Pacific Life Offers A QLAC
Newport Beach, CA (April 1, 2015) – Pacific Life Insurance Company has launched a new solution for IRA owners who are looking to save on taxes earlier in retirement and would like to increase their guaranteed lifetime income payments at a later time.
The solution is called a qualified longevity annuity contract (QLAC) and was made possible by U.S. Treasury regulations released in July 2014. The regulations enable an investor to allocate a portion of his or her IRA to a deferred income annuity (DIA) that meets specific QLAC criteria. Income from the annuity need not start until age 85. Meanwhile, the DIA amount will not be included when calculating the investor’s required minimum distributions (RMDs)—the amount that must be withdrawn from IRAs each year beginning at age 70½. As a result, RMDs are lower, providing a new tax-management opportunity for the investor.
“It can be a source of frustration for clients who would prefer the option to take a smaller distribution, because they may not need to take as much income as required early in retirement,” says Christine Tucker, vice president of marketing for Pacific Life’s Retirement Solutions Division. “Greater required minimum distribution amounts may bump retirees into a higher tax bracket. It can also affect the percentage of Social Security benefits exposed to taxation. For some, it may even increase the premiums they pay for Medicare Part B and D. This is why Pacific Life’s Pacific Secure IncomeSM as a QLAC may make sense for certain clients.”
Pacific Life is an early entrant in the QLAC market. To assist advisors, Pacific Life offers unique educational resources through its Retirement Strategies Group and Advanced Marketing Group. These home-office and field specialists can help financial professionals examine the application of QLACs in a variety of financial strategies.
“The new QLAC Treasury regulations have been called a ‘game changer’ for retirement income planning,” says Tucker. “Our main focus has always been to help financial advisors build strong relationships with clients and put innovative solutions in their hands. The QLAC-specific version of Pacific Secure Income is another way in which we’re accomplishing that.”
For more information on Pacific Secure Income and QLACs, visit www.PacificLife.com. Financial professionals are also invited to call a Pacific Life consultative wholesaler at (800) 722-2333.
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