QLAC Rules for 2020
The Annuity Man
Qualified Longevity Annuity Contracts (QLACs) were first introduced in 2014 by the Treasury Department and the IRS to encourage people to plan for future income needs using their 401k type plans or their personal/Traditional IRA assets.
Current funding rules for QLACs in 2020 is the lesser of 25% of your total IRA type assets or $135,000 per person. That means both you and your wife/partner can each have a QLAC if you both have Traditional IRA assets.
QLAC lifetime income guarantees are primarily based on your life expectancy (or life expectancies if joint life) at the time you start the payments. Interest rates play a secondary pricing role. The older you are, the higher the payment level....just like your Social Security payments.
QLAC quotes are commodities and should be shopped with all carriers to find the highest contractual guarantees available for your specific situation. Quotes expire every 7 to 10 days, just like a gallon of milk...and can be locked in if you are moving forward with the annuity application process.
You can start the lifetime income stream as early as you want, and as late as age 85. At age 85, you have to start taking payments...but you do not have to wait that long. You can also structure the QLAC policy to not only guarantee a lifetime income stream, but contractually guarantee that 100% of any unused money goes to your family...not the annuity company.
Contact Stan The Annuity Man for the best QLAC quotes using Stan's proprietary annuity calculators so you can shop for the highest contractual guarantees for your specific situation. You can also receive Stan's 6 Annuity Owner's Manuals for free and under no obligation.