The QLAC 2026 limit is $210,000, the most one person can pay in premiums across all of their qualifying longevity annuity contracts (Source: IRS Notice 2025-67). A QLAC is a deferred income annuity bought inside a traditional retirement account that can push income as late as age 85 and whose value is left out of required minimum distribution (RMD) math until payments begin. This guide explains the 2026 limit, the rules, the income a QLAC can produce, and the tradeoffs.
The QLAC 2026 limit is $210,000 per individual, unchanged from 2025 (Source: IRS Notice 2025-67). A qualifying longevity annuity contract is a deferred income annuity held in a traditional IRA or workplace plan that can defer income to age 85. Prior to annuitization, its value is excluded from the balance used to calculate RMDs, so RMDs shrink until payout (Source: IRS Instructions for Form 1098-Q, April 2025). Roth IRAs are excluded.
What is a QLAC in plain terms
A QLAC is a deferred income annuity that meets a set of IRS requirements so that its value can be excluded from required minimum distribution calculations before it starts paying out. It is purchased with money already inside a qualified retirement account, and it promises income beginning at a future date the owner selects, which can be as late as age 85 (Source: IRS Instructions for Form 1098-Q, April 2025).
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The “qualifying” part matters. An ordinary deferred annuity does not automatically get QLAC treatment. A contract earns the label only when it satisfies the premium limit, the starting-age ceiling, and the other conditions in Treasury Regulation section 1.401(a)(9)-6. The insurer that issues the contract, not the buyer, certifies QLAC status by filing an IRS form each year (Source: IRS Instructions for Form 1098-Q, April 2025).
A QLAC is built to address one risk in particular, outliving other assets, by converting a slice of a retirement balance into guaranteed lifetime income that starts in the mid-80s.
The QLAC 2026 limit: how much you can put in
For 2026, the most that can be paid in premiums across an individual’s QLACs is $210,000 (Source: IRS Notice 2025-67, page 3). That figure is unchanged from 2025, which had risen from the earlier $200,000 base (Source: IRS Notice 2024-80). The QLAC 2026 limit is a lifetime premium cap per person, applied across all QLACs the individual owns, not a per-contract or per-year figure.
The dollar limit is indexed for inflation for calendar years beginning on or after January 1, 2025, with any increase rounded down to the next lowest multiple of $10,000 (Source: IRS Instructions for Form 1098-Q, April 2025). Because 2026 saw no cost-of-living increase large enough to cross the next $10,000 step, the limit held at $210,000 (Source: IRS Notice 2025-67).
QLAC premium limit by year
The QLAC premium limit is a lifetime per-person cap that the IRS adjusts for inflation each year, rounded down to the next $10,000. It stood at $210,000 for both 2025 and 2026, having risen from the $200,000 statutory base set by the SECURE 2.0 Act (Source: IRS Notice 2025-67). The table below lists the applicable dollar limit by year and the primary IRS source that sets each figure.
| Year | QLAC premium limit | Primary source |
|---|---|---|
| 2023 to 2024 | $200,000 (SECURE 2.0 base) | SECURE 2.0 Act section 202; T.D. 10001 |
| 2025 | $210,000 | IRS Notice 2024-80 |
| 2026 | $210,000 | IRS Notice 2025-67 |
A widely repeated figure of $200,000 is out of date for a 2026 decision, as is any reference to a 25-percent-of-balance cap. The $200,000 was the statutory base set by the SECURE 2.0 Act and has since been indexed upward to $210,000 (Source: IRS Notice 2024-80).
Can a married couple each have a QLAC?
Yes. The QLAC premium limit applies per individual, so each spouse who owns eligible retirement accounts can fund a QLAC up to $210,000 in 2026. A married couple can therefore shelter as much as $420,000 combined from RMD calculations, provided each contract is held in that spouse’s own IRA or plan (Source: IRS Notice 2025-67). The limit cannot be shared or transferred between spouses; each person tracks their own cumulative premiums against their own $210,000 cap.
