FAQs

Annuities 101

How do insurance companies set annuity rates?

Insurance companies are in the business of helping people manage risk. They need to balance offering an attractive value proposition for you with maintaining a responsible risk profile (as required by law) and running a profitable business.   read more

DIA

What fees do you pay in buying a DIA?

There are no direct or recurring fees associated with buying a Deferred Income Annuity (also known as a DIA, a longevity annuity, or longevity insurance). The income quoted is net of all expenses incurred by the insurance company, including the distributor's commission.  read more

What are current DIA rates?

Deferred Income Annuity rates changes constantly. Quotes are based on your current age, gender, and when you'd like income to start. Using our Deferred Income Annuity Quote Tool, you can see personalized quotes in real-time.  read more

How does longevity insurance work?

Longevity insurance provides guaranteed income starting at some point in the future and continuing for life. Also known as a longevity annuity or Deferred Income Annuity, it protects you from outliving your savings.  read more

FIA

MYGA

What should I do with my MYGA at maturity?

Upon maturity of a Multi-Year Guaranteed Annuity (MYGA), you have multiple options. Depending on your goals, you could cash out, continue to accumulate interest in your current or a new MYGA, or generate a steady stream of retirement income, accomplished via annuitization or a rollover into an income annuity.  read more

What fees do you pay in buying a MYGA?

There are no direct or recurring fees associated with buying a MYGA. The crediting rate offered is net of all expenses incurred by the insurance company, including the distributor's commission. This means that your money will accumulate at the stated, guaranteed interest rate without any deductions or charges.  read more

Why wouldn’t someone buy a MYGA?

Someone wouldn't buy a MYGA if he/she is focused on generating retirement income, in which case an income annuity would be the right purchase. A MYGA is also not the right investment for someone looking for a higher expected return and willing to risk principal to achieve it.  read more

Why would someone buy a MYGA?

Someone would buy a MYGA if he/she is looking for a short-term low risk investment and is attracted to its higher rates when compared to CDs. He/she would be interested in the MYGA's tax-deferred growth of savings earmarked for retirement and the fact that it's an extremely simple product.  read more

What are current MYGA rates?

MYGA rates are constantly changing along with other fixed income investments. Here's a summary of current rates by investment term and credit rating. Contact Abaris for personalized rates based on your planned investment and state of residence.   read more

QLAC

What does the acronym ‘QLAC’ stand for?

QLAC is an acronym that stands for a Qualified Longevity Annuity Contract. The QLAC was created by a 2014 rule that permitted certain types of Deferred Income Annuities to be purchased within 401(k)s, IRAs, and other similar retirement plans and have the income from these policies start after age 70½.  read more

Where can I see the exact QLAC regulations?

The Internal Revenue Service issued a new regulation on July 2, 2014 creating the Qualified Longevity Annuity Contract (QLAC). The regulation, identified by ‘26 CFR Parts 1 and 602' and docket TD 9673, can be found in bulletin 2014-30 at irs.gov.  read more

How large of a QLAC should I purchase?

The size QLAC you decide to purchase will depend on your goals. If your goal is to close your retirement income gap, you can solve for the premium that produces that targeted income level. If you're focused on lowering RMDs, you'll likely want to maximize your premium at $125,000.  read more

Why wouldn’t someone buy a QLAC?

Someone would not buy a Qualified Longevity Annuity Contract (QLAC) if he/she has another source of income - such as a pension - that fully covers expected retirement expenses, is in poor health, is looking for an investment with high returns, and/or doesn't have a lot of 401(k)/IRA savings.  read more

Why would someone buy a QLAC?

Someone would buy a Qualified Longevity Annuity Contract (QLAC) if he/she is looking for longevity protection and a guaranteed lifetime paycheck and/or to defer the IRS-mandated required minimum distributions on their qualified retirement assets.  read more

What are current QLAC rates?

QLAC rates change constantly and are based on your current age, gender, and when you'd like income to start. Here are a sampling of current QLAC rates. Using our QLAC Quote Tool, you can see personalized quotes in real-time.  read more

Are there any options that can be purchased with a QLAC?

When choosing a QLAC, you'll need to decide whether: (a) to include return of premium and death benefit features; (b) to add an inflation rider; (c) to purchase a single life product that covers just you, or a joint life product that covers you and a spouse; and/or (d) to start the income at the latest possible age (85th birthday) or sooner.  read more

How is the income taxed from a QLAC?

