Source: United States House of Representatives – Congressman Jimmy Panetta (D-Calif)
Washington, DC – United States Representatives Jimmy Panetta (CA-19) and Darin LaHood (IL-16) reintroduced the Retirement Simplification and Clarity Act, bipartisan legislation that would provide more flexibility and clearer guidance to Americans navigating retirement savings decisions. The bill would empower individuals with options and digestible information for securing their financial futures.
“Navigating the various methods of saving for retirement can get very complicated, very fast,” said Rep. Panetta. “This bipartisan bill helps Americans plan for retirement by making the process simpler and giving them more flexibility. By helping Americans make informed decisions about their savings, we can strengthen their financial security for retirement and the years ahead.”
“Hardworking Americans planning for retirement shouldn’t have to face extraneous complications that create uncertainty about their financial future,” said Rep. LaHood. “Providing more flexibility and a better guidance during the process will help ensure Americans can properly prepare for retirement and feel confident in their decisions. I am proud to lead this bipartisan effort with Representative Panetta to help eliminate needless hurdles and reduce the confusion surrounding retirement.”
Specifically, the Retirement Simplification and Clarity Act would implement key recommendations from the Government Accountability Office (GAO) to streamline the complicated 402(f) notice process. A 402(f) notice is the document provided to individuals who leave an employer and request a distribution from their 401(k) plans. The notice outlines distribution options and their tax implications.
Under the bill, the IRS would be directed to redesign this notice in clear, straightforward language. The revised version would provide plain explanations of all distribution options, including rolling over savings into a new plan or leaving them in the current one, so that individuals can make well-informed decisions about their retirement funds. Additionally, the legislation would broaden in-service rollover options by allowing individuals aged 50 and older to transfer funds from their employer-sponsored 401(k) accounts into an annuity.
The Retirement Simplification and Clarity Act is supported by financial planning experts and organizations like the American Council of Life Insurers and the National Association of Insurance and Financial Advisors (NAIFA) who advocate for retirement security.
“The Retirement Simplification and Clarity Act will help ensure Americans have the information and ability to make the best decisions for their retirement,” said David Chavern, President and CEO of the American Council of Life Insurers. “As the only product that guarantees income for life, annuities play a unique and critical role in retirement planning. This important legislation will give Americans nearing retirement better information and additional options to achieve the retirement they want.”
“The National Association of Insurance and Financial Advisers (NAIFA) is pleased to endorse the Retirement Simplification and Clarity Act, introduced by Rep. Panetta (D-CA) and Rep. LaHood (R-IL),” said NAIFA CEO Kevin M. Mayeux. “As the largest national association of insurance and financial advisers with members assisting hard-working, everyday Americans in all states and Congressional districts with retirement savings choices, we applaud any effort to simplify the rules for retirement savings and to enhance the ability of retirees to ensure they do not outlive their savings through guaranteed income options. This bill will advance those worthy goals, and NAIFA looks forward to working with the sponsors to see it enacted.”
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