Deferred Variable Annuity in an IRA

Submitted by Mark Mannarelli on Sun, 2023-11-26 20:56

A few years ago annuity providers offered deferred variable annuities in an IRA. I recall that the annuitant could not withdraw funds until age 85 but the invested funds would not be counted in the RMD calculation during the holding period. They would be taxable and included in the consolidated RMD calculation once withdrawals began. Is this product still available and am I correct that the RMD calculation would be temporarily reduced for the invested funds?



Submitted by Alan - IRA critic on Sun, 2023-11-26 22:38

  • Yes,  QLACs (qualifying longevity annuity contract), were first available in 2014.  The premium for the annuity purchase is transferred to an insurance company offering this product and the QLAC IRA annuity is purchased. This  IRA account is exempt from RMDs until around age 85. Secure 2.0 has increased the maximum QLAC purchase to 200k and eliminates the % of IRA balance limit, as well as providing spousal survival rights and a 90 day “free look” period.  The IRS will have to update their QLAC Regs to reflect these changes, therefore some companies may still be operating under the original Regs. Note that once distributions begin around 85, total RMDs will be much larger, and if the QLAC owner is single at the time, they will be subject to the higher tax rates on these distributions as a single filer. Link to the original Regs is below:
  • 2014-15524.pdf (govinfo.gov)


Submitted by Mark Mannarelli on Sun, 2023-11-26 23:36

Thank you. This was very helpful. I remembered the product but not every company offers it.



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