Members of Congress have come through with legislation that could help insurers increase sales to retirees.[@@]
A group that includes 2 Republicans and 2 Democrats today unveiled a bill, the Retirement Security for Life Act, that would cut taxes on lifetime annuity benefit payments.
The bill is known as S. 381 in the Senate and H.R. 819 in the House.
If enacted, S. 381 would waive federal taxes on half of the income generated by a lifetime annuity, up to a maximum of $20,000 annually. For the typical retiree, the bill could provide a tax break of up to $5,000.
The sponsors of the bill are Sens. Gordon Smith, R-Ore., and Kent Conrad, D-N.D., in the Senate and Reps. Nancy Johnson, R-Conn., and John Tanner, D-Tenn., in the House.
“We’re going to have big challenges in the coming years as more Americans retire,” Smith said in a statement about the new bill. “We’re going to have big challenges in the coming years as more Americans retire. We need to be looking at ways to help people plan for their futures. Providing tax incentives for annuities is one of the easiest and most important things we can do.”
Similar legislation has been introduced before in Congress and stalled, but some members of Congress see supporting the new bill as an alternative to President Bush’s proposal for changing Social Security.
Members of Congress also are interested in increasing incentives for workers to contribute individual retirement accounts.
Congress has posted links to information about H.R. 819 at http://thomas.loc.gov/cgi-bin/bdquery/z?d109:s.00381: