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President Donald Trump has two messages about your retirement savings heading into Tuesday’s midterm elections.
The good news, as he tells it: “Your 401(k)s are a lot higher,” Trump said at an Oct. 27 rally in Corpus Christi, Texas, according to a Roll Call Factba.se transcript (1).
The warning: “If the Democrats win, you will have an economic depression,” Trump said in an Oct. 12 video posted to his X account, Newsweek reported (2).
I was a stockbroker on Black Monday in 1987, when the Dow Jones Industrial Average dropped 22.6% in a single day (3). Since then, I’ve made millions in the stock market. And here’s what all those years taught me: Panic is expensive.
History doesn’t back up election-day panic.
U.S. stocks “returned an average of 12.4% during the following 12 months” after midterm elections, according to an Oct. 28 analysis by U.S. Bank, which looked at midterms from 1900 through 2025 (4). That’s an average, though. “Stocks did not rise after every midterm,” U.S. Bank notes (4).
Here are 5 things I’d do with your 401(k) before Tuesday.
1. Don’t sell because of a campaign speech
In my experience, campaign seasons are full of predictions of disaster if the other side wins. If you sold every time you heard one, you’d almost never be invested.
I’ve lived through and traded markets during Black Monday, the dot-com crash, 2008 and the 2020 pandemic crash. The lesson every time: Decisions made in a panic are rarely the ones you’re glad you made.
If a speech made you nervous about your retirement money, talk it through with a professional before you touch it.
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2. Keep the money you’ll need soon out of stocks
In my view, the bigger risk for retirees isn’t an election. It’s being forced to sell stocks in a down market to pay the bills.
So keep cash you’ll need in the next year or two somewhere safe, like a savings account. One option is Barclays Online Savings. Check the current rate and terms before you open an account.
With your near-term spending covered, a bad stretch in the market is something you can wait out.
3. Remember what a real depression looks like
Trump warned of an “economic depression.” Here’s what the Great Depression looked like for stocks. After the 1929 crash, the Dow eventually hit, in 1932, “its lowest value of the twentieth century, 89 percent below its peak,” according to the Federal Reserve’s history of the crash (5).
And “the Dow did not return to its pre-crash heights until November 1954,” the Fed’s history says (5).
That’s an extreme case. But it’s one reason not to keep all of your retirement money in stocks, no matter who’s in charge.
Quick gut-check — if your money advice is coming from random online influencers, you’re playing a dangerous game. I’ve been a CPA since 1981 and writing about money since before the internet existed. Sign up for the free Money Talks Newsletter and get expert advice that’s been tested by time.
4. Rebalance on a schedule, not a headline
If your 401(k) is “a lot higher,” as Trump says, it may now hold more stocks than you planned. That’s a reason to rebalance back to your target mix, not a reason to bet bigger.
Pick a date, like your birthday or New Year’s Day, and rebalance then. Election night is not that date.
5. Vote with your ballot, not your 401(k)
Since 1980, the average return in the 12 months after a midterm election was 17.5%, according to U.S. Bank (4).
Your vote is how you weigh in on Tuesday. Your retirement account should stay on the plan you set when you were calm.
My honest take
Trump may be right that your 401(k) is up. He may or may not be right about what happens if his party loses. Nobody knows, including him.
What I do know, having invested for decades: Elections come and go. Good plans outlast them.
Stay invested in a mix you can live with, keep a cash cushion, and let Tuesday’s results be news, not a trading signal.
Sources: 1. Roll Call Factba.se; 2. Newsweek; 3. Federal Reserve History; 4. U.S. Bank; 5. Federal Reserve History
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