All of us experience important life events. Sometimes you have time to anticipate and plan for them (weddings, reunions, retirement). Occasionally they happen without warning. Both types — planned and surprise — require you to make decisions. Your financial future is often the focus.

This could be true for anyone, but women especially still often are thrust into unfamiliar territory when dealing with life-changing events like the death of a spouse or the sale of the family home. In those circumstances, you might find yourself with a large amount of money. You have to make decisions about how to make it last. You will be approached by agents or advisors from banks, insurance and real estate companies or financial service providers. They will all offer solutions. You need to educate yourself and decide what is best for you. More

Planning for retirement can never begin too soon but whether you are 25 or 65, basic principles apply and should guide your decision-making.

The goal for investors should be this: To generate enough consistent and sustainable retirement income to cover basic living expenses after paying any federal, state or local taxes and allowing for any gifting for estate or charitable purposes.

How do you do that? Start by making sure you understand the language of investment and the meaning of retirement.

For our purposes, “retirement” is the start of the period when the money you earn from a job (household salaries, wages and bonuses, etc.) do not cover basic living expenses. One or both spouses might be working full- or part-time, but for most investors, the way you manage your finances changes when a gap between earned income and expenses first appears.

So what’s “retirement income?” More

If you’ve been reading my blog, by now you already know Longevity Annuities are a unique way to “insure” your retirement by providing a guaranteed lifetime income starting at an age you select.

The newest player in the annuity marketplace is the Qualified Longevity Annuity Contract, or QLAC, and it provides very specific tax benefits. (To learn more about what QLACs are, check out “What Every Baby Boomer Should Know – Introducing QLAC.”)

Let’s delve into the value of the tax benefits QLACs provide. Intuitively one would expect significant savings by reducing the required minimum distributions (RMDs) from your retirement plan by 25%. This is because the investor is deferring not only the interest or investment return, but also deferring the principal (which the investor was previously available to deduct).

To point out the taxes on principal, I often ask knowledgeable people in the field, “What’s the rate of return on the IRA’s RMDs if: (1) the investments earn, say, 3%, and (2) the 65-year-old investor lives to age 95?”

Cutting to the chase, the answer is around .5% after tax. This means the investor barely gets his or her money back after tax. More