The Treasury Department and Internal Revenue Service on Tuesday unveiled new regulationsdesigned to bolster income security among retirees. These are making annuities eligible over later years to defer payments from them.

The Obama administration is loosening restrictions on longevity annuities to make them compatible with 401(k) and IRA plans, in a nod to aging baby boomers who are headed for retirement in droves.

“All Americans deserve security in their later years and need effective tools to make the most of their hard-earned savings,” said J. Mark Iwry, Treasury’s deputy assistant secretary for Retirement and Health Policy. “As boomers approach retirement and life expectancies increase, longevity income annuities can be an important option to help Americans plan for retirement and ensure they have a regular stream of income for as long as they live.” 

Longevity annuities are deferred income streams that begin paying out when an individual reaches an advanced age, such as 80 or 85. While seen as a safety net for people otherwise at risk of outliving their savings, previous regulations made them difficult to access for people wishing to use a “combination strategy” involving both annuities and other more liquid and flexible saving strategies, Treasury said.

The availability of longevity annuities in workplace plans and IRAs will facilitate access to a steady stream of guaranteed income throughout a retiree’s later years and help Americans enhance their retirement security at a time when they are most vulnerable to outliving their financial assets or facing reduced standards of living.