MONEY COMMENTARY
Your Biggest Retirement Risk Is Longevity
The good news: You’ll likely live longer than you expected. The better news: There’s a way to pay for it. ::
BY JOE STARK W
e’ve all worried about our health in retirement, seeing many go into a
nursing home, or experience a severe decline in quality of life. The fact is, it may be good health — not bad — that wrecks your dream retirement. Many people plan their retirement
on budgets that are in part based on their life expectancy. Unfortunately, that means the entire basis for many retirees’ planned income in retirement could be wrong. Life expectancy tables are calculated based upon the date at which 50 percent of people of a particular birth year and gender are expected to no longer be with us. This means you have a 50 percent
chance of being wrong if that date is what you’ve based your retirement income plans upon. Longevity in America is
increasing. In fact, the May 2013 cover of National Geographic magazine had a photo of a baby and the headline, “This Baby Will Live to Be 120.”
JOE STARK
Stark is CEO of Crown Atlantic, an insurance agency with a nationwide network of independent insurance professionals who can help you plan your retirement. He is a 25-year veteran of the annuity and insurance business.
76 NEWSMAX MAXLIFE | MARCH 2015
The article made the case that due to scientific and medical advances; a baby born today has a chance of living to 120. But longevity isn’t just something
that’s benefiting newborns; it’s truly starting to benefit those ready to retire today. With medical advances, better nutritional supplementation,
contracts special treatment. The new regulations allow participants in an IRA, 401(k), or similar plan to use as much as 25 percent (capped at $125,000) of their account balance to purchase a QLAC. Unlike many investment vehicles
Retirees need not shoulder all the risk of longevity themselves. Insurance companies allow seniors to pass off some of the risk through annuities.
and a greater focus on healthy living, today’s seniors are reaping their lifespan benefits now. Unfortunately, many are living long enough to run out of savings in retirement. But there’s a great solution to the
looming longevity crisis. Retirees need not shoulder all the risk of longevity themselves. Insurance companies allow seniors to pass off some of the risk to them through contracts called annuities. These contracts are a great way to generate a guaranteed lifelong income no matter how long you live.* Recently, the U.S. Treasury was
investigating the looming longevity crisis and suggested a new type of insurance company contract called a qualified longevity annuity contract (QLAC). The IRS worked with the Treasury to give these
where the IRS requires you to start taking a required minimum distribution no later than age 70½, a QLAC allows you to start taking income as late as age 85. Since longevity annuities are designed to generate an income stream for life, this makes QLACs particularly well suited to addressing
longevity risk issues. You can learn more about these
important insurance company contracts called annuities by getting Crown Atlantic’s Annuity Primer. Visit
CrownAtlantic.com/LiveLonger to get a copy today. If you’d like to meet with a Crown
Atlantic specialist to review solutions that can guarantee you income no matter how long you live, give us a call at 855-516-3574.
*Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company; they are not insured by the FDIC. A fixed indexed annuity is not a registered security or stock market investment and does not directly participate in any stock or equity investments, or index. Annuities are long-term insurance contracts designed for retirement. As a result there may be fees or penalties for early withdrawals, including surrender charges, and if taken prior to age 59 ½, withdrawals may be subject to a 10 percent federal additional tax. Crown Atlantic Insurance, LLC, is a wholly owned subsidiary of Newsmax Media.
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