Retirees can shelter up to $210,000 of pre-tax IRA funds in a QLAC, removing that money from RMD calculations until age 85. Moving $210,000 into a QLAC on a $257,000 IRA cuts the RMD base to $47,000, potentially avoiding higher Medicare IRMAA surcharges. With the 10-year Treasury yield at 4.7%, QLAC payout rates are near their most attractive level in years, beating the 1.68% average CD rate.
Many financial professionals are salespeople paid on what they push, not whether you end up wealthier. A fiduciary is the opposite. The SEC legally requires them to put your interests first.
Advisor.com's free matching tool pairs you with vetted fiduciaries from major national firms, all in under three minutes. See who you match with today. The Qualified Longevity Annuity Contract, or QLAC, is one of the least discussed tools in the U.S. retirement code.
It allows a retiree to move a portion of an IRA into a deferred income annuity and exclude that amount from the required minimum distribution calculation until age 85. For 2026, the maximum amount that can be moved is $210,000 per person, up from the original $200,000 cap that SECURE 2.0 indexed to inflation. Married couples can each use their own $210,000 allowance.
The reason most retirees have never encountered a QLAC is that they were a niche product until the SECURE 2.0 Act removed the old 25%-of-account limitation and set a flat dollar cap instead. The rule change matters because it makes the strategy usable for the typical retiree with a mid-sized IRA. According to Fidelity's Q3 2025 Retirement Analysis, the average Baby Boomer IRA balance sits at $257,002, meaning the $210,000 QLAC limit can shelter the majority of a typical boomer's IRA from RMDs.
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