RETIREMENT
“ President Trump pledged to put an end to Joe Biden’ s inflation and affordability crisis, and the administration is constantly exploring new policy actions to do just that,” White House spokesperson Kush Desai said.
The idea has already gained vocal support on Capitol Hill. Sen. Josh Hawley, a Missouri Republican, endorsed the idea in a post on X earlier this month.
“ For years, Wall Street has used your 401( k) money to buy single-family homes,” Hawley wrote.“ We should ban them from doing it— but allow you to use your 401( k) to help you buy a home, without penalties or caps or taxes.”
Supporters argue that homeownership itself is a form of retirement security. A paid-off home reduces expenses in later life bill is sponsored by Rep. Tim Walberg, a Michigan Republican, and Rep. Donald Norcross, a New Jersey Democrat.
Supporters say the measure would help close a growing retirement income gap as traditional pensions continue to disappear.
“ Lifetime income solutions can serve as a powerful way to ease the anxiety of workers and retirees,” said Wayne Chopus, president and CEO of the Insured Retirement Institute, when speaking to lawmakers during the hearing.“ When retirees have the confidence that their essential monthly expenses will be met through guaranteed income, such as Social Security and annuities, they gain more than financial stability— they gain peace of mind.”
More than four million Americans will
Research shows that 58 % of retirement savers say outliving their assets is their greatest fear. Nearly two-thirds worry more about running out of money than about death itself. and offers protection against inflation. Critics, however, warn that when savers get expanded early access to their funds it could worsen their retirement readiness later, since they would be draining accounts and erasing years of compounded growth.
While that debate plays out, lawmakers are also addressing a different concern: what happens when workers reach retirement with savings but no plan for turning it into income.
That concern took center stage in early January during a House of Representatives committee hearing on the bipartisan Lifetime Income for Employees Act, or LIFE Act, which would amend ERISA to allow certain annuities to be used as qualified default investment alternatives. The turn 65 each year through 2027, but twothirds of Americans say they are not confident they can retire between ages 65 and 70. Fewer than one in five are very confident their savings will last, Chopus said.
As pensions have faded, workers have been left to manage longevity risk largely on their own.
“ Unlike pensions, which deliver monthly retirement income for life, defined contribution plan participants are responsible for converting their retirement savings into sustainable income,” Chopus said.
Surya Kolluri, head of the TIAA Institute, urged lawmakers to support the legislation. Life expectancy has increased by roughly 17 years since Social Security was created, he said, leaving many workers facing retirements that last three decades or more.
Research shows that 58 % of retirement savers say outliving their assets is their greatest fear. Nearly two-thirds worry more about running out of money than about death itself.
Kolluri said people lack“ longevity literacy”: He pointed to TIAA Institute research that said only 35 % of U. S. adults correctly knew what the average life span was after age 65.
The LIFE Act would build on the SE- CURE and SECURE 2.0 laws. Those laws improved annuity portability and created safe harbors for plan sponsors, but they stopped short of allowing annuities to be default investments, largely because of concerns about their liquidity and the risk of liabilities for plan sponsors as fiduciary caretakers to retirees.
Critics remain skeptical. Chris Tobe, a retirement plan consultant, has warned that annuities in ERISA plans often fail fiduciary standards because of their opaque fees, inadequate disclosures and insurers’ reluctance to acknowledge fiduciary responsibility.
Still, industry advocates believe momentum is building.
“ We’ re being optimistic that a package could come together this year,” a longtime annuities industry lobbyist says.“ But election years can be challenging.”
Whether they allow plan participants to tap savings early or turn to lifetime income products, policymakers appear increasingly willing to rethink how 401( k) s are used— and what Americans expect them to deliver.
54 | FINANCIAL ADVISOR MAGAZINE | JANUARY / FEBRUARY 2026 WWW. FA-MAG. COM