A deferred income annuity buys guaranteed lifetime income now that starts years from now. A QLAC is a deferred income annuity bought inside a traditional IRA or employer plan under federal rules that let it sit outside the RMD calculation. This page covers both.
A deferred income annuity (DIA) is a SPIA with a waiting period. You pay a premium today, the carrier promises a fixed monthly income starting on a date you choose, often 5 to 20 years out, and the income then lasts for life. The longer the wait, the larger the check for the same premium.
A qualifying longevity annuity contract (QLAC) is the retirement-account version. Federal rules allow a limited amount of traditional IRA or plan money to buy a DIA whose value is excluded from required minimum distribution math and whose income can start as late as 85. The limits are set by regulation and are flagged on this page for verification.
Usually the wrong answer when
A DIA is the wrong answer when you may need the premium back before income starts, when you have no other liquid savings to carry you through the deferral period, or when your health makes a long life unlikely. It is also wrong for money you want to leave to heirs; a DIA without a death benefit pays nothing if you die before income begins, and one with a death benefit pays less income. For income starting within a year, a SPIA is the simpler contract.
Five terms that describe the product itself. The payout options are the same ones a SPIA offers, so they are defined on the Immediate annuities page and linked here rather than repeated.
What is a deferred income annuity, and how is it different from a SPIA?
DefinitionA deferred income annuity (DIA) is a contract in which you pay a premium now and the carrier guarantees a fixed income for life (or for a set period) starting on a future date you choose, anywhere from about 13 months to 40 years after purchase.
A DIA has no account value you can watch grow. You hand the carrier a premium and it hands back a promise: a stated monthly payment beginning on the income start date. Between purchase and that date, nothing is paid and, on the purest version, nothing can be withdrawn.
The payment is larger than a SPIA bought today for two reasons. The carrier earns interest on your premium during the Deferral period, and some buyers die before income starts, which funds bigger payments for those who live. That second source is Mortality credits, and it is the reason no bond or CD can match a DIA’s payout at the same risk level.
At the start date you receive the payout option you chose at purchase: Life only, Life with cash refund, Joint and survivor or another option. See Choosing a payout option.
Illustrative
A 60-year-old woman pays $100,000 for a single-life DIA. Figures based on quotes MAS ran in October 2026 for a $100,000 non-qualified premium, top carrier rated A- or better: income starting at 70 of about $1,411 a month ($16,937 a year); income starting at 80 of about $3,580 a month ($42,960 a year, representative).
The same $100,000 in a SPIA at 60 might pay about $638 a month. Actual quotes depend on age, sex, interest rates and the option chosen.
Watch for
The trade is Irrevocability: once the free look ends, the premium is the carrier’s and the payment schedule is fixed. If inflation runs 3% a year, a level check that starts in 20 years buys roughly half of what it would today. Buy a DIA for the portion of income you cannot afford to outlive, not for all of it.
Related: SPIA · Deferral period · Longevity annuity · Mortality credits · Irrevocability
How long do I have to wait, and does waiting longer really pay more?
DefinitionThe deferral period is the time between the date you pay the DIA premium and the date the first income payment is due; it is chosen at purchase and is usually fixed, though many contracts allow it to be moved once.
Carriers commonly allow deferral periods from 13 months to 40 years, subject to a maximum income start age, often 85 (and no later than the month after 85 on a QLAC). The payout rate rises with every year of deferral because the carrier has longer to earn interest and because more Mortality credits accrue.
Many contracts let you accelerate or postpone the start date once, within a window of perhaps five years, with the payment recalculated. That flexibility is worth asking for, since a retirement date rarely lands exactly where planned.
Illustrative
$100,000 at age 60, single life, representative payouts: start at 65, about $960 a month; start at 70, about $1,411; start at 75, about $2,180; start at 80, about $3,580. Each five extra years of waiting adds more than the last five did.
Watch for
The longer the deferral, the more years your income is exposed to inflation before you see a dollar of it. The longer the deferral, the more likely you are to die before the start date, which is exactly what the carrier is pricing. A Return of premium before income feature softens that risk at a cost.
Related: Deferred income annuity · Longevity annuity · QLAC income start age limit · Return of premium before income · Interest rate sensitivity
What is a longevity annuity, and is it the same as a DIA?
