Lawmakers on Capitol Hill are looking at the Lifetime Income Disclosure Act. This bi-partisan legislation would require employer-sponsored retirement plans to provide participants with an estimate of how much monthly income they could generate if they were to take all their retirement savings and purchase an annuity.
Under this law, employees would receive an annual statement of how their savings would reflect monthly income payments through an annuity.
For participants, this bill seems long overdue. According to a recent study by the Insured Retirement Institute, nine in 10 workers want these estimates on their benefit statements and find the information helpful in planning for their future. In addition, more than 75% of plan participants in the study said they would increase their plan contributions by four percentage points or more after seeing lifetime income estimates.
“At a time when American savers are shouldering more of the burden of planning for their retirement themselves, legislation which increases consumer education is vital to ensuring financially secure retirements,” says IRI President and CEO Catherine Weatherford. “The legislation introduced today by Representatives Luke Messer (R-IN) and Mark Pocan (D-WI) and Senators Johnny Isakson (R-GA) and Chris Murphy (D-CT) would provide Americans with a visualization of how much their current savings will provide in their retirement years, as well as a better understanding of their savings options.”
She adds, “IRI strongly supports initiatives, such as the Lifetime Income Disclosure Act, which provide retirement savers with the tools necessary to make informed financial decisions — as outlined in our 2017 Retirement Security Blueprint.”