Qualified Longevity Annuity Contract Rules

The Annuity Man

Qualified Longevity Annuity Contracts (QLACs) were introduced in 2014 by our friends at the IRS and the Treasury Department for use in Traditional IRAs and selected employer retirement plans.  QLACs were designed for future lifetime income guarantees to coincide with Social Security payments.

Social Security was never intended to be the sole source or retirement income, even though many people use it just for that.  QLACs represent the government "tapping us on the shoulder" as a reminder that we all need to plan for future income.

The current QLAC funding rules for 2020 is the lesser of 25% of your total IRA assets, or $135,000.  The government keeps increasing that amount.  When QLACs were introduced in 2014, that dollar limit was $125,000.

QLACs can be used in a Traditional IRA, and set up "Joint Life" with your spouse or partner.  Income can start as soon as age 72 and as far out as age 85.  You have to turn on the income at age 85, but you can start it sooner if needed.  The income stream is a return of principal plus interest and is primarily priced on your life expectancy(s) at the time you start the payments.  Interest rates play a secondary role.

Contact Stan The Annuity Man for the best and highest QLAC quotes with all carriers using Stan's proprietary annuity calculators.  You can also receive Stan's 6 Annuity Owner's Manuals for free and under no obligation, and see a live feed of the best fixed rates for your specific state of residence.


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