Longevity annuities are a recent addition to the save-for-retirement package. They don’t start to pay out until the owner is 80 or 85—about the time the retiree may be wondering if he or she has enough to last a lifetime. And because of that late start, these annuities can be bought at a deep discount.

Recently, there’s been an opportunity to devote a part of one’s IRA or 401(k) money to such an annuity. New rules from the Internal Revenue Service make it easier for the plans to offer this option.

Modified rules allow IRA owners and 401(k) participants to use as much as 25 percent of the account balance or $125,000—whichever is lower—to buy this kind of insurance. Those qualified amounts, invested in the longevity annuities, can be ignored when calculating the Required Minimum Distribution for those accounts when the owners retire or turn 70 1/2.

For nearly 30 years, Mike Nickerson has owned and managed a small, full-service accounting practice in the Midcoast. He holds a bachelor's degree in accounting from University of Southern Main and a master's degree in financial planning from Bentley University.

He is a past board member and president of the Maine Society of Certified Public Accountants and currently serves on the Maine Board of Accountancy.

An aged rock musician, Nickerson now finds musical enjoyment playing upright and electric bass in a variety of bands spanning folk to jazz music genres. He and his wife have three grown children, and they enjoy their free time hiking, kayaking, golfing, bicycling and motorcycling.

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