Qualifying Longevity Annuity Contract (QLAC)

Securing Retirements for Ten Years

In 2014 the U.S. Treasury Department issued a new rule that allowed retirees to use a portion of their qualified savings to purchase a deferred income annuity. With that, Qualifying Longevity Annuity Contracts (QLAC) were born. The new regulation, which was strengthened with the SECURE Act in 2022, provides a strategic tool for managing retirement income, optimizing tax outcomes, and providing financial security. This year, we’re celebrating the tenth anniversary of QLACs, and revisiting its many benefits which can help provide financial security in retirement.

What is a QLAC?

A Qualifying Longevity Annuity Contract (QLAC) is a type of deferred income annuity specifically designed to be purchased with funds from a qualified retirement plan, such as an IRA or 401(k). The primary purpose of a QLAC is to provide a guaranteed income stream for life starting at a future date, with payments beginning as late as age 85.

The Top 10 Benefits of QLACs

1. Diversification

QLACs can help keep some retirement nest eggs in a separate basket for later use

2. Peace of Mind

Because they’re deferred, QLACs provide guaranteed income later in retirement, which can help reduce stress and financial burden on family members

3. Mitigates Longevity Risk

Recipients can’t outlive the steady income QLACs provide

4. Reduces Dependence

on Social Security and cash-on-hand savings

5. Delay Social Security

May provide confidence to delay receiving Social Security benefits

6. Safety Net

A QLAC can help lessen the financial impact of the death of a spouse

7. RMD Relief

The purchase price of a QLAC reduces the account balance used as the required minimum distribution (RMD) calculation base

8. Tax Benefits

By deferring income, QLACs can help reduce taxable income during the deferral period

9. Offsets possibility of increased medical costs

which can be an unpredictable financial burden in retirement

10. Market Protection

Funds allocated to a QLAC are not subject to market volatility, providing a stable and predictable source of income regardless of market conditions

Despite these benefits, QLACs may not be right for everyone. For example, they don’t offer the flexibility of some other investment options; when you purchase a QLAC, you do not have access to those funds until the annuity payouts begin. Consult your financial advisor before purchasing a QLAC.

Learn More About How QLACs Work

Peace of Mind & Financial Security:

Lifestage Retirement Income Program

See how Pacific Life’s Qualifying Longevity Annuity Contract (QLAC) feature helped Wespath Benefits and Investments provide security and peace of mind in retirement with their award-winning LifeStage Retirement Income program.

For more information, please contact Pacific Life’s Institutional Retirement Solutions Group at: RetirementIncome@PacificLife.com


In order for the contract to be eligible as a QLAC, certain requirements under Treasury regulations must be met, including limits on the total amount of purchase payments that can be made to the contract. Qualified contracts, including traditional IRAs, Roth IRAs, and QLACs, are eligible for favorable tax treatment under the Internal Revenue Code (IRC). Certain payout options and features may not comply with various requirements for qualified contracts, which include required minimum distributions. Therefore, certain product features, including the ability to change the annuity payment start date, accelerate payments, and to exercise withdrawal features or payout options, may not be available or may have additional restrictions.

All guarantees are subject to the claims-paying ability and financial strength of the issuing insurance company.

Pacific Life, its affiliates, its distributors, and respective representatives do not provide tax, accounting, or legal advice. Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor or attorney.

Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products. Pacific Life, its affiliates, its distributors, and respective representatives do not provide any employer-sponsored qualified plan administrative services or impartial advice about investments and do not act in a fiduciary capacity for any plan.

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products can be issued in all states, except New York, by Pacific Life Insurance Company or Pacific Life & Annuity Company. In New York, insurance products are only issued by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues.


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