How to Use an Annuity in Your Individual Retirement Account

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Takeaways

Annuities, particularly Qualified Longevity Annuity Contracts (QLACs), can be used within Individual Retirement Accounts (IRAs) to manage income, defer taxes, and provide peace of mind in retirement.
While QLACs offer specific tax advantages, other annuity types and alternative strategies can also be considered to meet diverse retirement income and estate planning goals.

You’ve worked tirelessly to build your nest egg during your working years, and now, as you approach or enter retirement, the “golden years” may not appear as carefree as they once did.

People are living longer, inflation is stretching every dollar further than expected, and the markets are anything but predictable. Add in the rising cost of health care and the disappearance of traditional pensions, and even well-prepared retirees are asking: Will my savings last?

At the same time, the Internal Revenue Service (IRS) requires you to begin withdrawing from your traditional Individual Retirement Account (IRA) whether you need the income or not. These Required Minimum Distributions (RMDs) can bump you into a higher tax bracket, reduce the compounding power of your investments, and force tough financial decisions at exactly the wrong time.

For those looking for more control, predictability, and peace of mind, annuities within an IRA — particularly tools like the Qualified Longevity Annuity Contract (QLAC) — offer a way to manage income, reduce risk, and preserve the dream of a comfortable retirement.

RMDs, QLACs, and the Annuity Carve-Out Strategy

One of the major challenges for traditional IRA owners approaching retirement is how to withdraw funds without triggering unintended — and undesired — tax consequences. RMDs are central to that issue.

When Congress first authorized the IRA in 1974, the idea was simple: let workers defer taxes on income they’d use later in retirement. But the IRS wasn’t going to let those tax breaks last forever. RMDs were baked into the deal from the beginning.

Originally, IRA holders were required to begin withdrawals at age 70½. The SECURE Act (2019) and SECURE 2.0 (2022) raised the RMD age as follows:

If you turned 72 in 2022 or earlier, your RMDs already began at age 72.
If you turn 73 between 2023 and 2032, RMDs begin at 73.
For those born in 1960 or later, the RMD age rises to 75 beginning in 2033.

On paper, these delayed start dates appear to give retirees more flexibility. But for retirees who don’t need the income right away, they can create complications:

Higher taxable income in later years, potentially pushing retirees into higher tax brackets
Surcharges on Medicare premiums
Reduced compounding power due to earlier-than-desired withdrawals
Unwanted income timing, especially for early retirees aiming to delay tapping their IRAs

Fortunately, Congress didn’t leave retirees without options. Recognizing that more Americans risk outliving their savings, lawmakers introduced a carve-out strategy in the form of QLACs.

Created by the U.S. Treasury in 2014 and expanded under SECURE 2.0, a QLAC is a special type of deferred income annuity purchased inside a traditional IRA or 401(k).

Unlike most IRA investments, money placed in a QLAC is excluded from your RMD calculation, potentially for more than a decade. Here’s a simplified look at how it works:

You can use up to $200,000 of your IRA or 401(k) to purchase a QLAC
The QLAC pays a guaranteed stream of income starting at a future age (up to 85)
Until then, no RMDs are required on the money used to purchase the QLAC

For some retirees, QLACs are a game changer, offering a way to defer taxes, postpone income until it’s truly needed, and create a hedge against outliving their assets.

In addition, because the value of the annuity contract is excluded from the plan balance used to determine RMDs, if you die before receiving the full value of your QLAC, the unpaid portion of your original investment can be returned to your IRA and passed to your heirs.

But QLACs are not for everyone; they’re illiquid and irrevocable. If you don’t live long enough to collect payments, your heirs may receive little or nothing, unless you’ve selected optional features like return of premium or joint-life coverage. And while SECURE 2.0 introduced more flexibility, the rules remain complex, and the contracts are not easily undone.

Nonetheless, for retirees in strong health, with sizable IRA balances, and a desire to manage long-term income while minimizing RMD exposure, the QLAC stands out as a rare solution: IRS-approved, actuarially sound, and purpose-built to address longevity risk.

Other Annuities That Can Be Used Within an IRA

An annuity is essentially a contract with an insurance company where you exchange a sum of money for guaranteed payments, typically for life or a specified period.

Annuities can be purchased both outside and within an IRA. When used inside an IRA, they can give retirees the benefits discussed above: helping secure a predictable income stream, potentially mitigating longevity risk, and, when structured as a QLAC, an RMD workaround. Annuities can also be part of long-term care planning.

