Two bills currently in Congress could expand a deferred annuity known as the Qualified Longevity Annuity Contract (QLAC). Both the House and Senate are working on retirement savings legislation that would increase the allowable size of QLACs, making them more attractive to middle-income retirees. QLACs work like any fixed annuity. They pay a steady monthly income, but payments are deferred until the holder is at least 75 years of age. This means that you can buy a QLAC for a lower initial investment than immediate annuities. However, you can invest no more than $135,000 or 25% of your total retirement account balance over your lifetime. A Senate bill called the Enhancing American Retirement Now (EARN) Act, would raise the maximum investment to $200,000 and eliminate the 25 percent threshold, while a House bill, called the Securing a Strong Retirement Act, or SECURE 2.0, would repeal the 25 percent limit. The Senate bill has bipartisan support and the House bill passed last Spring. It appears Congress is looking to build a market for these products by raising the cap on maximum investments.

Finsum: Both houses of Congress are working on legislation that would increase the appeal of a deferred annuity called the Qualified Longevity Annuity Contract.