Immediate annuity and deferred annuity payout rates were up this month for most insurers as the yield on the 10-Year Treasury, which is a good proxy for annuity pricing, reached its highest point since the first quarter of 2017. If you have been considering an income annuity purchase, now may be a good time with the improved pricing.
QLAC Limits Are Up
For the first time since the QLAC ruling came out, the IRS is increasing the premium limit. The previous limit of $125,000 has been increased to $130,000 effective January 1, 2018. The increase in the limit was expected because the original ruling contemplated periodic increases to account for the impact of inflation.
The $130,000 limit applies to those with $520,00 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 new limits.
If you’re interested in learning more, you can email or call us and we can provide quotes.
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