Understanding Annuities in Your 60s
Annuities can be a key component of your retirement strategy, providing a reliable income stream. An annuity usually provides up to 75% more retirement income than financial advisors’ traditional withdrawal strategies and contractually guarantees the same payment or better for the rest of a retiree’s lifetime.
At The Annuity Expert, we’re an independent annuity broker. We compare quotes from top-rated carriers and help you buy a policy that fits your goals, taxes, and timeline.
Helpful Tip: Your 60s are the “transition decade.” If you have already retired or are planning for parents over age 70, read our specific guide on annuities for seniors to learn about age limits, RMDs, and long-term care protections.
Types of Annuities We Sell
- Immediate Annuities: Ideal if you need income right away. You make a lump sum payment and start receiving payments almost immediately.
- Deferred Annuities: Suitable if you don’t need income right away. Your investment grows tax-deferred until you start receiving payments at a future date.
- Fixed Annuities: Provide a guaranteed interest rate and stable payments. They are perfect for those who prioritize predictability and safety.
- Variable Annuities: Payments depend on the performance of investment options. These are for those willing to take on more risk for potentially higher returns.
- Indexed Annuities: Returns are linked to a stock market index, offering growth potential with some downside protection.
The Best Annuity Options In Your 60s
Multi-Year Guaranteed Annuity (MYGA)
What it is
- A fixed annuity with a guaranteed rate for a set term (for example, 3–7 years). Think “CD alternative” with tax-deferred growth.
Who benefits
- Savers who want higher yields than bank CDs with principal protection and simple terms
- Pre-retirees who plan to ladder terms to keep money freeing up regularly
Who might not
- Those who need a lifetime income right away
- Investors who want market-level upside and are comfortable with risk
Pros
- Guaranteed fixed rate and principal protection
- Tax-deferred growth (interest isn’t taxed until withdrawn)
- Simple contracts; easy to ladder
Cons
- Surrender charges if you exit early
- No lifetime income without adding or later moving to an income option
Money-saving tips
- Ladder 3–7 year MYGAs to keep flexibility and capture rate moves
- Use IRA dollars to defer taxes and coordinate with future RMDs
Fixed Index Annuity (FIA) With GLWB
What it is
- A fixed annuity that credits interest based on an index (with floors and caps) and an optional rider that guarantees lifetime withdrawals regardless of market performance.
Who benefits
- Retirees who want lifetime income with the option to delay or start in a near-term window
- Couples who need a joint lifetime income and want an account value for beneficiaries
Who might not
- Those who want the absolute highest immediate monthly payout (SPIA usually pays more on day one)
- People who plan to withdraw large amounts beyond rider limits
Pros
- Lifetime income you can time to your retirement date
- Account control and beneficiary value
- Downside protection with potential for higher credited interest than a MYGA
Cons
- Rider cost reduces net growth
- Crediting can be complex (caps, spreads, strategies)
Money-saving tips
- Only pay for a rider you truly need; if income is 5–7+ years away, compare rider roll-up rates vs. holding a higher-yield MYGA now and adding income later
- Use a 1035 exchange from an old, high-fee contract into a cleaner FIA + GLWB when the math improves
Single Premium Immediate Annuity (SPIA)
What it is
- Turn a lump sum into guaranteed income that starts within 12 months.
Who benefits
- Retirees who want the highest immediate guaranteed monthly paycheck and don’t need liquidity from this bucket
- Those with strong Social Security and pension gaps to fill now
Who might not
- Savers who want access to principal or to leave more for heirs
- People who prefer to delay or adjust income start
Pros
- Typically the highest starting income
- Simple and predictable
Cons
- Irrevocable once annuitized
- Limited liquidity and less for heirs unless you select period-certain or refund options
Money-saving tips
- Use period-certain or cash-refund options if spouse protection or estate balance matters
- Fund with IRA dollars if you need to satisfy RMDs efficiently via guaranteed income
Deferred Income Annuity (DIA)
What it is
- Lock in future lifetime income starting at a chosen age (often 70s to 80s).
