What You Need to Know
- A Senate hearing on financial literacy gave Democrats and Republicans a chance to find something like common ground.
- Gerri Walsh, a FINRA executive, talked about the need to balance the need for income with the need for liquidity.
- Cindy Hounsell of WISER said many young women learn about the need for retirement planning by looking at their grandparents.
Senators are still thinking about ways to help Americans get more and better help with retirement income planning.
They say they want to make sure the advice comes from trustworthy people, without hidden conflicts of interest, but is also affordable.
Sen. Bob Casey, D-Pa., the committee chairman, opened the hearing by pointing out that 11,000 Americans are turning 65 every day, and that many of those people are turning to his own office for help with retirement-related financial concerns.
“Last year, my constituent services team received over 1,000 calls and emails from Pennsylvanians on these issues,” Casey said.
Sen. Tim Scott of South Carolina, the ranking Republican on the committee, said that he had spent more than 20 years in the financial services industry himself, and that one challenge was the difficulty of finding the right products.
“Some of the annuities didn’t have the lifetime options, so, sometimes you could outlive your money,” Scott said.
Gerri Walsh, senior vice president of investor education at FINRA, told Scott that one concern is balancing the need for retirement income with need for ready access to cash.
“When people transition from accumulating to decumulating assets, they have a choice about what they can do with their money,” Walsh said. “Some people have a pension. Many Americans rely on Social Security. But if you have accumulated savings in a 401(k) or an IRA, you need to think about what to do with that.
”For many people, having guaranteed income can be critical to being able to meet expenses. So, deciding how much of your portfolio to annuitize, especially if you don’t have a very big portfolio, is a huge consideration, with important considerations. It’s a key topic”
But Scott had used up the time allocated for him and his questions at the hearing, and the committee had to move on before Walsh could say much about that topic.
Sen. Kirsten Gillibrand, D-N.Y., asked another witness, Cindy Hounsell, about helping young people, especially young women, handle the possibility that they might have to prepare for their own retirement while acting as caregivers.
Hounsell, president and founder of the Women’s Institute for a Secure Retirement, or WISER, said potential caregivers need to know how retirement, retirement programs and private retirement planning work as early as possible.