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New legislation changes retirement savings

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retirement savings legislation

Previously, retirement plans included lifetime income annuities and pensions, called “defined benefit” plans, but private sectors moved away from these and offer employer-sponsored 401(k) plans instead. The 401(k) retirement plans are stricter, in that retirees must make their retirement savings last as long as possible or risk outliving their own savings.

The House Ways and Means Committee is changing this by proposing a provision that allows any participant to convert their retirement savings into a steady stream of income. With this new provision, employees can avoid the hassle of manually withdrawing cash or using a separate allowance.

Katelin W. Davis, S&A Communications

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