A Qualified Longevity Annuity Contract (QLAC) (click here for definition) is a great way to defer taxes and reduce the risk of outliving retirement assets. A QLAC is not for everyone. But if more than a few of the 8 signs below describe you, you may need one! Watch the entire 8 Signs video or click one of the 8 signs below to learn more about each!

   
   
   

  

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You are of a certain age. 

Although a QLAC may be purchased any time before age 84, QLAC investors typically choose to make a QLAC purchase near retirement (e.g. early to late sixties), or upon reaching the age of 70 ½.  Here's why...

 

 

 

 

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You are in good health.

Good health and likely longevity are  key variables in deciding whether or not to purchase a QLAC.  This is because the QLAC has no cash value and cannot be undone after purchase. More...


 


 

 

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You have retirement assets. 

Most carriers offering QLACs have $15,000 minimum premium. This translates to a minimum qualified retirement account (e.g., IRA) balance of $60,000. The overall premium limit of $130,000 is 25% of $520,000 of IRA assets. More...

 

 


 

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Your estate plans are made.

Most parents want to avoid becoming dependents of their offspring. QLAC lifetime income can help prevent this. Return of premium features can be used to pass on QLAC assets in the event of an untimely death of the beneficiary. More...

 


 

 

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You're not great at budgeting.

A QLAC can impose discipline by simply putting the assets out of reach for a time.   Socking away up to 25% of your retirement assets now into an instrument that will begin paying fixed amounts during  later years can be a clever way of budgeting for future retirement income needs.  More...

 


 

 

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You're in the right investment climate.

If returns to investors are high, as they were during the 1990s, then an IRA owner may be able to apply the 4% rule of thumb. If, on the other hand, the returns climate is more uncertain and returns lower (as they have been in the last decade), then that IRA owner may want to purchase a QLAC and lock in an annuity payment for the future.  More...

 

 

 

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You have a low tolerance for risk. 

Some people  lay awake at night when there is turbulence in the markets. For these folks, a QLAC may be a good way to assure future income and current rest. If someone is comfortable with market volatility, then that person may be more comfortable self-insuring against running out of money in retirement. More...

 


 


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You want to defer income taxes.

A typical QLAC buyer can have a 10 to 20 year deferral of taxation between premium payment and benefit receipt. Further, in most instances the IRA owner is in a higher tax bracket at the premium purchase date than he or she will be when the QLAC benefits are paid.  More.. 

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Want to learn more? Check out our videos page to see additional QLACguru videos.  See our calculators to develop an anonymous RMD calculation and estimated QLAC quote. Answer specific questions by going to our Knowledgebase page.  Visit our blogs page for in-depth articles on a variety of topics including how QLACs help with Sequence Risk, how QLACs are similar to and different from Social Security, best practices in buying a QLAC as well as many other topics.

Free Consultation.  If you would like us to develop a free RMD analysis and illustration of how a QLAC might work for you, please click here.


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