It’s important to understand that when a “standard” annuity (i.e., one not designated as a QLAC) is held within an IRA, the primary benefit isn’t added tax deferral. Your IRA already does that. Instead, the value comes from layering the annuity’s unique features, such as income guarantees or principal protection, onto an already tax-advantaged retirement account. This combination can be particularly appealing to retirees who want stability, simplicity, and protection from market volatility.

Several other types of annuities can be used strategically within IRAs for retirement planning:

Immediate Annuities. Also known as Single Premium Immediate Annuities (SPIAs), these begin paying income almost immediately after purchase (usually within 12 months). They convert a lump sum of retirement savings into a steady stream of income.
Deferred Income Annuities (DIAs). Like QLACs, DIAs pay out a guaranteed income stream starting at a future date. Unless they meet QLAC rules, they don’t receive the same RMD exclusions, but they can still serve as a planning tool for later-life income needs.
Fixed Indexed Annuities (FIAs). These annuities have returns tied to a market index (like the S&P 500), but include downside protection (i.e., your principal won’t decrease due to market losses). Within an IRA, they can serve as a conservative growth vehicle with the potential for guaranteed income via optional riders.
Variable Annuities (VAs). A variable annuity provides market exposure through investment subaccounts, with optional riders for income guarantees. While they offer greater growth potential, they also carry market risk and typically higher fees. Inside an IRA, their value lies in lifetime income guarantees, not added tax sheltering.

Each type of annuity carries its own tradeoffs in terms of liquidity, fees, growth potential, and guarantees. But for retirees concerned with income reliability, longevity protection, or estate planning goals, annuities can be part of a broader retirement income strategy.

Types of Annuities: A Comparison.

Annuity Type	When Income Begins	RMD Treatment	Primary Use	Legacy Considerations
QLAC (Qualified Longevity Annuity Contract)	Age 80–85 (chosen by contract)	Excluded from RMDs up to $200,000 of IRA/401(k) funds	Defer income and taxes; hedge longevity	Optional return-of-premium or joint life options
SPIA (Immediate Annuity)	Within 12 months of purchase	Included in RMDs; income generally satisfies RMDs	Create immediate, predictable income	May offer period-certain or refund options
DIA (Deferred Income Annuit)	Future date (not QLAC-qualified)	Included in RMDs unless QLAC-qualified	Secure income starting later in retirement	Options vary; not always legacy-friendly
Fixed Indexed Annuity (FIA)	Depends on contract terms	Included in RMDs	Principal protection + index-linked growth	May include death benefit or guaranteed minimum
Variable Annuity (VA)	Flexible; can add income rider	Included in RMDs	Market exposure with optional income rider	Can include enhanced death benefit riders

Practical Considerations for Estate Planning

Annuities can play a role in retirement income strategies, but their complexities extend into estate planning and should not be overlooked from a legacy perspective. Key considerations include:

Fees and Liquidity. Annuities often carry various fees and surrender charges that can reduce the value passing to heirs. It’s important to maintain enough liquid assets outside the annuity to avoid costly early withdrawals.
Inflation Risk. Fixed income annuities may lose purchasing power over time unless you opt for inflation riders, which typically reduce initial payouts. This can affect the long-term value of income for both you and your heirs.
Taxation and Inherited IRAs. Under recent SECURE Act changes, most nonspouse beneficiaries must distribute inherited IRA assets, including annuities, within 10 years, which can accelerate taxable income and complicate legacy planning. Spouses retain more flexibility.
Estate Tax Impact. The value of annuities inside IRAs is included in your taxable estate and may affect estate or inheritance taxes at the state level, even if federal thresholds are not met.

Understanding these factors helps ensure your retirement income strategy not only matches your personal retirement goals but also fits into your long-term plans for your beneficiaries.

Alternatives to QLACs and Annuities

Annuities are one way to manage retirement income and longevity risk. For more flexibility, liquidity, or growth potential, other options can work either alongside or instead of annuities. Some of them are:

Bond Ladders. Buying individual bonds with staggered maturities can create a steady stream of income with predictable payouts. They’re more liquid than annuities and help manage interest rate risk, though they lack lifetime income guarantees.
Dividend-Paying Stocks and Funds. High-quality dividend-paying stocks or mutual funds offer recurring income and potential for long-term growth. Dividends aren’t guaranteed, but these assets are highly liquid and often receive a step-up in basis for heirs.
Systematic Withdrawals. Withdrawing a set percentage from a diversified investment portfolio is a flexible, common approach. It allows for liquidity and growth but carries market risk and requires careful planning to avoid prematurely depleting assets.
Delaying Social Security. Waiting until you reach age 70 to claim Social Security benefits can significantly boost guaranteed lifetime income and reduce pressure on IRA withdrawals early in retirement.

