Qualified Longevity Annuity Contract (QLAC)

Hello Terry, please respond to The subject in regards to NO RMD after a certain age is reached (ie. 80+ years). Tell all you know on the subject. Thanks from Charles M SMG (Ret) Atlanta GA.

Terry Says:  I recently wrote a column — please check the HuffingtonPost archives by clicking on the box at my website — www.terrysavage.com.  Or, better yet, here’s a link to that column:  http://www.huffingtonpost.com/terry-savage/longevity-annuities-buyin_b_5607731.html   Cut and paste it into your browser if the link doesn’t work.

You have things a bit  confused.  These annuity contracts, now being offered by many retirement plans,  start paying out at a later age.  The payments last your remaining lifetime, thus helping defray the worry of “running out of money.”  But because they start later in life, the monthly payment can be larger.

What you’re referring to is the fact that the value of money placed into these contracts in your retirement plan does not count when you calculate the minimum required distributions (MRD) that start at age 70-1/2.