A 72-Year-Old Can Still Move Up to $210,000 Into a QLAC and Cut Next Year’s RMD by About $7,900. The Check Doesn’t Start Until 85, and Neither Does the Tax

A 72-year-old who moves $210,000 into a QLAC before year-end reduces their next RMD by roughly $7,900, saving about $1,740 in federal taxes at the 22% bracket.

QLAC funds are fully illiquid until age 85, cannot participate in market gains, and all payments are taxed as ordinary income when received.

This strategy best fits retirees with surplus IRA assets, other liquid savings, family longevity, and income high enough that shrinking RMDs meaningfully reduces taxes or IRMAA exposure.

A qualified longevity annuity contract, or QLAC, is a deferred income annuity purchased inside a traditional IRA or qualified plan that lets a retiree push a slice of their tax-deferred balance out of the required minimum distribution calculation and delay income until as late as age 85. For a 72-year-old with more IRA money than they expect to spend in their 70s, the 2026 rules create a narrow but concrete planning window worth running the numbers on.

How the $210,000 Limit Turns Into a Smaller RMD Next Year

Under SECURE 2.0, the lifetime QLAC premium cap is indexed for inflation, and for 2026 that ceiling sits at $210,000 per individual. Dollars moved into a QLAC are carved out of the IRA balance used to compute the following year's RMD, which is where the tax-deferral benefit actually shows up on a tax return.

The IRS Uniform Lifetime Table assigns a divisor of 27.4 at age 72 and 26.5 at age 73. A 72-year-old who moves the full $210,000 into a QLAC before year-end removes that amount from the December 31 balance that drives the following year's RMD. Divided by the age-73 factor of 26.5, the mechanical reduction in next year's required withdrawal comes to roughly $7,925, or about $7,900 less that has to leave the IRA and land on a 1040 as ordinary income.

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For a retiree in the 22% federal bracket in 2026, that shift trims federal tax on the RMD by roughly $1,740 for the year. The 22% bracket applies to single incomes over $50,400 and joint incomes over $100,800, covering many retirees with Social Security plus meaningful IRA withdrawals.