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Avraham "AY"  Rappaport, CLTC

President, Financial Professional


Yaniv "Jay" Natanov

President, Financial Planner


Eli Rappaport

Vice President, Financial Planner


Shlomo Rosenstein

Financial Professional


Ozzie Marizan

Financial Planner


Joseph Greer

Employee Benefits Administrator


Dylan Pinsky

Client Relations Manager


Premier Financial

6395 Dobbin Road, Suite 102

Columbia, MD 21045


Phone:  240-309-6001




July/August 2023

Understanding QLAC

Understanding QLAC

A Qualified Longevity Annuity Contract (QLAC)* is a type of deferred annuity purchased with funds from a qualified retirement plan or individual retirement account. It is designed to provide guaranteed income later in life. A QLAC may help a retiree remain in a lower tax bracket by reducing the balance in a retirement account used to calculate required minimum distributions (RMDs).

How It Works
Secure 2.0 allows an individual to move up to $200,000 from a qualified retirement plan or IRA into a QLAC. The buyer purchases an annuity contract either with a lump sum payment or a series of premiums. Taxes are deferred until payments begin. Payments must start by the annuitant’s 85th birthday, which is also when RMDs kick in. Payments are taxed at regular income tax rates.

Three Options
QLAC purchasers generally have three options to choose from.

  • Payments end when the annuity owner dies.

  • Payments stop after the death of the owner and a spouse (joint life QLAC).

  • The plan pays a refund to a designated beneficiary.

The second two options will result in lower monthly annuity payments. Buyers can also add cost-of-living adjustments to their contracts.

Laddering QLACs
Purchasing a series of smaller QLACs over several years can help manage the risk that growth will be locked in at a fixed rate. Laddering can provide an advantage if interest rates rise.

QLACs may or may not be right for you, so before purchasing a QLAC, check the ratings of the issuing company and consult your financial professional.

*Annuity products are not FDIC-insured, and their guarantees are backed solely by the claims-paying ability of their issuing life insurance company.



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