Good financial advisors spend a good deal of their time helping clients understand – and address – the risks coming from Washington.
From the potential for higher taxes in retirement to changing rules on 401(k)s and IRAs, Congress can have a big impact on the success – or failure – of our clients’ retirement approaches.
But this week, advisors from across the country gathered in Washington to flip the script: Rather than advise clients on how to protect themselves from legislative changes, they advised Congressional leaders on how to pass legislation that will help U.S. savers.
I was honored to speak at NAIFA’s Congressional Conference this week in Washington, DC. From the stage, I outlined key risks developing for American savers – and how our nation’s leadership, spending, and tax policy are making it harder than ever for retirees to feel secure in their retirement plans.
If you missed my talk, Insurance News Net ran a nice piece highlighting some of the key messages.
Here are the three main takeaways:
1 | When it comes to your clients and their retirement, the 2024 election matters… but it’s not the only election that matters. Retirement is not just concerned with the next several years; it’s concerned with the next several decades. That means we need to help our clients prepare for the next 10 to 20 election cycles.
Since we can’t possibly know what the political and legislative environment will be 20 years from now, how can we help our clients prepare? Diversify their retirement assets to protect against the risk of rising taxes and the risk of legislative changes to retirement accounts.
In 2024, all eyes are on Washington. Leverage this attention. As advisors, we’ve known for years that our clients need to take tax risk seriously. But it’s sometimes been challenging to get a saver’s attention on taxes.
Not so in 2024. With the presidential election in November and a general feeling of volatility and instability in Washington, U.S. savers are uniquely open to the tax message this year. Be sure to leverage it in your prospecting, marketing, and client meetings.
For example, advisors are using Stonewood Financial’s Retirement Tax Bill Lead Generator in email campaigns to uncover tax risk for clients and prospects alike. (Here’s a quick webinar with some concrete ways you can leverage the tax message ahead of the election this year.)
3 | The bad news is that we can’t predict future tax rates for your clients. The good news is that we don’t have to. The signs point to higher taxes ahead – especially for higher-net-worth savers. But we don’t have to know future tax rates to help our clients be prepared.
Just like we help our clients prepare for the possibility of a down market through asset allocation, we can help them prepare for the possibility of rising taxes through asset allocation, too. Tax-free assets will become an increasingly important part of many savers’ retirement approaches. But they need help from advisors like us to uncover, quantify, and address this emerging retirement risk.
As I left the nation’s capital this week and came home to Kentucky to vote in our Presidential Primary, I was reminded of this:
In 2024, one of the highest gifts we can give to our clients is the confidence that their retirement will be secure no matter what happens in Washington.
And it’s up to all of us – and great national organizations like NAIFA – to make it happen.
About the Author
Becky helps your clients outsmart Washington and take control of their retirement. Making the complex simple and meaningful? It’s all in a day's work.
