In recognition of the reality that many Americans will live well into their 80s, the Department of Treasury recently issued final rules making Deferred Income Annuities more accessible to those with good genes and perhaps inadequate savings.
The rules could be a game changer for how boomers, and their advisors, allocate 401(k) and IRA assets going forward.
1. Defined contribution.
Defined contribution participants and IRA owners are now allowed to invest up to 25 percent of their account balances, or up to $125,000, in qualifying longevity annuity contracts, or QLACs.
2. Longevity annuities
Longevity annuities will distribute cash at a set age, typically by 80 or 85.
3. The IRS
What happens in the event that investors, and or their advisors, inadvertently distribute more than the 25 percent limit to a deferred annuity?
4. The Lump-sum
As far as the lump-sum goes:
5. Cash value
Finally, there's the issue of cash value:
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