Each strategy has its own trade-offs in terms of taxes, risk, flexibility, and legacy goals. The right mix depends on your personal situation and preferences and should be coordinated in conjunction with your financial and estate plans.

<h2><img alt="Senior man stands talking to his smiling wife who is on a swing in their backyard." src="https://cdn.elderlawanswers.com/common/uploads/photos/21097-Senior man stands talking to his senior wife who is on a swing outdoors pexels-pixabay-34761 RESIZED.jpg" style="float:right; height:200px; margin-left:10px; margin-right:10px; width:302px" />Takeaways</h2> <ul> <li>Annuities, particularly Qualified Longevity Annuity Contracts (QLACs), can be used within Individual Retirement Accounts (IRAs) to manage income, defer taxes, and provide peace of mind in retirement.</li> <li>While QLACs offer specific tax advantages, other annuity types and alternative strategies can also be considered to meet diverse retirement income and estate planning goals.</li> </ul> You’ve worked tirelessly to build your nest egg during your working years, and now, as you approach or enter retirement, the “golden years” may not appear as carefree as they once did. People are living longer, inflation is stretching every dollar further than expected, and the markets are anything but predictable. Add in the rising cost of health care and the disappearance of traditional pensions, and even well-prepared retirees are asking: Will my savings last? At the same time, the Internal Revenue Service (IRS) requires you to begin withdrawing from your traditional Individual Retirement Account (IRA) whether you need the income or not. These <a href="https://www.elderlawanswers.com/what-you-should-know-about-required-minimum-distributions-19296" target="_self">Required Minimum Distributions</a> (RMDs) can bump you into a higher tax bracket, reduce the compounding power of your investments, and force tough financial decisions at exactly the wrong time. For those looking for more control, predictability, and peace of mind, annuities within an IRA — particularly tools like the <a href="https://www.elderlawanswers.com/should-i-explore-qualified-longevity-annuity-contracts-19668" target="_self">Qualified Longevity Annuity Contract</a> (QLAC) — offer a way to manage income, reduce risk, and preserve the dream of a comfortable retirement. <h2>RMDs, QLACs, and the Annuity Carve-Out Strategy</h2> One of the major challenges for traditional IRA owners <a href="https://www.elderlawanswers.com/older-adults-are-failing-at-retirement-planning-study-shows-20341" target="_self">approaching retirement</a> is how to withdraw funds without triggering unintended — and undesired — tax consequences. RMDs are central to that issue. When Congress first authorized the IRA in 1974, the idea was simple: let workers defer taxes on income they’d use later in retirement. But the IRS wasn’t going to let those tax breaks last forever. RMDs were baked into the deal from the beginning. Originally, IRA holders were required to begin withdrawals at age 70½. The SECURE Act (2019) and SECURE 2.0 (2022) raised the RMD age as follows: <ul> <li>If you turned 72 in 2022 or earlier, your RMDs already began at age 72.</li> <li>If you turn 73 between 2023 and 2032, RMDs begin at 73.</li> <li>For those born in 1960 or later, the RMD age rises to 75 beginning in 2033.</li> </ul> On paper, these delayed start dates appear to give retirees more flexibility. But for retirees who don’t need the income right away, they can create complications: <ul> <li>Higher taxable income in later years, potentially pushing retirees into higher tax brackets</li> <li><a href="https://www.elderlawanswers.com/what-is-irmaa-and-how-does-it-affect-my-medicare-premiums-19487" target="_self">Surcharges on Medicare premiums</a></li> <li>Reduced compounding power due to earlier-than-desired withdrawals</li> <li>Unwanted income timing, especially for early retirees aiming to delay tapping their IRAs</li> </ul> Fortunately, Congress didn’t leave retirees without options. Recognizing that more Americans risk outliving their savings, lawmakers introduced a carve-out strategy in the form of QLACs. <a href="https://www.forbes.com/sites/ashleaebeling/2014/07/01/treasury-green-lights-longevity-annuities-in-401ks-and-iras/" target="_self">Created by the U.S. Treasury in 2014</a> and expanded under SECURE 2.0, a QLAC is a special type of deferred income annuity purchased inside a traditional IRA or 401(k). Unlike most IRA investments, money placed in a QLAC is excluded