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Uncle Sam encourages annuity options

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in Small Business Tax,Small Business Tax Deduction Strategies

The federal government wants to give retirement plan participants more incentive to invest in annuities. In a new package of proposed regulations and rulings, the IRS and Treasury Department are reducing the administrative burdens for partial annuities by simplifying the benefit calculation. (Reg.-110980-10)

A partial annuity can provide a lump-sum payout with a stream of income over a term of years.

In addition, the required minimum distribution (RMD) rules will be relaxed so retirees can use part of their IRA or 401(k) balances to buy “longevity annuities.”

These begin late in life—typically, at age 80 or 85—so premiums are cheap and the retirees don’t have to worry about outliving their savings.

{ 2 comments… read them below or add one }

Rachel Summit May 29, 2012 at 10:34 pm

Any promotion of annuities is a good thing! I applaud the government for realizing the potential that annuities have to finance Americans’ retirement and ensure they don’t outlive their savings.


toooldtofail May 29, 2012 at 1:34 pm

Great idea and it can’t come too soon for me. It’s like funding your own increase in SS. It protects not only against longevity but inflation as well.


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