The final regulations are out and the IRS is supporting the purchase of annuities in an IRA or a QLAC. The problem, as all seniors know, is an IRA requires minimum distributions April 1st after you turn age 70½. How would you like to not make a distribution on some of your funds and not have to pay the tax? You can purchase a QLAC or a fixed annuity which will not start payment to age 85 and defer up to $100,000 from taxation (the rule is 25 percent of the value of the account up to $100,000).
There is a catch. Variable and equity index annuities will not work, but fixed annuities and annuities that pay a dividend will work. Go figure, the drafter really does not understand annuity contracts). Under the final regulations, they will allow for return of premium so the annuity need not be a "no refund" annuity.
There are 10,000 people a day turning age 65. Many will want to defer RMD on a certain amount of their income, or at least $100,000. This will be a huge market.
Insurance company response: Does any insurance company have a QLAC today?
Lawyer response: How about IRA trust? Do they have language to account for the QLAC?
What does Dave Ramsey say? Who cares? By the way... I am not picking on Dave. His general ideas on not getting into debt is good and I am sure he has helped a lot of people; however, his expertise in tax and financial matters are not up to ... adequate.