A qualified longevity annuity contract (QLAC) uses eligible qualified retirement assets to fund income beginning later in life. The tradeoff is deliberate: commit a limited portion now, keep other assets available for earlier retirement years, and reserve the QLAC income for an advanced-age spending horizon.
The current federal ceiling and qualification rules are specific. A carrier illustration cannot fix an ineligible funding source, unavailable plan feature, excess premium, or nonqualifying contract design.
IRS Notice 2025-67 states that the QLAC premium limitation for 2026 remains $210,000. It is an aggregate federal ceiling across QLAC contracts—not an annual contribution limit or a recommended allocation. Product, plan, custodian, and suitability limits may be lower.
For QLACs purchased or received after December 28, 2022, premiums are no longer limited to 25% of the individual’s retirement-account balance. The inflation-adjusted dollar limitation still applies.
The contract must require distributions to begin no later than the first day of the month after the employee’s 85th birthday. An earlier permitted date may be selected and must be documented in the illustration and contract.
Federal rules permit QLACs under eligible section 401(a), 403(a), 403(b), and 408 accounts other than a Roth IRA, plus an eligible governmental 457(b) plan. The plan administrator or custodian must confirm availability and instructions.
A qualifying contract cannot be variable, indexed, or a similar contract except to the extent the IRS provides otherwise in published guidance. A fixed indexed annuity is not automatically a QLAC.
Before annuitization, the QLAC value is excluded from the account balance used to calculate required minimum distributions. This does not eliminate RMDs on remaining qualified assets or the tax rules that apply when QLAC payments begin.
A QLAC addresses longevity risk at an advanced age. It does not replace the liquid, invested, and income-producing assets needed before the QLAC start date.
A QLAC is a later-life longevity-income tool. It should not absorb the search intent or job of broader retirement-income planning, immediate income, accumulation annuities, pension elections, or arithmetic tools.
A limited portion of eligible retirement assets funds deferred income under the federal QLAC rules. The RMD account-balance exclusion applies before annuitization, while other qualified assets keep their own RMD obligations.
A single premium immediate annuity generally begins income within one year. It solves a different timing need and does not receive QLAC treatment merely because qualified money funds it.
A fixed indexed annuity or multi-year guaranteed annuity is generally compared for accumulation and protection. Indexed contracts do not satisfy the QLAC contract restriction, and a MYGA label alone does not establish QLAC status.
The income-target calculator performs arithmetic only. A pension comparison evaluates an employer-plan election. The broader guaranteed-retirement-income guide coordinates household income, liquidity, growth, and legacy. None substitutes for QLAC eligibility confirmation and a current insurer-approved illustration.
An employer plan is not required to offer a QLAC. Confirm whether the plan permits the purchase, whether a distribution or direct transfer is available, and which paperwork the administrator or custodian requires.
The federal dollar limit applies across contracts. Inventory existing or prior QLAC premiums before relying on remaining capacity, and correct any excess under current IRS procedures.
Choose the advanced-age start date only after mapping Social Security, pensions, portfolio withdrawals, care costs, and liquid reserves for the years before payments begin.
Joint-and-survivor and permitted return-of-premium provisions can change income and legacy outcomes. Divorce, beneficiary, and plan rules may require specialized review.
QLAC funding uses qualified assets, and payments are generally taxable when distributed except to the extent of any basis. First Freedom Life does not provide tax or legal advice; use a qualified professional for the actual case.
Review insurer financial strength, payment terms, restrictions, death provisions, all compensation and conflicts, and whether the recommendation fits the consumer’s needs, liquidity, tax status, time horizon, objectives, and existing products.
Not a tax shortcut: excluding the pre-annuitization QLAC value from the RMD account balance does not make the purchase tax-free, eliminate RMDs on other assets, or make later payments tax-free.
Book below or call (786) 567-6889. Bring your age, state, desired income-start age, eligible account type, amount being considered, existing QLAC premiums, spouse or beneficiary priorities, and plan or custodian information. No transfer or product decision is required for the review.
Educational comparison only; not a quote, illustration, recommendation, contract, tax advice, or legal advice. QLAC eligibility, plan availability, premium capacity, benefits, start dates, survivor provisions, and terms vary by individual circumstances, plan, custodian, contract, state, and insurer.
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A qualified longevity annuity contract (QLAC) is a deferred income annuity that meets specific federal requirements and is purchased with eligible qualified retirement assets. It is designed for income beginning later in life, not immediate income or liquid account access.
IRS Notice 2025-67 states that the aggregate QLAC premium limitation for 2026 remains $210,000. This is an inflation-adjusted federal ceiling across contracts, not an annual contribution limit or a recommendation to use that amount. Product, plan, custodian, and suitability limits may be lower.
No. Before annuitization, the QLAC value is excluded from the account balance used to calculate required minimum distributions. RMD rules still apply to the remaining qualified accounts, and QLAC payments are subject to the applicable distribution and tax rules when they begin.
Federal rules permit a QLAC under eligible plans, annuities, and accounts described in sections 401(a), 403(a), 403(b), and 408 other than a Roth IRA, plus an eligible governmental 457(b) plan. An employer plan is not required to offer a QLAC, so the plan administrator or custodian must confirm availability and instructions.
The contract must require distributions to begin no later than the first day of the month after the employee’s 85th birthday. A contract may use an earlier permitted start date; the selected date and payment terms must appear in the insurer-approved illustration and contract.
QLACs are intentionally restrictive. Federal qualification rules generally prohibit cash-surrender, commutation, or similar access after the required beginning date, apart from a permitted rescission period of no more than 90 days. Actual rights depend on the contract and applicable law, so separate liquidity is essential.
Permitted joint-and-survivor and return-of-premium provisions may be available under federal rules and the specific contract. These elections can change the income amount and early-death outcome. The illustration, beneficiary designation, plan rules, and tax consequences should be reviewed before purchase.
Current IRS authority controls the 2026 limit and qualification rules. The Department of Labor material supplies historical market context only; its older numerical examples do not replace current IRS guidance.
Annuity obligations depend on the issuing insurer’s claims-paying ability and the contract terms. Annuities are not FDIC or SIPC insured and are not bank deposits or bank guaranteed. QLAC availability and approval vary by plan, custodian, insurer, contract, and state. Confirm current requirements before acting.