What Will Be Covered in this Review?
In this review, we will be discussing the following information regarding the Mass Mutual RetireEase Choice QLAC:
- Product type
- Current rates
- Realistic long-term return expectations
- How it is used
- How it is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
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If you have been getting closer to retirement, but you aren’t sure that you’ll have enough income to get you through, then it could be time to consider some unique income generation strategies.
Over the past several years – and particularly as life expectancy has increased overall – one of the biggest worries that retirees and pre-retirees have is not having income when they need it during their golden years.
With today’s uncertain market and economic environment, there are many people who just simply do not know what to do with their money in order to help ensure that they will have an ongoing income in retirement. This is especially the case as many people could live for 20, 30 or more years in retirement.
One income generating strategy that some have started turning to is the QLAC, or Qualified Longevity Annuity Contract. Doing so can provide you with a regular, guaranteed income, in addition to some nice tax advantages.
A QLAC is a deferred annuity that is funded with an investment from a qualified retirement plan or an IRA (Individual Retirement Account). The annuity provides guaranteed monthly income for the remainder of your life – regardless of how long that may be – and, provided that the annuity you choose is in compliance with IRS requirements, it will also be exempt from the RMS (required minimum distribution) rules until the income payouts start (following the set income start date).
QLACs were actually created by the Internal Revenue Service (IRS) as a way to allow retirees enjoyment of lifetime income, while at the same time following the Required Minimum Distribution rules of qualified retirement plans and IRA accounts, which typically require that you begin taking income from the account(s) at age 70 1/2.
But, as nice as these benefits might sound, prior to going out and setting up a QLAC, there are some things that you need to know – starting with whether or not the annuity you go with will be the right fit for you.
This is where the Annuity Gator comes in.
Annuity and Retirement Income Planning Information You Can Trust
If this is the first time you have been to our website, then please allow us to personally welcome you to AnnuityGator.com. We are a team of experienced annuity experts who have a primary focus on offering in-depth, and non-biased, annuity reviews. We have been at this for quite a few years now, far longer than our “copycat” competitors. Because of this, we have become known as a highly trusted source of information about annuities.
If you’ve been in the process of researching annuities via the Internet, you may have come across a great deal of conflicting information about these products. This, however, is not entirely shocking, as there are many, many opinions about these financial vehicles floating around out there. This can be even more intensified when discussing a somewhat confusing strategy such as using a QLAC.
While there is a lot of good information out there in the marketplace about annuities, you may have discovered that there are some websites online that will try “luring” you in by making some pretty bold claims about the annuity products that they offer, like:
- Lowest Fees
- Highest income payouts
- Guaranteed income for life
Does this look familiar?
Yet, even though these claims might sound very enticing, it makes it all that much more important for you to really know whether or not they are actually true.
If you have landed here at Annuity Gator in search of more information regarding the Mass Mutual RetireEase Choice QLAC, you are in the right place. In fact, we dare say that this website is the only place where you will learn all of the details you need to know, which includes the good, the bad, and yes, even the downright ugly. But we feel that knowing the whole picture is the very best way to make a well-informed decision regarding whether or not this is the right annuity for you.
Just to be perfectly clear, we do want to state that annuities can and do provide some very good benefits – including those annuities that are in QLACS. But this is really only the case if the annuity fits in with your overall financial needs and goals.
So, if you’re ready to begin the review, let’s go ahead and dive in!
The Mass Mutual RetireEase Choice at a Glance
|Product Name||RetireEase Choice|
|Type of Product||Qualified Longevity Annuity Contract (QLAC)|
|S&P Rating||AA+ (Very Strong)|
|Phone Number||(800) 272-2216|
Opening Thoughts on the Mass Mutual RetireEase Choice QLAC
Massachusetts Mutual Life Insurance Company (also known as Mass Mutual for short) has been in the business of helping customers to build and protect wealth since 1851. The company offers a long list of financial and insurance products, including life insurance and retirement annuities, which are distributed via more than 9,500 advisors.
As of year-end 2016, Mass Mutual had approximately $560 billion of life insurance in force. The insurer delivered $5 billion in benefits to its customers just in 2016.
The company has earned very high ratings from the insurer rating agencies, including a(n):
- A++ (Superior) from A.M. Best Company (#1 out of a total of 15 rating categories)
- AA+ (Very Strong) from Fitch (#2 out of a total of 21 categories)
- Aa2 (Excellent) from Moody’s Investor Services (#3 out of a total of 21 categories)
- AA+ (Very Strong) from Standard & Poor’s (#2 out of a total of 21 rating categories)
Given these figures, suffice it to say that Mass Mutual is financially strong and stable and that it has a good reputation for paying out its policyholders’ claims. The company will likely continue to do so, particularly in the area of fixed and fixed indexed annuities, as these products have become much more popular over the past decade or so.
For example, with a fixed rate annuity, you can be sure that your principal is protected, and that it is growing at a set and steady interest rate. This growth is also tax-deferred, meaning that there is no tax due on the gain until the time of withdrawal. This, in turn, can allow your funds to grow and compound exponentially over time.
As more and more of the Baby Boomer generation starts to retire, ensuring an ongoing income has become a key concern for both consumers and financial advisors alike. Yet, with longer life spans today, ensuring a regular income stream can be difficult – particularly in light of a volatile market.
