QLAC

pgiguer — Wed, 30 Oct 2024 22:14:29 GMT

Is the Qualified Longevity Annuity Contract (QLAC) a good tax (RMD option), I don't get any information generally from financial advisor. Pro's and Con's are hard to find, Why?

Re: QLAC

marctu — Wed, 30 Oct 2024 23:05:41 GMT

So I am somewhat familiar with qualified longevity annuity contract (QLAC), but by no means an expert on them. You transfer funds from a retirement account, up to $200K, in a lump sum or periodically to a QLAC. Because the transfer is from one plan custodian to another, it’s tax-free. IRS rules stipulate that required minimum distributions begin at age 85 from the QLAC. So it is a good tool to delay RMD

One of the the downsides of annuities are the costs, both upfront and over the life of the contract, which may be why your advisor did not provide you with much information. Another downside is since it is an annuity you are no longer in control of the principal, so they are not flexible instruments. With any annuity you should shop for the best deal.

I do hope this was helpful @pgiguer

All the best,

Marc T.

TurboTax Live Tax Expert

27 Years of Experience Helping Clients

topic QLAC in Get your taxes done using TurboTax

QLAC

Re: QLAC