Retiree Defers Up to $200,000 in RMDs With $210,000 QLAC by 85
Updated
Updated · 24/7 Wall St. · May 24
Retiree Defers Up to $200,000 in RMDs With $210,000 QLAC by 85
2 articles · Updated · 24/7 Wall St. · May 24
$210,000 shifted from a traditional 401(k) into a QLAC cuts a 70-year-old retiree’s RMD base to $1.79 million, delaying distributions until as late as age 85.
At age 73, that carve-out lowers the first required withdrawal to about $67,547 from $75,472, reducing forced ordinary income by roughly $7,925 and potentially more than $100,000 over 12 years.
Those smaller RMDs can help keep income below 2026 IRMAA thresholds of $109,000 for single filers and $218,000 for joint filers, avoiding Medicare surcharges that can add $70 to $400 a month per spouse.
By age 85, a $210,000 QLAC bought at 70 can generate roughly $35,000 to $45,000 a year from major insurers, though adding death-benefit protection trims payouts by about 10% to 15%.
The strategy is most useful in the narrow window before RMDs begin at 73, especially for retirees balancing tax management, Medicare premiums and longevity insurance.
Is a QLAC a savvy tax move or a costly 15-year bet against market growth?
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