes take time, need legislation, and come with transition periods.
A cautionary tale from Boldin members
Election nerves show up in many forms. These composites reflect common ones from the weeks before the midterms:
- One expected their portfolio to drop by half if Democrats won.
- Another moved much of their savings into cash and CDs out of worry about the current administration.
- A third moved an entire workplace retirement account into its most conservative fund, just to be safe.
- A fourth, a parent, asked whether to follow their adult son, who sold two-thirds of his stocks expecting a post-election crash and planned to buy back in later.
A fifth ran a planned Roth conversion the week of the election, on the schedule they’d set months earlier.
No one in these examples could know what the market would do. The one who stayed on plan didn’t need to.
What this means for your plan
Don’t overhaul your investments because of which party controls Congress. Ask whether your strategy fits your timeline, risk tolerance, and spending needs. If you’re close to retirement, stress-test your plan, since poor returns in the first years of retirement do the most damage.
Plan for What You Can Control
The election changed who shapes federal policy for the next two years. Some of what’s proposed could help you save or cost you more, and plenty of it won’t become law. The useful work is figuring out how different outcomes would affect your plan.
With the Boldin Planner, you can:
- Test how a smaller Social Security benefit changes your plan
- Compare Roth conversions and withdrawal strategies under current tax rules
- See how working longer or retiring earlier shifts your outlook
- Model higher inflation and healthcare costs
- Weigh a move, downsizing, or staying put
- Check how your plan holds up in different market outcomes
Run those scenarios now, and you’ll be ready to adapt as the rules change.