How much income a QLAC can pay
The income a QLAC pays depends on the premium, the buyer’s age and sex, the deferral length, prevailing interest rates, and any death-benefit or joint-life options selected. Longer deferral concentrates larger payments into later years. Public deferred income annuity quotes in mid-2026 suggest a $210,000 premium bought at age 65 may generate income in the ranges shown below when payments start at 75, 80, or 85. These are illustrative estimates, not quotes or guarantees.
| Income start age | Years deferred | Illustrative annual income from $210,000 |
|---|---|---|
| 75 | 10 | ~$21,000 to $24,000 |
| 80 | 15 | ~$36,000 to $42,000 |
| 85 | 20 | ~$58,000 to $66,000 |
Illustrative figures reflect single-life quotes without a return-of-premium rider for a male buyer as of mid-2026; adding a death benefit or joint-life option lowers the payment. A near-retiree comparing this deferred income against other levers may also weigh a Roth conversion strategy, which shifts money out of RMD-exposed accounts entirely rather than deferring within them.
How a QLAC reduces RMDs
A QLAC reduces required minimum distributions because, prior to annuitization, its value is excluded from the account balance used to determine RMDs (Source: IRS Instructions for Form 1098-Q, April 2025). Moving eligible dollars into a QLAC shrinks the balance that drives the annual RMD calculation, so the required withdrawal from the remaining account is smaller until QLAC income begins.
This exclusion is the mechanical difference that sets a QLAC apart from a plain annuity. A separate general rule in IRS Publication 590-B (2025) covers annuities bought with part of an IRA balance and can require combining values or reducing the RMD by annuity payments. A QLAC uses its own exclusion instead (Source: IRS Publication 590-B, 2025).
The deferral is temporary by design. Once QLAC payments start, the income itself is generally taxable as ordinary income and counts as distributions. The exclusion applies during the accumulation window, not forever. For the current age triggers and calculation basics behind those distributions, see the Q3 Advisors required minimum distributions guide for 2026.
The age 85 rule and when income starts
A QLAC’s distributions must begin no later than the first day of the month after the owner’s 85th birthday (Source: IRS Instructions for Form 1098-Q, April 2025). The owner can choose an earlier start date, often around age 70 or later, but age 85 is the outer ceiling a contract cannot exceed and still qualify as a QLAC under Treasury Regulation section 1.401(a)(9)-6.
This ceiling is what makes a QLAC a longevity tool. Deferring income toward the mid-80s concentrates larger guaranteed payments into the years when other assets may be depleted. The tradeoff is that the money is committed for a long stretch before any income arrives.
Which accounts can hold a QLAC (and which cannot)
A QLAC may be purchased or held under a plan or account described in Internal Revenue Code section 401(a), 403(a), 403(b), or 408, or an eligible governmental 457(b) plan (Source: IRS Instructions for Form 1098-Q, April 2025). That covers traditional IRAs and most employer retirement plans. Roth IRAs are explicitly excluded (Source: IRS Instructions for Form 1098-Q, April 2025).
| Account type | Eligible to hold a QLAC? |
|---|---|
| Traditional IRA (section 408) | Yes |
| 401(a) / 403(a) / 403(b) plans | Yes |
| Eligible governmental 457(b) plan | Yes |
| Roth IRA | No (explicitly excluded) |
The Roth exclusion follows a logic: Roth IRAs have no lifetime RMDs for the original owner, so a QLAC’s RMD-deferral feature would have nothing to defer. Investors weighing Roth strategies often look at how much to move and when separately from any QLAC decision, using tools such as the Q3 Advisors how much to convert to Roth analysis.
