By using IRA or 401(k) money to buy a longevity annuity, you can reduce RMDs and get income for life. Getty Images By Kimberly Lankford, Contributing Editor From Kiplinger's Personal Finance, January 2018 Q I have heard that a QLAC can help me reduce my required minimum distributions. What is it? --C.V., Edison, N.J.See Also: Take the Retiree Tax Quiz A A qualifying longevity annuity contract (QLAC) provides guaranteed lifetime income later in retirement and reduces your required minimum distributions. You can invest up to 25% of your total traditional IRA or 401(k) balance (or $130,000, whichever is less, up from $125,000 in 2017) in a QLAC, usually when you’re in your sixties or early seventies. That money is removed from your RMD calculations. The QLAC starts to pay out at a future date you choose—age 85 is the oldest—and continues for life. Payouts are taxable when you receive them. (Note that few 401(k)s offer QLACs at this point.) For example, if a man invests $130,000 in a New York Life QLAC at age 65, he’ll receive $60,902 per year for the rest of his life starting at age 85 (payouts are less for women). Payments stop at death, but you can take a reduced payout—$43,690 a year for a man investing at age 65—in return for a cash refund to your heirs if you die before the payouts equal your initial investment. Got a question? Ask Kim at email@example.com.