Now it’s just getting weird. Regulatory rollbacks have market soaring, something most 401k advisors would applaud. But one political promise won’t work as expected.
Tax reform was a major Republican campaign platform, largely touted to rally the base. As American Retirement Association Brian Graff said at the 401k confab in Vegas this week, the Republican electoral sweep came as a surprise to many, none more so than Republicans themselves.
Now they own it and gotta act.
It doesn’t bode well for the 401k industry, with both Graff and outgoing NAPA president Sam Brandwein referencing the 1986 tax act (and it’s 70 percent reduction on 401k contribution limits); the former adding that if Trump’s tax reform package passes, “there is no way we get through it unscathed.”
Graff depressingly noted that some members of Congress with whom he speaks aren’t even aware of a 401k’s tax deferred nature—seriously. This is what we’re dealing with, and the reason for copious amounts of alcohol (we think; it was Vegas).
Now layer in all that’s happening with health care which, surprisingly, may serve to sooth the Beltway burn. One reason is the rise of health savings accounts. One HSA provider in attendance was heard to exhaustedly say his meetings were back-to-back for the entire two-plus day summit.
Graff himself noted some sort of HSA/401k-hybrid was a possible result of Washington meddling, and a senior executive at a major 401k provider said breaking down the silos between heath care and retirement advisors in critical to success moving forward for sponsors and participants.
So 401k advisors better bone up. It’s easy to see which way the political winds are blowing. If you want to get out in front, look to HSAs as well as health care investment products in general, especially those that complement what you do. It’s a competitive differentiator now and table stakes soon.
“To see what is in front of one’s nose needs a constant struggle,” Orwell wrote and is now oft repeated. Consider this a call to focus.