Qualified Longevity Annuity Contract (QLAC)
Just read Jerry Blakely’s article on QLACs. Do these need to be set up by the taxpayer before their RMDs begin or can they be set up and carved out of an exiting IRA after their RMDs begin?
The article focused on the RMD reduction aspect of QLACs. You say otherwise. Can you please explain why?Thank you.
- See the following article for the rationale, even though QLAC limits have been amended:
- Don’t Use A QLAC To Avoid IRA RMD Obligations (kitces.com)
Permalink Submitted by Alan - IRA critic on Thu, 2024-02-01 21:16
They can be purchased either before or after RMDs begin, but if purchased in an RMD distribution year, RMDs will not be reduced until the following year. That said, RMD reduction should generally not be the driving force for QLAC purchases.
Permalink Submitted by George W Smith IV on Fri, 2024-02-02 01:09
Thank you You answer makes complete sense to me.