The TontineIRA® is a soon to be released new type of individual retirement account that combines the benefits of a tontineTontines are one of the world’s oldest and most enduring wealth management strategies, using longevity risk pooling to generate gains beyond traditional asset performance alone.
Tontines provide lifetime monthly distributions to members for as long as they remain alive.
When members pass away, their unused assets stay within the tontine and are redistributed among surviving members, enhancing future distributions over time.
While this concept may seem novel at first glance, tontines have been widely used by mainstream savers for centuries for a simple reason:
by pooling longevity risk, tontines enable members to sustain a higher standard of living throughout their lifetime than would typically be possible if they held the same assets outside of a tontine. with a traditional IRA.
TontineIRA® account holders receive a steady income each month for as long as they are alive and they can expect that income to rise over time thanks to the tontine effectThe Tontine Effect supplements the trust balances of individual members from leftover monies of similar aged members that have passed away..
What is a TontineIRA®?
How can it pay an income for life?
Each TontineIRA® is part of a class of members with similar life expectanciesLife Expectancy refers to the average number of years that a member is expected to live for taking into account their age, sex and other demographic characteristics. that agree to share their risk of living longer.
In practice, this means that members receive a steady monthly income from their TontineIRA® while alive with any leftover monies when they pass being shared among the surviving members of their Tontine ClassA Tontine class is a category that tontine members are assigned to by the tontine trustees for the purpose of sharing their risk of living longer.
The trustees assign each member to these categories typically based upon similar life expectancies, sex and demographics.
When a member of a class passes away, whatever funds are leftover in their trust will be shared amongst the surviving members of the same class using our patented algorithms which are designed to ensure absolute fairness. to support their continuing spending in later years.
How long does the TontineIRA® income last for?
Since 2017 we have been developing, testing and patenting a technology platform which ensures that the income always continues for as long as the members are alive, even if hundreds of members of a Tontine Class outlive their life expectancyLife Expectancy refers to the average number of years that a member is expected to live for taking into account their age, sex and other demographic characteristics. .
Why would I choose a TontineIRA® over a basic IRA?
With a traditional IRA, if you want to avoid running out of money, you need to keep adjusting your spending based upon the performance of your portfolio and your life expectancy to prevent your savings running out.
The TontineIRA® platform handles all of that automatically so that you only have to focus on staying alive and spending the income.
Why not just invest my IRA in assets generating passive income?
The safe level of spending from a TontineIRA® will always be higher than an equivalent passive income IRA.
This is because in addition to the passive income from the investments, you will also be inheriting a share of the assets leftover by members of your tontine classA Tontine class is a category that tontine members are assigned to by the tontine trustees for the purpose of sharing their risk of living longer.
The trustees assign each member to these categories typically based upon similar life expectancies, sex and demographics.
When a member of a class passes away, whatever funds are leftover in their trust will be shared amongst the surviving members of the same class using our patented algorithms which are designed to ensure absolute fairness. that have already passed away.
What can a TontineIRA® invest in?
A TontineIRA® can invest in the same assets as a traditional IRA as long as those assets are generally suitable for retirement plans.
For now, each TontineIRA® will invest in FDIC insured bank certificates of deposit (‘CDs’). Additional investment options will be made available soon subject to standard suitability tests for retirement savers.
Who will be in my TontineIRA® Class?
Soon after joining, we will assign you to a class of members all of which will have similar average life expectanciesLife Expectancy refers to the average number of years that a member is expected to live for taking into account their age, sex and other demographic characteristics. as you.
We don't mix sexes because women generally live longer than men.
We don't mix age groups because nobody wants to be in a tontine with members much younger than themselves.
What are the contribution limits for a TontineIRA®?
The TontineIRA® can accept full balance transfers from old IRAs as well as rollovers from 401K and other qualifiedQualified monies refers to ordinarily taxable income that qualifies for exemption from taxes by virtue that it is held within a retirement account or pension rather than paid directly to the owner. Once the pension benefits start getting paid to the owner, the income paid out becomes taxable to the owner or their beneficiaries. plans.
New contributions are subject to the same annual contribution limits as a traditional IRA which for 2025 are:
- For savers under the age of 50: Up to $7,000
- For savers aged 50 or older: Up to $8,000.
Will the income from the TontineIRA® be fixed for life?
Generally ‘living on a fixed income’ is not a good thing in a world such as ours where inflation exists.
This is why our patented system is designed to start you on a predictable income that is expected to grow over the years to resist the effects of inflation.
The MyTontine app shows your expected monthly income for life based on expected trust returns and life expectancy, and is updated regularly as trust returns or the longevity of your Tontine Class change.