Income Later

Many retirees fear that they will run out of money later in life.   There are many financial risks of a lengthy retirement.  The federal government shares these concerns.  Qualified Longevity Annuity Contracts (“QLACs”) are investments facilitated by the IRS and issued by insurance companies, to address this exact concern by serving as longevity insurance.  Think of a QLAC as an additional lifetime income stream or paycheck in retirement that doesn’t start until a point later in retirement.

Why did the IRS create these vehicles?  Imagine a common scenario where a retiree wants or needs to spend significant money in the early years of retirement.  This may include things like travel, entertainment, taking care of a lingering health issue, or helping with college costs for grandchildren.  A retiree might also have to draw from retirement savings too quickly for basic living expenses resulting in outliving their savings.

Will these activities cause the retiree to run out of money in 10 or 20 years?  A QLAC adds value by making sure sufficient monthly lifetime income is established for the later years at the time of retirement.

ANNUA has been working in the retirement annuity market for nearly 40 years.

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