Who benefits
- Healthy individuals planning to retire later who want to pre-lock higher income in the future
- People worried about outliving assets in a very late retirement
Who might not
- Those needing flexibility, liquidity, or income options in the next few years
- People who value beneficiary control over maximum payout
Pros
- Strong longevity insurance; higher income if you defer longer
- Simple, pension-like solution for late-life years
Cons
- Limited access to the principal
- Income is locked to a start date unless the contract allows changes
Money-saving tips
- Use a two-bucket strategy: MYGA or FIA for the 60s and early 70s; DIA starting later to insure late-life income
When To Buy In Your 60s (And Why Timing Matters)
- Buy 12–36 months before income if you know your retirement date to lock guaranteed income factors and reduce sequence-of-returns risk
- Buy now for safe yield if you are holding cash or short-term CDs; a MYGA can boost yield while you finalize your plan
- Buy now for immediate paychecks if you need income right away and value simplicity; a SPIA can maximize today’s check
- Delay strategically if you still work and don’t need income yet; delaying GLWB start can increase lifetime payout per contract rules
Smart Funding Strategies In Your 60s
- IRA/401(k) rollover: Consolidate old workplace plans into an annuity inside an IRA to streamline RMDs and future income planning
- Roth dollars: Funding with Roth money can produce tax-free income if requirements are met; consider staged Roth conversions before RMD age for long-term tax efficiency
- 1035 exchange (non-qualified): Move from an outdated or high-fee annuity into a better contract without triggering current taxes under 1035 rules
- Taxable money: MYGA or FIA can defer taxes on interest or credited growth until you withdraw, potentially improving after-tax results over CDs
Important: Required minimum distributions generally begin at age 73 under current law. Coordinate income start, surrender schedules, and liquidity to meet RMDs without penalties.
How To Coordinate With Social Security & Pensions
- Bridge income by using MYGA or FIA withdrawals while delaying Social Security for a higher benefit
- Pair pension options with life insurance to protect a spouse while choosing a higher pension payout
- Map household paychecks by aligning Social Security, pensions, and annuities to fixed expenses and keeping discretionary spending flexible
How We Shop Carriers For You
- We compare AM Best, S&P, Moody’s, and Fitch financial ratings
- We review surrender schedules, free-withdrawal provisions, and market value adjustments
- We analyze cap, spread, and participation strategies on FIAs and evaluate GLWB rider costs versus benefits
- You get side-by-side quotes and clear recommendations
Related Coverages That We Offer
- Life Insurance: Protect a spouse so you can choose a higher pension option or annuity payout with confidence
- Long-Term Care Insurance Or Hybrid LTC Policies: Shield retirement income from potential care costs, so more of every check supports your lifestyle
- Medicare Supplement or Advantage Guidance: Coordinate health costs with your guaranteed income plan so your budget stays predictable
How To Get Started
- Step 1: Tell us your age range, ideal retirement date, and monthly income target
- Step 2: Share account balances (IRA, Roth, taxable) and any old annuity contracts
- Step 3: We compare quotes, map the cleanest income path, and help you buy the right policy for your plan
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Questions From Our Readers
What are the benefits of buying annuities in my 60s?
Annuities provide income stability, allowing for regular payments that you can count on for retirement. They also offer some tax advantages and may provide a death benefit if you pass away before receiving all your payments.
How do I know if buying an annuity in my 60s is right for me?
Evaluate your financial goals and consider whether guaranteed income is your top priority or if you have other investments to cover living expenses and unexpected costs. Be sure to factor in all the potential drawbacks before making a decision.
How can annuities serve as a retirement income solution?
Annuities provide a reliable retirement income solution by offering guaranteed income, principal protection, and income predictability. By purchasing an annuity, individuals can ensure a steady stream of income throughout retirement, protecting against the risk of outliving their savings.
How do annuities provide tax-deferred growth opportunities?
Annuities offer tax-deferred growth, allowing individuals to supplement their retirement savings through tax advantages. By utilizing annuities with after-tax money, individuals can benefit from compounding growth and potentially lower their tax bracket, ramping up their retirement savings.