One of my readers wrote to ask:
Question: Can insurance be taken to ensure at least your investment (original amount) will be sent to your heirs if you do not live to be 85 years old? More
Kiplinger’s September issue of the Retirement Report featured the Golden Retirement website, Go2Income.com, in an article about Qualifying Longevity Annuity Contracts, or QLACs. Here’s what the article said about the website.
Golden’s firm, Golden Retirement Advisors, created go2income.com to help consumers shop for QLACs. If you’re interested in a QLAC, you’ve got homework to do and may need the help of an adviser. Golden emphasizes that the first step is to design the policy. Death benefit or no? Single or joint life? Cost-of-living adjustments or not? Then shop for the best deal.
During his interview with me, the reporter and I discussed why QLACs are not more popular. As he wrote, in the first quarter of 2016, only $87 million of the $729 million invested in deferred annuities went to QLACs.The view that I expressed to him is that while the product and tax features of a QLAC are attractive, QLACs should be positioned as a component of an overall retirement plan – not as a standalone product. That’s when it makes sense: As an addition to most retirement plans.
As I wrote in the blog post QLAC Introduction, “the IRS published regulations in July 2014 that allow savers to use a portion of their rollover IRA or 401(k) to purchase a QLAC, which will provide guaranteed lifetime income starting at an age you choose (but not later than age 85).” More
Last week, we examined the Republican and Democratic parties’ platforms regarding Social Security. The Republican position would allow us to invest some of our Social Security savings in the stock market. The Democrats advocate higher taxes on the wealthy to ensure Social Security solvency.
This week, I offer my own platform, a list of proposals that I think provide common sense solutions to the real problems that the Social Security system faces, while offering some new benefits.
With election season in full swing, the Republican and Democratic parties are running on platforms that explain how they would tackle difficult problems facing the country. I was particularly interested in their stands on Social Security. As the government’s most expensive program, which affects millions of workers and which faces the possible need to reduce payouts after 2037, leaders of the two parties will have to do something eventually.
What they choose to do would affect each of us in different ways, ranging from no change in our circumstances to 
potentially large adjustments in lifestyle. I consider myself neutral in the political debate, beyond desiring a solution that doesn’t lead to calamity. With that in mind, I present both parties’ stances on Social Security in this article, and also examine some possible approaches that I believe would lead to financial health for retirees in a second article to be released next week.
When it comes to Social Security, here are my general principals: More
One of my first assignments as a junior actuary was to analyze a new program that helped students to afford college. It was a public-private loan program that varied students’ repayment responsibilities based on how much money they made after graduation. For each $3,000 borrowed, a student-borrower committed to paying the loan back with 1% of their earnings. So if four years of college cost $24,000, the student committed 8% of their earnings.
The loan had a market rate of interest and you kept paying until the balance was paid off.
If you had a well-paying job, you paid down the loan quickly. If you were teaching poetry to prison inmates, you might only pay off the interest and never repay too much of the principal. My job was to look at the “actuarial aspects” of the loan program and price the insurance cost of paying off the loan in the case of death, disability or unemployment.
That project has influenced my position on paying for college ever since. More