Overview
- New guidance highlights fixed immediate annuities and multi‑year guarantee annuities as practical tools to generate guaranteed income before benefits begin.
- An example cited shows a 63‑year‑old investing $200,000 in a seven‑year immediate annuity receiving about $2,776.77 per month until age 70, with most of each payment treated as return of principal.
- A seven‑year MYGA alternative can pay up to roughly 5.75% interest, producing about $11,500 in annual taxable income on $200,000 while preserving principal and typically allowing limited penalty‑free withdrawals.
- Delaying claiming increases monthly payments by about 24% from age 67 to 70 and roughly 77% from 62 to 70, with break‑even estimates commonly in the late 70s to early 80s depending on health and longevity.
- Experts note that early retirement does not automatically shrink future benefits if a worker already has 35 years of strong earnings, and they urge buyers to check insurer financial strength and liquidity terms because annuities are not FDIC‑insured.