“We’re sleepwalking towards a retirement death,” warned former Congressman Earl Pomeroy at an Insured Retirement Institute (IRI) conference earlier this year. I’ve known the congressman for decades—dating back to our days as insurance commissioners. So when my friend uttered those words, I knew how serious he was.
Pomeroy said it would be outrageous to put into question the tax incentives that are encouraging Americans to save for retirement, at a time when nation is not saving nearly enough. Yet with the so-called fiscal cliff on our doorstep, leaders in Washington are studying tax expenditures, hoping to identify new revenue. With retirement savings ranking among the largest tax expenditures, those same tax incentives are now in jeopardy and the repercussions for the insured retirement industry could be vast.
Among the tax incentives on the table that could be reduced or eliminated: the tax-deferred status of the inside buildup of annuities and other retirement savings vehicles. Given that these incentives are helping Americans attain financial freedom and security during their retirement years, in no uncertain terms, this would be a retirement death.