On 20th January 2025, Donald Trump became the 47th president of the United States. Thousands of Trump supporters gathered in Washington DC filled the occasion with pageantry. In his inaugural address, Trump emphasized America’s economy and the issue of immigration, as well as promoted government-run diversity programmes.

“The golden age of America begins right now. We will not allow ourselves to be taken advantage of any longer,” Trump said in his inaugural address. He added that the US would once again be considered a ‘growing nation’ and pledged to improve the country’s overall financial health.

Here are 4 key financial takeaways from Trump’s return to the Oval Office.

1. Tackling Inflation Through Housing & Energy Costs

The surge of inflation post-2022 has continued to be more than the Federal Reserve’s target for a 2% annual rate. During his Presidential rallies, Trump brought this issue to the forefront multiple times and assured people he would ‘end inflation on day one’ if re-elected.

On his first day, Trump issued several executive orders, including one addressing housing and energy costs—key contributors to inflation. These expenses make up a substantial portion of people’s budgets, so lowering them could significantly improve living standards.

While the President listed ways to tackle inflation, he also mentioned imposing tariffs on Mexico and Canada starting 1st February. According to several economists, these tariffs might raise the costs of consumer goods as companies will likely pass this tariff on to the consumers. This in turn might negate his initiative to reduce inflation.

Additionally, he expressed his intent to address the US trade deficit with the EU by implementing tariffs or increasing US energy exports.

2. Dramatic Changes in Healthcare

Trump has revoked nearly 78 Biden-era executive orders, including one that extended Affordable Care Act (ACA) enrollment periods and boosted subsidies, which helped increase ACA enrollment to 24 million.

Some individuals may face significant increases in their premiums. Due to the limitations of policy changes under the budget reconciliation process, analysts predict that these subsidies could eventually expire.

He also repealed an order directing the Center for Medicare and Medicaid Innovation to explore three drug pricing initiatives: funding Medicaid for gene therapies, reducing Medicare costs for FDA-accelerated drugs, and offering $2 copays for generic medicines.

Medicare changes in 2025 could affect drug pricing and plan structures, potentially raising out-of-pocket costs.

Also Read: F.S.A. vs. H.S.A.: Which Account to Choose for Medical Costs & Tax Benefits – Vola

3. Taxes, Social Security & Lower Credit Card Rates

According to the Tax Foundation, over 60 per cent of taxpayers might see an increase in taxes in 2026 as the provisions in the 2017 Tax Cuts and Jobs Act, or TCJA will expire soon.

Experts also anticipate that one of the major debates will centre around the state and local tax (SALT) deduction currently capped at $10,000. This cap has a significant impact on taxpayers in high-tax states like California, New York, and New Jersey, where top tax rates exceed 10%.

Meanwhile, Trump has also promised to do away with taxes on Social Security income for seniors. While this may sound like a relief for 40 per cent of Americans currently paying taxes on their Social Security, it can be detrimental in the long run.

No taxes means less money going back to the Social Security fund, which might mean fewer benefits for future retirees. Economists have also predicted that this move could potentially exhaust Social Security’s trust fund by the 2030s.

Trump’s proposal for a temporary 10 per cent cap on credit card interest rates could benefit those with outstanding balances. Legislation is likely being drafted to implement the same measure. However, experts warn that such a cap, if enacted, could make it more difficult for people to access credit.

Also Read: Understanding COLA: How Social Security Benefits Keep Pace with Inflation – Vola

4. Private Equities for 401(k) Savings

Financial experts anticipate potential changes to retirement account regulations, including proposals to adjust contribution limits and revise withdrawal requirements for 401(k) plans and IRAs.

Additionally, private equity (PE) firms hope that Trump will be their pathway to tapping the 401(k) savings market. If this move is given a green signal, private equity investments will offer more choices and possibly higher returns.

Presently, the Employee Retirement Income Security Act prevents private equity from gaining access to 401(k)s as these investments often mean higher fees, higher risks, limited liquidity, and less transparency.