A QLAC could provide you with a solution. However, before you commit to this (or any type of annuity contract), you should ideally gather as much information as you possibly can, as this strategy could require a large chunk of your savings. And, if you find out after you’ve made a commitment that this just isn’t for you, it could be much too late to get your money back.
Before we get into the gritty details, here are some necessary legal disclosures…
This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Mass Mutual has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see out perspective when breaking down the positives and the negatives of this particular annuity. Before purchasing any type of insurance and/or investment product, it is important that you do your own due diligence, and that you consult a properly licensed professional if you should have any specific questions that relate to your individual situation. All of the names, marks, and materials that were used for this annuity review are the property of their respective owners.
For more information on how to compare annuities in order to determine which one may be the best for you and your financial circumstances, click here to obtain our free annuity report.
How Mass Mutual Describes the RetireEase Choice Qualified Longevity Annuity Contract
Mass Mutual describes the RetireEase Choice as a flexible premium deferred annuity that provides guaranteed income that begins in the future and lasts for as long as you live.
When RetireEase Choice is set up as a qualified longevity annuity contract, or QLAC, owners of qualified assets can delay distribution on a portion of those assets for a longer period of time – up to age 85. Therefore, a QLAC can make it easier to establish a pension-like income stream that begins later on in retirement.
When the RetireEase Choice annuity is used in a QLAC, there are contribution limits on the annuity. In this case, the limit would be the lesser of:
- $125,000 (across all QLAC contracts), or
- 25% of the owner’s aggregated IRA balances (which includes any QLAC IRAs and Custodial QLAC IRAs, as of December 31 of the prior year)
For additional details on the Mass Mutual RetireEase Choice QLAC, you can check out the product literature HERE.
How a Financial Advisor Might Pitch this Product
There are few things in life that are nicer than financial guarantees. This is particularly the case when such guarantees come with the assurance that you can count on an income that will last for the remainder of your lifetime – regardless of how long that may be.
With that in mind, it is likely that an insurance or financial advisor who is presenting the Mass Mutual RetireEase Choice QLAC will key in on the product’s income guarantee, as well as the fact that you can continue to defer your taxable gains for a longer period of time than you otherwise would by keeping funds in a qualified retirement plan and/or a traditional IRA account.
Because income from a QLAC does not need to begin until you are age 85, this can essentially offer nearly 15 extra years of tax deferral – which can definitely add up over time. You can also count on a higher dollar amount of monthly income by waiting a few more years, rather than having to take withdrawals at age 70 1/2 (especially if you really don’t need the money at that time).
However, there are some things that you also need to be aware of, because usually when something sounds too good to be true, it is!
First, the great benefits that can be provided via a QLAC may only be attained if the rules that are set by the IRS are followed. This means that:
- The deferral of only $125,000 or 25 percent of your qualified assets – whichever is less
- Not being able to use IRA money that is in a Roth, or that is from an inherited IRA
- Depositing the money prior to turning age 82
- Only using a deferred income annuity that qualifies as a QLAC
In addition, it is important to understand that the premium that is paid to purchase a deferred income annuity is done in exchange for the receipt of future income – so once this is paid in, you will not have future access to these funds, even in the event of an emergency. This means that you need to be sure that you have other sources of income for meeting short-term expenses, as well as other funds available just in case.
The Annuity Gator’s End Take on the Mass Mutual RetireEase Choice QLAC
Where it works best:
Although the Mass Mutual RetireEase QLAC may not be right for everyone, this product could be a good option for those who:
- Are anticipating a long life
- Require an income source later in life
- Want to ensure that a spouse has guaranteed income later in life
- Want to continue tax-deferred compounding for a longer period of time (beyond RMD requirements)
Where it works the worst:
Conversely, this product may not fare so well for those who:
- Do not anticipate a long life (i.e., who may already have serious health issues)
- Want or need to start taking income at or before age 70 1/2
- Do not intend to use the lifetime income feature
In order to truly know how to compare the best annuity options for you, click here so that you can download our free annuity report.
If you’ve been considering the purchase of a deferred income annuity as a QLAC – or any financial vehicle, for that matter – it is always important that you consider several factors prior to moving ahead. That way, you will have a much better idea as to whether or not the product is right for you and your specific needs.
If the Mass Mutual RetireEase Choice QLAC seems to be the best alternative for you, then you can be sure that it will offer you certain tax advantages, along with a guaranteed income that you (and possibly also your spouse) cannot outlive.
Even so, though, it is also possible that this financial vehicle might fall somewhat short – and that a different option could be better for you and your specific needs. In any case, the only way to really know how this product could work for you is to have it tested. We can perform this testing for you, and provide you with a spreadsheet of the results. If this is something that you are interested in (free and with no obligation), then please just simply contact us here via our secure online form.
Any Additional Questions? Did You Notice Any Mistakes in this Annuity Review?
We realize that this annuity review went a bit long, so we appreciate you sticking with us. However, in this regard, we would much rather that you have too much information on this product than to not have enough. So, if you found this annuity review to be beneficial, please feel free to pass it on and to share it with other people who could also find value in it.
We also understand that, just like with most other financial vehicles, the information on annuities can change frequently. Therefore, if you did happen to notice information in this annuity review that may need to be updated or revised, then please let us know and we will happily make the necessary updates.
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