A qualified longevity annuity contract lets you set aside part of your retirement savings today and receive guaranteed income payments later in life, while shrinking the required minimum distributions that push up your tax bill.
The hardest question in any retirement plan is how long your money needs to last. Live into your late 80s or 90s and even careful savers can watch their retirement accounts drain faster than expected, with required withdrawals forcing taxable income they never asked for.
A QLAC answers that question directly. You move a portion of your qualified retirement account into the contract now, choose an income start date, and receive guaranteed income for life once payments begin. The primary purpose of a QLAC is to manage longevity risk, so the years you are most worried about become the years you are paid the most to reach.
The sooner you set your deferral period, the larger your future income payments will be, get your free consultation online or call 951-470-3771 today.
What Does a QLAC Annuity Mean?
QLAC stands for qualified longevity annuity contract. It is a deferred income annuity purchased only with funds from qualified retirement accounts, such as a traditional IRA or an employer retirement plan. In plain terms, you exchange a portion of your retirement funds for a contract that pays guaranteed monthly income starting at a future date you choose. Because the funds sit inside a qualified contract, they are excluded from RMD calculations until your income payments begin, which is what separates a QLAC from every other longevity annuity.
How Does a QLAC Work?
You fund the contract with pre tax funds from a qualified retirement account, up to the QLAC contribution limit of $210,000 in 2026. You then pick your income start date. During the deferral period your money is out of the market, unaffected by market volatility, and excluded from required minimum distributions. When payments begin, the insurance company sends you guaranteed monthly payments for the rest of your life. Payments increase the longer you defer starting them, so patience is rewarded with a larger check.
How Quickly Can a QLAC Start Paying Income?
You control the income start date, which is the trade-off at the heart of the contract. A QLAC is built for later-life income rather than immediate income, and payments must start by age 85 at the latest. Choose an earlier start date and you receive income sooner at a lower monthly amount. Push the start date further out and your monthly income grows. A licensed advisor can model several start dates side by side so you can see exactly what each deferral period pays.
A QLAC is a deferred income annuity funded from a qualified retirement account and designed to provide guaranteed income during the later years of retirement. You can invest up to $210,000, a limit that applies to all your retirement accounts combined, and each individual gets their own limit. The funds you move into the contract are excluded from RMD calculations until payments begin, and payments must begin no later than age 85. After the deferral period ends, the contract pays guaranteed lifetime income.
No two retirement income plans look the same, so the right QLAC depends on who needs the income and when. Final Expense Company advisors compare contracts from multiple insurers, explain each one in plain English, and help you match the structure to your retirement goals.
These are the main ways a QLAC can be set up.
The standard structure. The contract covers one person and pays guaranteed income for life once payments begin. It typically produces the highest monthly income for the amount invested, because the insurance company is covering a single lifetime. Be aware that with a standard contract, if you die before payments begin, your beneficiaries may receive little in return.
You can choose a joint QLAC for spousal income benefits. Income payments continue for as long as either of you is alive, so a surviving spouse is never left without that monthly check. Monthly payments run lower than a single-life contract in exchange for covering both lifetimes, which many couples consider a fair trade for the certainty.
You can purchase a QLAC only using funds from qualified retirement accounts, most commonly a traditional IRA or a 401(k). Moving money from an existing account into a QLAC is a straightforward process, and it pairs naturally with a wider 401(k) rollover strategy if you are consolidating old workplace plans.
Comparing contracts side by side takes minutes and could change your entire retirement income plan, get your free consultation online or call 951-470-3771.
The right structure depends on your age, the size of your qualified accounts, your health, and who relies on your income. A married couple weighing spousal protection faces a different decision than a single retiree maximizing monthly income. A licensed advisor walks through your situation, runs the numbers on each option, and shows you what every deferral period would actually pay.
A standard fixed annuity grows your money at a guaranteed rate and can begin income relatively quickly, with some access to your funds subject to surrender charges. It suits savers who want growth with principal protection and the option of nearer-term income.
A QLAC works differently. It is bought with pre tax funds from qualified accounts, locks those funds away until your chosen income start date, and in return removes them from RMD calculations while promising guaranteed lifetime income later. If your concern is outliving your money and reducing required withdrawals, the QLAC is the purpose-built tool. Many retirees hold both, and an advisor can show you how they fit together.
One conversation is enough to see which contract fits your retirement, get your free consultation online or call 951-470-3771 today.
Payments increase the longer you defer starting them. Choosing a later income start date turns waiting into a larger guaranteed monthly income.
A joint-life option keeps income payments flowing to your spouse for their lifetime, so the household income plan survives either of you.
