This QLAC calculator answers three questions about a qualified longevity annuity contract bought with pre-tax IRA or 401(k) money: how much the IRS lets you put in this year, how much smaller your required minimum distributions get before the income start date, and what the annuity could pay once checks begin. Enter your age, your year-end balance, premiums already paid into other QLACs, the premium you plan to pay, the income start age, and a rate from an insurer quote.
The defaults describe a 70-year-old with $800,000 in a traditional IRA who puts the full $210,000 into a contract that starts paying at age 85. Her RMDs begin at 73, and at a 5% assumed return the RMD calculation comes out $9,173.63 lower in 2029 and $141,694.16 lower across the 12 years before the checks start. At a 30% payout rate, a placeholder assumption and not a quote, the QLAC income would be $63,000 a year, or $5,250 of monthly income.
QLAC Calculator
Check the most you can put into a qualifying longevity annuity contract this year, how much lower your required minimum distributions run until the income starts, and what a payout rate you enter would pay at the start age.
Uses the 2026 IRS premium limit ($210,000, Notice 2025-67), the Uniform Lifetime Table from IRS Publication 590-B, and your own return and payout rate assumptions. The income figure is an illustration from the rate you enter, not an insurer quote. Joint and survivor or return-of-premium features lower the payout. Educational only, not financial, tax, or insurance advice.
What a Qualified Longevity Annuity Contract Is
A QLAC is a deferred income annuity held inside a traditional IRA or qualified retirement plan. You pay an insurer now for guaranteed lifetime income starting on a date you choose, no later than age 85. Immediate income annuities pay within a year; this type of annuity waits, so each dollar buys more. The rules sit in Treas. Reg. 1.401(a)(9)-6(q), and a few QLAC regulations separate it from any other type of deferred income annuity:
- Pre-tax money only, from an IRA, 401(k), 403(b), or governmental 457(b). A Roth IRA can’t hold one.
- Payments must begin by the first day of the month after your 85th birthday.
- No cash value after your required beginning date, apart from a free look of up to 90 days after purchase.
- The contract must say it’s intended to be a QLAC and can’t be variable or indexed. A fixed income annuity with a cost-of-living rider is allowed.
So it’s a type of longevity annuity: you give up access to part of your savings for guaranteed income later in life. Every QLAC is a deferred annuity, but most annuities sold today aren’t QLACs.
The 2026 QLAC Limit: $210,000, With No 25% Cap
SECURE 2.0 changed two things for contracts purchased on or after December 29, 2022: it dropped the rule that held premiums to 25% of your balance, and it set a flat $200,000 cap indexed for inflation. The cap rose to $210,000 in 2025 and stayed there for 2026 under IRS Notice 2025-67.
| Contracts bought | Dollar limit | Share-of-balance cap |
|---|---|---|
| Before December 29, 2022 | Lower, older cap | 25% |
| 2025 | $210,000 | None |
| 2026 | $210,000 | None |
| 2027 | IRS notice due late 2026 | None |
The limit is per person across all your IRAs and workplace plans, not per account. Spouses each have their own, so a couple could place $420,000. Increases are rounded down to a multiple of $10,000, which is why the figure can stand still for a year. The default example uses 26.25% of the balance, which would have failed before 2023. If you overpay, return the excess to the non-QLAC part of the account by the end of the following year, or the contract stops qualifying.
How a QLAC Reduces Your RMD, Year by Year
Treas. Reg. 1.401(a)(9)-5(b)(4) says the balance used for RMDs “does not include the value of any” QLAC. Each required minimum distribution is last December 31’s balance divided by the Uniform Lifetime Table factor for your age, so moving $210,000 out shrinks every RMD until the checks start.
Timing is where many explanations slip. Money used to purchase a QLAC in 2026 was still in the IRA on December 31, 2025, so the 2026 RMD doesn’t change. The first smaller one is for 2027, or your first RMD year if later. In the default case that’s 2029.
| Year | Age | Divisor | RMD without | Lower by |
|---|---|---|---|---|
| 2029 | 73 | 26.5 | $34,947.17 | $9,173.63 |
| 2031 | 75 | 24.6 | $38,372.63 | $10,072.82 |
| 2034 | 78 | 22.0 | $43,648.06 | $11,457.62 |
| 2037 | 81 | 19.4 | $49,523.79 | $12,999.99 |
| 2040 | 84 | 16.8 | $56,040.22 | $14,710.56 |
The tool lists all 12 years. It assumes the $210,000 would have earned 5% in the IRA; at 0% the first cut is $7,924.53 and the total $92,608.66. Inherited accounts follow another table; see our inherited IRA RMD calculator.
