I was ruminating on VOYA's recent survey of working Americans and their views on retirement in light of the coming Presidential election. What are the implications for retirement plans if one party or the other wins? How does this impact Americans and their retirement if at all? And what should we as the advisor community do?
According to the survey, 35% of working Americans say they are delaying decisions about saving for retirement until after the 2024 presidential and congressional elections. 42% of working Americans believe that the pending elections will have a severe or major impact on their ability to save for retirement. But what do the facts actually show?
Both short- and long-term election effects tend to be negligible. The election news-cycle may cause some short-term volatility but it is just that - short-term. And while there likely will be policy changes (ie, the RMD age went from 72 to 73), Americans will still retire when they feel they are ready financially, emotionally, and physically.
We may see some regulatory shifts. For example, certain tax cuts are set to expire in 2025. I assume the fiduciary duty rule and perhaps the ESG battle will get revisited. Maybe the Roth debate will be revived.
Having said all that, I think about 56 years on this planet (President Johnson when I arrived on the scene one Saturday morning), 34 years in the industry (President George H. W. Bush back then) and 18 years as a practitioner (President George W. Bush at the start). Has my way of doing business being impacted by who is in the Oval Office? Not really. My promise to you, my fellow Americans, (and one that I hope is echoed by all 401k advisors), is to:
Always put your interests above mine and do what is right for you. This includes directing you to a different channel or another advisor if my judgement and experience suggest you will be better served elsewhere.
Provide more educational resources and communicate even more frequently. In times of uncertainty, it helps to communicate frequently and provide useful resources to employees so they can make the best decisions for themselves.
Highlight retirement planning tools. These tools will adapt to whatever regulatory changes are implemented. The goal of the tools remains the same. How can you best chart a path towards retiring with dignity?
Emphasize the need to diversify. This is particularly true in times of volatility.
Continue to offer one-on-one guidance to employees and fiduciary training to my plan sponsors. The only certainty is change and I will do my best to summarize what is happening so employees and sponsors can stay focused on their primary tasks.
I sound rather Presidential, don't I? Perhaps you should vote for me? HA!