Should I Buy an Annuity at Age 70? A Comprehensive Guide

Although many financial advisors recommend starting annuity payments between the ages of 70 and 75, many retirees begin receiving income streams as early as 60. However, the ideal time to purchase an annuity depends on the kind of annuity you’re looking for and the timing of your payouts.

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Navigating the world of retirement planning can be daunting, especially when it comes to making significant financial decisions like purchasing an annuity at age 70. This guide aims to provide you with a comprehensive overview of annuities, their potential benefits and drawbacks, and whether they might be a suitable option for you at this stage in your life.

Understanding Annuities:

An annuity is a financial product that provides a steady stream of income, typically for life, in exchange for a lump-sum investment. This income can be immediate or deferred, depending on the type of annuity you choose. Annuities offer several potential advantages, including:

  • Guaranteed income: Annuities provide a consistent income stream, regardless of market fluctuations, offering peace of mind and financial security.
  • Tax-deferred growth: The money invested in an annuity grows tax-free until you begin receiving payments.
  • Protection from market volatility: Depending on the type of annuity, your investment may be shielded from market downturns, ensuring a stable income source.

However, there are also potential downsides to consider:

  • High fees: Some annuities come with high fees that can eat into your returns.
  • Lack of liquidity: Annuities typically have surrender charges if you withdraw money early, limiting your access to your funds.
  • Limited growth potential: Depending on the type of annuity, your investment may not grow as much as it could in the stock market.

Factors to Consider When Deciding:

Before making a decision about purchasing an annuity at age 70, it’s crucial to consider several factors:

  • Your financial situation: Are you in good financial health with other sources of income, such as Social Security or pensions?
  • Your retirement goals: Do you need a guaranteed income stream, or are you comfortable with some risk for potentially higher returns?
  • Your health and life expectancy: How long do you expect to live? This will impact the total amount of income you will receive from the annuity.
  • The type of annuity: Different types of annuities offer varying features and benefits. It’s important to choose an annuity that aligns with your specific needs and goals.

Consulting a financial advisor can be invaluable in navigating these factors and making an informed decision about whether an annuity is right for you.

Benefits of Buying an Annuity at Age 70:

  • Guaranteed income: This is particularly beneficial at age 70, when you may have fewer income sources and need financial security.
  • Tax-deferred growth: This can be advantageous if you are in a high tax bracket.
  • Protection from market volatility: This can provide peace of mind during retirement, especially if you are risk-averse.

Drawbacks of Buying an Annuity at Age 70:

  • High fees: Be mindful of the fees associated with the annuity, as they can significantly impact your returns.
  • Lack of liquidity: Consider if you may need access to your funds in the future, as early withdrawals may incur penalties.
  • Limited growth potential: Annuities may not offer the same growth potential as other investments, such as stocks.

Types of Annuities to Consider:

  • Immediate annuities: Begin paying out immediately after your initial investment.
  • Deferred annuities: Payments start several years after the initial investment.
  • Variable annuities: Invest your payments in different avenues, offering growth potential but also carrying more risk.
  • Fixed annuities: Guarantee specific returns for a specified period, ensuring a stable income stream.
  • Long-term care annuities: Provide additional benefits if you become seriously ill or disabled, potentially covering long-term care costs.

Impact of an Annuity on Retirement:

  • Supplemental income: Annuities can supplement your existing income sources, such as Social Security or pensions.
  • Estate planning: Consider how the annuity will impact your estate planning and potential inheritance.
  • Liquidity: Annuities may limit your access to additional funds for investments or unexpected expenses.

Tips for Retirement Planning:

  • Consult a financial advisor: Seek professional guidance to assess your situation and make informed decisions.
  • Use retirement calculators: Tools like SmartAsset’s retirement calculator can help you estimate your retirement needs.
  • Diversify your investments: Don’t rely solely on annuities; diversify your portfolio with other investments to manage risk and maximize potential returns.

Deciding whether to purchase an annuity at age 70 is a personal choice that depends on your individual circumstances and financial goals. Carefully weigh the potential benefits and drawbacks, consider different types of annuities, and consult a financial advisor for personalized guidance. Remember, there is no one-size-fits-all solution, and the right decision for you will depend on your unique financial situation and retirement aspirations.

