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Longevity Insurance - new tax rules for retirement plans
Old 07-01-2014, 10:08 AM   #1
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Longevity Insurance - new tax rules for retirement plans

Has this been discussed? I know longevity insurance has been a topic on here, but I saw this article this morning on new tax rules for longevity insurance offerings within retirement plans.

From the article:

New tax rules will make it possible for workers to buy a type of annuity often called longevity insurance inside their retirement plans. The annuity aims to protect people from exhausting their savings in their later years.

http://finance.yahoo.com/news/longev...124539390.html

I work for a fortune 50 company - I wonder if megacorp retirement plans will open up this option...
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Old 07-01-2014, 12:37 PM   #2
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Longevity insurance is also known as a deferred annuity, that is, and annuity that you buy now, or over a period of time, and which starts paying out at some later date, such as when you reach a specific age.

The deferred annuity that DW and I have is one that we've paid into over our working lives, and which we plan to start taking the payout when I reach age 70. This particular annuity has both a cost of living adjustment, a substantial survivor benefit, and the option to start payout earlier for a reduced payment size.

The vendor offers planning tools including various estimation and benefit calculators here.
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Old 07-01-2014, 08:42 PM   #3
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I too am curious what my company will offer. I will definitely consider it. Hope they are reasonable and give me another income stream option.


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Old 07-03-2014, 11:49 AM   #4
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A much better option would be a tontine-type defined benefit plan (i.e. a longevity plan) that begins paying once the retiree attains age 85 (or whatever). There is no adverse selection risk and it is much more efficient.
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Old 07-04-2014, 09:19 PM   #5
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Quote:
Originally Posted by Big_Hitter View Post
A much better option would be a tontine-type defined benefit plan (i.e. a longevity plan) that begins paying once the retiree attains age 85 (or whatever). There is no adverse selection risk and it is much more efficient.
It seems to me that you are talking about the product described in the OP
http://www.nytimes.com/2010/11/05/bu...l5/05LONG.html
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Old 07-07-2014, 09:26 AM   #6
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No, very different. The OP describes an insurance policy, my suggestion is a defined benefit pension plan. No adverse selection.
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