I have just turned 60 years old and am interested in a QLAC. Is it worthwhile to wait to see if interest rates increase in the next year or so, or should I start shopping now? Also, if I don’t live long enough to use most of my investment, is a return on death benefit a good deal?
As a certified financial planner, I get a lot of questions about annuities. The variations seem endless and I’m one of those geeks who loves digging into the details. A QLAC, or a qualified longevity annuity contract, is one of the simpler annuity arrangements.
QLACs: The Basics
You can buy a QLAC through a traditional IRA, 401(k) rollover or qualified retirement plan and choose when you want to start collecting payments in the future. Per IRS rules, you can use up to $135,000 or 25% of your total account holdings, whichever is lower, to buy QLACs during your lifetime.