In 2014, our "friends" at the IRS and the Department of the Treasury introduced Qualified Longevity Annuity Contracts (QLACs). The true reason for QLACs being thrown upon us is to "tap America on the shoulder" to start planning for future income needs.
Social Security is a guaranteed lifetime income annuity payment that every single American citizen owns. However, it was never intended to be the sole source for retirement income even though that's how most people use this government benefit.
QLACs can only be used in Traditional IRAs and some selected employer sponsored plans. For 2020, the maximum amount of money you can place is a QLAC is the lesser of 25% of your total IRA assets...or $135,000. So if you and your spouse/partner both have an IRA, each of you can have a QLAC.
QLACs allow you to add your spouse/partner as a "Joint Life" payment recipient, and the $135,000 is not a part of your RMD (Required Minimum Distribution) calculations. This has the potential to save taxes on those RMD withdrawal. You can start QLAC income as soon as age 72 and as late as age 85. You don't have to defer to 85, but the is the maximum age before you are required to start the income stream.
Contact Stan The Annuity Man to get the best and highest QLAC quotes with all carriers using Stan's proprietary annuity calculators. You can also get quotes on all other annuity types and receive Stan's 6 Annuity Owner's Manuals for free and under no obligation. You can also see a live feed of the best fixed rates for your specific state of residence.