DefinitionA longevity annuity is a deferred income annuity bought specifically to cover the late years of life, typically with income starting at 80 to 85, so that a relatively small premium produces a large payment if you live that long.
The term describes a use, not a different contract. A longevity annuity is a DIA with a long Deferral period and, usually, no death benefit, bought as insurance against Longevity risk. Because many buyers will not reach the start age, the survivors’ payments are heavily funded by Mortality credits, and the payout per dollar of premium is far higher than on a short-deferral DIA.
The planning logic is to spend down other savings between retirement and the start age, knowing a guaranteed check arrives if you are still here. A QLAC is the IRA-funded form of a longevity annuity.
Illustrative
A 65-year-old puts $50,000 into a longevity annuity starting at 85. Representative payout: about $1,280 a month for life from 85 onward, roughly $15,400 a year, on a $50,000 premium. If the buyer dies at 84 and chose no death benefit, nothing is paid.
Watch for
The high payout comes from accepting that you may get nothing. Buyers who add a return of premium death benefit cut the payout sharply and are then paying for life insurance they could buy more cheaply elsewhere. Decide which problem you are solving before you choose.
Related: Deferred income annuity · Longevity risk · Mortality credits · QLAC · Deferral period
Can I add to a deferred income annuity over time instead of paying all at once?
DefinitionA flexible premium DIA accepts additional premiums after the first one, each buying its own slice of future income at the rate in effect when that payment is made, all starting on the same income date.
Most DIAs are Single premium contracts. A flexible premium version lets you make further deposits, often with a minimum of $100 to $1,000 each, during the Deferral period. Each deposit is priced at the carrier’s current rates for your age and remaining deferral, so later deposits buy less income per dollar than earlier ones.
The design suits someone still working who wants to build a personal pension from each year’s savings. Total premiums are usually capped, and deposits generally must stop a year or more before the start date.
Illustrative
A 55-year-old opens a flexible premium DIA with $25,000 and adds $10,000 a year for ten years, income to start at 70. Each $10,000 buys a stated monthly amount at that year’s rate; the carrier sums them into one payment at 70. Representative total: roughly $1,800 a month for life.
Watch for
The first deposit’s rate is not locked for later deposits. If rates fall, your later money buys less. Compare the carrier’s record of in-force rates, and compare the whole plan against simply buying a new single-premium DIA every few years, which keeps your options open.
Related: Deferred income annuity · Flexible premium · Single premium · Deferral period · DIA vs SPIA ladder
If I die before the income starts, does my family get the money back?
DefinitionReturn of premium before income is a DIA death benefit that pays your beneficiary the premiums you paid (sometimes with modest interest) if you die during the deferral period, instead of the contract ending with nothing.
On a DIA with no death benefit, death before the start date forfeits the premium; that forfeiture is what funds the high payouts for survivors. A return of premium (ROP) feature removes the forfeiture.
The carrier pays the beneficiary the premium, less any payments already received, usually as a lump sum. Some carriers offer ROP plus interest at 1% to 3% a year, which costs more.
Because the carrier no longer keeps the premiums of those who die early, it has fewer Mortality credits to spread among the living. The payout for the same premium and start date is lower, often by 10% to 25% depending on the deferral length, and the longer the deferral, the bigger the gap.
A QLAC may offer a return of premium death benefit under the federal rules, which is the common choice for IRA buyers who want their heirs protected.
Illustrative
$100,000 at 60, income at 80, single life, representative payouts: no death benefit, about $3,580 a month; with return of premium before income, about $2,810 a month. The ROP buyer gives up roughly $9,200 a year of income for life in exchange for the $100,000 passing to heirs if death comes before 80.
Watch for
Decide what the DIA is for. If it is longevity insurance, the death benefit works against the purpose and term life insurance may protect heirs more cheaply. If leaving the premium behind matters more than maximum income, ROP is the honest way to buy that protection inside the contract.
See also Return of premium death benefit on deferred annuities generally.
Related: Deferred income annuity · Longevity annuity · Return of premium death benefit · Life with cash refund · Mortality credits
Defined elsewhere
- Choosing a payout option: A DIA uses the same life only, period certain, refund and joint and survivor options as a SPIA, chosen at purchase and locked for the start date.
