Best Annuity for a 60 Year Old

There is no single right age; it depends on your goals. For deferred income, buying between ages 50 and 60 allows time for the income base to grow before you need income. For immediate income, payout rates rise with the age at which payments start. MYGAs can be purchased across a wide range of ages for a guaranteed rate. Annuities are most often used by people within 10 to 15 years of retirement or already retired.

What happens depends on the type of annuity and the options you selected. Most deferred annuities include a death benefit that pays your beneficiary at least the account value or total premiums paid (whichever is greater). With income annuities, you can choose options like period certain (payments continue to beneficiaries for a set period), joint life (payments continue to a surviving spouse), or life only (payments stop at death). Choosing the right beneficiary options is an important part of annuity planning.

Start with your timeline (when you need the money or the income), your goal (income, growth, or leaving money to heirs), and how long you can leave the money in place. Then compare the issuing insurance company's financial strength ratings, fees and surrender charges, and, for income, the rider payout rates. Comparing several products side by side, and talking the trade-offs through with a licensed insurance professional, helps you see what each contract gives up for what it offers.

A lifetime income rider is an optional benefit you can add to a deferred annuity that guarantees you a stream of income for life, even if your account value runs out, subject to the claims-paying ability of the issuing insurance company. The rider typically has a rollup rate that grows your income base during the deferral period, and a payout rate based on your age when you begin taking income. Rider fees vary by product and are usually charged each year as a percentage of the income base.

A fixed indexed annuity is a type of annuity that earns interest based on the performance of a market index, such as the S&P 500, without directly investing in the market. When the index performs well, you earn interest up to a cap or participation rate. When the index declines, the interest credited for that period is zero rather than negative, so index losses are not subtracted from your account. Surrender charges, market value adjustments and optional rider fees can still reduce your account value, and the guarantees depend on the claims-paying ability of the issuing insurance company.