Death benefit, return of premium, and joint-life options
A QLAC can include options that return value to a spouse or heirs, addressing the common worry about dying early after paying a large premium. Permitted features include a life annuity to a surviving spouse (a joint-life option) and a return-of-premium death benefit that pays beneficiaries the difference between premiums paid and income already received (Source: IRS Instructions for Form 1098-Q, April 2025). Each option lowers the monthly income in exchange for protecting the principal.
The return-of-premium rider is the feature most buyers focus on. If the owner dies before total payments equal total premiums, the beneficiary receives the shortfall. A joint-life QLAC instead continues income to a surviving spouse for that spouse’s lifetime. QLAC rules limit non-spouse death benefits to a return of premium rather than an ongoing income stream, so heirs generally receive money back, not a lifetime annuity.
Pros and cons of a QLAC
A QLAC’s main advantages are guaranteed lifetime income starting later in life and a smaller RMD during the deferral years. Its main drawbacks are illiquidity, limited inflation protection over a long deferral, and the risk of dying before or soon after income starts. The table below weighs the tradeoffs a near-retiree may consider before funding one.
| Potential benefits | Potential drawbacks |
|---|---|
| Guaranteed income that cannot be outlived, starting as late as age 85 | Illiquid: the premium is generally locked, and you usually cannot cash out |
| Value excluded from RMD calculations until payout, lowering earlier RMDs | Fixed payments may lose purchasing power to inflation over a long deferral |
| Premium up to $210,000 in 2026, or $420,000 for a married couple | Longevity risk works against you if you die before or soon after income starts |
| Optional death benefit or joint-life rider can protect a spouse or heirs | Riders reduce the monthly income; payments are taxed as ordinary income |
Illiquidity is the tradeoff most buyers underweight: once the premium is paid, a QLAC generally cannot be surrendered for cash. Because it uses tax-deferred dollars, its payments are taxed as ordinary income when they start, which can interact with other retirement income. Investors managing taxable income sometimes compare that effect with a net investment income tax review and the timing in a Roth conversion break-even analysis.
How SECURE 2.0 changed QLAC rules
Section 202 of the SECURE 2.0 Act of 2022 reshaped QLACs in two ways: it eliminated the requirement that premiums be limited to 25 percent of the account balance, and it increased the dollar limit from $125,000 to $200,000, adjusted for inflation (Source: IRS final-regulation preamble, T.D. 10001, IRB 2024-33). SECURE 2.0 was enacted December 29, 2022 as Division T of Public Law 117-328.
The timing has a wrinkle. The repealed 25 percent limit and the higher dollar limit apply to premiums paid after December 29, 2022. Premiums paid on or before that date under a pre-existing contract remain subject to the old 25 percent and $125,000 rules (Source: IRS Instructions for Form 1098-Q, April 2025).
The final RMD regulations (T.D. 10001, effective September 17, 2024) implemented much of SECURE 2.0 but reserved the detailed QLAC operational rules to a separate proposed rulemaking, REG-103529-23. The operative premium-limit citation used in the IRS cost-of-living notices remains section 1.401(a)(9)-6(q)(2)(ii) (Source: IRS Notice 2025-67).
How a QLAC is reported: Form 1098-Q
The QLAC issuer files IRS Form 1098-Q, “Qualifying Longevity Annuity Contract Information,” to report QLAC status each year (Source: IRS Instructions for Form 1098-Q, April 2025). Box 3 reports the cumulative total of all premiums paid for the contract through year end, which is how the running total is tracked against the $210,000 premium limit.
This is a useful tell. If a contract is a genuine QLAC, the owner should expect Form 1098-Q from the insurer each year. The form is the paper trail behind the RMD exclusion, and its absence is a sign a contract may not actually qualify.
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Frequently asked questions
These answers cover the questions people most often ask about qualifying longevity annuity contracts: the 2026 premium limit, the downsides, the income a QLAC can pay, whether you can cash out, when payments must begin, the RMD effect, and the married-couple angle. Each answer cites the primary IRS source where a figure is involved. None of it is advice; confirm any figure that applies to your situation with a qualified professional.
