U.S. Reps. Darin LaHood (R-IL) and Jimmy Panetta (D_CA) introduced legislation in the House that would help American seniors planning for and entering into retirement.
The legislation, the Retirement Simplification and Clarity Act, would work to remove barriers and provide individuals with more guidance and flexibility while retirement planning.
“Hardworking Americans planning for retirement shouldn’t have to face extraneous complications that create uncertainty about their financial future,” LaHood said. “Providing more flexibility and a better guidance during the process will help ensure Americans can properly prepare for retirement and feel confident in their decisions. I am proud to lead this bipartisan effort with Representative Panetta to help eliminate needless hurdles and reduce the confusion surrounding retirement.”
The bill would enact some changes to retirement information from the government to simplify notices that outline what an individual’s options are when requesting distributions from their retirement plans. Additionally, it would create a new in-service rollover option that would allow individuals over 50 to roll over some or all of their existing retirement savings into an annuity product for guaranteed lifetime income while continuing to save in their 401k plans.
Currently, the 402(f) notices sent out to 401k participants are complex and hard to understand. Additionally, individuals can’t use an in-service rollover to buy annuities while continuing to save in their 401k.
“Navigating the various processes of saving for retirement can get very complicated, very fast,” Panetta said. “This bipartisan bill helps Americans plan for retirement by making the process simpler and giving them more flexibility. By helping Americans make informed decisions about their savings, we can strengthen their financial security for retirement and the years ahead.”
The legislation is endorsed by the National Association of Insurance and Financial Advisers (NAIFA).
“As the largest national association of insurance and financial advisers with members assisting hard-working, everyday Americans in all states and Congressional districts with retirement savings choices, we applaud any effort to simplify the rules for retirement savings and to enhance the ability of retirees to ensure they do not outlive their savings through guaranteed income options. This bill will advance those worthy goals, and NAIFA looks forward to working with the sponsors to see it enacted,” NAIFA CEO Kevin M. Mayeux said.