Tom Meaglia photo

Tom Meaglia, ChFC®, AEP®,

CLU®, CRPC®, MSFS

Chartered Financial Consultant

Investment Advisor Representative

Chartered Retirement Planning Counselor

CA Insurance Lic. #0567507

 

Meaglia Financial Consulting

2105 Foothill Blvd., #B140, La Verne, CA 91750

 

Toll Free: 800-386-3700

Bus:         909-593-6105

Cell:         818-681-8600

Fax:         909-593-6120

 

Email: tom@meagliafinancialconsulting.com

Website: www.meagliafinancialconsulting.com

July/August 2023

Understanding QLAC

Understanding QLAC

A Qualified Longevity Annuity Contract (QLAC)* is a type of deferred annuity purchased with funds from a qualified retirement plan or individual retirement account. It is designed to provide guaranteed income later in life. A QLAC may help a retiree remain in a lower tax bracket by reducing the balance in a retirement account used to calculate required minimum distributions (RMDs).


How It Works
Secure 2.0 allows an individual to move up to $200,000 from a qualified retirement plan or IRA into a QLAC. The buyer purchases an annuity contract either with a lump sum payment or a series of premiums. Taxes are deferred until payments begin. Payments must start by the annuitant’s 85th birthday, which is also when RMDs kick in. Payments are taxed at regular income tax rates.


Three Options
QLAC purchasers generally have three options to choose from.


  • Payments end when the annuity owner dies.

  • Payments stop after the death of the owner and a spouse (joint life QLAC).

  • The plan pays a refund to a designated beneficiary.


The second two options will result in lower monthly annuity payments. Buyers can also add cost-of-living adjustments to their contracts.


Laddering QLACs
Purchasing a series of smaller QLACs over several years can help manage the risk that growth will be locked in at a fixed rate. Laddering can provide an advantage if interest rates rise.


QLACs may or may not be right for you, so before purchasing a QLAC, check the ratings of the issuing company and consult your financial professional.

*Annuity products are not FDIC-insured, and their guarantees are backed solely by the claims-paying ability of their issuing life insurance company.


SUBSCRIBE

Enter your Name and Email address to get
the newsletter delivered to your inbox.

Please include name of person that directed you to my online newsletter so I can thank them personally.


CONTACT US

Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

Thomas Meaglia is an Investment Adviser Representative of Coppell Advisory Solutions LLC, dba, Fusion Capital Management, a registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
Insurance and annuity products are not sold through Fusion Capital Management. Fusion does not endorse any annuity or insurance product, nor does it guarantee any insurance or annuity performance. Annuity and life insurance guarantees are subject to the claims-paying ability of the issuing insurance company. If you withdraw money from or surrender your contract within a certain time after investing, the insurance company may assess a surrender charge. Withdrawals may be subject to tax penalties and income taxes. Persons selling annuities and other insurance products receive compensation for these transactions. These commissions are separate and distinct from Fusion's investment advisory fees.
Meaglia Financial Consulting and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.