Annuity Age Restriction - How Young Is Too Young
What Other Agents Won’t Tell You About Annuity Age Restrictions
Don’t fall for the annuity industry’s generalized advice. Let me explain what information you need to make the best decision for your specific situation.
What is the minimum age for an annuity?
It depends on the type of annuity you're looking to buy and what you want it to do. Annuities are all customizable. For a lot of annuities, most carriers don't issue policies until you're around age 40. Even then, I'm not sure you should be buying an index annuity or a multi-year guaranteed, etc. Single premium immediate annuities, which is the original pension type of annuity, can pretty much be issued at any age. In my opinion, annuities should be looked at by people around their fifties going toward retirement or in retirement. There are exceptions to that rule. Variable annuities and index annuities have some minimum ages that are, in my opinion, still too low. Forget what most agents will allow you to do. Up until planning for retirement, you're young enough to accept risk, understand it, and get the growth needed for your portfolio.
Can you get an annuity at 55 years old?
You can get an annuity at 55, but not everyone needs one. The question begs, how do I determine if I need one at age 55? It comes down to two questions. What do I want the money to contractually do, and when do I want those contractual guarantees to start? From those two answers, we can determine the type of annuity, if any, that you need.
Then the other thing that I use is an acronym called PILLS. P stands for principal protection. I stand for income for life, L stands for legacy, and the other L stands for long-term care. If you do not need to solve for one of those four, you do not need an annuity. Even though most agents out there will tell you to buy for market growth, do not do that. Buy annuities for what they will do, not what they might do. Focus on the contractual guarantees.
Are annuities a good investment for the elderly?
Maybe. I'm not sure that every person in their golden years or retirement needs an annuity. Too often, elderly senior citizens get targeted by annuity people because they have money, trust people, and it's an easy sell.
Most elderly love their Social Security payments, and I don’t blame them because Social Security is the best inflation annuity on the planet that solves for lifetime income& for longevity risk. So in a lot of cases, the elderly are looking for an additional income stream that compliments and adds to that Social Security payment or pension payment. To do this, we will reverse-engineer a quote solving for the specific dollar amount that you need to live life. We do this by using a single premium immediate annuity but only using the amount of money needed to solve for that contractual guarantee.
There are excellent principal protection products for senior citizens and the elderly, like a multi-year guarantee annuity. It’s similar to a CD because it protects the principal and provides an annual interest rate. So an annuity can be a good investment for the elderly if they're solving for a specific contractual guarantee that's needed.
My staff and I at theannuityman.com can help you navigate the risks and decide if planning for an annuity early in your life expectancy will benefit you and your retirement plan.