BY MARC CADIN, OPINION CONTRIBUTOR — 09/27/18 09:30 AM EDT
At a time when our nation’s balance sheet shows over $21 trillion in debt, the federal government should be doing everything it can to incentivize retirement savings for families around the country. With all the discussion of tax reform 2.0, it’s important to understand that the financial security of all Americans will largely depend on what Congress does to address long-term financial planning.
Social Security has lifted millions out of poverty; however, it is not sufficient for protecting the financial security of American families. We are observing what might be the perfect storm of financial insecurity. Insufficient savings, longer life expectancy that requires more resources during retirement, and a sharp increase in the number of retirees that the federal government is ill-prepared to support.
In dealing with these challenges, policymakers must empower the financial security advisor community with more, and better, private sector solutions, in partnership with the public sector.
Fortunately, the momentum for change is building as leaders in Congress are starting to address these issues. The provisions in tax reform 2.0 to help increase retirement savings are a good first step.
A stronger step is found in the Retirement Enhancement and Savings Act (RESA), which has wide, bipartisan support, includes even more robust provisions, which would clear the way for retirement plans to offer annuity solutions (which provide guaranteed lifetime income) and pave the way for more access to, and participation in, employer-sponsored plans.
At its foundation, financial security is largely connected to one’s ability to mitigate two primary risks – mortality and longevity.
Financial security advisors are the key to helping more Americans address these risks and achieve true financial and retirement security. And with September being Life Insurance Awareness Month, it is a great opportunity to appreciate the expertise, advice, and financial solutions they bring to consumers every day.
While it’s not pleasant to talk about, death can bring real financial strain on a family or business. And this strain is most effectively solved through the benefits of life insurance planning. Everyone needs life insurance, but most people do not have enough. A financial security advisor ensures those important conversations take place and that individuals, families, businesses, and employees take the necessary steps towards long-term financial security.
An equally challenging and growing concern is outliving one’s retirement savings – a longevity risk.
President Trump’s executive order designed to expand access to retirement plans (especially for small businesses), reduce administrative burdens, and review rules governing required minimum distributions at the end of August is an excellent and helpful initiative.
But let’s not stop there. The magnitude of the challenges requires innovation. What other ways can we encourage action today that will help to mitigate problems later? More collaboration between the financial security advisor community and policymakers, and more appreciation and support for the professionals serving American consumers, will produce the financial and retirement security so many desperately need.
And so, as tax reform 2.0 advances from Committee markup to the floor, lawmakers in Congress should seize this opportunity to help financial security advisors continue to elevate protection and savings opportunities for millions of Americans.
The financial security of our nation depends on the financial security of our retirees!
Marc Cadin is the CEO of AALU, a professional trade association representing 2,000 life insurance agents and professionals nationwide.
View original publication on The Hill here.
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