FOR IMMEDIATE RELEASE:
June 21,
2006
CONTACT:
Idil Oyman, 202.777.3518
Kelly
Alderson, 202.777.3542
Aging Committee
Weighs How to Ensure Americans Have Steady Income in
Retirement
ASR Submits Testimony Supporting
Incentives for Lifetime Annuities
WASHINGTON –Americans for
Secure Retirement (ASR) Chairman Walter Welsh today told the Senate Special
Committee on Aging that Congress should help Americans better plan for
retirement and not outlive their savings by implementing policies encouraging
the use of lifetime annuities as a way to secure a steady stream of income for
life. Specifically, Welsh called on Congress to enact legislation called The
Retirement Security for Life Act (S. 381, H.R. 819), which would result in
an average tax savings of $5,000 for Americans in the 25 percent tax bracket by
providing a 50 percent tax exclusion on the payout from a lifetime annuity.
“When you consider that Americans are spending often 20-30 years in
retirement, that currently 88 million American workers do not have any kind of
employer-based retirement plan, and Social Security replaces only 42 percent of
pre-retirement income, it’s clear that people will increasingly have to rely on
their own planning to ensure a secure retirement,“ said ASR Chairman Walter
Welsh. “With the first wave of 77 million baby boomers set to retire over the
next few years, it is urgent that lawmakers promote policies that help Americans
ensure a steady stream of income all through retirement.”
ASR says the
management side of the retirement policy equation has received relatively little
attention compared to the need for savings, yet is one about which an increasing
number of Americans are greatly concerned. In fact, a recent poll ASR
commissioned found that half of American voters between 50-70 years old are
actually more concerned about managing their savings so they do not outlive
them, than actually just saving before retirement. These poll findings show
that this hearing is both timely and of great interest to the millions of baby
boomers who will soon rely on America’s retirement system.
There are a
number of important factors contributing to the conundrum many face in planning
for retirement, including increased longevity, a decreasing ability to rely on
regular monthly income from Social Security and pensions, and the growing number
of people who do not have access to, or participate in, any kind of
employer-sponsored retirement plan.
“Outside Social Security and
pensions, lifetime annuities are the only vehicles that literally provide a
“paycheck for life” and can help ensure a regular source of income to augment
Social Security and other savings they may have,” Welsh said. “That's why ASR
urges members of this committee to support the Retirement Security for Life
Act, and the Flexible Retirement Security Act, which offer a
strong tax incentive for Americans to use lifetime annuities.”
“ASR
commends Chairman Smith and all the Senators on this panel for recognizing the
scope of the challenges facing women as they plan for retirement, and the
importance of examining the full range of potential approaches that can be
tapped to improve retirement security for millions of Americans,” Welsh said.
Americans for Secure Retirement supports legislation introduced by
Aging Committee Chairman Gordon Smith and Senators Conrad (D-ND) called The
Retirement Security for Life Act (S. 381) and the Flexible Retirement
Security Act of 2005 (S. 1359), which would encourage Americans to invest a
portion of their savings in lifetime annuities to secure a guaranteed source of
income in retirement. Under these proposals, individuals would not pay federal
taxes on one-half of the income generated by lifetime annuities up to $20,000
per year. This would result in approximately $5,000 tax savings for a typical
American in the 25 percent tax bracket.
To view the testimony online or to
learn more about ASR, please visit www.paycheckforlife.org.
To read the Americans for Secure Retirement Testimony click here
