U.S. Senators Jeff Bingaman (D-NM), Johnny Isakson (R-GA) and Herb Kohl (D-WI) have introduced a bill aimed at helping Americans save enough so that they will not be in danger of outliving their retirement savings.
The Lifetime Income Disclosure Act would require 401(k) plan sponsors to use an annuity model to project how much income an investor would have each month in retirement based on how much they have saved, patterned on the Social Security Administration’s annual statements it has been mailing to all working Americans since 1989.
“It is estimated that half of American households will lack sufficient retirement income to maintain their pre-retirement standard of living,” Bingaman said. “Yet, many Americas are unaware of their financial vulnerability. Our bill is a common-sense approach to empowering Americans, and helping them determine whether they are on a path to a secure retirement.”
Isakson added, “Defined contribution plans such as 401(k)s are the retirement plans of the present and future. This bill will enable participants to receive additional, helpful information so they can better plan for their retirement.”