Frequently asked questions

When you join a tontine, you invest enough of your savings to ensure that you receive a suitable level of steady income for the rest of your life.

BUT, the golden rule of a tontine is that when a member dies, they no longer need their monthly income and this income is put towards supporting those surviving members that still need the income.
‍
Therefore, members that are unfortunate to die at younger ages may not have received back their investment in full however they will have benefitted in different ways:

1. They will have enjoyed spending their retirement income without the ongoing stress of worrying about running out of money in later years.
   ‍
2. They can look down from the pearly gates and know that they have helped sustain their fellow members that were blessed with a longer life.

With existing retirement accounts, your children could have to wait 30+ years until you pass away to see if there is any savings left over.

A Tontine IRA™ make it easier for you take care of your children financially now without them having to wait.

In a Tontine IRA™, you tontinize enough of your savings to secure a lifetime income and then use the balance to help your children now when they need it most to pay university fees, buy a house or start a business.

A Tontine IRA™ also removes the risk that you will become a financial burden to your children in later years.

As Nobel Laureate Richard Thaler put it: "the best bequest you can give your kids is a guarantee that you will never need to move in with them".

In the past, a corporate pension plan fixed in advance what benefits you would receive when you reached retirement, many years into the future.

But when people started living much longer, the cost of these fixed benefit plans became unaffordable for corporate sponsors who then switched to only offering 401(k)s instead.

The other option available to the corporates was to follow the lead of the safest defined benefit plans in the world which allow trustees to make ongoing adjustments to future benefit levels to keep the books balanced.

Our Tontines work in the same way. Our platform constantly monitors interest rates and life expectancies making tiny micro-adjustments to every members future expected payouts to ensure that the Tontine always has enough money in reserve to be able to sustain the surviving members even if they live exceptionally long lives.

The assets of your Tontine IRA™️ are always held in trust by chartered trustees whom will spread your savings across a panel of Federal Deposit Insurance Company ("FDIC") insured banks enabling up to $10m of FDIC insurance per Tontine IRA™️ account.

If any of the banks fail, the FDIC will take it over and pay out any insured deposits from it's insurance fund. As at the end of 2022, the insurance fund had a balance of $128 billion and that it is "backed by the full faith and credit of the United States government” which means that even if the fund runs out of money then all of your insured deposits will still get paid. 

This stands in sharp contrast to Insurance Guaranty Associations which are not federally guaranteed and which limit annuity claims to a maximum of $250,000 with an overall cap of $300,000 in total benefits for any individual with one or multiple policies with an insolvent insurer.

The word Tontine has two syllables and is pronounced as tohn-teen although we often also see it spelt phonetically also as taunteen or even tauntine.

Tontine Trust is a financial technology ('fintech') firm that enables savers and retirees to open and control TontineIRA™s through us at our partner banks, trusts and credit unions whom are the ultimate responsible institutions for ensuring safe custody of our members' assets.

Simple answer: Whenever you like.

You have complete control over when the monthly payouts start and you can pause and change the starting date whenever and as often as you like just by changing the income start date in your account settings.

Please bear in mind however that the IRS imposes penalty taxes if you start receiving your income sooner than 59.5 years young or if you delay the start later than April 1 of the year following the calendar year in which you reach age 72 (73 if you reached age 72 after Dec. 31, 2022).

For further information, see the IRS website here.

Once you are fully onboarded together with our partner banks and your account is funded, as soon as possible thereafter you will be assigned to a Tontine Trust of members that are the same sex as you and of a similar age.

Typically these groups of members will all have been born within a couple of years of each other.

For example, Alice was born in 1958 and so could be assigned to a Tontine solely for females born between 1955 and 1960.

In future years, as our membership numbers grow Alice may be re-assigned to a new grouping that more precisely matches her profile, for example, a Tontine solely for females born in 1958.

This is one of our favourite questions mostly because we have spent over 5 years building a system that keeps everything mathematically fair for every single member.

The easiest way to understand this is using an example:

Adam (age 70), Bob (67) and Charlie (65) have each deposited the same amount to their TontineIRA™️ and have been assigned to a Tontine Trust for males aged between 65 & 70.

The income they each receive is calculated on a pro-rata basis taking into account each members account balance, remaining life expectancy as well as interest rates.

When another member of their Tontine Trust passes away, his remaining balance is distributed amongst the surviving members with Adam (70) getting a slightly larger share than Bob (67) who gets slightly more than spring chicken Charlie (age 65).

Why do we do it like this?

Well strictly speaking, Adam (70) is taking slightly more risk being in a Tontine with Bob (67) and both are taking slightly more risk than Charlie (65) so it is only fair that both Adam and Bob are rewarded for taking that little bit extra risk.

That said, even though the math keeps everything perfectly fair, as we grow and add hundreds of thousands more members, it's likely that Adam, Bob and Charlie will eventually be re-assigned to Tontines where every other member is born in the same year as them.

Absolutely not. Neither Tontine Trust nor our banking partners are ever allowed to touch capital that should be supporting the retirement lifestyles of our members.

Together with our banking partners we make sure that all of the monies are distributed to the members before they pass away.

We achieve this by allowing the monthly incomes to rise over time in response to the reality that year by year there are fewer surviving members with less remaining years of receiving income as they get older.

Currently we only offer TontineIRAs which are retirement plans specific to US taxpayers whether resident in the US or not.

These accounts are not suitable for non-US taxpayers because we are required to withold income tax from the payouts which is owed to the IRS.

In the very near future, international Tontines will be made available for non-US taxpayers.

Make sure to subscribe for updates so that we can keep you informed.

Tontine 401(k)s etc. are not available yet however the IRS allows the following plans to be rolled over to your TontineIRA™️:

• Traditional IRAs,
• 401(k)s,
• 403(b)s,
• SEP IRAs,
• 457(b) Government plans
• Qualified plans
• Simple IRAs

In general, each plan can only be rolled over once per year so if you have recently rolled over your plan, you may have to wait before rolling it over into your TontineIRA™️. For further details, see the IRS notes on IRA Rollevers here.

After many years of research, we decided to base our anti-fraud system on Liveness Detecting facial recognition which protects against deep fakes and other fraud methods.

The partner that provides us with the underlying technology is so confident in their security that they have $600,000 in rewards on offer to anyone that can beat their system.

We are working to make rollovers as simple and smooth as possible and will shortly publish a full guide as to how to rollover existing plans into your TontineIRA™.

A tontine is defined as an arrangement where multiple participants subscribe money in return for a pro-rata share of a regular dividend.

The share of the dividend however can only be collected by the original subscriber meaning that if the original subscriber dies, they won't receive any further share of the dividend.

Over time, as subscribers die and the number of survivors keeps falling, each remaining subscribers receives a higher and higher share of the remaining dividends.

This tyically continues until the second last subscriber passes away at which point all of the remaining monies go to the remaining subscriber.

This is why tontines are also referred as a death pool or dead pool although such phrases are a bit harsh for a product that is loved by retirees because it protects & improves their quality of their retirement lifestyle.

Whereas you can only use up to $200,000 of your IRA savings to buy an annuity, there's no limit to the amount of savings that you can tontinize in your TontineIRA™.

Note that the greater the balance of your TontineIRA™, the more you stand to inherit from other members that pass away before you.

Please note however that, like pets, Tontines are for life not just for Christmas.

Therefore you should only subscribe those monies that are reserved for your lifetime spending needs.

Many Tontiners may find it sensible to also set aside some cash that can be accessed in the event of an emergency. If in doubt, speak to a fincial advisor.