2026 Midterm Elections: Investors and Retirees Should Know

Key Takeaways: 

 

• Election results could shape financial policy: The 2026 midterms may influence future decisions on taxes, health care, retirement benefits, and investment regulations.
• Market reactions are never guaranteed: Historical trends suggest stocks have often performed well after midterm elections, but past performance does not predict future results.
• Tax laws may change: Some provisions from the 2025 tax legislation are scheduled to expire in 2028 and 2029, making proactive tax planning important.
• Social Security remains a concern: Future funding challenges highlight the importance of incorporating Social Security into a broader retirement income strategy.
• Health care costs matter in retirement: Rising premiums and medical expenses make health care planning an essential part of preparing for retirement.
• Focus on your long-term goals: Rather than reacting to political headlines, maintain a financial plan designed to help you navigate changing economic and policy conditions.

 

As Americans prepare to vote in the November 2026 midterm elections, the results could influence more than the balance of power in Congress. The outcome may also shape the country's legislative priorities, economic policies, and financial landscape over the next two years.

Historically, the party occupying the White House often loses congressional seats during midterm elections. However, past trends do not guarantee future results. Neither party may secure a decisive majority, potentially creating a divided Congress where passing new legislation becomes more challenging.

For investors, retirees, and families planning for their financial futures, understanding the potential implications of the election can help put upcoming policy changes into perspective.

 

The 2026 Midterm Elections and the Stock Market

Historical market data suggests that stocks have often performed well during the 12 months following midterm elections. Although investors generally prefer predictable policies, a divided Congress can sometimes limit major legislative changes. Reduced regulatory restrictions may also benefit certain businesses and industries.

Still, the election comes at a time when many Americans are concerned about their financial well-being. Persistent inflation, rising household and energy costs, and questions about the long-term funding of Social Security and Medicare are important issues for individuals planning for retirement. International conflicts and broader economic uncertainty add to these concerns.

The election results could also influence how successfully the current administration advances its policy agenda. In recent years, significant tax legislation, expanded tariffs, and efforts to reduce regulations in areas such as energy, environmental policy, and financial services have affected the economic environment.

With congressional control likely to remain closely contested, passing major legislation could prove difficult regardless of which party gains seats. As a result, executive orders and federal agency regulations may become increasingly important tools for implementing policy priorities.

Here are several areas worth watching as the election approaches and its effects unfold.

 

Which Party Will Control Congress After the 2026 Midterms?

Every seat in the U.S. House of Representatives is up for election in November, along with approximately one-third of the Senate. Republicans currently hold narrow majorities in both chambers, making control of Congress a central issue in the upcoming election.

Several competitive races, including Senate contests in Maine, Ohio, and Texas, could influence the final balance of power. Special elections to fill vacant seats may also affect congressional margins.

Republicans will need to defend their existing majorities, while Democrats must retain their current seats and win additional Republican-held seats to take control. The Senate presents a particularly challenging path for Democrats, who would need to flip multiple seats to establish a majority.

The political landscape can change as campaigns progress. Although a substantial Democratic gain in the House has become a possibility, redistricting has reduced the number of competitive House districts in some areas.

Ultimately, even relatively small shifts in congressional representation could influence the types of legislation lawmakers pursue and how easily proposals move through Congress.

 

Potential Regulatory Changes Following the Election

If Congress remains closely divided, significant policy changes over the next two years could come through executive actions and federal agency decisions rather than sweeping new laws.

The administration has relied on executive orders and regulatory measures to pursue priorities involving immigration, energy production, digital assets, tariffs, and other policy areas. The direction of future actions will depend on political priorities, legal considerations, and developments in Congress.

Several issues could have implications for personal finances and investment decisions.

• Investment opportunities: Changes to investment regulations could affect whether alternative investments become more accessible to individual investors.
• Trump Accounts: Future regulatory and legislative decisions could influence how these accounts develop and how families use them.
• Health savings accounts: Potential changes could expand access to HSAs or alter the expenses these accounts can cover.
• Trade and inflation: Tariff policies could continue to influence consumer prices, business costs, and the broader inflation outlook.
• Investment regulations: Federal agencies may revisit how environmental, social, and governance (ESG) considerations are addressed in investment products.
• Digital assets: Regulators may continue developing rules for cryptocurrencies and other digital assets, particularly if Congress does not enact a comprehensive legislative framework.

Deregulation may also remain a priority as the administration seeks to reduce federal oversight and administrative requirements for businesses. Depending on the policies adopted, these efforts could have consequences for consumers in industries such as financial services, health care, and international trade.

 

Could the Midterms Lead to Additional Tax Reform?

Tax policy directly affects household budgets, investment decisions, and retirement planning. However, following the passage of the One Big Beautiful Bill Act (OBBBA) in 2025, the possibility of another major tax package remains uncertain.

If Congress is divided, lawmakers may focus on narrower proposals that have bipartisan support rather than pursuing another sweeping tax overhaul. Potential areas of discussion include expiring tax provisions, improvements to Internal Revenue Service operations, and measures designed to reduce tax fraud.

The 2025 legislation established tax brackets and capital gains tax brackets, while increasing the standard deduction. These changes may help taxpayers plan with greater clarity under the current rules.

However, some provisions are scheduled to expire between 2028 and 2029. These include the expanded state and local tax (SALT) deduction, the additional $6,000 deduction for eligible seniors, and tax relief for certain tipped income.