FAQs About the Best Age To Buy an Annuity

Generally speaking, the best time to purchase an annuity is in your 60s or 70s. This is the case if you have just recently retired or are a few years away from retirement. But your financial objectives and the kind of annuity you’re thinking about play a part in the choice as well.

If you are young and have a high risk tolerance, or if you already have a reliable source of income that will cover your anticipated retirement costs, you may want to think about an annuity alternative. This might include sufficient Social Security or pension benefits. Please don’t make financial decisions without first consulting a qualified professional.

should i buy an annuity at age 70

should i buy an annuity at age 70

should i buy an annuity at age 70

should i buy an annuity at age 70

Discover how annuities provide: ✏ Protection against market volatility ✏ Guaranteed income for life ✏ Security for families ✏ Long-term care planning

In particular, variable annuities are so complicated that it is against business policy for companies to allow clients to independently review the contracts. You have to meet with a financial advisor who sells these products, including representatives from the annuity companies themselves, in order to compare them. An agent pushing a single brand of products cannot provide you with a more comprehensive comparison than a financial advisor representing several companies.

It may seem like a bad idea to purchase an annuity right now, especially one that locks in lifetime payments based on a fixed interest rate, given the rising cost of living and historically low interest rates. But waiting has disadvantages as well if you need money right away, according to Keady.

You can set up a fixed annuity for roughly three years to earn a higher return than other fixed-income investments if you don’t need the income right away. If rates are higher later, you can reinvest the proceeds. According to Shah, you won’t have to pay income tax on annuity earnings every year like you would for bond interest because they are tax-deferred.

Because they are simpler products that pay a set interest rate, fixed annuities are easier to evaluate. Calculators on annuity company websites estimate how much income you can expect from a deposit on a fixed annuity contract. Online comparison websites, like and, let you compare quotes from different companies. For example, according to recent numbers from Immediate Annuities, a 70-year-old man in New York who buys a fixed income annuity for $100,000 would get $574 in income per month.

Because annuity fees reduce returns, you might be better off investing on your own if you can take on some risk. When looking for an annuity, you should consider three factors when evaluating contracts.

Should You Buy an Annuity? Retirement Planning


At what age should you not buy an annuity?

Those aged 50 to 70 are typically best positioned to buy annuities, but the reasons to do so vary by age group. Legally, you must be 18 to buy an annuity. Many annuity providers set their own minimum age limit of 50 and maximum of somewhere between 75 and 95 years old.

What is the best annuity for a 72 year old?

Seniors & Annuities. Annuities can help seniors build tax-deferred savings to handle retirement costs such as healthcare and living expenses. Immediate annuities tend to be the best annuities for seniors because they begin paying out within 12 months of purchase.

How much does a $100 000 annuity pay per month?

Investing $100,000 in an annuity can offer a sense of security. Based on current annuity rates, this investment might yield a monthly income in the ballpark of $500 to $600.

What are the downside of annuities?

Disadvantages of annuities. Annuities usually come with annual fees, and withdrawing money before retirement can result in a hefty penalty. The money in an annuity is also inaccessible during the contract period, which can be a disadvantage if you’re facing an unexpected expense.

Should I buy an annuity at 70?

The decision to buy an annuity at 70 is a complex one and hinges on an individual’s unique financial situation and retirement goals. In fact, it’s often beneficial to consult with a financial advisor in making any big decisions about your retirement. The key advantage of purchasing an annuity at 70 is the guarantee of a steady income stream.

Can a 70 year old buy a second annuity?

At age 70, he can buy a second annuity for $50,000, giving him another $287 a month based on today’s rates. Adding a third annuity at age 75 for $50,000 boosts his monthly income by $348, assuming interest rates and life expectancies don’t change.

Should you buy an annuity if you’re 65?

In addition, you benefit from the higher payouts that come with buying an annuity at an older age. For example, according to, a 65-year-old man with $200,000 to invest in an annuity, could buy one for $100,000 to generate $493 now in monthly, lifelong income.

Can you buy an annuity at 18?

It’s possible to buy an annuity for yourself as early as age 18, though annuity companies can set minimum and maximum age restrictions on who they sell to. For example, you might need to be at least 50 or under age 95 to purchase an annuity. Does it make sense to buy an annuity when you’re younger? It can, depending on the circumstances.

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