Your QLAC funds are not exposed to market volatility during the deferral period. The income you were promised is the income you receive, whatever the markets do.
Once your income payments begin, they continue for the rest of your life. The check arrives every month no matter how long you live, backed by the claims paying ability of the issuing insurance company.
Funds used to purchase a QLAC are excluded from RMD calculations, and QLACs allow deferral of RMDs on that money until age 85. That is money staying tax deferred for longer, on your schedule.
Lower RMDs can reduce tax liabilities in retirement. QLACs can help manage taxable income during early retirement, keeping required withdrawals from inflating your tax bracket in the years you least need extra income.
Every feature of a qualified longevity annuity contract exists to solve one problem: making sure your income lasts as long as you do. Here is what that means in practice for your retirement accounts and your tax position.
✓ Guaranteed Income for Life From Your Chosen Start Date
Savings May Run Out in Your Later Years
✓ QLAC Funds Excluded From RMD Calculations Until Age 85
Full Required Withdrawals From the RMD Start Age
✓ Lower RMDs Can Reduce Tax Liabilities
Forced Taxable Withdrawals You May Not Need
✓ Managed by Design, Income Lasts as Long as You Do
Entirely on Your Shoulders
✓ Fixed Monthly Payments You Can Plan Around
Income Depends on Markets and Withdrawal Discipline
✓ Joint-Life Option Continues Payments for a Surviving Spouse
Spouse Relies on Whatever Assets Remain
✓ Deferred Funds Sit Outside the Market
Retirement Income Exposed to Downturns
Speak to a Licensed Annuity Advisor
Get straight answers on contribution limits, start dates, and payouts from a licensed advisor, with no pressure and no obligation to buy.
In Your 50s and Early 60s
At this stage a QLAC is a planning tool with maximum leverage on time. Your deferral period can run long, and payments increase the longer you defer starting them, so the same $210,000 maximum investment buys more future monthly income than it will later. You also get ahead of the RMD problem before it exists, positioning pre tax funds outside future RMD calculations while your other retirement accounts keep working.
In Your 60s and Early 70s
This is the classic QLAC window. Required minimum distributions are approaching or beginning, and moving funds into a qualified longevity annuity contract shrinks those forced withdrawals immediately. Lower RMDs can reduce tax liabilities during early retirement, and the contract quietly builds a guaranteed income floor for your 80s. Many buyers coordinate the income start date with the year other assets are projected to thin out.
In Your Mid 70s and Beyond
A QLAC can still work, but the window narrows because QLAC payments must start by age 85. A shorter deferral period means smaller monthly payments for the same investment, so the decision becomes a careful trade between RMD relief now and income size later. An advisor can tell you quickly if the numbers still favor the contract or if a different fixed annuity serves you better.
An honest answer starts with what a QLAC is not. It is not a growth product, it offers no cash surrender value, and funds in a QLAC are not accessible until payments begin. You cannot withdraw funds from a QLAC once purchased until payments begin, so it should never hold money you may need early. What it does, better than almost anything else, is guarantee income for the later years of retirement while cutting required minimum distributions along the way. Where it fits depends heavily on your stage of life.
Every consultation is free and carries no obligation. Ask every question, take the quotes away, and decide on your own schedule.
Your advisor helps you coordinate the QLAC with your wider retirement plan, from Social Security timing questions to how the contract sits alongside your other retirement accounts.
Retirees in every state work with Final Expense Company advisors by phone, with the same process and the same plain-English standard wherever you live.
You will not wait days to see numbers. Share your details once and receive QLAC quotes the same day, with each deferral period priced out clearly.
Deferral periods, joint-life options, RMD calculations, all of it explained in language a real person uses, so you understand exactly what you are buying before you buy it.
Rather than pushing one company's contract, your advisor lines up options from several insurers so you can weigh income, features, and financial strength side by side.
A QLAC is a long-term promise, so the guarantee of a QLAC is only as strong as the insurance company providing it. Final Expense Company advisors compare contracts across insurers, explain the financial strength behind each guarantee, and put your interests ahead of any single product.
QLAC pricing is quoted as the guaranteed monthly income your investment buys at your chosen start date, and rates change frequently as insurers adjust their offers. Two factors drive your number more than anything else: how much you invest, up to the $210,000 limit for 2026, and how long you defer, since payments increase the longer you defer starting them.
Because quotes move and vary between insurers, the only reliable figure is one priced for your age, your deferral period, and your chosen options on the day you ask. A licensed advisor can pull current quotes from multiple insurers in a single call.
