News Column

United States : OPTING for deferred income annuities for retirement

July 14, 2014



The Treasury Department just changed the tax rules so people can now invest IRA money in deferred income annuities without worrying about required minimum distributions.

When a person plans for their retirement-income. Deferred income annuities (known as longevity annuities) have become a popular way to protect against the risk of outliving your money in retirement, and not worrying about minimum distributions to make it even more attractive.

With deferred income annuity, the person can invest a lump sum at ages 50s or 60s and lock in a guaranteed lifetime payout that starts at a later date. Having this guaranteed income stream kicks in after a certain age can help you plan withdrawals from the rest of your savings.

The longer the payouts are deferred for, the bigger the bang for the buck. So, if the investment is $50,000 in New York Life s Guaranteed Future Income annuity at age 60, starting at age 80, the person will receive $17,614 each year for the rest of your life. Also, the person will get $13,695 per year if the option for cash refund promises that the beneficiary will receive the amount of money originally invested on death before receiving the $50,000 back in payouts.

The average buyer of deferred income annuities is about 59 and defers the payouts for 7 or 8 years. Removing the minimum distribution creates an opportunity for people to get higher payouts by deferring longer.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: TendersInfo (India)


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters