NEW LEGISLATION IS A VICTORY FOR MILLIONS OF AMERICANS LOOKING FOR PROTECTED LIFETIME INCOME IN THEIR EMPLOYER-SPONSORED RETIREMENT PLANS
The SECURE Act will help improve retirement security by expanding access to annuities.
WASHINGTON, D.C., December 30, 2019 — This month, Congress officially passed the SECURE Act as a part of major appropriations bills. The SECURE Act, short for the “Setting Every Community Up for Retirement Enhancement Act,” takes a big step in tackling the looming retirement income crisis in America by improving Americans’ ability to save for retirement and enhancing the workplace plan options that employers are able to offer.
A key provision of the bill provides employees with increased access to annuities in their 401(k) and other employer-sponsored retirement plans, which may provide a much-needed source of protected lifetime income for retirement.
“Americans face many of the same challenges and have similar hopes for retirement security,” said Jean Statler, Executive Director of the Alliance for Lifetime Income. “The three-legged stool of retirement security – employer pensions, personal savings, and Social Security – has collapsed over the past forty years, in part, due to the disappearance of pensions as they’ve been replaced by 401(k)s and other defined contribution plans. Our research shows this has left approximately 64% of U.S. households (80 million) unprotected, meaning they have no source of protected monthly income other than Social Security. Today those Americans stand the real chance of running out of money in retirement.”
Statler continued, “Other than pensions and Social Security, annuities are the only source of protected lifetime income available today, which is why it’s important that more employers offer their employees a choice to select an annuity as part of their retirement savings plan. The Alliance’s mission is to educate consumers on the need for protected lifetime income in retirement, so they don’t run out of money.”
“Employer-sponsored plans offer a variety of asset classes for employees to choose from, but currently, only 20 percent of plan sponsors offer access to protected lifetime income products,” said Jason Fichtner, Alliance for Lifetime Income Fellow and Associate Director of the Master’s in International Economics and Finance at Johns Hopkins. “By including annuities as an option, employers are helping their employees protect a portion of their portfolio while continuing to accumulate and grow savings in other parts of their 401(k).”
Annuities are an important part of a comprehensive retirement plan and passage of the SECURE Act goes a long way towards strengthening Americans’ retirement security.
About the Alliance for Lifetime Income:
The Alliance for Lifetime Income is a nonprofit 501(c)(6) organization formed and supported by some of the nation’s leading financial services organizations, to create awareness and educate Americans about the importance of protected lifetime income. The Alliance is focused on helping educate Americans on the risks of outliving their income so they can enjoy their retirement lives. The Alliance provides consumers and financial advisors with the educational resources, tools and insights they can use to build plans for protected retirement income.