Buying a QLAC: What to Compare Before You Purchase

Use our tips below when buying a QLAC:

• Know all your available options before buying a QLAC
• Make sure that a QLAC is right for your financial situation
• Compare QLACs from different insurance companies with Blueprint Income’s quote tool

When you buy a QLAC from an insurance company using your pre-tax retirement savings, it generates guaranteed income that lasts as long as you do. Because of its special designation, income from QLACs can start much later in life (up to age 85), which can reduce required minimum distributions (RMDs) and associated taxes. It’s a great way to diversify your portfolio and help ensure that all, or most, of your basic retirement expenses are covered for as long as you live.

Buying one is a long-term commitment, so we want to make sure you know the answers to these questions before purchasing.

1. Is the policy officially designated as a QLAC?

Annuities must be specifically designated as QLACs to qualify for special tax treatment under rules set by the Internal Revenue Service.

The QLAC designation allows you to allocate up to $200,000 (indexed for inflation) from your qualified retirement savings into the contract. The previous 25% account balance limit no longer applies.

If you purchase a regular qualified (pre-tax) deferred income annuity, it generally cannot be reclassified later as a QLAC. Make sure the policy is labeled as a QLAC at the time of purchase.

2. Which insurance companies offer QLACs?

Leading insurance companies such as Guardian Life Insurance Company of America, Lincoln Financial Group, Mutual of Omaha, New York Life Insurance Company, Pacific Life Insurance Company, and Principal Financial Group offer QLACs.

When determining which insurer to purchase from, keep in mind that not all companies sell every product or feature in every state.

3. Where can I buy a QLAC?

You can purchase a QLAC online through platforms like Blueprint Income or through insurance agents, brokers, and financial advisors. Working with a marketplace that offers multiple carriers can help you compare payouts and features side-by-side. Blueprint Income works with A-rated and higher insurers to provide reliable, competitive options.

4. What incentive does my broker or insurance agent have to sell this to me?

Not all financial advisors are fiduciaries, meaning they may not be legally required to put your best interests first.

If you’re working with an agent or advisor, it’s important to understand:

• How they’re compensated
• How they select the products they show you
• How many insurance companies they represent

If they only offer one or two carriers, you may not be seeing the full range of options available.

5. How do insurance company credit ratings factor into my choice?

While higher payouts may be appealing, they shouldn’t be the only factor. The value of a QLAC depends on the claims-paying ability of the insurance company. Since income payments may begin decades in the future and continue for life, it’s important to choose financially strong insurers. Credit ratings from independent agencies can help assess the company’s long-term stability. Many buyers choose to work only with highly rated insurers for added peace of mind.

6. Should I buy a QLAC with money from my 401(k)?

It is possible! You can often roll funds from a 401(k) into an IRA and then purchase a QLAC within the IRA. Some employer plans may also allow annuity purchases directly inside the plan. Before proceeding, check with your benefits department or plan administrator to understand your options and any plan-specific rules.your 401(k) savings.

How Can I Purchase a QLAC?

At Blueprint Income, we offer annuities from more than 40 top-rated insurance companies. Buying a QLAC is a simple and efficient process using our online tools and application.