Advisors' Advice: What Does the Secure Act Really Mean for Clients?

The Setting Every Community Up for Retirement Enhancement (Secure) Act has been called the most comprehensive retirement security legislation in decades. Overall, it has received a thumbs up for several changes, such as:

• It will be easier for small businesses to set up 401(k)s by increasing the cap under which they can automatically enroll workers in "safe harbor" retirement plans, from 10% of wages to 15%;
• Providing a maximum tax credit of $500 per year to employers who create a 401(k) or SIMPLE IRA plan with automatic enrollment;
• Encouraging plan sponsors to include annuities as an option in workplace plans by reducing their liability if the insurer cannot meet its financial obligations (a provision popular with the insurance industry but questioned by some advisors);
• Pushing back the age at which retirement plan participants need to take required minimum distributions (RMDs), from 70 ½ to 72.

However, the Act has received both cheers and jeers from the investment advisor realm. On one hand it gives retirees more time for the RMD, but on the other, gone is the stretch IRA that allowed for lifetime IRA distribution to heirs. Our request to advisors through the Financial Planning Association and XY Planning Network on what they are telling clients evoked a flood of comments and advice. We've provided 15 of those comments in the gallery above. --- Related on ThinkAdvisor:

• Secure Act's 401(k) Annuity Options: The Pros and Cons
• Life Insurance and the Demise of the Stretch IRA
• Secure Act Forcing Shift in IRA Planning
• Advisors' Advice: How to Plan for Health Care Costs in Retirement