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Scaling Your Practice with RightCapital Adaptive Technology

November 29, 2022

Scaling your practice

Key Takeaways

  • Tax and retirement laws are constantly evolving, especially as political control shifts. Advisors who can clearly explain pending changes, such as proposals around TCJA and SECURE Act 2.0, position themselves as a trusted, proactive resource.
  • Verbally describing potential law changes is far less effective than showing them. RightCapital's "adaptive technology" turns hypothetical scenarios, such as a higher RMD age, into clear visuals clients can actually understand.
  • Pending legislation is an opportunity to scale your practice. Proactively showing prospects and clients the impact of potential changes, through visuals, sample portfolios, and content, helps advisors demonstrate value and grow.

Change is inevitable, particularly when financial rules and tax laws are governed by a two-party system. The most recent midterm elections in the United States are a good example of this. The timing of existing retirement legislation is sure to be accelerated with the balance of power shifting in January. Are you prepared to explain the changes to your clients?

Here at RightCapital, we pride ourselves on what we like to describe as “adaptive technology.” Our users know what we mean by this. Several features were designed to show hypothetical changes that could happen if certain laws get passed. A good example of this is the increase in minimum RMD age proposed in Secure Act 2.0.

Congressional Agenda for Retirement Legislation in 2022 

In 2018, we wrote about the tax planning opportunities of the Tax Cuts and Jobs Act. That bill is still evolving. We’re also keeping a close eye on Secure Act 2.0, which could have a significant impact on retirement planning. Here’s an update on each of these:

Tax Cuts and Jobs Act (TCJA)

The end of 2022 is a critical milestone for the TCJA. Among the many provisions scheduled for 2023 are an increase in corporate income tax, a required five-year amortization of R&D expenses, and a gradual phase-out of allowed expenses for short-life business investments. According to the Tax Foundation, these could all slow economic growth.

Most of the personal income tax changes made by TCJA in 2017 are still in effect through 2025, but the next two months may be the last chance that the party currently controlling both chambers of Congress can solidify those. Provisions that may change in 2023 involve the current increase in standard deductions and the doubling of the child tax credit.

Secure Act 2.0

The original Secure Act was passed in December 2019. That wasn’t a midterm year, but it did immediately precede what would become a hotly contested presidential election. The pressing need for changes in the retirement system overrode gleaned enough bipartisan support to attach the legislation to a government funding bill. That may happen again this year.

Secure Act 2.0 proposes improved access to workplace retirement plans, increased catch-up contributions, a change in the minimum retirement distribution (RMD) age to 75, and penalty free early withdrawals from workplace savings plans.

Using Right Capital to Show this to Prospects 

Verbally describing what might happen if Congress modifies TCJA or passes Secure Act 2.0 is an ineffective way to communicate their impact on client retirement. RightCapital adaptive technology provides visuals. We’ve written several articles describing how to show tax cuts and raises, changes in investment models, and strategies for retirement distribution.

December 2022 is an opportunity to scale your practice by showing the effects of pending legislation. In the coming weeks, we’ll cover how to do that with content marketing, sample client portfolios, and video presentations. We’ll also discuss how to capitalize on trending news and market volatility. Bookmark this site and come back frequently for more on all this.

Frequently asked questions

Tax and retirement laws change frequently, and those changes can significantly affect a client's plan. Advisors who understand and can clearly explain pending or new legislation position themselves as trusted, proactive resources, which helps build confidence and deepen client relationships.

Rather than describing changes verbally, advisors can use planning software to model scenarios visually, showing how a higher RMD age, tax change, or new contribution rule would affect a client's plan. Visual, side-by-side comparisons make complex changes far easier for clients to grasp.

RightCapital's adaptive technology refers to features designed to model hypothetical changes that could result from new or pending legislation, such as an increased RMD age. This allows advisors to illustrate the potential impact of evolving tax and retirement laws on a client's plan in real time.

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