There is a new form of deferred income annuity (DIA) being offered the Obama administration to address longevity risks called a qualified longevity annuity contract (QLAC). New rules were implemented by the U.S. Treasury last year to encourage the use of QLACs in both individual retirement accounts and 401(k) plans by doing away with the required minimum distributions (RMDs). QLACS benefit buyers by letting them pay for an initial premium and then make a series of scheduled payments until a future date when they start receiving distributions. This article provides details about the way this investment strategy works. There are currently many people including President Obama who are promoting this financial tool for people entering into retirement.
See Mark Miller, A New Tool for Retirement Income, Morningstar, September 5, 2015.
