Lifetime annuitization has gotten another boost, this time as bipartisan members of both the Senate and House have reintroduced the Retirement Security for Life Act. The bill, originally proposed last year, originally called for making $20,000 of annual annuity payments tax-free.
In the new bill, the exclusion would apply only to payments from lifetime annuization from non-qualified assets. Also, life-contingent annuities that are later converted to fixed-term payouts would be subject to a recapture tax.
The bill was introduced to both the House and Senate on Feb. 15. Senators Gordon Smith (R.-Ore.) and Kent Conrad (D.-N.D.) brought it to the Senate, while Representatives John Tanner (D.-Tenn.) and Nancy Johnson (R.-Conn.) brought it to the House.
Americans for a Secure Retirement, a group supporting the bill, cited research from PricewaterhouseCoopers that found the measure will cost between $10 billion and $17 billion over 10 years, not counting the cost savings to social services programs.