Last month, the Treasury Department and the IRS proposed a package of rules to make it easier for retirement plan participants and IRA holders to invest in longevity insurance — an annuity purchased at retirement but not collected on until a person reaches their 80s. One part of the proposed regulation is to adjust tax laws so the annuity wouldn’t be subject to required-minimum-distribution rules until it started paying out income. Another part would allow participants in defined-benefit plans to split their savings into an annuity and a lump sum. Even with the proposal, experts feel it will be some time before longevity insurance becomes a regular employee option. It will require more regulatory clarity, increased education for workers and plan sponsors, and a ramp-up in sales suitability procedures.

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