In recent years, the focus in Congress and the media has almost entirely been on the need to accumulate a nest egg to fund retirement. Congress is doing much to encourage personal saving and employer-provided retirement plans. Encouraging more savings is an important step, but it’s not enough. What has received little attention is the spending, or payout, side of retirement savings.

Americans for Secure Retirement supports giving retirees greater financial control over their retirement. Our proposal is aimed at helping people maintain their standard of living through retirement by making it easier for them to secure a steady income for life.

We believe Congress should create incentives that encourage the use of retirement vehicles that pay a guaranteed lifetime income. Our proposal would work this way: An individual would not pay federal income taxes on one-half of the income payments from annuities that make lifetime payments. No more than $20,000 annually could be excluded. For a typical American in the 25% tax bracket, this would provide an annual tax savings of up to $5,000.

Such an incentive would involve a relatively modest investment of federal revenues. This amount does not reflect cost savings to public social-services programs that would be generated by the greater use of life annuities. Nor does it account for the salutary effects of a guaranteed income stream on the quality of life of millions of seniors.