QLAC Calculator
Calculate a Qualified Longevity Annuity Contract (QLAC) purchase from your IRA or 401(k): defer up to $210,000 (2026 limit) of pre-tax balance from required minimum distributions, then start guaranteed income at any age from 70 to 85.
What Is a QLAC?
A Qualified Longevity Annuity Contract (QLAC) is a deferred income annuity purchased inside a traditional IRA or 401(k) that exempts the purchase amount from Required Minimum Distribution (RMD) calculations until income begins. Income can start any time from age 72 to age 85, with most retirees choosing 80-85 to maximize the deferral benefit. Per IRS RMD guidance, the QLAC amount comes out of the IRA balance for RMD calculations the year of purchase and stays excluded until annuity income begins. The 2026 maximum QLAC purchase is $210,000 per person (indexed annually under SECURE 2.0, up from $200,000 in 2025) — and unlike the pre-SECURE 2.0 rules, there is no longer a 25% of IRA balance cap. The previous "25% rule" was eliminated by SECURE 2.0 Section 202, making QLACs accessible to retirees with smaller IRA balances who couldn't previously meet the 25% threshold.
Three Reasons to Buy a QLAC
(1) Longevity insurance: guaranteed income for life regardless of how long you live or what markets do. A 65-year-old who buys a $200K QLAC with income starting at 85 receives roughly $40,000-$55,000 per year for life from a single-life contract — about 20-27% per year of original purchase, because most buyers die before collecting. (2) RMD deferral: $210K out of a $700K IRA reduces your RMD by 30% from age 73 onwards. If your marginal tax bracket is 24%, that's roughly $2,000-$4,000 annual tax savings during the deferral years. (3) Behavioral simplification: knowing you have guaranteed income starting at 85 lets you spend more confidently from the rest of your portfolio in your 70s without fearing running out of money. Source: Kitces QLAC research.
QLAC Downsides — Why Not Everyone Should Buy One
QLACs aren't appropriate for everyone. The downsides: (1) Mortality risk — if you die before income begins (or shortly after starting), single-life QLAC payments stop and the insurance company keeps the remainder. Cash refund and joint-life versions exist but reduce the payout rate by 10-20%. (2) Inflation risk — most QLACs are fixed-dollar; an inflation-adjusted QLAC reduces starting income by 30-40% in exchange for CPI-linked future increases. (3) Credit risk — payouts depend on the insurance company's solvency for 20+ years. State guaranty associations cover roughly $100-$300K per insurer per state, so spreading large QLACs across multiple insurers is wise. (4) Opportunity cost — money in a QLAC can't be invested in stocks, real estate, or other assets that might grow faster. QLAC works best as a 10-25% slice of total retirement assets, not the centerpiece.
SECURE 2.0 QLAC Changes — What Changed in 2024
The SECURE 2.0 Act (passed December 2022, mostly effective 2024) made four major QLAC improvements: (1) raised the dollar limit from $145,000 to $200,000 (now $210,000 for 2026), (2) removed the 25% of IRA balance cap, opening QLACs to smaller savers, (3) permits spousal QLACs with continuation at the same level (previously capped at 50% survivor), and (4) allows free-look refunds within 90 days of purchase for buyer remorse. These changes made QLACs significantly more flexible — for example, a 65-year-old with a $400K IRA can now buy a $200K QLAC (50% of balance), whereas under pre-2024 rules they were capped at $100K (25% of balance). Per IRS SECURE 2.0 guidance, these changes apply to QLACs purchased on or after January 1, 2024. Last updated May 2026.