from your RMD calculation, potentially for more than a decade. Here’s a simplified look at how it works: <ul> <li>You can use up to $200,000 of your IRA or 401(k) to purchase a QLAC </li> <li>The QLAC pays a guaranteed stream of income starting at a future age (up to 85)</li> <li>Until then, no RMDs are required on the money used to purchase the QLAC</li> </ul> For some retirees, QLACs are a game changer, offering a way to defer taxes, postpone income until it’s truly needed, and create a hedge against outliving their assets. In addition, because the value of the annuity contract is excluded from the plan balance used to determine RMDs, if you die before receiving the full value of your QLAC, the unpaid portion of your original investment can be returned to your IRA and passed to your heirs. But QLACs are not for everyone; they’re illiquid and irrevocable. If you don’t live long enough to collect payments, your heirs may receive little or nothing, unless you’ve selected optional features like return of premium or joint-life coverage. And while SECURE 2.0 introduced more flexibility, the rules remain complex, and the contracts are not easily undone. Nonetheless, for retirees in strong health, with sizable IRA balances, and a desire to manage long-term income while minimizing RMD exposure, the QLAC stands out as a rare solution: IRS-approved, actuarially sound, and purpose-built to address longevity risk. <h2>Other Annuities That Can Be Used Within an IRA</h2> An annuity is essentially a contract with an insurance company where you exchange a sum of money for guaranteed payments, typically for life or a specified period. Annuities can be purchased both outside and within an IRA. When used inside an IRA, they can give retirees the benefits discussed above: helping secure a predictable income stream, potentially mitigating longevity risk, and, when structured as a QLAC, an RMD workaround. <a href="https://www.elderlawanswers.com/what-to-look-for-when-buying-an-annuity-17356" target="_self">Annuities can also be part of long-term care planning</a>. It’s important to understand that when a “standard” annuity (i.e., one not designated as a QLAC) is held within an IRA, the primary benefit isn’t added tax deferral. Your IRA already does that. Instead, the value comes from layering the annuity’s unique features, such as income guarantees or principal protection, onto an already tax-advantaged retirement account. This combination can be particularly appealing to retirees who want stability, simplicity, and protection from market volatility. Several other types of annuities can be <a href="https://www.elderlawanswers.com/should-an-annuity-be-part-of-your-retirement-planning--15415" target="_self">used strategically within IRAs for retirement planning</a>: <ul> <li>Immediate Annuities. Also known as Single Premium Immediate Annuities (SPIAs), these begin paying income almost immediately after purchase (usually within 12 months). They convert a lump sum of retirement savings into a steady stream of income. </li> <li>Deferred Income Annuities (DIAs). Like QLACs, DIAs pay out a guaranteed income stream starting at a future date. Unless they meet QLAC rules, they don’t receive the same RMD exclusions, but they can still serve as a planning tool for later-life income needs.</li> <li>Fixed Indexed Annuities (FIAs). These annuities have returns tied to a market index (like the S&P 500), but include downside protection (i.e., your principal won’t decrease due to market losses). Within an IRA, they can serve as a conservative growth vehicle with the potential for guaranteed income via optional riders.</li> <li>Variable Annuities (VAs). A variable annuity provides market exposure through investment subaccounts, with optional riders for income guarantees. While they offer greater growth potential, they also carry market risk and typically higher fees. Inside an IRA, their value lies in lifetime income guarantees, not added tax sheltering.</li> </ul> Each type of annuity carries its own tradeoffs in terms of liquidity, fees, growth potential, and guarantees. But for retirees concerned with income reliability, longevity protection, or estate planning goals, annuities can be part of a broader retirement income strategy. <table align="center" border="1" cellpadding="1" cellspacing="1" style="width:100%"> <h3>Types of Annuities: A Comparison.