A deferred income annuity inside your IRA/401(k) that also pushes back required minimum distributions on the money used.
A special deferred income annuity funded with qualified (pre-tax retirement) money. Its two jobs: guarantee late-life income, and let you defer RMDs on the premium used — up to age 85 — shrinking taxable required withdrawals in your 70s.
It's a longevity bet locked inside your IRA: illiquid, and if you die early the tax and income benefits may never fully materialize without a return-of-premium option (which lowers the payout). The RMD deferral is real, but it's still your money you can't touch.
High income per dollar (it's a deferred annuity) plus a tax benefit: smaller RMDs — and potentially lower taxes — in the years before income starts.
No explicit fee, like other income annuities; cost is embedded in the payout and the illiquidity.
Very low by design — QLAC rules require it be a lifetime income contract, not a liquid account.
Funded with pre-tax money, so income is fully taxable when it starts. The benefit is timing: deferring RMDs on the premium reduces taxable income in your 70s. Under SECURE 2.0 the premium limit is $200,000 (indexed for inflation), and the old 25%-of-balance cap was repealed.
Educational explainer, not individualized financial advice. Figures are typical industry ranges as of 2026 and vary by insurer, product, and state. Sources: SEC/FINRA investor bulletins, IRS Pub 575/939, NAIC model regulations, SECURE 2.0 Act. We’re independent and don’t sell annuities.