Rules issued today by the
The rules relate to longevity annuities - types of deferred annuities that typically begin paying policy-holders long after retirement begins, perhaps at age 75 or 85, to eliminate the risk of running out of retirement savings. Like all annuities, they give the owner the ability to secure a lifetime income payment.
The Treasury-IRS rules make longevity annuities accessible to the 401(k) and IRA markets. As noted in the Treasury-IRS release, the rules expand "the availability of retirement income options as an increasing number of Americans reach retirement age."
According to Treasury and the
"This change will make it easier for retirees to consider using lifetime income options: instead of having to devote all of their account balance to annuities, retirees who wish to follow a combination strategy that uses a portion of their savings to purchase guaranteed income for life while retaining other savings in more liquid or flexible investments will be able to do so," Treasury and the
While ACLI is still reviewing the rules, it is clear that they represent wise public policy. Americans are living longer than ever before. Many can expect to spend 20 years, 30 years or more in retirement. To obtain retirement security and peace of mind, retirees and workers need rules tailored to their changing needs.
The rules issued today represent national retirement policy moving in the right direction.
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