g2itutorial
spacer

THREE SHORT STEPS TO DECIDE, DESIGN AND FIND YOUR BEST QLAC ELECTION.

 

INVESTORS LIKE YOU



Design

Your QLAC to match your personal circumstances.

Your Annuity


  You









Return to Step 1

Annuity Payments

 

The graph above is designed to show you the level of payments, when annuitants and any beneficiaries are paid, and the pattern of payments. Use the graph to compare different annuity options you select for Your Annuity.







FREE QLAC REPORT

Fill in the information below to receive a free, no obligation QLAC Report. By registering you will also receive quarterly Annuity Alerts that update your annuity information to reflect then current market conditions and your age. This could help you determine whether and/or when to purchase an annuity.






See our privacy policy statement for how we handle your information.

 

g2itutorial

Select Survival Age
RMD Payments
QLAC Payments
Advantage QLAC

"Payments" above include (1) periodic amounts paid to annuitant(s) through the selected survival age, and (2) any residual amount paid to the beneficiary at the survival age. A negative "Advantage QLAC" will likely occur if you select a young survival age.

MAXIMUM QLAC premium


MAXIMUM QLAC premium is smaller of $125,000 and 25% of Rollover IRA balance as of December 31st of previous year.

Fill in balance below if you need help.

Rollover Account Balance
Your Maximum Premium

Use Your Max Premium in calculation

You may be able to make larger purchase if Income Start Age is 70 or under

Single Female Age 62 Wants Security


Situation:

Denise, age 62, accumulated nearly $300,000 in 401(k) savings over her working career. Denise has no pension and has a small amount in personal savings for emergencies. Her parents are both alive, and in their early 90s. Denise decides to invest in a Qualifying Longevity Annuity Contract (QLAC). Without any beneficiaries to depend on her, and to maximize her future income, Denise chooses not to elect the Return of Premium protection.


Solution:

Denise rolls over $225,000 of her $300,000 401(k) balance into a self-directed Rollover IRA account, and the remaining 25% ($75,000) to a QLAC, electing to defer income from the QLAC until age 80. Starting at age 80, Denise can expect $16,800 a year in guaranteed income from the QLAC, which translates to $224 for each $1,000 of allocation. The balance in the Rollover IRA account is invested in a diversified portfolio of mutual funds from which she can make periodic drawdowns, and/or purchase non-QLAC guaranteed annuities.

Married Couple 70:67 Wants Predictability


Situation:

Ron, age 70, and Karen, age 67, have been married 30 years; they want predictability of income that lasts as long as both or either are still living. Ron has $600,000 in Rollover IRA savings, and Karen has $100,000 in a Tax Sheltered Annuity. They want to avoid the fluctuations in each year's Required Minimum Distributions. Ron does not elect the Return of Premium protection, Karen does.


Solution:

Ron allocated $125,000, the maximum currently allowable, into a structured Qualifying Longevity Annuity Contract (QLAC) which will guarantee $5,976 starting at age 75, increase to $9,566 at age 80, and then to $12,883 at 85. This income will be paid as long as either Ron or Karen is alive. Karen also allocates $25,000 (the 25% maximum allowable) into a QLAC with a deferred income payout starting at $5,420 at age 85. With these guaranteed "pensions for life" in place, Ron and Karen can invest the balance of their accounts more aggressively should they wish to do so.

Husband 73 and Wife 70 Want to Reduce Current Taxes


Situation:

Jack, age 73, and Ginny, age 70, are looking to reduce the taxes on their Required Minimum Distributions since they have income from other sources. Jack has $350,000 in a Rollover IRA, and Ginny $450,000 in her Rollover IRA account. They decide to each purchase a Qualifying Longevity Annuity Contract (QLAC) for the tax benefits as well as the peace of mind it provides. Because they have provided for their beneficiaries in other ways, neither Jack nor Ginny elect the Return of Premium protection.


Solution:

Jack decides upon a structured QLAC, allocating the allowable 25% maximum amount of $87,500. At age 75, Jack begins to receive $4,862 of guaranteed income starting at age 75, increasing to $9,352 at age 80, and to $13,153 at age 85. Ginny elects the 25% QLAC maximum deferral option on her $450,000 Rollover IRA account which will pay out $31,590 starting at her age 85.

QLAC Plan Options


Depending on whether your objective is to "Reduce Current Taxes", "Predictability of Income Distributions", or "Income Security", you can select a QLAC Plan to help meet that objective.

  • By selecting Max Deferral By selecting Max Deferral you are deferring payments (and taxes thereon) until the Income Start Age you select.

  • If you select Income Plan* you are phasing in your guaranteed income at ages 75, 80 and 85.

  • If you choose Balanced Plan* you are combining both deferral of certain payments until age 85, and start of income at ages 75, 80 and 85.

  • *The Income Goal illustrated above will be the initial payment. Selection of these plans at current ages 74 to 80 will be changed to a Max Deferral plan.

    How QLAC Makes Your Rollover IRA Better

    You designed a QLAC Income Plan that can make your IRA better by enabling you to control, increase and stabilize the income coming from your Rollover IRA.

    Most investors think that taking the Required Minimum Distributions required by the IRS is a retirement income strategy. It's not. It's a way for the IRS to recover the taxes on the income that was deferred.

    Set out is an illustration of replacing 25% of your IRA Account Balance with your QLAC Plan.

    The advantages of this approach are the following:
    • 1 Your total IRA payments are stabilized.

    • 2 Your income is greater and increases for most of your period.

    • 3 40% of your payments through age 95 come from QLAC purchased with only 25% of your account.

    • 4

       With a large percentage of your payments guaranteed you can take greater risk on non-QLAC portion.

    Return to Step 2 >


    Investing Non-QLAC Funds:

    If you'd like some ideas on how you might invest the non-QLAC portion of your account, we can refer you to advisors who work with QLACs as part of their investment strategy. Please check "Request a Referral" in box at right.

    GET THE RETIREMENT YOU WANT

    Illustration of Total Payments from Rollover IRA

    Note: QLAC payments are based on plan you selected. Balance of payments based on RMD withdrawals from investment funds.

    If you'd like to have a copy of the QLAC Report, please provide name and email address.