</h3> <thead> <tr> <th scope="row">Annuity Type</th> <th scope="col">When Income Begins</th> <th scope="col">RMD Treatment</th> <th scope="col">Primary Use</th> <th scope="col">Legacy Considerations</th> </tr> </thead> <tbody> <tr> <th scope="row">QLAC (Qualified Longevity Annuity Contract)</th> <td>Age 80–85 (chosen by contract)</td> <td>Excluded from RMDs up to $200,000 of IRA/401(k) funds</td> <td>Defer income and taxes; hedge longevity</td> <td>Optional return-of-premium or joint life options</td> </tr> <tr> <th scope="row">SPIA (Immediate Annuity)</th> <td>Within 12 months of purchase</td> <td>Included in RMDs; income generally satisfies RMDs</td> <td>Create immediate, predictable income</td> <td>May offer period-certain or refund options</td> </tr> <tr> <th scope="row">DIA (Deferred Income Annuit)</th> <td>Future date (not QLAC-qualified)</td> <td>Included in RMDs unless QLAC-qualified</td> <td>Secure income starting later in retirement</td> <td>Options vary; not always legacy-friendly</td> </tr> <tr> <th scope="row">Fixed Indexed Annuity (FIA)</th> <td>Depends on contract terms</td> <td>Included in RMDs</td> <td>Principal protection + index-linked growth</td> <td>May include death benefit or guaranteed minimum</td> </tr> <tr> <th scope="row">Variable Annuity (VA)</th> <td>Flexible; can add income rider</td> <td>Included in RMDs</td> <td>Market exposure with optional income rider</td> <td>Can include enhanced death benefit riders</td> </tr> </tbody> </table> <h2>Practical Considerations for Estate Planning</h2> Annuities can play a role in retirement income strategies, but their complexities extend into estate planning and should not be overlooked from a legacy perspective. Key considerations include: <ul> <li>Fees and Liquidity. Annuities often carry various fees and surrender charges that can reduce the value passing to heirs. It’s important to maintain enough liquid assets outside the annuity to avoid costly early withdrawals.</li> <li>Inflation Risk. Fixed income annuities may lose purchasing power over time unless you opt for inflation riders, which typically reduce initial payouts. This can affect the long-term value of income for both you and your heirs.</li> <li>Taxation and Inherited IRAs. Under recent SECURE Act changes, most nonspouse beneficiaries must distribute <a href="https://www.elderlawanswers.com/inherited-retirement-accounts-minimizing-tax-consequences-19859" target="_self">inherited IRA assets</a>, including annuities, within 10 years, which can accelerate taxable income and complicate legacy planning. Spouses retain more flexibility.</li> <li>Estate Tax Impact. The value of annuities inside IRAs is included in your taxable estate and may affect estate or inheritance taxes at the state level, even if federal thresholds are not met.</li> </ul> Understanding these factors helps ensure your retirement income strategy not only matches your personal retirement goals but also fits into your long-term plans for your beneficiaries. <h2>Alternatives to QLACs and Annuities</h2> Annuities are one way to manage retirement income and longevity risk. For more flexibility, liquidity, or growth potential, other options can work either alongside or instead of annuities. Some of them are: <ul> <li>Bond Ladders. Buying individual bonds with staggered maturities can create a steady stream of income with predictable payouts. They’re more liquid than annuities and help manage interest rate risk, though they lack lifetime income guarantees.</li> <li>Dividend-Paying Stocks and Funds. High-quality dividend-paying stocks or mutual funds offer recurring income and potential for long-term growth. Dividends aren’t guaranteed, but these assets are highly liquid and often receive a <a href="https://www.elderlawanswers.com/step-up-in-basis-and-why-it-matters-in-estate-planning-19384" target="_self">step-up in basis</a> for heirs.</li> <li>Systematic Withdrawals. Withdrawing a set percentage from a diversified investment portfolio is a flexible, common approach. It allows for liquidity and growth but carries market risk and requires careful planning to avoid prematurely depleting assets.</li> <li>Delaying Social Security. Waiting until you reach age 70 to claim <a href="https://www.elderlawanswers.com/claiming-social-security-benefits-at-age-70-18756" target="_self">Social Security benefits</a> can significantly boost guaranteed lifetime income and reduce pressure on IRA withdrawals early in retirement. </li> </ul> Each strategy has its own trade-offs in terms of taxes, risk, flexibility, and legacy goals. The right mix depends on your personal situation and preferences and should be coordinated in conjunction with your financial and estate plans.

