SECURE Peace of Mind for Retirees
Running out of money is the biggest financial concern for people planning for retirement, according to a recent survey by the American Institute of Certified Public Accountants.
Fortunately, Congress has crafted legislation that can provide peace of mind to people concerned about their retirement. The Setting Every Community Up for Retirement Enhancement (SECURE) Act expands access to retirement plans for millions of workers.
The U.S. House of Representatives passed SECURE, 417-3. And momentum is building in the Senate as several senators pushed for a vote last week.
The bill makes it simpler for small businesses to band together and provide retirement plans for their employees. And it contains provisions that will make it easier for employers to offer annuities in their retirement plans. Annuities can be used to turn retirement assets into guaranteed income for life.
Currently, less than 10 percent of employers make annuities available to employees in their retirement plans. Many employers are concerned about liability issues. The SECURE Act addresses this by permitting employers to rely on the expertise of the state insurance departments when choosing lifetime income providers. This would eliminate a huge roadblock that has prevented many employers from offering lifetime income benefit options under a defined contribution plan.
It is perfectly understandable why people are concerned about having enough money in retirement. People are living longer than ever before, resulting in retirements that could stretch for decades. Yet, nearly 1/3 of Americans reaching retirement age have less than $25,000 saved. And 63 percent of Americans have no source of protected retirement income – such as pensions or annuities – other than Social Security.
In addition to the lifetime income components, the SECURE Act contains many other critical provisions that will help people planning for retirement. It also contains important measures that will correct unfair tax treatment for 18,000 Gold Star families. And it will help new parents, including those adopting, with expenses by allowing tax-fee distributions of retirement savings.
The Senate has a real opportunity to ease the anxiety and stress level for millions of Americans concerned about outliving their savings by passing the SECURE Act.