According to a recent Edward Jones survey, 60% of Americans varying in age are concerned about paying for health care in retirement, as revealed in an article called “Most Americans Concerned About Health Care Costs in Retirement.”

We agree that health care, including medical and long-term care, costs are a concern for most individuals in or nearing retirement.

These individuals know that these costs, particularly when related to Alzheimers, can linger for years.

Our suggestion, besides considering long-term care insurance, is to consider deferred income annuities or QLACs that can be purchased today to cover these late-in-retirement expenses.

Another article that I read, called “Longevity Risk and the Annuity Answer,” focused on the issue that living longer is creating when it comes to retirement income planning.

I wholeheartedly agree with the conclusions that:

  1. society is facing serious challenges as people live longer, and
  2. income annuities are one financial instrument that shifts that longevity risk from society and the individual to insurance companies.

So what should “society” do, if anything, to encourage individuals to purchase income annuities with their retirement savings?

If “society” means the government, then there is the lever of tax policy. One simple suggestion to encourage longevity annuities is to eliminate (up to a limit) the taxability of longevity credits.