WASHINGTON — Sen. Chris Murphy is looking to help Americans become a little more informed when saving for retirement.
On Tuesday, Murphy, along with Sen. Johnny Isakson of Georgia, introduced the Lifetime Income Disclosure Act, a bill that would require 401(k) plan sponsors to inform participants of the projected monthly income they could expect at retirement based on their current account balance.
The process would emulate the Social Security Administration's annual statements that notify working Americans of the projected monthly benefits they would receive monthly once retired.
By providing similar information for 401(k) plans, the Lifetime Income Disclosure Act would give American workers a more complete snapshot of their projected income in retirement.
"For too many Connecticut families, saving for retirement is daunting, if not impossible. The fact is too many people find out too late in their careers that they haven't been saving enough," said Murphy.
"The Lifetime Income Disclosure Act is a simple solution to give working Americans an easy way to judge for themselves whether they're saving enough to maintain the standard of living they're used to. This bill won't put money in workers' pockets, but it will empower them to make smarter decisions."
Typically, participants in 401(k) plans designate a percentage of each paycheck to contribute to their retirement accounts but many Americans are not saving enough. Under the Lifetime Income Disclosure Act, participants would be informed annually how their account balance would translate into a monthly income stream based on age at retirement and other factors.