Approaching the Tipping Point

Oct 19, 2023

The Alliance for Lifetime Income (ALI) recently shared three eye-opening facts.

  • For the first time, the majority of retirement-age Americans do not have traditional pensions and are self-funding retirement through 401(k)s and similar plans.
  • Next year, more Americans will reach age 65 than ever before, a historic milestone ALI coined Peak 65™.
  • More than half of consumers ages 45 – 75 don’t think they’ll have enough savings to last their lifetime, according to ALI’s 2023 Protected Retirement Income & Planning Study.

In addition, the Census Bureau projects that by 2034 there will be more Americans 65 years and older than 18 and under.

We are rapidly approaching a significant demographic and cultural tipping point.

Now more than ever, public policy must be aligned to support those who want to plan and save for their own retirement.

Congress acted wisely in 2019 and again in 2022 with bipartisan passage of SECURE and SECURE 2.0. These laws close savings gaps and expand access to retirement security, with key provisions to help facilitate access to annuities.

With so few companies offering traditional lifetime pension benefits anymore, savers are increasingly looking to annuities that can turn their accumulated savings into a “pension-like” stream of guaranteed lifetime income.

Annuity sales last year were the highest ever. And sales this year are on pace to set another record.

Unfortunately, the specter of a misguided fiduciary regulation has emerged in Washington, one that would erect a barrier to financial certainty for millions of Americans.

The U.S. Department of Labor (DOL) recently sent a proposed regulation to the Office of Management and Budget for review. When the DOL adopted a fiduciary regulation in 2016, it included a strict fiduciary-only standard. Fiduciary advisors commonly require account holders to invest at least $100,000.  This prevented low- and middle-income Americans from getting the help they needed to secure their retirements with an annuity.

That onerous regulation was vacated in federal court. But if this latest DOL proposal is like the earlier one, it will once again block working Americans from obtaining vital assistance from financial professionals. 

Such a move would be very unpopular. Americans overwhelmingly prefer the option to work with any type of financial professional who is offering products and services that meet their needs.

It’s hard enough for families to balance their current expenses with saving for retirement. It doesn’t make sense to add impediments that could push savers over the edge. Any proposal that would make it harder for savers to achieve financial security should be scrapped.

Jill Kozeny

Jill Kozeny serves as Executive Vice President & Chief Advocacy Officer at the American Council of Life Insurers (ACLI). Kozeny is a member of the Executive Management Team and reports to the President and CEO. Kozeny leads ACLI Government Relations, Public Affairs, Research, and the work of the Chief Inclusion Officer to build opportunities and expand access to family financial certainty through all stages of life.