Annuity Age Limits: What’s The Youngest And Oldest Ages

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Annuity Age Limits

Understanding the age limits associated with annuities is crucial for making informed retirement planning decisions. While annuities can provide a reliable income stream in retirement, there are specific age-related rules and guidelines you should be aware of. This guide will focus on the youngest and oldest ages at which you can buy an annuity, highlighting key considerations for different types of annuities.

Youngest Age to Buy an Annuity

Deferred Annuities

Deferred annuities have no strict minimum age requirement, allowing even young adults to invest in them as a long-term savings strategy. However, it’s important to consider the long-term nature of these investments and the potential penalties for early withdrawal before retirement age.

Immediate Annuities

Immediate annuities start paying out soon after a lump sum investment is made. While there is no formal minimum age to purchase an immediate annuity, they are typically more suitable for individuals nearing or already in retirement and need an immediate income stream.

Oldest Age to Buy an Annuity

Deferred Annuities

Insurance companies often set maximum age limits for purchasing deferred annuities to ensure that there is enough time for the funds to grow before payouts begin. The maximum age varies by provider but is generally around 80 to 85 years old. Some companies may offer deferred annuities up to age 90, although this is less common.

Immediate Annuities

Immediate annuities generally have higher maximum age limits compared to deferred annuities. Many insurance companies allow the purchase of immediate annuities up to age 90 or even 95. Since these annuities begin payments almost immediately, the concern about the time for accumulation is irrelevant.

Annuity Age Limits

Age Considerations for Different Annuity Types

Fixed Annuities

Fixed annuities typically have age limits ranging from 18 to 85, although this can vary by provider. These annuities offer a guaranteed payout and are suitable for individuals looking for a predictable income stream.

Variable Annuities

Variable annuities usually have age limits between 18 and 85. They offer investment options within the annuity, with payouts depending on the performance of the chosen investments. Due to their complexity and risk, variable annuities are often more suitable for younger individuals with a longer time horizon until retirement.

Indexed Annuities

Indexed annuities generally have age limits ranging from 18 to 85. These annuities provide returns based on a specific market index, such as the S&P 500, and are often chosen by those who want to balance some market exposure with a level of protection against loss.

Impact of Age on Annuity Benefits

Younger Buyers

Younger buyers can benefit from the long-term growth potential of deferred annuities and the power of compound interest. Starting early allows for a longer accumulation period, leading to a more significant income stream in retirement. Additionally, younger buyers can take advantage of lower premiums and higher interest rates.

Older Buyers

Older buyers might focus on immediate income needs and security. Immediate annuities can provide a guaranteed income stream that starts right away, which is valuable for those in or nearing retirement. However, the older you are when purchasing an annuity, the shorter the accumulation period and the higher the premiums might be.

What We Recommend

When considering an annuity, it’s essential to evaluate your age, financial goals, and retirement plans. Younger individuals can benefit from the long-term growth potential of deferred annuities, while older individuals might find immediate annuities more suitable for their immediate income needs. Always compare different annuity products and consult with a financial advisor to find the best option tailored to your specific circumstances.

If you have questions about annuities and which option is best for you, contact us for free advice or a quote. Our experts are here to help you make informed decisions about your retirement planning.

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Frequently Asked Questions

Can I buy an annuity if I’m over 85?

While many annuities have upper age limits around 85, some products and companies may offer options up to age 90 or beyond, albeit with different terms.

What happens if I outlive my annuity?

Certain annuities offer lifetime income options, ensuring you receive payments for as long as you live. Always check the specific terms of the annuity product.

Are there age restrictions for adding to an existing annuity?

Yes, age restrictions can apply to additional contributions, particularly for tax-deferred products like IRAs. Always verify with the annuity provider.

Can you buy an annuity at any age?

No, you cannot buy an annuity at any age. While there is no strict minimum age for deferred annuities, immediate annuities typically suit those near retirement. Maximum age limits, usually around 80 to 90 years, apply for both deferred and immediate annuities.

Can I buy an immediate annuity at age 45?

Yes, you can buy an immediate annuity at age 45, but they are typically more suitable for those nearing retirement. Immediate annuities start paying out almost immediately, so they are generally intended for those who need an income stream soon after purchasing.

Can you buy an annuity at 55?

Yes, you can buy an annuity at 55. At this age, both deferred and immediate annuities are available options, depending on your retirement goals and income needs.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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