QLACs
Hi Terry, From listening to you on WGN over the years, I know you’re not a fan of annuities. But what about QLACs? All our money is in IRAs and we’re in the 22% tax bracket, so the $200K that we can take out of our IRA to fund the annuity (QLAC) seems like a good idea to help reduce our taxes now, via a smaller RMD. Does that make sense? My wife and I are both 71.
Thank you for all you do.
Terry Says
A qualified longevity annuity contract is an annuity product designed to prevent you from outliving your retirement savings. The term longevity in the name is key: QLACs are deferred annuities that you can buy at any time, with payments that typically kick in only after you turn 80 years old. The latest you can start payments from a QLAC is age 85.
Actually, you should buy the QLAC (deferred annuity) WITHIN your IRA. Then the amount invested can be deducted from your balance used to calculate the RMD in each of your IRAs, when that starts in two years!
