Is your mindset turning toward how to safeguard your retirement standard of living for many years ahead? A deferred income annuity (DIA) provides protected lifetime income in the future. While the income stream can be started as soon as 13 months after purchase, it also can be delayed for a long time (40 years in some cases).
Bottom line: The longer the deferral period, the larger the income payout amount.
Next, What is QLAC?
A qualified longevity annuity contract (QLAC) is a special type of DIA and it brings added advantages. It allows traditional IRA owners and defined contribution plan participants to ignore the QLAC funds in those accounts when calculating their RMDs. As long as the QLAC distributions are delayed, the associated Required Minimum Distributions (RMDs) and taxes are too.
2 Reasons why a QLAC stands out for modern retirements include:
- No other qualified retirement product allows you to defer the start of your guaranteed income payments to as late as age 85
- It’s the only way to defer RMDs past age 70½ (other than the “still working” exception)