When it comes to annuities, particularly income annuities, your age at the time of purchase directly affects your payout. This isn't a sales tactic. It's actuarial math, and it works the same way regardless of which company, product, or advisor you work with.
A simple illustration.
Take $200,000 placed into an income annuity. (These figures are illustrative, not a quote — actual payouts depend on the carrier, product, and rates at the time.)
- Start income at 60: roughly $1,000 a month for life.
- Start at 65: roughly $1,200 a month.
- Start at 70: roughly $1,450 a month.
Same money. The difference is time — partly because the carrier has longer to grow it, and partly because the payout is calculated over a shorter expected lifetime.
The two ways "waiting" costs you.
If you wait to buy, you may also be waiting through a lower-rate environment, and the caps and payout factors available today aren't guaranteed to be there next year. If you buy now and wait to turn on the income, the deferral usually works for you — the income base grows while you wait.
In other words, the cost of waiting isn't about rushing into a purchase. It's about knowing what the clock is doing while you think.
What I'd suggest.
Find out what your money could produce today, at your age, at current rates. Then decide. That's a 15-minute conversation, and you'll leave with a real number instead of a guess.
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Author of Indexed Annuity Secrets and founder of Pacific Ridgeway Insurance Solutions in San Diego. Navy veteran. Licensed financial professional, CA #4132743.
Fixed indexed annuities are insurance products, not investments. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. This article is for educational purposes only and is not financial, investment, tax, or insurance advice.