The States Should Partner with Federal and State Regulators on Consumer Protection

The average person changes jobs 10-to-15 times during their career. That’s 10-to-15 different bosses. 10-to-15 different business cards. And 10-to-15 different retirement plans. In most cases, rolling over assets from one retirement plan to another is a fairly seamless process. But if lawmakers and regulators in certain states have their way, rollovers and other transactions involving retirement security products could become quite complicated. Some states including Massachusetts, New Jersey, and Nevada are working to limit savers and retirees to fiduciary-only services. This would be a mistake. Like the Department of Labor’s now-vacated fiduciary rule, these proposed state regulations would make … Continue reading "The States Should Partner with Federal and State Regulators on Consumer Protection"

Guaranty Associations: A Critical Consumer Protection You’ve Probably Never Heard Of

It’s common knowledge that the Federal Deposit Insurance Corporation (FDIC) provides deposit insurance coverage if a bank fails and is unable to meet its obligations. FDIC signs are prominently displayed at every bank to let us know that our deposits are guaranteed for up to $250,000 per person per account category. The financial crisis of 2008 reminded us that while our banking system as a whole is financially sound, banks can, and do fail.  It’s comforting to know that if that happens, the FDIC will protect your savings. But what about when you buy a life insurance policy or an … Continue reading "Guaranty Associations: A Critical Consumer Protection You’ve Probably Never Heard Of"

Financial Professionals Must Consider All Options for Retirees, Including Annuities

Fascinating – and depressing – research from the investment advisory group United Income shows 96 percent of Social Security recipients likely have tapped their benefits too soon. They’re missing out on $3.4 trillion in benefits – an average of $111,000 per household. The research report notes that not everyone should wait till age 70 to start receiving benefits. But for those who can, Social Security will annually boost its payout by 8 percent. Still, too many people are bypassing this option. And as suggested in a Bloomberg News story, “Americans Losing Trillions Claiming Social Security At the Wrong Time,” financial … Continue reading "Financial Professionals Must Consider All Options for Retirees, Including Annuities"

Ignore the Naysayers, SEC’s Regulation Best Interest Provides Strong Consumer Protection

The American Council of Life Insurers (ACLI) believes strongly in a best interest standard of care for all financial professionals. Fortunately, so does the Securities and Exchange Commission (SEC). The SEC introduced a strong standard of care in June when it unveiled its Regulation Best Interest (Reg BI). Reg BI is a robust measure that will protect consumers. It will also preserve their access to financial advisors that sell annuities, the one product that provides guaranteed lifetime income. People planning for retirement deserve good advice, and to choose the type of advice they get and how they’ll pay for it. … Continue reading "Ignore the Naysayers, SEC’s Regulation Best Interest Provides Strong Consumer Protection"

Why it’s Important to Start Saving Early

According to the Federal Reserve, only 42 percent of American households headed by someone younger than age 30 have any retirement savings. By some estimates only 5 percent of millennials are saving adequately. Retirement saving among younger workers often falls short because many lack access to workplace plans. Younger workers also face multiple financial demands that compete with retirement saving including student loans, car loans, building an emergency fund or saving for a house. By the time heads of households reach age 50 things look somewhat better. About two-thirds of households headed by a 50- to-54-year-old have some retirement savings, … Continue reading "Why it’s Important to Start Saving Early"

U.S. Senate Needs to Pass SECURE Act

Have you ever worked forever on a jigsaw puzzle, only to discover you’re missing a key piece? If so, then you’ll understand the current frustration among retirement security proponents who have been working to help solve the nation’s retirement puzzle by passing the Setting Every Community Up for Retirement Enhancement (SECURE) Act. The bill will help Americans prepare for a secure retirement while resolving a vexing tax problem harming our nation’s military families. The U.S. House of Representatives in May voted 417-3 to pass the SECURE Act, which used the Retirement Enhancement and Savings Act (RESA) as a bedrock. It built … Continue reading "U.S. Senate Needs to Pass SECURE Act"

Brookings Reports Contain Essential Lifetime Income Information For All Seasons

Did you catch the recent New York Times article featuring the summer’s best “beach reads?” Not surprisingly, there were no books about annuities on the list. That’s a shame, because Americans need to learn more about annuities, the only financial product in the marketplace that guarantees lifetime income. Fortunately, the Brookings Institution released three reports this summer about annuities: Can annuities become a bigger contributor to retirement security? Automatic enrollment in 401(k) annuities: Boosting retiree lifetime income Using behavioral insights to increase annuitization rates: The role of framing and anchoring The subject matter certainly isn’t typical beach reading material. But … Continue reading "Brookings Reports Contain Essential Lifetime Income Information For All Seasons"