What is the QLAC limit for 2026?
The QLAC limit for 2026 is $210,000 (Source: IRS Notice 2025-67). It is a lifetime cap on total premiums across all of an individual’s QLACs, unchanged from 2025. The limit is indexed for inflation for years beginning on or after January 1, 2025, with any increase rounded down to the next $10,000 (Source: IRS Instructions for Form 1098-Q, April 2025).
What is the downside of a QLAC?
The main downside of a QLAC is illiquidity: the premium is generally locked and cannot be surrendered for cash once paid. Other drawbacks include limited inflation protection over a long deferral, ordinary-income tax on payments once they begin, and longevity risk if the owner dies before or soon after income starts. Optional death-benefit or joint-life riders reduce the monthly income.
How much income does a $200,000 QLAC pay?
A $200,000 QLAC bought at age 65 may generate roughly $34,000 to $40,000 a year if income starts at 80, based on public deferred income annuity quotes in mid-2026. Actual amounts vary by insurer, sex, deferral length, interest rates, and any death-benefit or joint-life option, and adding a rider lowers the payment. These are illustrative estimates, not quotes or guarantees.
Can you cash out a QLAC?
No, you generally cannot cash out a QLAC. A qualifying longevity annuity contract is designed as an illiquid deferred income annuity, so the premium is committed and cannot be surrendered for a lump sum once paid. This illiquidity is part of what lets the contract exclude its value from RMD calculations. Return-of-premium or joint-life riders can return value to heirs or a spouse, but not to the owner as cash.
At what age must a QLAC start paying out?
A QLAC’s distributions must begin no later than the first day of the month after the owner’s 85th birthday (Source: IRS Instructions for Form 1098-Q, April 2025). The owner may choose an earlier start date, often around age 70 or later. Age 85 is the outer ceiling a contract cannot exceed and still qualify as a QLAC under Treasury Regulation section 1.401(a)(9)-6.
Does a QLAC reduce RMDs?
Yes, indirectly. Prior to annuitization, a QLAC’s value is excluded from the account balance used to calculate RMDs (Source: IRS Instructions for Form 1098-Q, April 2025). Moving eligible dollars into a QLAC lowers the balance driving the annual RMD figure until QLAC income begins, at which point the payments are generally taxable ordinary-income distributions.
Is a QLAC a good idea?
Whether a QLAC fits depends on health, other guaranteed income, and how much longevity risk an investor wants to offload. A QLAC can appeal to those who expect a long retirement and want income that cannot be outlived, while the illiquidity and inflation tradeoffs may outweigh the benefit for others. This is educational, not a recommendation; many investors weigh a QLAC against alternatives with a qualified professional.
Can a married couple each have a QLAC?
Yes. The QLAC premium limit applies per individual, so each spouse with eligible retirement accounts can fund a QLAC up to $210,000 in 2026, sheltering as much as $420,000 combined from RMD calculations (Source: IRS Notice 2025-67). Each contract must be held in that spouse’s own IRA or plan; the limit cannot be shared or transferred between spouses.
Sources
IRS Notice 2025-67 (2026 retirement plan cost-of-living notice), https://www.irs.gov/pub/irs-drop/n-25-67.pdf. IRS Notice 2024-80 (2025 cost-of-living notice), https://www.irs.gov/pub/irs-drop/n-24-80.pdf. IRS Instructions for Form 1098-Q (Rev. April 2025), https://www.irs.gov/instructions/i1098q. IRS final regulations T.D. 10001, Internal Revenue Bulletin 2024-33, https://www.irs.gov/irb/2024-33_IRB. IRS Publication 590-B (2025), https://www.irs.gov/publications/p590b. SECURE 2.0 Act of 2022, Division T of Public Law 117-328. For related figures, see the Q3 Advisors RMD guide and Roth conversion deadline for 2026.
