The 60-second version
- A QLAC is a deferred income annuity that qualifies under IRS rules for eligible retirement accounts.
- The key tax feature is RMD timing: the qualifying QLAC premium is excluded from the RMD account balance while income is deferred.
- The current IRS QLAC premium limit for 2026 is $210,000, and the dollar limit is inflation-indexed.
- QLAC income generally must begin no later than the first day of the month after age 85; once paid, income is generally taxable.
- Use DIA and QLAC quotes for future income, and use annuity taxation for the broader RMD context.
Start here
What is a QLAC?
A QLAC, short for qualified longevity annuity contract, is an annuity that meets IRS rules for eligible retirement accounts. In practical product terms, it is usually a deferred income annuity held inside qualified money such as a traditional IRA or certain employer retirement plans.
In one sentence
| Question | Plain-English answer | Why it matters |
|---|---|---|
| What is the product? | A deferred income annuity that qualifies under IRS QLAC rules. | You compare income through the same deferred-income lens as a DIA. |
| Where does the money sit? | Inside eligible qualified retirement money, such as a traditional IRA or certain plans. | The tax and RMD rules are tied to the retirement account. |
| What does it solve? | Late-life guaranteed income and temporary RMD relief on the QLAC premium. | It can reserve a slice of IRA money for income later, rather than forcing that slice into near-term RMD calculations. |
The tax mechanism
How the RMD deferral works
IRS Form 1098-Q instructions say that, before annuitization, the value of a QLAC is excluded from the account balance used to determine required minimum distributions. The RMD calculator on this page applies that idea to a simplified IRA balance using the IRS Pub. 590-B Uniform Lifetime table.
| RMD step | Without QLAC | With a qualifying QLAC |
|---|---|---|
| Account balance | The prior-year IRA balance is used for the RMD calculation. | The qualifying QLAC premium is carved out while income is deferred. |
| Divisor | The applicable IRS life-expectancy divisor is still used. | The same divisor applies to the smaller RMD balance in this simplified model. |
| Tax result | The RMD creates taxable IRA income for the year. | That portion is delayed; QLAC income is generally taxable when paid. |
Run the RMD deferral estimate
Use the calculator above to see the RMD amount attributable to the QLAC premium under the selected assumptions.
Current IRS rules
Limits & rules: current IRS premium limit and start-age cap
The current IRS QLAC premium limit for 2026 is $210,000, sourced from IRS Notice 2025-67 (2026). IRS Form 1098-Q instructions also state that the old account-balance percentage cap is repealed for contracts purchased or received after December 28, 2022.
The start-age rule matters too: under the IRS Form 1098-Q instructions, the contract must provide that distributions begin no later than a specified annuity starting date that is no later than the first day of the month after the employee's 85th birthday.
| Rule | Current treatment | Source / planning note |
|---|---|---|
| Premium limit | $210,000 for 2026. | IRS Notice 2025-67 (2026) |
| Start-age cap | Income generally cannot begin later than the first day of the month after age 85. | IRS Form 1098-Q instructions |
| Old percentage cap | Repealed for contracts purchased or received after December 28, 2022. | Do not use stale examples based on the old account-balance percentage rule. |
| Contract design | Must be intended as a QLAC and satisfy the IRS conditions. | Variable, indexed, surrender-value, and post-death-benefit features are constrained by the rules. |
Suitability
Who it's for
A QLAC is not a default IRA move. It can fit when late-life income matters more than keeping that slice liquid, and when the RMD deferral is useful enough to justify the product tradeoff. It can be a poor fit if you may need the money back, want market participation, or already have enough guaranteed income.
| May fit if | May not fit if | What to check |
|---|---|---|
| You do not need the whole IRA balance for near-term spending. | You need flexible access to the premium. | Emergency reserves and other liquid retirement assets. |
| You want contract-backed income later in life. | You already have enough pension, Social Security, or annuity income. | How the QLAC start age lines up with household spending. |
| RMD timing creates a meaningful tax-planning issue. | Your tax bracket may be higher when QLAC income begins. | RMD and annuity tax rules |
Product comparison
QLAC vs a regular DIA
A regular deferred income annuity is built to turn premium into guaranteed income at a later start date. A QLAC uses that same deferred-income idea, but adds qualified-account rules so a qualifying premium can be excluded from the RMD balance while deferred.
| Feature | QLAC | Regular DIA |
|---|---|---|
| Funding source | Eligible qualified retirement money, subject to QLAC rules. | Can be funded with non-qualified money or other eligible sources depending on the contract. |
| RMD treatment | Qualifying premium is excluded from RMD account balance while deferred. | No special QLAC RMD exclusion unless the contract qualifies as a QLAC. |
| Income quote | Compare DIA and QLAC quotes | Compare deferred income annuity quotes |
| Main tradeoff | More tax-rule constraints in exchange for RMD deferral on that slice. | Potentially more flexible funding, but without the QLAC RMD carve-out. |
Need the income number?
The RMD calculator does not project carrier payouts. Use the DIA page for live future-income quotes, then verify QLAC status with a licensed professional.
Quick answers
Frequently asked questions
What is a QLAC in plain English?
A QLAC is a qualifying deferred income annuity funded with eligible retirement money. It can defer RMDs on the qualifying premium while income is delayed, subject to IRS rules.
How much can I put in a QLAC in 2026?
For 2026, IRS Notice 2025-67 lists the QLAC premium limitation as $210,000. The limit is inflation-indexed and should be checked annually.
Does a QLAC eliminate taxes?
No. A QLAC can delay RMDs on the qualifying premium while income is deferred, but payments are generally taxable when they begin.
When must QLAC income start?
IRS Form 1098-Q instructions say the contract must require distributions to begin no later than a specified annuity starting date that is no later than the first day of the month after age 85.
Is a QLAC the same as a DIA?
A QLAC is usually a DIA that also satisfies qualified-account QLAC rules. A regular DIA can create future income, but it does not get the QLAC RMD exclusion unless it qualifies under those rules.
Should I use a QLAC for all my IRA money?
Usually no. A QLAC is limited by IRS premium rules and trades liquidity for future income. It should be tested against cash-flow needs, taxes, beneficiary goals, carrier strength, and other retirement income sources.
Educational only - not financial, tax, legal, or investment advice, not a quote, not a tax opinion, and not a carrier-approved illustration. The RMD calculator is illustrative and uses the versioned IRS Pub. 590-B (2025) Uniform Lifetime table plus the current QLAC premium limit from IRS Notice 2025-67 (2026). Actual RMDs, QLAC eligibility, excess-premium correction, spouse-beneficiary tables, qualified plan rules, start dates, taxes, and income payouts can differ. Confirm with a qualified tax professional and licensed insurance professional.