Department of Labor Introduces New Retirement Security Proposal

When saving for retirement, sound advice is needed to grow your savings fund. However, retirement savers lose billions of dollars due to wrong financial advices, according to the U.S. Department of Labor.

In order to protect retirement savers and investors, the Labor department released a new retirement security proposal to ensure that individuals hire a financial adviser that will champion their best financial interests, rather than giving conflicted advice that will only benefit the adviser.

Based on the White House Fact Sheet, the proposal will enforce the following:

– Close loopholes so that financial recommendations to buy any investment vehicles are in the savers’ best interest.
– Cover advice to roll assets out of an employer-sponsored plan like a 401(k).
– Cover advice to plan sponsors about which investments to make available as options in 401(k) and other employer-sponsored plans.

“This rule will level the playing field and make sure that all advisers are competing under a common best interest standard when they make recommendations about retirement investments. And it’s about time,” wrote Lisa M. Gomez, the assistant secretary for employee benefits security in the U.S. Department of Labor.

“This proposal achieves those goals and will make it much easier for people to invest their hard-earned retirement savings confidently so that they can eventually enjoy the carefree retirement that they deserve.”