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The Company intends, but does not guarantee, that the Web Page will be operational 24 hours per day, 7 days per week, 365 days per year. The Website and Web Page may not be hosted on the Company's own servers, and the Company depends on a hosting service provider to keep the Website and Web Page operational. Notwithstanding anything to the contrary in this Agreement, the Company's obligation to keep the Website and Web Page operational is subject to the delivery and limited by the scope of hosting services provided to the Company by its hosting service. Interruptions in service demonstrably due to a failure of the Company's or its hosting service provider's web servers ("Interruptions") that last twenty-four (24) continuous hours or less will not be compensated. Interruptions that last more than twenty-four (24) continuous hours will result in an extension of the Term of this Agreement equal to the duration of the Interruption (the "Extension of Service") not to exceed 30 (thirty) days. AN EXTENSION OF SERVICE IS THE FIRM'S SOLE REMEDY FOR AN INTERRUPTION IN SERVICE, AT LAW AND IN EQUITY.

User Information

Any and all information provided by or collected from visitors of the Website and the Web Page (the "User Information") shall be owned solely by the Company, except that the User Information which is part of the text of an e-mail communication initiated on the Website or the Web Page, shall be treated as confidential and as protected by the attorney-client privilege between the user who initiated the e-mail and the Firm or attorney to whom it is addressed (the "Confidential Information"). User Information that would otherwise be deemed to be Confidential Information shall not qualify as Confidential Information if it is also provided to or collected by the Company in a manner other than as indicated above. The Company will neither collect, track nor store Confidential Information.

No Warranties

THE COMPANY DOES NOT MAKE ANY REPRESENTATIONS OR WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF ANY KIND AS TO ANY ASPECT OF THE WEBSITE, THE WEB PAGE, THE INFORMATION THEREIN AND ANY SERVICES PROVIDED UNDER THIS AGREEMENT, INCLUDING THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. THE COMPANY DOES NOT WARRANT THAT THE WEBSITE AND THE WEB PAGE WILL BE ONLINE UNINTERRUPTED, ERROR FREE OR COMPLETELY SECURE, AND WILL NOT BE LIABLE FOR THE CONSEQUENCES OF ANY INTERRUPTIONS, ERRORS OR BREACHES IN SECURITY. IN ADDITION, THE COMPANY SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS AND WARRANTIES WITH RESPECT TO ANY SERVICES OR PRODUCTS OFFERED OR SOLD THROUGH THE WEBSITE.

Limitation Of Liability

IN NO EVENT WILL THE COMPANY BE LIABLE TO THE FIRM FOR LOSS OF PROFITS, LOSS OF REVENUES, LOSS OF SAVINGS, LOSS OF USE, LOSS OR CORRUPTION OF CONTENT, DATA OR INFORMATION OR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, WHETHER UNDER TORT, CONTRACT OR OTHER THEORIES OF RECOVERY. IN NO EVENT WILL THE COMPANY'S TOTAL LIABILITY ARISING OUT OF, CONNECTED WITH OR RESULTING FROM THIS AGREEMENT EXCEED THE AMOUNT PAID BY THE FIRM TO THE COMPANY UNDER THIS AGREEMENT FOR THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO THE CLAIM OF LIABILITY.

Indemnification

Each party will indemnify, defend and hold the other party harmless from and against any and all costs, liabilities, losses, damages and expenses, including reasonable attorney's fees, and amounts paid in settlement, resulting from or arising out of any claim, suit, action or proceeding brought against the other party as a consequence of the indemnifying party's infringement of any intellectual property right of a third party, including without limitation, any third party patent, copyright, trademark or trade secret. This indemnification is subject to the parties' limitation of liability under this Agreement.

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey and shall be deemed to have been executed in Jersey City, New Jersey. Any legal action arising from or related to this Agreement shall be brought in any state or federal court located in the State of New Jersey, County of Hudson, and the parties hereby consent to the jurisdiction of such courts.

Entire Agreement

This Agreement is the entire Agreement between the parties with respect to the subject matter hereof.

Arbitration

Any disputes that arise between the parties with respect to the performance of this Agreement shall be submitted to binding arbitration in the State of New Jersey, County of Hudson by the American Arbitration Association, to be determined and resolved by said Association under its rules and procedures in effect at the time of submission and the judgment upon the award be entered in any court having jurisdiction thereof. The parties hereby agree to share equally in the costs of said arbitration except that in the discretion of the arbitrator, any award may include the cost of the party's counsel if the arbitrator expressly determines that the party against whom the award is entered has caused the dispute, controversy or claim to be submitted to arbitration as a frivolous or dilatory action.

Severability

Should any term, warrant, covenant, condition, or provision of this Agreement be held to be invalid or unenforceable, the balance of this Agreement shall remain in full force and shall stand as if the unenforceable part did not exist.

Validity

This Agreement is valid and enforceable against the Firm. Payment by the Firm to the Company, by check or electronic transaction, constitutes the Firm's execution and delivery of this Agreement.

I have read and agree with the terms of the End User License Agreement (EULA).

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