QLAC Limit Remains at $130,000 in 2019

Published January 14, 2019
The IRS QLAC limit for how much of your 401(k) or IRA you can convert into a Qualified Longevity Annuity Contract remains at $130,000 for 2019.
  • A QLAC is a particular kind of longevity annuity that allows buyers to defer a portion of their required minimum distributions (RMDs) past the age of 70.5 until as late as age 85.
  • For those with at least $520,000 in an IRA or 401(k), the maximum amount that can be contributed to a Qualified Longevity Annuity Contract (QLAC) is $130,000.
  • For those with less than $520,000 in an IRA or 401(k), the maximum amount that can be contributed to a Qualified Longevity Annuity Contract (QLAC) is 25% of their December 31, 2018 balance.
  • The limit is unchanged in 2019 and will likely remain $130,000 in 2020, barring some kind of legislative action.

The QLAC limit, which increased from $125,000 to $130,00 in 2018, remains at $130,000 for 2019. A Qualified Longevity Annuity Contract (QLAC) is an annuity that receives special tax treatment from the IRS. It’s the only way to purchase guaranteed retirement income while also deferring required minimum distributions (RMDs) within your 401(k) or IRA. That means with a QLAC, you don’t have to take the full RMDs starting at 72, instead pushing back a portion of them back until as late as age 85.


The IRS imposes premium limits on QLAC purchases because of their special tax treatment.

A 2014 U.S. Treasury ruling exempted certain longevity annuity (a.k.a. deferred income annuity) products from the standard required minimum distribution rules, which force those older than 70½ (revised via the SECURE Act to 72 in 2020) to withdraw a specific amount of money from their tax-deferred retirement accounts each year. This ruling created the QLAC designation.

The original ruling contemplated periodic increases to account for the impact of inflation. The $130,000 QLAC limit, updated in 2018, applies to those with $520,000 or more in their IRA or 401(k). If you have less than $520,000 in your IRA or 401(k), you can’t use more than 25% of those assets to buy a QLAC. This is calculated based on your balance as of December 31 of the previous year. If you have $520,000 or more in those assets, you can use up to $130,000 to buy a QLAC. Here’s a link to an IRS document with the QLAC limits that were updated in 2018.

Here are some FAQs about the QLAC.

What’s the QLAC?

A QLAC is a type of deferred income annuity purchased inside of your 401(k) or IRA. With such products, an individual or couple will pay a premium — all at once or over time — and elect when to receive the income. The insurance company, in return, agrees to provide a predetermined, guaranteed monthly payout for life. You can think of it like a pension you buy for yourself.

What was the old QLAC limit?

Before 2018, it was the lesser of $125,000 or 25% of your 401(k) or IRA account balance.  In 2018, the limit was updated to $130,000, still with the constraint that you can’t use more than 25% of your 401(k) or IRA balance.

Other than the QLAC limit on premium, what makes a QLAC a QLAC?

  • QLAC designation: Annuities must be specifically designated as QLACs to qualify for this special treatment. If you bought a product that wasn’t labeled a QLAC, it can’t be reclassified.
  • Fixed payouts: A QLAC cannot have any market-based features, with the exception of an inflation adjustment feature. This means that payouts must be predetermined. If you want your payouts to go up if the stock market goes up, for example, a QLAC isn’t for you.
  • Deferral limits: You can defer payments until you’re 85.

Which insurers offer the QLAC?

About eight insurers currently offer the QLAC. You can see a full list here.

Which insurers offer QLAC purchases of as little as $5,000?

Currently, only New York Life and Guardian offer purchase sizes this small.

When should I expect the limits to increase again?

It depends on the pace of inflation, but probably 2-4 years for another $5,000 increase.

Where can I learn more about the QLAC?

Here are links to some of the other articles in our resource center:

  • What’s a QLAC? A Qualified Longevity Annuity Contract (QLAC) is a pension-like product you can purchase with qualified savings that will provide you income for as long as you live. We’ve outlined the key components of QLACs and how they work here. Read more…
  • The Financial Value of a QLAC. A QLAC is not only financially valuable, but it offers something traditional investments cannot: peace of mind. We’ve laid out how to determine your financial return from a QLAC. Read more…
  • Should You Buy a QLAC? A QLAC offers you a guaranteed income stream to give you peace of mind during retirement. We’ve created this quick checklist so you can know if a longevity annuity is a good fit for you. Read more…
  • The Pros and Cons of a QLAC. QLACs have many financial benefits which make retirement planning simpler. But, it’s important that you know all they have to offer to determine if it’s right for you. Read more…
  • How Does a QLAC Defer RMDs? By transferring money out of your Traditional IRA and into a QLAC, you reduce the Traditional IRA balance subject to RMDs, deferring them until the QLAC income starts. Read more…

Where can I get a QLAC quote?

Here’s our free tool that provides QLAC quotes in real-time:

QLAC Quotes

Blueprint Income

Blueprint Income

Financial Planning Professional

We are a team of finance, insurance, and actuarial professionals working to make it easier for everyone to achieve a steady and comfortable retirement. We write about annuities (the good and the bad) and provide strategies to help Americans prepare for retirement.

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How Will My QLAC Be Taxed?

QLACs’ special designation means that the income you receive can start later than age 70 1/2, reducing your RMDs and associated taxes. We’ve laid out the tax treatment your QLAC can receive.