The top Democrat on the Ways and Means Committee took issue with tax reform presented by the Trump Administration, warning against the targeting of retirement plans to pay for other cuts.
The Hill reports that Rep. Richard Neal, D-Mass., said Democrats “are concerned that one of the goals of the Republicans’ tax plan is to use the cuts as a justification to scale back retirement programs like Social Security.”
The website notes that Neal, who was among the lawmakers who huddled with President Trump Tuesday to talk taxes at the White House, said Democrats will oppose any overhaul plan that points to tax cuts “as offering a substitute for retirement savings.”
“One of the priorities of tax reform has got to be retirement savings,” Neal told attendees at an event sponsored by the Financial Services Roundtable in Washington on Wednesday. “You can outlive an annuity, you can’t outlive Social Security.
“That check is coming.”
Neal said Democrats will fight to preserve what he called the “three-legged stool” of retirement security, combining the efforts of government (Social Security), employers (pension plans) and individuals (personal savings), according to The Hill.
“Neal also laid out three red lines governing the Democrats’ approach to tax reform. First, they will insist that any tax package be revenue neutral. Second, it must help the middle class. And third, it must not shower any benefits on the wealthiest taxpayers.”
The Financial Services Roundtable event also featured an industry perspective from Robert Reynolds, CEO of Great-West Financial and Putnam Investments who similarly “called on Congress to act in the best interest of American workers and to preserve and expand incentives inherent in the nation’s retirement savings system.”
“A cut to retirement savings incentives in order to ‘pay for’ unrelated cuts would be a serious policy mistake,” Reynolds argued. “Congress must not sacrifice the savings individuals will need for tomorrow to fund today’s budget. We should, in fact, strengthen and expand incentives for retirement savings as part of any national tax reform.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
“One of the priorities of tax reform has got to be retirement savings,” Neal told attendees at an event sponsored by the Financial Services Roundtable in Washington on Wednesday. “You can outlive an annuity, you can’t outlive Social Security.
Seriously??? Did this guy actually say that?? “You can outlive an annuity, but you can’t outlive Social Security”. Does he have ANY clue what an annuity is? For that matter we might want to question if he has any clue as to the current state of Social Security solvency. This is an excellent example of another politician speaking on a subject that they know absolutely nothing about. Mr. Neal might want to heed the advice of Abraham Lincoln … “It is better to remain silent and be thought a fool than to speak out and remove all doubt” … The scariest part of all is that the good folks in Mass. voted for this fool ….
And, annuities actually have the financial reserves of the insurance company to back their lifetime income guarantee promise. The second misstatement is equating Social Security with retirement plans. Social Security is a social program designed to provide a variety of benefits to enrollees and their families. It is not, per se, a retirement plan. Yes, politicians, especially those who are uninformed or misinformed need to keep their mouths shut. They do more harm than good; often preventing financially sound programs from being enacted. We need public servants in office; not self-seeking or politically minded people looking to feather their own nest or forward their party’s agenda at the expense of their constituents.
Sam, you can outlive an annuity, the type was not specified, if you have a Term Certain Annuity or if the annuity is in your spouses name and it is not have last survivor rights. The politician in Mass might not be the most educated individual on annuities but your correction is at best partially wrong and not helpful to furthering the conversation in a meaningful manner. There are more than enough brokers out there willing to sign someone up tomorrow with a term certain annuity as they are less expensive and do not look at current health conditions due to their payout structure. Accuracy in our industry is of paramount importance due to the implications a simple misstatement or misunderstanding can have on someone 20 years down the road. Please be accurate in the future, it will help us all out.