Sep 12, 2023
In this episode, The Annuity Man discussed:
Why QLACs should be number one
Three reasons to buy a QLAC
The downsides of a QLAC
If agent commission didn’t come into play, QLACs would be the number one best-selling annuity product. It’s simple, pro-consumer, and works; it’s a product that focuses on the “will do” and not the “might do.” It’s a guaranteed lifetime income rolled from your IRA, and can be deferred as far out as age 85.
There are primarily three good reasons to buy a QLAC. First, you’ll get future income to combat inflation. Second, you can add your spouse as a joint annuitant, which means that they too get paid as long as one of you is breathing. Third, you can have tax savings. The amount that you put into a QLAC is not included in your required minimum distribution calculations.
The downsides of a QLAC are that it’s irrevocable, there’s no trackable interest, and there’s no market attachment. The latter “downside” isn’t much of a downside at all. Being detached from the market means it’s not affected by market fluctuations.
"With QLACs, SPIAs, and DIAs, there's no annual phase. There's no market attachment; it’s a straight transfer risk. You're saying to the issuing QLACcompany, here's the money, and you are on the hook to pay me, or me and my wife, or me and my husband forever as long as one of us is breathing, but you don't get to keep a penny. " — Stan The Annuity Man.
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