Buying an annuity early can significantly boost your retirement income. Discover how a 5-year head start can increase guaranteed payouts by over 40%.
Why Buying an Annuity at Age 60 Might Be a Smarter Move
Many people consider buying annuities right at retirement—around age 65. Typically, this provides about a 7.2% effective withdrawal rate from the purchase amount.
But what if you locked in that annuity at age 60 instead? With 5 years of deferral, the same premium could generate over 40% more income annually—guaranteed for life.
Case Study: $1M Purchase at Age 60
Let’s say a 60-year-old male purchases the Athene Ascent Pro 10 Bonus Annuity with $1,000,000 and defers income until age 65. According to current product rates (as of 2025):
- 💰 Initial Premium: $1,000,000
- ➕ 20% Income Base Bonus: $200,000
- 📈 10% annual compound growth on Income Base over 5 years: $500,000
- 📊 Final Income Base: $1,700,000
- 📉 Payout Rate at 65: 6.15%
👉 Annual Lifetime Income = $1,700,000 × 6.15% = $104,550 (guaranteed for life)
What If You Wait Until Age 65 to Buy?
If you waited until 65 to purchase a similar annuity, and you wanted the same $104,550/year, you’d need approximately $1,440,000 upfront. That's a 44% higher investment for the same income.
| Scenario | Purchase Age | Start Age | Required Investment | Annual Income |
|---|---|---|---|---|
| Immediate Income | 65 | 65 | $1,440,000 | $104,550 |
| 5-Year Deferral | 60 | 65 | $1,000,000 | $104,550 |
What About Other Deferral Periods?
The longer you defer annuity income, the more your income base can grow. However, the payout percentage may slightly decrease with age. Here’s a comparison of deferral strategies:
| Deferral Years | Total Income Base | Estimated Payout % | Annual Guaranteed Income |
|---|---|---|---|
| 0 years (Immediate) | $1,000,000 | 7.2% | $72,000 |
| 5 years | $1,700,000 | 6.15% | $104,550 |
| 10 years | $2,200,000 | 5.9% | $129,800 |
📌 Insight: Deferral grows the income base significantly, but payout percentages slightly decline with age. The earlier you start, the more you can benefit from compounding.
What If You Die Early? (Death Benefit)
This product includes a death benefit. If you pass away before receiving the full income equivalent to your principal, the remaining balance is paid to your beneficiary.
- Example: You receive $500,000 in income and pass away → Your heirs receive at least $500,000 more
- Guaranteed return of original premium
What About the Long-Term Care Benefit?
This annuity includes an Annual Enhanced Income Benefit—a feature that doubles income if you qualify for long-term care (LTC).
However, this only works if the Account Value (cash value) is not depleted. Since many annuities deplete by your 80s, this benefit may not be available when needed.
💡 Conclusion: Don't rely solely on this feature for LTC planning. Consider a separate LTC policy.
Key Takeaways
- ✅ Buying annuities early (age 60) locks in growth and bonuses
- ✅ Deferral periods boost income base and total lifetime income
- ✅ Death benefit offers peace of mind for heirs
- ⚠ Long-term care features are limited by account depletion risks
