The “QLAC”: Move $210,000 of Your IRA Into This One Account and the IRS Stops Counting It for RMDs Until You’re 85.

The IRS allows IRA holders to set aside up to $210,000 in a special account called a qualifying longevity annuity contract, or QLAC, which is excluded from required minimum distribution calculations until the owner reaches age 85. This deferred income annuity locks the premium money away from the RMD formula, while income payments start as taxable ordinary income.

The rule change in the SECURE 2.0 Act of 2022 abolished the previous $210,000 cap, which was 25% of an individual's retirement balance, replacing it with a single inflation-indexed limit across all retirement accounts. QLACs are ideal for retirees who want a guaranteed income stream in their 80s, have other liquid assets, and expect a long life.

However, the funds are permanently inaccessible once the premium is paid, and the fixed income payments lose purchasing power over time due to inflation.