Ever since the IRS released regulations in July 2014 about QLACs (defined below), I’ve been making strong and positive statements about this new investment vehicle. I’ve stated that it’s “the most important change in retirement plans since the 401(k) was invented,” and “every Baby Boomer with retirement savings will need to consider a QLAC as part of his/her plans for retirement income distributions.”
These statements are in stark contrast to those who suggest that a QLAC is simply a way for high net worth investors to defer taxes on retirement distributions they don’t need.
Over the coming months, I intend to write about QLACs, provide real-life examples, and describe the QLAC marketplace, all with a goal to educate readers about QLACs. But for today, let’s start with this introduction to QLAC so that you can understand the significance of what’s to follow in coming months. More