Fill out the short form or call 951-470-3771. It takes about two minutes, and a licensed annuity advisor takes it from there.
Tell your advisor about your qualified accounts, your income needs, and when you want payments to begin. This shapes which contracts make sense.
Review same-day quotes from multiple insurers, with every deferral period, income figure, and optional feature explained in plain English.
Choose the contract that fits, complete the paperwork with your advisor's help, and your future income start date is secured.
Every month you wait is a month of deferral you cannot get back, get your free consultation online or call 951-470-3771 today.
Speak to a Licensed Annuity Advisor
Compare QLAC contracts from multiple insurers with a licensed advisor who explains everything in plain English and never pressures a decision.
A QLAC annuity, short for qualified longevity annuity contract, is a deferred income annuity purchased with funds from qualified retirement accounts. It is designed to provide guaranteed income during the later years of retirement, with payments starting at a future date you choose and continuing for life.
You move pre tax funds from a qualified retirement account into the contract and select an income start date. During the deferral period the funds are excluded from RMD calculations, and once payments begin the insurance company pays you guaranteed monthly income for life.
In 2026, the QLAC contribution limit is $210,000, and each individual can invest up to that amount. The limit applies to all your retirement accounts combined. Prior to 2023 the cap was $145,000 or 25% of the account balance, so the current rules are considerably more generous.
QLAC payments must start by age 85 at the latest, and you can choose an earlier income start date if you prefer. Payments increase the longer you defer starting them, so the start date is a direct trade between waiting and monthly income size.
Funds used to purchase a QLAC are excluded from RMD calculations until your payments begin, which means QLACs reduce required minimum distributions on that money for years. Lower RMDs can reduce tax liabilities and help manage taxable income during early retirement.
No. You cannot withdraw funds from a QLAC once purchased until payments begin, and the contract has no cash surrender value. That lock is the price of the guarantee, so a QLAC should only ever hold money you will not need before your income start date.
With a standard contract, your beneficiaries may receive little if you die before payments begin. Optional features can change that, including joint-life options, so ask your advisor how each contract you are quoted treats death before and after the income start date, and whether a cash refund feature is available.
Yes. You can choose a joint QLAC for spousal income benefits, which keeps payments continuing for as long as either spouse is alive. Monthly income runs a little lower than a single-life contract in exchange for protecting the surviving spouse.
You can purchase a QLAC only using funds from qualified retirement accounts, most commonly a traditional IRA or a 401(k). Roth IRAs are generally not used to fund a QLAC. Your advisor can confirm which of your retirement accounts qualify.
A QLAC is a strong fit if your priority is guaranteed lifetime income in later retirement and a smaller tax burden from required withdrawals. It is a poor fit for money you may need early, since funds are locked until payments begin. The honest answer depends on your accounts, your age, and your retirement goals.
Yes. Payments increase the longer you defer starting them, because the insurance company has more time before its obligation begins. A longer deferral period converts the same investment into a larger guaranteed monthly income.
All deferred income annuities exchange a lump sum today for income payments starting at a future date. A QLAC is the version built for qualified retirement money: it is funded only from qualified accounts and its balance is excluded from RMD calculations until payments begin, a treatment ordinary deferred annuities do not receive.
A QLAC delays tax rather than removing it. The contract is funded with pre tax funds, so income payments are taxable when you receive them, while the deferral years keep that money out of RMD calculations. A tax professional can map exactly how the timing affects your situation.
QLAC income arrives independently of Social Security benefits and is often used to supplement them in later retirement, when fixed payments elsewhere may have lost purchasing power. How the extra income interacts with the taxation of your benefits is a question for a tax professional or your advisor.
The biggest tax advantages come from keeping tax deferred savings working for longer. A QLAC lets you delay distributions on the invested funds beyond your normal RMD age, shrinking required minimum distributions (RMDs) until you receive payments. Lower forced withdrawals can mean less taxable early retirement income and a lighter tax bill in the years before the contract starts to provide income. QLAC limits can be adjusted annually, and recent changes linked to the SECURE Act raised the cap, so a financial advisor can confirm the current figure.
Both are optional features rather than standard, and they shape what a longevity annuity contract (QLAC) leaves behind. A standard contract has no cash value, and beneficiaries may receive little if you die before payments begin, so ask about a death benefit or cash refund feature if protecting remaining assets matters to you. Inflation protection is worth weighing too, because without it fixed payments can lose purchasing power over the years. A joint-life option covering both you and your spouse is the most common way couples build longevity insurance into the contract.
Still weighing it up? Speak to a licensed annuity advisor today with no pressure and no obligation, get your free consultation online or call 951-470-3771.
