New Annuity Product Provides an Income Stream for a Long Life

Federal rules now allow taxpayers to invest a portion of their retirement accounts into a longevity annuity.

Senior Woman with Piggy Bank
(Image credit: Getty Images/Fuse)

More than half of retirees rank outliving their savings as their top worry in retirement, according to a recent survey. But will this fear motivate individuals in their mid sixties to plunk down cash for a hefty guaranteed income stream that won't begin until their mid eighties?

Thanks to new rules by the federal government, a growing number of insurance companies are betting that retirees will do just that. Insurers are offering an annuity product that retirees can buy for their IRAs and employer-sponsored retirement plans, such as 401(k)s. Ten insurers -- among them Guardian Life, MetLife and Principal Financial -- are selling qualified longevity annuity contracts, known as QLACs.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

To continue reading this article
please register for free

This is different from signing in to your print subscription

Why am I seeing this? Find out more here

Susan B. Garland
Contributing Editor, Kiplinger's Retirement Report
Susan Garland is the former editor of Kiplinger's Retirement Report, a personal finance publication whose subscribers are retirees and those approaching retirement. Before joining Kiplinger in 2006, Garland was a freelance writer whose work appeared in the New York Times, the Washington Post, BusinessWeek, Modern Maturity (now AARP The Magazine), Fortune Small Business and other publications. For 12 years, Garland was a Washington-based correspondent for BusinessWeek, covering the White House, national politics, social policy and legal affairs. Garland is a graduate of Colgate University.