- SPIA: A DIA is a SPIA whose first payment is deferred by years instead of months; the pricing, options and tax treatment share the same mechanics.
A QLAC is a DIA bought with traditional IRA or employer plan money under a federal rule set that excludes it from required minimum distribution math. The limits below are regulatory figures and are flagged for verification; the IRS adjusts the dollar limit for inflation. MAS does not give tax advice.
What is a QLAC, and why would I buy one inside my IRA?
DefinitionA qualifying longevity annuity contract (QLAC) is a deferred income annuity bought with traditional IRA or qualified plan money that meets federal requirements, so its value is left out of your required minimum distribution calculation and its income can start as late as the month after you turn 85.
Normally every dollar in a traditional IRA counts toward your RMD once you reach the RMD age, and a deferred annuity inside an IRA is no exception; see RMDs from an annuity in an IRA. Treasury created the QLAC in 2014 regulations, and Congress widened it in the SECURE 2.0 Act of 2022, so that retirees could use part of an IRA to insure against outliving their money without the RMD rules forcing income to start at 73.
To qualify, the contract must meet the rules in 26 CFR 1.401(a)(9)-6(q). The main ones:
- Funding source: a traditional IRA, 401(k), 403(b) or governmental 457(b). Roth IRA money cannot buy a QLAC, because a Roth IRA has no lifetime RMDs anyway.
- Premium cap: $210,000 across all your QLACs for 2026 (IRS Notice 2025-67), adjusted for inflation. See QLAC premium limit.
- Latest start date: the first day of the month after your 85th birthday. See QLAC income start age limit.
- Fixed income only: the contract must be a fixed annuity with no cash surrender value and no commutation right, so it cannot be a variable or index contract.
- Death benefits allowed: a spouse as joint annuitant and a return of premium death benefit, as described in Return of premium before income.
Once purchased, the QLAC’s value is excluded from the IRA balance used to compute RMDs; see QLAC and RMDs. The payments, when they begin, are taxable as Ordinary income like any traditional IRA distribution, and they satisfy the RMD for the QLAC itself.
Illustrative
A 70-year-old has $800,000 in a traditional IRA and moves $200,000 into a QLAC starting at 85. Representative payout: about $6,400 a month for life from 85, single life, no death benefit. From the next year on, RMDs are calculated on the remaining $600,000 rather than $800,000, cutting the first RMD by roughly a quarter.
Watch for
A QLAC does not avoid tax; it defers it and converts a lump of IRA money into a lifetime check. It is irrevocable after the free look, so the $200,000 above is gone from the IRA for good.
It fits a healthy retiree with more IRA than they need before 85 and real worry about the years after. It does not fit someone who needs that money for income in their 70s or wants to leave the IRA intact to children. See Income rider vs DIA for the alternative that keeps the account value.
Related: QLAC premium limit · QLAC income start age limit · QLAC and RMDs · Longevity annuity · Annuity inside an IRA
How much of my IRA can I put into a QLAC?
DefinitionThe QLAC premium limit is the federal cap on total premiums you may pay into all of your QLACs combined: $210,000 for 2026, indexed to inflation in $10,000 steps.
The regulation sets a base amount of $200,000 and adjusts it for cost-of-living increases the same way other retirement plan limits are adjusted, rounded down to the next $10,000 (26 CFR 1.401(a)(9)-6(q)(2)). The IRS confirmed the 2026 figure remains $210,000 in Notice 2025-67. The cap is per person and lifetime, counted across every IRA and plan you own, not per account and not per year.
An older rule also limited QLAC premiums to 25% of the account balance; the SECURE 2.0 Act of 2022 removed that percentage test, leaving only the dollar cap. If a premium goes over the limit, the whole contract stops qualifying as a QLAC from that payment date unless the excess is returned to the non-QLAC part of the account by the end of the following calendar year, in which case it is treated as never having exceeded the limit.
Illustrative
You and your spouse each have your own IRA. Each of you may buy a QLAC up to the full $210,000 limit in 2026 from your own account, for $420,000 of household QLAC premium. You may not buy one $420,000 QLAC from one IRA.
