Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
Updated July 28, 2026. Quick answer: A qualified longevity annuity contract removes the amount used to buy it from the balance the RMD calculation runs on, deferring that portion until the annuity starts paying — up to a dollar limit that is indexed and that SECURE 2.0 raised.
The mechanism
Use part of an IRA to buy a QLAC and that amount leaves the RMD base. The RMD is calculated on what remains. When the annuity begins paying — at an age you choose, up to a statutory maximum — those payments are taxable income.
It is a deferral and a longevity hedge, not an elimination.
The dollar limit is indexed and was changed by SECURE 2.0, so this page does not state a figure. Confirm the current limit before planning around it. The percentage-of-balance limit that used to apply was also removed — verify the current structure rather than relying on older summaries.
What you give up
- Liquidity — the money is committed.
- Investment upside on that portion.
- Flexibility, since the contract terms are fixed at purchase.
Plan the withdrawal, not just the minimum
A required distribution is the floor rather than the plan, and an adviser can look at how the withdrawal interacts with your bracket, your Medicare premiums and your other accounts before a deadline decides it for you.
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Who it suits
Someone with a large IRA, real longevity risk, and enough other liquid assets that committing a slice is comfortable. It is a poor fit for anyone whose IRA is most of their net worth, and a poor fit purely as a tax play — the deferral is real but modest against what the illiquidity costs.
Sources
IRC §401(a)(9) (required minimum distributions); IRC §408(d)(8) (qualified charitable distributions); IRC §4974 (excise tax on shortfalls, as amended by SECURE 2.0); SECURE Act (2019) and SECURE 2.0 (2022); final RMD regulations published 19 July 2024. Cross-checked July 2026 against professional analyses. Indexed dollar limits and correction windows are described rather than asserted.
This states what the cited authority says. It is not tax advice.