QLACs are purchased within a retirement account like a 401(k) or IRA with pre-tax dollars, and as with other financial products purchased in these plans, there generally is no taxable event until funds are withdrawn. In the case of a QLAC, these withdrawals would occur when periodic income payments are received. These withdrawals are taxed at ordinary income rates.  read more

At what age do my QLAC payments have to start?

QLAC payments must start by the owner/annuitant's 85th birthday. In order for the product to be considered a QLAC, payments must also start later than age 70½. The longer you wait for income payments to start, the more powerful the QLAC's tax-deferral.  read more

What are the limitations on the purchase of a QLAC?

A QLAC can be purchased with at most $125,000 of non-Roth IRA, 401(k), 403(b), or 457(b) funds. It cannot have any market-based adjustments or liquidity, and income payments must begin between ages 70½ and 85. The deferred income annuity must be designated as a QLAC at purchase.  read more

What are the benefits of purchasing a QLAC?

QLACs offer longevity insurance by providing a steady source of income later in life which lasts as long as you (or your spouse if you purchase a joint policy) are alive. By rolling over up to 25% of your traditional IRA into a QLAC, you can reduce your required minimum distributions and associated income taxes up until age 85.  read more

What is a Qualified Longevity Annuity Contract (QLAC)?

A Qualified Longevity Annuity Contract, or QLAC, is pension-like product you can buy for yourself using up to $125,000 of your traditional IRA or 401(k). Beyond providing guaranteed income for life, it's the only way to defer the government-mandated required minimum distributions to as late as age 85.  read more

Retirement Planning

How should I plan for retirement in my 30s?

Retirement is still a ways away when you're in your 30s. But, the earlier you save, the more time your money can be invested, growing and compounding year after year. Just make sure your savings are tax-advantaged and exposed to the lowest possible fees.  read more

How should I plan for retirement in my 20s?

Retirement is a long way away when you're in your 20s. But, the money you save early on has the biggest accumulation potential. Save as much as you can without sacrificing fun, and put it away in tax-advantaged and low-fee investment vehicles.   read more

What financial products are specifically made for retirees?

Financial products exist to help retirees manage their portfolio's decumulation, cover their retirement expenses, and protect against outliving their savings. These products include income annuities (also known as longevity annuities or longevity insurance), managed payout funds, and reverse mortgages. Depending on your financial situation, they can prove to be useful supplements to Social Security and any pensions you may have from employers.  read more

What does decumulation mean?

Decumulation, also referred to as de-accumulation, is the process of deploying your savings to fund your lifestyle in retirement. It's essentially the opposite of accumulation, or the process of building wealth during your working years. How you decide to decumulate your assets is the most important decision you'll make as you approach retirement.  read more

How does people’s spending change when they retire?

For the average American household, spending in retirement declines to 80% of pre-retirement levels. Retirees spend less on food, housing, clothing, transportation, and entertainment, but more on healthcare. In addition, retirees do not need to save for retirement or pay Social Security and Medicare (FICA) taxes.   read more

SPIA

What fees do you pay in buying a SPIA?

There is no direct cost to you of purchasing an immediate annuity (also known as a Single Premium Immediate Annuity or SPIA). That doesn't mean there isn't an indirect cost though. Insurance companies generally pay a commission to the agents and advisors who sell their product. Commissions for SPIAs are generally under 5%, which is lower than those paid for other kinds of annuities. And, over a lifetime, it amounts to less than the 1% per year that many financial advisors charge you.  read more

How large of a SPIA should I purchase?

The size of the immediate annuity you decide to purchase will depend on your goals. If your goal is to close your retirement income gap, you can solve for the premium that produces that targeted income level. If you're just looking to raise the amount of guaranteed income you will have, you can think of the purchase in terms of what percentage of your assets you want to commit.  read more

Why wouldn’t someone buy a SPIA?

The primary reasons not to buy a SPIA are (1) you're looking to take market risk in the hopes of earning a higher return, (2) you want a product that has a readily accessible cash value, or (3) you're years away from retirement.  read more

Why would someone buy a SPIA?

There are a number of reasons to consider buying an immediate annuity (also known as a Single Premium Immediate Annuity or SPIA) including protecting your longevity, diversifying your assets, and setting up an automated retirement paycheck.   read more

What are current SPIA rates?

Immediate annuity (also known as a Single Premium Immediate Annuity or SPIA) pricing changes constantly. Quotes are based on your current age, gender, and when (within the next 12 months) you'd like income to start. Using our SPIA Quote Tool, you can see personalized quotes in real-time.  read more