Quick Read – A $200,000 QLAC purchase cuts the RMD calculation base from $2 million to $1.8 million, deferring over $150,000 in forced income across ages 73 to 84. – Reducing RMDs keeps income below the $109,000 IRMAA threshold, preventing Medicare surcharges and an effective…
rginal rate near 40% on each additional RMD dollar. – With the 30-year Treasury at 5.08%, insurers can offer roughly a 20% annual payout at 85, a mortality-credit return no CD or I-bond can replicate. – A 70-year-old with a $2 million traditional 401(k), no immediate withdrawal need, and three years before required minimum distributions kick in at 73 faces a looming tax bill. A QLAC (qualifying longevity annuity contract) purchased for $200,000 could pay roughly $42,704 per year starting at 85, and that money leaves the RMD calculation the moment it moves
The value lies in what happens to your RMD schedule, Medicare premiums, and tax bracket the year you carve $200,000 out of the qualified pile. It starts working the moment the annuity is issued. How the RMD Math Actually Changes Under SECURE 2.0, the 2026 QLAC premium cap sits at $210,000 per person, indexed for inflation and no longer capped at 25% of your account.
A $200,000 purchase fits comfortably under that ceiling. Once issued, that $200,000 is excluded from the balance used to compute your RMD each year until QLAC payments begin, which can be pushed as far as the first of the month after your 85th birthday. _________________________________ What’s Your Number…? __________________________________________ At 73, the Uniform Lifetime Table divisor is 26.5. On a $2 million balance, your first RMD is roughly $75,500.