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When Is an Annuity a Longevity Annuity?

Q. What makes an annuity a longevity annuity?

A. A longevity annuity is any annuity designed to provide a benefit commencing at an advanced age in the future. What is unique about the latest regulations is that they will permit an individual to purchase an annuity that would commence payments at an age later than 70½ (but no later than 85), yet be able to retire before that age and not need to take a required minimum distribution if there are over age 70½. So this is a method of deferring the receipt of taxable income for those who wish to preserve, rather than spend, retirement plan assets.  And, like other annuities, it is another method of protecting retirement assets at later ages from adverse market events.