Watch for
The limit is indexed, so the figure on a carrier brochure may be a year old. Check the current IRS notice before writing the application. Many carriers set their own maximum below the federal limit, and most set a minimum premium of $10,000 to $25,000.
Related: QLAC · QLAC income start age limit · QLAC and RMDs · RMDs from an annuity in an IRA
How late can QLAC income start?
DefinitionQLAC income must begin no later than the first day of the month after your 85th birthday; you may choose an earlier start date, but not a later one.
The regulation requires distributions to begin “no later than the first day of the month next following the 85th anniversary of the employee’s birth” (26 CFR 1.401(a)(9)-6(q)(1)(ii)). Carriers price the contract to that date or any earlier date you select, typically no earlier than age 70 to 72 for most buyers who want the RMD exclusion to matter.
The 85 limit is why a QLAC is often called a longevity annuity: the latest permitted start is around the point where a 65-year-old retiree’s other savings are most likely to be running low. See Longevity annuity.
Illustrative
A buyer born June 15, 1956 turns 85 on June 15, 2041. The latest permitted QLAC income start date is July 1, 2041. Choosing 80 instead would produce a smaller monthly payment but five more years of checks.
Watch for
The age limit is a maximum, not a target. Starting at 85 maximizes the payment and the chance of collecting nothing. Compare quotes at 80, 82 and 85 against your other income sources before locking the date, and confirm whether the contract allows the start date to be moved later.
Related: QLAC · QLAC premium limit · Deferral period · Longevity risk · RMD age
How does a QLAC lower my required minimum distributions?
DefinitionThe value of a QLAC is excluded from the IRA or plan balance used to compute your RMD, so each year’s required withdrawal is calculated on a smaller balance until the QLAC’s own payments begin.
Under 26 CFR 1.401(a)(9)-6(q)(4), the QLAC’s value “will not be included in the employee’s account balance” for RMD purposes. Your December 31 IRA balance, which drives the next year’s RMD, simply does not count the QLAC. When QLAC income starts, those payments satisfy the RMD for the QLAC; they are not added to, and do not reduce, the RMD on the rest of the IRA.
This is the only way a deferred annuity inside an IRA escapes the Actuarial present value rule and the general treatment in RMDs from an annuity in an IRA. A non-QLAC deferred annuity in an IRA remains in the balance and must be valued every year.
Illustrative
At 73 your IRA is $1,000,000 and your RMD factor is 26.5, for an RMD of about $37,700. With $200,000 in a QLAC, the balance that counts is $800,000 and the RMD is about $30,200, a $7,500 reduction that year. The deferred tax is not forgiven; it comes due as the QLAC pays out from 85.
Watch for
The smaller RMD is a side effect, not the purpose. Buying a QLAC solely to cut an RMD trades liquid IRA money for an irrevocable promise, and the full tax arrives later in a shorter window. If your goal is only to lower RMDs, a Roth conversion in low-income years may fit better; see Roth conversion of an annuity.
Related: QLAC · RMD age · RMDs from an annuity in an IRA · Actuarial present value rule · Annuitizing qualified money
Can my spouse keep receiving the QLAC income after I die?
DefinitionA joint QLAC names your spouse as joint annuitant so that payments continue for the survivor’s lifetime; the regulations allow a spouse as joint annuitant, with the survivor benefit set by the contract within federal limits.
The QLAC rules permit a Joint and survivor form with the owner’s spouse as Joint annuitant. Payments are based on both lives and continue to whichever spouse lives longer, at 100% or at a reduced percentage, the same choices described under Joint and survivor with reduction. The premium still counts against the owner’s QLAC premium limit only, since it came from the owner’s IRA.
Because the payment must cover two lifetimes, the monthly amount is lower than a single-life QLAC on the same premium, usually by 10% to 20% depending on ages. The federal rules also address a joint annuitant who becomes a former spouse through divorce, allowing the survivor benefit to continue under a divorce or separation instrument in some circumstances. Non-spouse joint annuitants face stricter limits on the survivor percentage.
