Why the Highest-Paying Immediate Annuity Isn’t Technically a SPIA Anymore
Scenario
You’re age 70, ready to retire now, and want a guaranteed monthly income for life starting immediately. Most people assume a Single Premium Immediate Annuity (SPIA) pays the most. But there’s a better plan that offers more income and more flexibility, and it’s not the traditional SPIA.
Start Immediate Withdrawals From a Fixed Index Annuity With a GLWB
Key Stat: At age 70, a GLWB can offer up to an 8.22% lifetime withdrawal rate—higher than any SPIA.
How It Works:
You deposit a lump sum into a Fixed Index Annuity (FIA) with a Guaranteed Lifetime Withdrawal Benefit (GLWB) rider. Your income starts immediately and is guaranteed for life, even if your account balance hits zero. Unlike an SPIA, you retain ownership of the money, and any remaining balance goes to your heirs.
Pros
- Highest immediate lifetime income available at age 70 (up to 8.22%)
- You keep control over your money
- The remaining balance goes to the beneficiaries
- Income never drops, even if the market crashes
- Can defer withdrawals for more growth if desired
Cons
- Slightly more complex than a SPIA
- Annual fees for the GLWB rider (typically 0.95%–1.25%)
- Income is based on a benefit base, not the account value
Who Needs It
- Retirees who want maximum lifetime income now
- Anyone who wants a guaranteed income but flexibility
- People who want to leave unused funds to beneficiaries
- Those seeking protection from market losses
Who Doesn’t
- People who want ultra-simple, contractually rigid payouts
- Investors are unwilling to pay rider fees, even for guarantees
- Those with very short life expectancies and no spouse
Helpful Add-on:
You can fund the GLWB with IRA, Roth IRA, 401(k), or nonqualified money. If you’re using qualified funds, consider pairing this with a QLAC to delay additional income to age 85, reducing RMDs.
Why a Life-Only SPIA Isn’t Technically the Best Option Anymore
Key Stat: As of 2025, a 70-year-old male gets about 7.8% annually with a life-only SPIA. That’s lower than the 8.22% from a GLWB—and with no death benefit.
How It Works:
SPIAs convert a lump sum into a stream of guaranteed income. Payments are fixed and irrevocable. If you die early, the insurer keeps the rest unless you bought a refund option.
Pros
- Simple, predictable, guaranteed income
- No investment or interest rate risk
- Excellent for covering fixed retirement expenses
Cons
- No access to funds once annuitized
- No death benefit unless you lower the payout
- Lower payout than GLWB for the same age
Who Needs It
- People with no heirs and a long life expectancy
- Retirees who want the most predictable plan
- Those who want to set and forget income
Who Doesn’t
- Anyone who wants access to the principal
- People are concerned about leaving assets to their family
- Investors wanting income plus flexibility
Also Consider:
If you’re leaning toward a SPIA, buy a low-cost term life insurance policy to offset the loss of principal if you die early.
Don’t Forget Insurance to Protect Your Income Plan
- Term Life Insurance – Replace lost SPIA principal or protect spouse
- Long-Term Care Insurance – Prevent income erosion due to care costs
- Medicare Supplement or Advantage Plan – Avoid surprise medical bills
- QLAC – Delay taxes and defer income to age 85
Final Verdict
The highest-paying immediate annuity plan isn’t a SPIA anymore—it’s a Fixed Index Annuity with a Guaranteed Lifetime Withdrawal Benefit (GLWB). At age 70, this plan pays up to 8.22% for life, offers control, legacy options, and flexibility, and still provides contractual guarantees.
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At The Annuity Expert, we compare every top insurer and product to find you the highest guaranteed income. Whether it’s a SPIA or a GLWB, we’ll help you choose the best option for your age, health, and goals. 👉 Book a free call now to compare immediate annuity income quotes and get help choosing the best plan.
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