The political world seems to be turned on its head every other day, but thankfully there is plenty good that comes from our House of Representatives. One of those good things is an act that benefits retirees and protects them after they've done their part in the working world. The SECURE Act, otherwise known as the Setting Every Community Up for Retirement Enhancement Act, has just recently passed with a massive wave of support. In general, this bill gives retirees more access to workplace pensions and makes it, so they don't have to jump through hoops to get annuities they're deserved.
Back when 401(k) plans were introduced during the Revenue Act in 1978, it let employees invest and save for their future from their paychecks. Great, right? Well, yes but most retirees don't know exactly how much to save for the rest of their days. Will they live comfortably? Or will the money run out because of unexpected medical expenses or other things? The SECURE Act rights that wrong and even promotes the use of annuities by companies! This is fantastic news since it's not an easy or cheap thing to get an annuity.
If you're not familiar, an annuity is a fixed sum of money paid annually, and this is usually for the rest of their lives. Often it's given through insurance companies that have control of your savings, and they then supply you with a yearly income. Many economists highly recommend annuities in the reasoning that no one truly knows the exact amount they should have saved for retirement and it's a vicious game to play. You also aren't playing an investment game that could lead to all your hard-earned money being lost in the investment game, or worse, stolen from a non-trustworthy investor.
With the SECURE Act, it makes getting an annuity quite a bit easier and won't always involve you going through various agents with vague answers regarding your money for your future. The SECURE Act removes the legality risk from employers who offer 401(k), which means that a lawsuit won't be involved in the consumer regrets their annuity. This Act also requires the statements on a 401(k) to predict the annual income expected once their savings are in order. This keeps those looking to retire in the know and helps them plan for as much as they can at the moment.
While everyone seems to be for the SECURE Act and passing it through, it's still up to the people to decide if they will get an annuity or not. It's time to start thinking differently about annuities and what the SECURE Act can do for our nation's retirees. You worked hard enough already; this should be the least stressful time in your life!
West Financial Group can help you make these best financial decisions to secure your future! Contact our office today!