Illustrative
A 70-year-old owner and a 68-year-old spouse put $200,000 of the owner’s IRA into a QLAC starting at 85. Representative payouts: single life, about $6,400 a month; joint and 100% survivor, about $5,400 a month, paid until the second death.
Watch for
If the owner dies before 85 on a joint QLAC with no return of premium, the spouse begins receiving the survivor payments on the scheduled start date, not at death. Ask the carrier exactly when survivor payments begin, and compare the joint design against two separate QLACs, one from each spouse’s IRA, which keeps each contract simpler. See Annuities in divorce for how a divorce decree treats annuity income.
Related: QLAC · Joint and survivor · Joint annuitant · Joint and survivor with reduction · Return of premium before income
Can I cancel a QLAC after I buy it?
DefinitionA QLAC can be returned during the state free look period like any annuity, and the federal QLAC regulations separately allow a contract to be rescinded within 90 days of purchase without losing QLAC status.
Two different rights apply. The Free look period is set by state law, usually 10 to 30 days from delivery, and refunds the premium to the IRA custodian if you return the contract. The 90-day rescission right comes from the QLAC regulations as amended by SECURE 2.0, which allow a QLAC to provide that the buyer may rescind it within 90 days of purchase, with the premium returned to the IRA or plan.
The rescission right exists because a QLAC is otherwise irrevocable and the dollar limit is strict; it gives a buyer time to confirm the premium did not exceed the QLAC premium limit and that the contract was issued as applied for. Not every carrier includes the 90-day provision, so ask.
Watch for
Any refund must go back to the IRA or plan, not to you personally, or it becomes a taxable distribution. Use the window to confirm the funding source, the start date, the joint annuitant and the death benefit against your application. After it closes, no part of the premium is available again until income begins.
Related: QLAC · Free look period · Irrevocability · QLAC premium limit · Extended free look on replacements
Two comparisons buyers ask for most. The income rider comparison is owned by the Income riders page and summarized here; the SPIA ladder comparison is defined below.
Should I buy a DIA now, or buy a SPIA every few years as I need the income?
DefinitionA DIA locks in future income at today’s pricing with one irrevocable premium; a SPIA ladder keeps the money liquid and buys income in stages at whatever rates and ages apply when each purchase is made.
Both strategies turn savings into guaranteed lifetime income. The difference is when you commit.
A Deferred income annuity commits today and collects Mortality credits through the whole Deferral period. A SPIA ladder holds the money in CDs, MYGAs or Treasuries and buys a SPIA at, say, 70, 75 and 80, each priced at that year’s rates and your then-current age.
The DIA wins on income per dollar for a buyer who lives long and does not need the money back. The ladder wins on flexibility, on heirs, and for a buyer who is not sure the income will be needed.
Illustrative
$150,000 at 60. DIA option: all $150,000 into a DIA starting at 75, representative payout about $3,270 a month for life. Ladder option: $150,000 held in a MYGA ladder earning about 4.5%, then $50,000 into a SPIA at each of 70, 75 and 80.
The ladder buyer has income starting earlier and keeps control of the uncommitted money, and if the uncommitted money compounds at about 4.5% until each purchase, the three SPIAs together end up paying about $2,620 a month by 80, roughly 80% of the DIA payout. Without that growth they would pay roughly 40% as much. Actual results depend on rates at each purchase and on health.
Watch for
The ladder depends on you actually buying the next rung when the time comes, often during a market scare or after a health event. Many people never do. The DIA depends on the carrier’s rates being good today and on your not needing the money for 15 years.
Neither is free of risk; pick the one whose risk you can live with, and consider splitting between the two. The third option, keeping the account value and adding an Income rider, is compared under Income rider vs DIA.
Related: SPIA ladder · Deferred income annuity · SPIA · Interest rate sensitivity · Income rider vs DIA
Defined elsewhere
- Income rider vs DIA: An income rider keeps the account value and death benefit while guaranteeing a lifetime withdrawal; a DIA gives those up for a higher guaranteed payment.
My Annuity Store is a licensed insurance agency. This reference is general education, not a recommendation for any product or carrier, and it is not tax or legal advice. MAS does not give tax advice; QLAC limits and ages are federal rules summarized as of October 2026. Call 855-277-8088 or email info@myannuitystore.com with questions.
