QLAC Calculator
Get Your Customized QLAC Quote
If you’re considering a QLAC, use our exclusive calculator to find the best option for you.
- QLACs allow you to defer a portion of your RMDs.
- Traditional IRA funds can be used to purchase a QLAC.
- Defer QLAC income payments as late as age 85.
Qualified Longevity Annuity Contract
- Great option for reducing RMDs
- Only Traditional IRA funding allowed
- Can delay income payments as late as age 85
- Can be set up as either joint or single payouts
- Funding limits apply (currently $200k per person)
Qualified Longevity Annuity Contracts (QLACs): Delay Taxes, Secure Future Income
A QLAC is a type of deferred income annuity designed specifically for qualified retirement accounts (like traditional IRAs or 401(k)s). It helps reduce required minimum distributions (RMDs) now while creating guaranteed income for later in life.
What Is a QLAC?
A QLAC is funded using pre-tax retirement savings from an IRA, 401(k), or similar account.
Income begins at a future date you select—often between age 73 and 85.
It’s approved by the IRS to let you delay RMDs on the money used to purchase it, helping manage taxes.
Key Benefits
Delays Required Minimum Distributions (RMDs): Money placed in a QLAC is excluded from your RMD calculation until payments start.
Guaranteed Lifetime Income: Provides a predictable stream of income in later retirement.
Tax-Deferred Growth: Premium grows without taxation until distributions begin.
Longevity Insurance: Ensures you have income if you live past life expectancy.
Flexibility on Start Date: Payments can begin as late as age 85.
Drawbacks to Consider
| Downsides | Details |
|---|---|
| Contribution Limits | The IRS caps how much you can invest (currently up to $210,000 or 25% of your retirement accounts, whichever is less). |
| Illiquidity | Once purchased, funds are locked in. |
| No Market Growth Participation | Payout is based on contract terms, not stock market gains. |
| Inflation Risk | Unless you add inflation protection, future payments may lose buying power. |
| Limited Legacy Options | Unless a joint or refund feature is chosen, payments typically end at death. |
How QLAC Payouts Are Determined
Premium amount – how much you allocate from your retirement accounts.
Deferral period – the longer you wait, the higher the income.
Age and gender – life expectancy impacts payouts.
Payout structure – single life, joint life, or period-certain options affect income.
Interest rates at purchase – higher rates usually mean higher payments.
Who Should Consider a QLAC?
Retirees who don’t need all their RMDs immediately and want to lower current taxable income.
Individuals seeking a guaranteed income stream starting later in life (e.g., 75–85).
Those who want to hedge against longevity risk while preserving other investments for growth.
People with qualified assets (traditional IRA, 401(k), etc.) looking for tax deferral opportunities.
How the QLAC Calculator Helps
Your QLAC calculator allows you to:
Estimate future income based on premium, start age, and payout type.
Visualize RMD savings by showing how much taxable income can be delayed.
Compare scenarios—single vs. joint life, different deferral periods, inflation options.
Plan your retirement income layers, integrating QLAC income with Social Security, pensions, or other annuities.
Pros vs. Cons
Pros
Reduces immediate RMDs and taxes.
Guarantees income for life.
Helps with late-retirement planning.
Simple, predictable contract.
Cons
Limited to qualified accounts only.
Contribution limits cap how much you can use.
Not liquid—money is tied up.
May lose purchasing power without inflation protection.
Final Thoughts
A QLAC is both a tax strategy and an income strategy—it reduces RMD pressure now and provides guaranteed payments later in life. It’s especially valuable for those with ample retirement savings who want to minimize taxes in their 70s while ensuring reliable income in their 80s or beyond.
Use the QLAC calculator to see how much income you could generate, how much tax deferral you might achieve, and whether a QLAC fits your long-term retirement plan.