Retirement groups hailed a House proposal Tuesday that would provide incentives for retirees to receive a portion of their retirement savings in the form of guaranteed lifetime income.
Reps. Earl Pomeroy, D-N.D., and Ginny Brown-Waite, R-Fla., have introduced H.R. 2748, the Retirement Security Needs for Life Act. Included in the bill is a provision that would give a 50-percent tax exclusion on the annual income from a non-qualified lifetime annuity, up to $10,000 per year. Also tax exempt is 25 percent of income payments from Individual Retirement Accounts (IRAs) and qualified retirement plans other than defined benefit plans. The bill also excludes the value of longevity insurance from amounts subject to required minimum distributions while clarifying the taxation of payments from partially annuitized deferred annuity contracts.