By Mary E. Vandenack.
Owners of IRAs or participants in certain retirement plans can use up to $125,000 or 25% of their account balance to purchase a qualified longevity annuity contract (“QLAC”). A QLAC is an annuity that begins payments when the annuitant reaches age 85. The annuity contract is not used in calculating minimum required distributions. QLACs cannot make available cash surrender value and cannot be a variable or indexed contract presently. QLACs may contain cost of living adjustments.
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