Choosing When Payments Begin, Up to Age 85
You set the income start age when you buy, and some insurers let you start income earlier. Waiting usually buys a larger check per dollar, because the insurer holds the money longer and fewer buyers live to collect. Try 80, then 85, above.
The SSA table behind our life expectancy calculator gives a 70-year-old man about 14.7 more years and a woman about 16.8, so averages land near 85 and many people outlive them. That’s the case this product is built for: income starting later in life, when savings run thin. A QLAC annuity is really insurance, a guaranteed income stream that provides lifetime income once other income sources shrink.
Death Benefits: Joint and Survivor or Return of Premium
On a life-only contract the checks stop at death, and if that comes before age 85 nothing is paid. Two options protect heirs, and each lowers the payment per dollar:
- Joint and survivor. A surviving spouse can receive up to 100% of your payment as guaranteed income for life. For a non-spouse, an IRS table caps the share by age gap: 100% within 2 years, 70% at 5, 44% at 10, 20% at 25 or more.
- Return of premium. If you die before the checks add up to what you paid, a beneficiary gets the difference by the end of the year after death. After your required beginning date, that payment counts as an RMD.
These income options can be combined. When a quote includes one, enter the lower rate it shows.
QLAC Payments, Taxes, and a Retirement Income Plan
Checks are taxed as ordinary income, like any IRA withdrawal, because the premium was pre-tax. The contract defers tax; it doesn’t erase it. In the default case, $141,694.16 of smaller RMDs in a 22% bracket puts off about $31,172.71 of federal tax. The insurer reports each QLAC premium to you and the IRS on Form 1098-Q.
Lower RMDs also mean lower adjusted gross income in your 70s, which can reduce how much Social Security is taxed and the Medicare IRMAA surcharge two years later. After 85 it flips: each $63,000 income payment adds to taxable income, which is future income you should plan for now. In a retirement income strategy the contract sits beside Social Security, any pension, and the rest of the IRA.
When to Consider a QLAC, and When It Doesn’t Fit
Consider a QLAC if several of these describe you:
- Your required withdrawals exceed what you spend.
- You worry more about outliving savings than about what heirs receive.
- You’re healthy, and relatives lived into their 90s.
- You want income security, and a way to provide income for a younger spouse.
A QLAC fits poorly when the IRA is your cushion for health costs or most savings sit in Roth accounts. The main benefit of a QLAC is protection against a long life; the tax deferral is a side effect. Check the insurer’s financial strength rating before you invest in a QLAC.
How to Buy a QLAC and Compare QLAC Quotes
- Confirm your room: $210,000 minus earlier premiums.
- Get quotes from several insurers for the same start date and death benefit. QLAC payout rates move with interest rates, so one quote isn’t a market.
- Fund a QLAC by direct transfer from the IRA, or buy inside a 401(k) if the retirement plan offers one. Most people use a QLAC for part of the account.
- Name any non-spouse beneficiary by your required beginning date.
Then replace the 30% placeholder with the quoted rate. A generic annuity calculator treats every annuity type alike; this one applies the IRS rules. An annuity expert or fee-only advisor can say whether the best QLAC is the highest quote or the one with the death benefit you want.
Frequently Asked Questions
What is the best age to buy an annuity like this?
Many people purchase an annuity of this kind in their late 60s or early 70s, near RMD age 73 (75 if born in 1960 or later). With an annuity purchased earlier, the insurer holds the money longer.
What are the downsides?
No liquidity, no inflation protection without a rider, lower checks with death benefits, and nothing for heirs on a life-only contract.
What are current QLAC rates?
They vary by insurer, age, sex, and start date. We don’t publish one; get a live quote and enter it.
Is $210,000 a lifetime limit?
It’s a running total: earlier premiums count, though the cap can rise with inflation. You can own more than one of these QLACs.
Last reviewed September 2026 against Treas. Reg. 1.401(a)(9)-6(q), IRS Notice 2025-67 (2026 limit of $210,000), the Form 1098-Q instructions, and the Uniform Lifetime Table in IRS Publication 590-B. The 2027 limit comes out late in 2026. The income figure uses a rate you enter and is not a quote. Educational only, not financial, tax, or insurance advice.