Washington, D.C. (June 22, 2009) — The American Council of Life Insurers (ACLI) applauds Sens. Kent Conrad (D-ND) and Pat Roberts (R-KS) for introducing on June 18 legislation that would help all Americans manage their retirement savings to last a lifetime.
The Retirement Security for Life Act (S. 1297) would create tax incentives to encourage people to invest a portion of their retirement assets in an individual lifetime annuity, the only financial product that promises a lifetime income.
“America’s retirement security model has changed. Instead of relying on defined benefit plans to provide retirement income, Americans must now manage their own savings for a comfortable and secure retirement. The challenge that millions of retirees now face is how to make those savings last throughout retirement. The Retirement Security for Life Act will help retirees meet this challenge by encouraging them to convert some of their savings into a lifetime income stream through an annuity,” said ACLI President and CEO Frank Keating.
The legislation would encourage retirees to invest in guaranteed lifetime income by allowing them to receive up to $20,000 annually tax free from an individual lifetime annuity. Specifically, it would provide a 50 percent deduction on income up to $40,000 received from a lifetime annuity. For the typical American in the 25 percent tax bracket, this would provide an annual tax savings of up to $5,000.
S. 1297 would particularly address the needs of individuals who are not covered by employer-sponsored retirement plans and who acquire their retirement savings through a life insurance policy or the sale of a home or business.
“By addressing their retirement income concerns, S. 1297 will help millions of Americans find the peace of mind in retirement they want and need,” Keating said.
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The American Council of Life Insurers (ACLI) is a Washington, D.C.-based trade association whose 340 member companies account for 93 percent of the life insurance industry’s total assets in the United States, 94 percent of life insurance premiums and 94 percent of annuity considerations. In addition to life insurance and annuities, ACLI member companies offer pensions, including 401(k)s, long-term care insurance, disability income insurance and other retirement and financial protection products, as well as reinsurance. ACLI's public Web site can be accessed at www.acli.com.