The Pros and Cons of Buying an Annuity in Your 70s

June 18, 2025 | Kathy Ingulsrud

What Is an Annuity?

An annuity is a legal agreement between a life insurance company and the contract holder. It can only be issued by a licensed life insurance company and sold by a licensed life agent.

Types of Annuities to Consider in Your 70s

If you are getting an annuity in your 70's you are likely wanting the funds immediately or in the near future. There are several types of annuities to consider to achieve your financial goals.

Immediate Annuities

These begin paying out shortly after you make a lump-sum payment. They’re ideal if you want a set payment amount to start right away and prefer a predictable stream of payments. This type of annuity takes what you saved and pays you kind of like a paycheck.

Deferred Annuities

These delay payouts until a future date, allowing your money to grow tax-deferred in the meantime. They may be useful if you don’t need the money right away but want to plan ahead. This type of annuity is also helpful in a similar way to how an immediate annuity provides the feel of a paycheck.

Fixed vs. Variable Annuities

Fixed annuities offer guaranteed interest rates and predictable payout. Variable annuities fluctuate based on market performance and come with more risk and potential reward.

MYGAs (Multi-Year Guaranteed Annuities)

MYGAs are a type of fixed and often deferred annuity. With a guaranteed interest rate for a set period, they are often considered appealing for their simplicity, lack of fees, stability in payout, and CD-like structure without market exposure.

Pros of Buying an Annuity in Your 70s

Annuities can offer peace of mind in retirement, especially for those seeking stability and less financial guesswork. Here are a few key benefits:

Guaranteed payout amount
Protection from market volatility
Simpler financial planning
Tax-deferred growth
Customizable payout options
Options like MYGAs can be low-maintenance

Cons and Considerations of Annuities

While annuities can offer stability, they aren’t the right fit for everyone. Here are a few things to keep in mind:

Less liquidity (your money is tied up)
Potential fees or surrender charges
May not be suitable for those with limited life expectancy (unless you have designated beneficiaries)
There could be inflation risk with fixed payouts depending on which annuity type you choose

Learn about the Mistakes to Avoid When Buying an Annuity

Are Annuities Right for You?

Now that you have a better understanding of how annuities work, along with their benefits and potential downsides, you’re probably trying to figure out if one is the right fit for you. Before deciding to buy an annuity, it’s important to ask yourself a few key questions:

Do I want guaranteed payouts to supplement my retirement savings?
Do I have other assets or income sources that could meet my financial needs?
Am I comfortable with the lack of liquidity, or do I need access to my funds in the short term?

These are just some of the questions to consider when purchasing an annuity. It’s always a good idea to talk to a professional who can assess your unique situation and help guide your decision.

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Get Help Deciding if an Annuity Is Right for You

Buying an annuity in your 70s isn’t a one-size-fits-all decision. It’s important to weigh your options and consider what works best for your current and future financial goals. For those wanting stability and simplicity, products like MYGAs can offer a reliable and straightforward solution. However, each person's situation is unique, and what works for one individual might not be right for another.

If you’d like to discuss whether an annuity, such as a MYGA, is the right choice for you, reach out to talk to our team at Twin City Underwriters. We’re here to help guide you through your options and make the best decision for your future.

At Twin City Underwriters, we know that individualized attention to a client’s personal situation and needs are especially important, which is why we take the time to understand you and your financial goals. Contact us to schedule an appointment with one of our experienced insurance agents.

Are you ready to have a meaningful discussion about your financial needs? Call or email TCU today to set up a free, no-obligation appointment with one of our dedicated agents.

Call Twin City Underwriters to learn more: 651-488-0172 or 800-507-6778.