New results from a survey of financial advisors reveal that nearly all are in favor of the proposed SECURE Act 2.0, believing the legislation will make it easier for their clients to save for retirement.
The Nationwide Retirement Institute’s survey finds that over 9 out of 10 financial professionals (93%) support passage of the Securing a Strong Retirement Act that was introduced last year by House Ways & Means Committee Chairman Rep. Richard Neal (D-MA) and Rep. Kevin Brady (R-TX), who is the ranking Republican on the committee. The financial professionals agree that the legislation’s features would financially benefit their clients.
According to Nationwide, this support suggests the proposed legislation would be “well-timed,” with 77% of financial professionals agreeing that COVID-19 has led their clients to slow or stop contributions toward their retirement savings, and another 50% reporting that their clients’ financial security has been negatively impacted by COVID-19.
Financial professionals also report that when the original SECURE Act was enacted at the end of 2019, their clients:
- updated their retirement plans (50%);
- were able to save more in general (48%);
- increased their retirement account contributions (48%); and
- increased their emergency savings (47%).
Today, they agree that many of the proposed components of SECURE Act 2.0 would make it even easier for their clients to save for retirement and get back on track toward their goals, Nationwide notes.
Eight in 10 (81%) agree that increasing the catch-up contribution limit for those age 60 or older to $10,000 for retirement plans and $5,000 for simple IRAs will help increase their clients’ financial security. Similarly, 79% support increasing the required minimum distribution (RMD) age from 72 to 75 years old and 78% agree adding ETFs as an investment option to variable annuities would also be financially beneficial for clients.
Additionally, 93% of financial professionals are in favor of the proposed Saver’s Credit changes, which would simplify and increase tax incentives for low- and middle-income individuals saving for retirement, and 93% say it will promote healthy financial practices.
Similarly, 93% believe allowing employers to match contributions under a 401(k) plan, 403(b) plan or Simple IRA while employees make student loan payments will increase their clients’ financial security. These findings were slightly more nuanced when broken down by client assets, however. For example, 51% of financial advisors with their average clients owning $500,000 or more in assets strongly agree that the ability for an employer to make matching contributions while the employee is making student loan payments would promote Americans’ financial and retirement security. By contrast, only 33% of advisors for clients averaging under $100,000 in assets strongly agreed.
In terms of additional opportunities to help clients save for retirement, 94% of financial professionals agree that adding an emergency savings provision to the proposed legislation that would permit employees to withdraw or use limited retirement plan contributions for short-term financial needs without an early withdrawal penalty would help improve Americans’ financial security. Additionally, 91% agree that it should be included as part of the SECURE Act 2.0 legislation.
“SECURE Act 2.0 is a significant next step that will help many Americans take control of their financial futures,” notes John Carter, President and COO of Nationwide Financial. “It’s great to see that advisors and financial professionals helping Americans prepare for retirement also see significant opportunities for their clients in the proposed legislation.”
Interestingly, a recent survey of plan sponsors by Principal similarly found broad-based support for the legislation overall, but only lukewarm support for some of the specific provisions.
Neal and Brady have not yet reintroduced the SECURE Act 2.0 legislation, but they are expected to do so in the coming weeks.
On behalf of Nationwide, Edelman Data and Intelligence conducted a 13-question, online survey among 500 full-time U.S.-based financial advisors and financial professionals between Feb. 9–19, 2021.