The “best” age to buy an annuity is the age when you’re within a realistic window of needing the income (or protection) it’s designed to provide. For many people, that’s about 45–70 for buying/positioning, and about 70–75 for starting lifetime income—but the right timing depends on your goals, liquidity needs and annuity type.
A Practical Rule of Thumb:
- If you want income soon: the “best age” is often late 60s to mid-70s, because payouts are typically higher when you’re older and closer to (or in) retirement.
- If you want a future paycheck later: many buyers position a deferred annuity in their 50s or 60s to lock in guarantees and let value build before income starts.
- If you’re younger: annuities can fit, but they’re often less likely to be the best first choice if you need maximum liquidity and growth flexibility.
“Sweet spot” ranges are often discussed as ~45 to 70 for purchasing strategy, while ~70 to 75 is commonly cited as a strong window to start payouts, depending on the product and goals.
Age makes a big difference on annuity payouts. An older person in their 70s will have a much higher payout versus someone in their 60s. That said, if someone wants to purchase an annuity at age 60 and begin receiving income 10 years later at age 70, then the income benefit can be substantial. The compound growth effect makes a big difference. A rule of thumb is that if you don’t need the income now, take advantage of an income rider that will provide a high roll-up rate and withdrawal rate for a much larger income in the future.
John Stevenson, CFFOwner and Advisor at Stevenson Retirement SolutionsJohn Stevenson, a Certified Financial Fiduciary®️, specializes in securing retirements with tax-free accounts. With a focus on guaranteed retirement, he’s ensured none of his clients suffer from market fluctuations. As a renowned educator and podcast host, John empowers thousands weekly, sharing his expertise in minimizing taxes and protecting against financial downturns.
Match Your Age to Your Goal
The right age to buy an annuity depends less on your birthday and more on what job you need the annuity to do. Some people use annuities earlier to help grow money with limits on risk, while others turn to them later to protect principal or reduce market stress as retirement approaches. For some, the priority isn’t income at all, but making sure a spouse or heirs are protected. The examples below show how different goals tend to line up with different age ranges.
Grow Money with Guardrails (Accumulation with Some Protection)
Best fit timing: often 45–70, especially 50s/60s
Why: you may have time to let the contract build value before turning it into income.
Protect Principal or Reduce Market Stress
Best fit timing: commonly late 50s to 70
Why: many people start valuing stability more as retirement approaches.
Legacy or Spouse Protection Planning
Best fit timing: varies widely
Why: design choices (period-certain, joint life, riders) matter as much as age.
Best Annuity Types by Life Stage
Different annuities “fit” at different ages because time horizon and risk tolerance change.
| Your stage | What often matters most | Annuity types that commonly match |
| Late 40s–50s | Growth runway + ability to recover from volatility | Variable annuity (for those who understand market risk/fees) and some fixed indexed annuities for capped upside with limits |
| 59–70 | “I’m close enough to retirement—I want predictability” | Fixed deferred annuity (guaranteed rate) and some indexed annuities depending on goals |
| 70–75 | Turn savings into income now; maximize payout per dollar | SPIA / immediate annuity often highlighted for retirement income starts |
These are patterns, not rules. Certified Financial Planner™ Matt Frankel emphasizes that it can make sense to buy earlier or later depending on goals and risk tolerance, and that a planner can help evaluate options.
Why Payouts Change With Age
Older age usually increases payout rates because insurers expect to pay for fewer years, but deferring income can also raise payments through growth.
- Payout Rate
- The income you receive relative to the premium you pay.
- Why It Rises With Age
- The insurer is pricing based on life expectancy and interest-rate assumptions, so starting later often means larger monthly checks.
A Simple Way To Think About It
A “Both Can Be True” Example With Real Numbers
Imagine two retirees, Linda (60) and Mark (70). Each has $100,000 earmarked for guaranteed retirement income.
Mark is 70 and wants income now. He uses his $100,000 to buy an immediate lifetime annuity. Because he’s starting income at 70, the insurer expects a shorter payout period.
- His monthly income might land in the range of $550–$650 per month, starting immediately.
Linda is 60 and doesn’t need income yet. She buys a deferred annuity at 60 and plans to turn income on at 70. Over those 10 years, her annuity grows through interest and compounding.
- By age 70, her contract value might grow to $135,000–$160,000, depending on rates and product features.
- When she starts lifetime income, her monthly payment could fall in a similar range — roughly $550–$700 per month.
What this shows:
- Mark’s income is higher now because he’s older.
- Linda’s income later can be just as strong — or stronger — because she combined time + growth + delayed income.
That’s why there isn’t one best age to buy an annuity. The better question is whether you benefit more from starting income sooner or letting your money grow before turning it on.
See How Much You Could Earn With Today’s Best Rates
Age Rules and Restrictions to Know
You can legally buy an annuity at 18, but for most young people it’s a poor fit. Annuities are designed to solve retirement problems — like turning savings into predictable income — not early-life needs like education, housing or career changes. Locking up money too early reduces flexibility and can lead to penalties if you need access.
The most important age to know is 59 ½. Withdrawals from a tax-deferred annuity before this age may trigger ordinary income taxes plus a 10% IRS penalty, making annuities impractical for people who might need the money sooner.
At the other end, insurers typically set maximum issue ages, often between 75 and 95, depending on the product. These limits exist because annuities are priced based on life expectancy and payout timelines.
18–30 | Maximum flexibility matters
Annuities rarely fit. Money is usually better kept accessible and adaptable.
30s–40s | Situational use
Annuities may work in narrow cases, but flexibility and growth often matter more.
50s–60s | Common planning window
Many people start using annuities to prepare for retirement income and manage risk.
70s+ | Income focus
Annuities are often used to convert savings into guaranteed income, subject to insurer age limits.
Frequently Asked Questions
Often in your 60s or 70s, when retirement income becomes a priority—but it depends on the annuity type and what you’re trying to solve.
If you’re young with high risk tolerance, need high liquidity, or already have enough guaranteed income (e.g., pension + Social Security covers essentials), you may prefer alternatives.
It’s a common range cited for starting income (especially immediate/lifetime income), because payouts can be more favorable at older ages. But it’s not universal.
