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What's New With QLACs in 2023

Stan Haithcock
January 12, 2023
What's New With QLACs in 2023

The Big Secure Act 2.0 Update

Today we're discussing what's new with QLACs in 2023. QLACs were put on the planet in 2014 and can be used with IRA-qualified type assets. The Department of the Treasury and the IRS designed these in 2014 so people could use their IRA-qualified assets for future Lifetime Income. As of January 1, 2023, congress has passed the Secure Act 2.0 and made a few changes to QLACs. The two significant changes include:

  • Eligible participants can use up to $200,000 (indexed) to purchase a QLAC.
  • The threshold age increases to 73 for taking required minimum distributions (RMDs) from traditional IRAs and workplace retirement plans.

Specifically, the Secure Act 2.0 Section 202 removed the percentage restriction and raised the maximum premium, making QLACs a more attractive strategy than before. Section 202 also facilitates the sales of QLACs with spousal survival rights and clarifies that free-look periods are permitted up to 90 days with respect to contracts purchased or received in an exchange on or after July 2, 2014. Section 202 is effective for contracts purchased or received in an exchange on the Act's enactment date of January 1, 2023.

Protect Your Savings

QLACs offer a way to protect retirement savings by paying beneficiaries near their life expectancy. Now we can structure it either life only or life with a cash refund, joint life only, or joint life with a cash refund. You can add your spouse, which is excellent with your IRA. You can also add your spouse as a joint Lifetime Income annuitant, meaning that when you die, the income continues uninterrupted and unchanged for their lives and the cash refund part. If you want to structure it that way, when the second spouse dies, 100% of any unused money goes to the list of beneficiaries of the policy, and the evil annuity company doesn't keep a penny.

Joint Life

QLACs are great for you and your spouse if you want to set joint life up because everybody needs more income. This is a Lifetime Income stream transfer of risk that you'll never outlive, and the annuity companies on the hook to pay period. With inflation and that gorilla looming in the background, QLACs are an excellent way to combat that with income starting at a future date.

Getting a Quote

If you want a QLAC quote or to use our QLAC calculator, you can easily do so by going here. First of all, we don't sell your name, and we don't share any information. Everything is confidential and is held right there, period. So, feel confident to use that calculator 24/7, 365. You're going to have to put in your name, and you're going to have to put in your email address. You're going to put in the quote, and the quote's going to pop up, but then we're going to email you that quote for you to look at in the future and put in your file if you're thinking about it and just trying to look at what the guarantees are. Remember, eligible participants can use up to $200,000 to purchase a QLAC and understand that a QLAC quote expires every 7-10 business days. These are also commodity products, and it's like buying a plane ticket. You punch in all your specific details, and then you see the guarantees, and you can lock in that guarantee.

Never forget to live in reality, not the dream, with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.

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