President Joe Biden spoke about protecting retirement savings. The White House is proposing new regulations they say will keep more money in workers' pockets.
"People should be able to trust that when they get advice from a so-called expert, they're getting real help, not getting ripped off," said President Biden.
The Labor Department's proposed rule protects workers from expensive advice when rolling over savings from a workplace 401 to an IRA. It ensures financial advisors are acting in the best interest of the saver over personal profits.But this may be scarce consolation for boomers who are still struggling to get their 401 balance back to pre-COVID levels. According to Fidelity, the average boomer's 401 balance was $220,900 in June.
“Three years ago, if you had been aiming for a retirement savings of let's say $500,000, in today’s climate with higher prices, you need more like $600,000. In three years, you need another $100,000 to have the same purchasing power. So inflation has very much eaten away at people’s savings,” said Paul Mueller with American Institute for Economic Research.
But critics of the proposal say regulating the retirement market could do more harm than good. And some firms could start limiting the advice they give to investors. Inflation and the economy as a whole are huge issues to voters in the 2024 campaign, and that's led the Biden White House to crack down on junk fees in other industries too, like banking, rental housing, and concert tickets.
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