Future legislation could extend, modify, or allow these provisions to expire. In a closely divided Congress, reaching agreement on their future may be difficult.

For individuals who currently benefit from these tax provisions, understanding their eligibility requirements and scheduled expiration dates can be an important part of tax planning. Reviewing your financial strategy with a qualified tax professional may help you prepare for potential changes.

 

Social Security Reform May Remain a Challenge

Social Security is an important source of income for millions of retirees, but questions about the program's long-term financial sustainability remain unresolved.

According to the source material's discussion of the Social Security trustees' projections, the Old-Age and Survivors Insurance (OASI) trust fund could begin running out of reserves toward the end of 2032. The senators elected in 2026 will serve into January 2033, placing the next Congress in a potentially important position to address the program's funding challenges.

Various proposals have been introduced to improve Social Security's financial outlook. Potential approaches have included increasing the age at which individuals receive benefits, expanding the earnings subject to Social Security payroll taxes, and reducing benefits under certain proposals.

Despite the urgency, meaningful reform has historically been difficult to advance politically. The issue affects a broad range of Americans, and proposed changes can have significant consequences for workers, retirees, and future beneficiaries.

Major changes immediately following the midterms are therefore uncertain, even as the projected funding challenges draw closer.

For individuals approaching retirement, it is important to consider Social Security as one component of a broader income strategy. Reviewing different claiming ages, other sources of retirement income, and the potential effects of future policy changes can help you build a more flexible plan.

 

Health Care Costs and Potential Policy Changes

Health care affordability is another issue that could receive attention after the election. Rising premiums and out-of-pocket expenses can put pressure on households at every stage of life, particularly those approaching retirement.

The expiration of enhanced tax credits for Affordable Care Act (ACA) marketplace coverage has increased costs for many Americans in 2026. Early retirees and people without employer-sponsored insurance may be especially affected because they often need to secure coverage independently before becoming eligible for Medicare.

Health care can also represent a substantial retirement expense. Fidelity's 2026 annual retiree health care cost estimate puts the expected health care costs for a single 65-year-old retiring that year at approximately $185,000 over retirement, a 7.5% increase from its 2025 estimate.

Although restoring the enhanced ACA subsidies may be uncertain, other health care proposals could advance. Possible areas of focus include expanding access to health savings accounts (HSAs), allowing these accounts to cover a broader range of eligible expenses, and changing how Medicare reimburses health care providers.

Policymakers may also consider greater transparency requirements for pharmacy benefit managers, which negotiate prescription drug prices and manage benefits for health insurance plans.

For households planning for retirement, these potential developments reinforce the importance of accounting for premiums, prescription medications, out-of-pocket expenses, and other health care needs in a long-term financial plan.

 

Retirement Savings Could Offer an Opportunity for Bipartisan Cooperation

Retirement policy has historically provided opportunities for lawmakers from both parties to work together. Legislation such as the SECURE 2.0 Act reflects efforts to improve access to retirement savings and encourage Americans to prepare for their later years.

Additional incremental changes could emerge over the next two years, particularly in the area of employer-sponsored retirement plans.

One proposal highlighted in the source material is the Helping Young Americans Save for Retirement Act, introduced by Senators Bill Cassidy and Tim Kaine. The legislation would lower the minimum age for participation in certain workplace retirement plans from 21 to 18 and ease some administrative testing requirements for employers.

If enacted, measures of this kind could make it easier for younger workers to begin saving through workplace plans earlier in their careers.

Expanding access to retirement accounts could benefit employees who might otherwise delay saving. Starting earlier gives contributions more time to potentially grow through compounding, making early participation an important consideration for long-term financial health.

While the details and timing of any future retirement legislation remain uncertain, this area could provide an opportunity for lawmakers to pursue practical changes with support across party lines.

 

Keep Your Long-Term Financial Plan in Focus

The 2026 midterm elections could influence taxes, health care costs, retirement benefits, investment regulations, and the broader economic environment. However, the ultimate effects will depend on election results, subsequent legislative negotiations, and decisions made by the administration and federal agencies.

Rather than making financial decisions based on election predictions or short-term market reactions, consider how your current strategy aligns with your long-term goals.

A thoughtful financial plan can account for different economic conditions, changes in tax policy, potential health care expenses, and uncertainty surrounding future retirement benefits. Periodically reviewing your investment strategy, retirement income sources, and tax planning approach can also help you identify areas that may need attention as circumstances change.

 

Sources:

https://www.fidelity.com/learning-center/personal-finance/2026-midterm-elections-and-your-money

 

Disclosure:

Past performance is not indicative of future results. The material above has been provided for informationalpurposes only and is not intended as legal or investment advice or a recommendation of any particularsecurity or strategy. The investment strategy and themes discussed herein may be unsuitable for investorsdepending on their specific investment objectives and financial situation. Information obtained from thirdpartysources is believed to be reliable though its accuracy is not guaranteed, and Olde Raleigh FinancialGroup makes no representation or warranty as to the accuracy or completeness of the information, whichshould not be used as the basis of any investment decision. Information contained on third-party websitesthat Olde Raleigh Financial Group may link to are not reviewed in their entirety for accuracy and Olde RaleighFinancial Group assumes no liability for the information contained on these websites. Opinions expressed inthis commentary reflect subjective judgments of the author based on conditions at the time of writing and aresubject to change without notice. No part of this material may be reproduced in any form, or referred to inany other publication, without express written permission from Olde Raleigh Financial Group.