On June 16, 2010, the United States Senate Special Committee on Aging, chaired by Senator Herb Kohl (D-WI), held a hearing on lifetime income solutions titled, “The Retirement Challenge: Making Savings Last a Lifetime.”
Lisa Mensah, Executive Director of the Aspen Institute Initiative on Financial Security, was on hand to urge the cautious consideration of any Federal policy making retirement income products a default decumulation option. “We can say confidently that everyone needs to save. We cannot say that everyone needs to annuitize,” asserted Ms. Mensah.
The Committee hearing also featured panelists Phyllis Borzi, Assistant Secretary of Labor of the U.S. Department of Labor; J. Mark Iwry, Senior Advisor to the Secretary of the Treasury and Deputy Assistant Secretary for Retirement and Health Policy of the U.S. Department of Treasury; Ted Beck, President and CEO of National Endowment for Financial Education; Kelli Hueler, Founder and CEO of Hueler Companies; and William Mullaney, President of MetLife’s U.S. Business.
Multiple panelists cited Americans’ need for better education on the benefits of lifetime income products. Ms. Mensah took a different tack. “At Aspen IFS, we believe that the journey to financial security is not just a “people” problem, but also a “product” problem,” Mensah affirmed. “[We] need simple and secure financial products to help all Americans save, invest, and own.”
Ms. Mensah went on to highlight the importance of covering those Americans who are not currently served by employer sponsored retirement plans and offered up an innovative policy proposal, Security Plus Annuities, which would help the over 3 million baby boomers retiring every year secure some lifetime income. “Aspen IFS has proposed a new public/private partnership to market “Security Plus Annuities” through the Social Security Administration,” Ms. Mensah explained. “Seniors who are deciding to claim Social Security could opt to “buy” an additional layer of Social Security like income with their own money and have it added to their monthly checks.” For more information on Security Plus Annuities click here.
Ms. Mensah concluded on an inspirational note. “I have hope that we will learn much more about what American workers value in a lifelong income product. Once we do, we’ll be able to improve our system of savings so that it truly delivers lifelong financial security for a diverse America.”
To learn more and to watch a video of the hearing click here.