facebookWhen is best time to buy annuities for retirement income? At young age (<40), it is better to invest for higher gains. Is it better to do it around age 45 as guaranteed return is only about 2.5%? - Seedly

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Anonymous

15 Jul 2020

Retirement

When is best time to buy annuities for retirement income? At young age (<40), it is better to invest for higher gains. Is it better to do it around age 45 as guaranteed return is only about 2.5%?

At older age also less risk should be taken and new savings can channel from investing towards annuities.

Discussion (3)

What are your thoughts?

Pang Zhe Liang

Pang Zhe Liang

15 Jul 2020

Level 14·Senior Financial Services Consultant at AIA Singapore Private Limited

As always, the earlier the better. This is because we have the power to make use of compound interest to work for us. Generally, this means that we can reach the same goal with a lesser capital outlay, due to a longer accumulation time period.

More Details:

What is Compound Interest

Moreover, it is always good to have a balanced portfolio. At the end of the day, investment yields only non-guaranteed returns. Therefore, a guaranteed step-up annuity will become a strong cushion for you to fall back on.

I share quality content on estate planning and financial planning here.

The value of annuities is in the guaranteed cash flow.

Any time is good to buy for retirement.

To achieve the same level of retirement payout, starting later will definitely cost more than if you start earlier.

I get where you are coming from too, from a time value of money perspective.

There is no right or wrong. You will need to weigh against the risk you are undertaking in investments, while factoring in the opportunity cost of using the funds for investment or annuities.​​​

Hariz Arthur Maloy

Hariz Arthur Maloy

14 Jul 2020

Level 15·Independent Financial Advisor at Promiseland Independent

Hi Anon,

Annuities are great to provide for income and capital preservation. So that isn't an age s...

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