How to Make Your Retirement Savings Last a Lifetime

retirement savings

How to Make Your Retirement Savings Last a Lifetime

No matter your current age, retirement is coming, at some point. For most people, the earlier that time comes the happier they are. In any case, whether you’re looking forward to that day or you want to work as long as you’re physically able, you will have to call it quits eventually. There are all kinds of ways to spend your retirement but the key to any comfortable retirement is having the right plan in pace, which includes having enough money to last as long as you do.

Making the Most of Your Retirement Saving

Therefore, no matter how close you are to actually hanging it up, you should start working on your retirement plan as soon as you can. That plan needs to include measures that will prevent you from running out of money too soon. Going broke in retirement is not a good way to spend your golden years. So how do you make sure that your retirement savings are going to last as long as you need them to?

Open a Qualified Longevity Annuity Contract

One way to ensure that your money lasts as long as you do is by opening up a qualified longevity annuity contract, or QLAC. This option allows you to invest as much as 25 percent of the total balance of your 401(k)s and IRAs, up to $125,000, into a QLAC. So how does it work? It’s rather simple actually. You start by paying a lump sum amount to an insurance company. At some point in the future the insurance company then starts to pay you a yearly income for the rest of your life. This happens between the ages of 70 1/2 and 85-years-old and the longer you wait to start taking the payout the larger your annual payment will be.

Lifetime Annuities Help Reduce Risks

According to a recent study by the Pension Research Council, putting a portion of your retirement savings into a lifetime annuity is an effective way to protect your savings from longevity risks. Lifetime annuities also help provide people with significantly higher consumption possibilities, especially when they get older.

Using Retirement Funds Saves on Taxes

Another advantage of a QLAC is the fact that you can use your IRA money to open one of these contracts. Any money you invest from an IRA or 401(k) does not count against your balance when you turn 70 1/2 and you have to start withdrawing minimum distributions from those accounts. On the down side, your QLAC payments will be taxed at regular income rates. Just be sure to shop around before you sign one of these contracts in order to get the best payout possible, as each company’s payout amounts will vary.

We hope you found this article about “How to Make Your Retirement Savings Last a Lifetime” helpful.  If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page  or our website at  Unfortunately, we no longer give advice to other tax professionals gratis.

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Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan L. Olsen, CPA, Wikipedia Bio is a proud sponsor of The American Dreams Show.



The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

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