QLAC: Single or Joint

Submitted by David Heuring on Thu, 2023-09-21 23:40

I’m 71 years old and considering a $200,000 QLAC funded from my traditional IRA in order to reduce IRA RMDs in two years. I’ve looked at single and joint accounts and my understanding of a joint QLAC is that upon my passing, my spouse would continue to receive the monthly payments. However, she is considerably younger than I am (30 years) so obviously she’d max out the premium long before she reached retirement age. I’ve researched but haven’t found anything that explains what would happen in the event the surviving spouse exhausts the premium paid for the QLAC so early. So I’m left wondering whether I should get a single or joint QLAC account. I don’t know if annuities are outside of the scope of this forum, but thought to pose the question in case there is a straight forward answer to this scenario.

Thanks much,

Dave



Submitted by Alan - IRA critic on Fri, 2023-09-22 16:23

  • You would have to get quotes for various combinations of options. Not naming a beneficiary would produce the highest payout, adding a return of premium rider (ROP) would reduce that payout, and naming spouse as beneficiary would reduce it far more to finance the much longer expected years that payouts would be made to your surviving spouse. You may be able to limit the 100% of your payment made to spouse after your death, eg 50% rather than 100%, but the % she receives cannot exceed 100% of your payments. Payouts to spouse would not be limited to the premium you paid if she lives long enough. Attached are the QLAC Regs from 2014 which have only been modified to eliminate the % limit and increase the allowed premium limit to 200k.
  • 2014-15524.pdf (govinfo.gov)

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