A More Secure Retirement
AARP is backing a new protection for your savings
AARP has been fighting to make sure Americans are financially secure after?retirement?since our founding 65 years ago. It’s been a long, hard road, but we have seen our share of victories, and there are more battles still to win.
That’s why I was pleased when President Joe Biden announced the Department of Labor’s proposed improvement to a key provision of the Employee Retirement Income Security Act (ERISA).?AARP believes the rule?would provide a more secure and prosperous retirement for millions of Americans.
The proposed changes, contained in what is called the Retirement Security Rule, are extensive. But at their core is an expansion of the definition of an “investment advice fiduciary.” Put simply, when you are a fiduciary, you are legally obligated to put your client’s interest first. The new rule would expand the products and services for which a financial professional must operate as a fiduciary.
That’s critical. Many Americans seek help to manage their money, and they deserve to have?financial advisers?whose goal is to protect and grow their savings. Right now, loopholes in the law allow many financial advisers to make investment recommendations that are based on what makes the most money for them, not the person saving for retirement.
The proposed rule will better protect millions of American workers and retirees from being involved with financial products that are not in their best interest, such as those with higher fees or inappropriate levels of risk, or just not of a high quality.
It will also ensure that when an employee is doing a one-time transfer of funds to a new type of retirement account — for example, during a rollover from a?401(k) to an IRA?— the advice they receive from their provider is in their best interest.
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The new rule would cover financial products currently regulated by ERISA but outside the scope of the Securities and Exchange Commission’s Regulation Best Interest, such as commodities, real estate and insurance products, including annuities.
An update of the rules that govern retirement plans is overdue. Some of the regulations are nearly 50 years old. The definition of investment advice fiduciary was adopted in 1975, when IRAs were new, 401(k) plans didn’t exist and most Americans relied on traditional pensions for retirement savings.
Times have changed dramatically. Today, it is largely workers, not employers, who shoulder the risk and responsibility of choosing investments. Individual plan participants and IRA owners, rather than professional money managers, are expected to make financial decisions. This has become increasingly difficult as financial products have become more numerous and complicated.
It makes no sense that 401(k)s are under the fiduciary duty protection of ERISA, but 401(k) rollovers into IRAs are not. Consumers are often not aware that advice to roll over their IRAs is not subject to the same protections. As a result, significant value of these accounts can be lost, year by year, in undisclosed fees, commissions or below-par rates of return.
In today’s world, it’s hard enough to save for retirement and achieve your financial goals. We don’t need to make it more difficult by allowing some in the financial industry to take advantage of hardworking Americans.
AARP will continue fighting to ensure that investment professionals put consumers’ interests ahead of their personal gain.
Event Coordinator at THEY Improv
1 年I feel you do not do what you promise for seniors, I have sent an email with what you are needed to help us with but your gatekeeper Bruce refuses to get this information to you. Talk to Bruce see my emails is it just for advertising when you do commercials because I am not seeing anything that looks like help
Helping Hearts Non-Medical PCA Inc.
1 年. https://drive.google.com/file/d/1b_ZYUV2atGfb80r_Cj7rM1y6eRVNxXzX/view?usp=drive_link Sincerely, Shanike Williams Founder, Helping Hearts PCA? [email protected]? DONATIONS ARE WELL ACCEPTED TO SUPPORT OUR WORK IN PROGRESS? (857)498-5450 ?for more information on Donations please email the office. ?for more information on Donations please email the Helping Hearts MP3.mp3
Operations | Project Manager | Creative
1 年Most people don't know what a fiduciary is. First, educate. Then, encourage. And hopefully, people will benefit.
Ms Jo Ann Jenkins. You may want to review #Brazil's #retirementincome bond which ensures #retirementsecurity through a simple, low-cost, low-risk, liquid and bequeathable security (#RendA+). All available through a simple app (that ideally U.S. Department of the Treasury creates) and can be purchased in slices of $5/time for even the most unsophisticated/uncovered individuals. Time for real change, rather than trivial measures otherwise minority and poor populations will need to be bailed out or retire in poverty.
OFFICE MANAGER - CENTURY TOWING SERVICE, INC.
1 年What about having a law that any money browed from social security by the government is paid back with interest and no political party can touch these funds again. No cuts will be necessary and seniors can live a descent life.