Wouldn’t it be nice to have an idea of how much income your retirement savings could deliver when you retire? Well, legislators are looking to make this information available right at your fingertips through The Lifetime Income Disclosure Act.
Details of proposed legislation:
The intent of the bill is to help participants of defined contribution plans understand how their current account balance translates to monthly lifetime income at retirement. In other words, participants would receive a snapshot into their financial future in just one glance.
Plan sponsors of defined contributions plans (subject to the Employee Retirement Income Security Act (ERISA)) would be required to illustrate how a participant’s account balance would translate into guaranteed monthly payments at retirement. The monthly income estimates take into account the participant’s current accrued value of benefits, with no future earnings or contributions assumed in the income calculation.