Best Annuity for a 70-Year-Old (2026): Honest Analysis
Written & reviewed by Hans Goldstein, EA, Independent Licensed Insurance Producer · CA license 4273294 · NPN 20602398Admitted to practice before the IRS
Independently reviewed & last reviewed 2026-10-07
Short answer
What is the best annuity for a 70-year-old?
For most 70-year-olds it is one of two plain products. A 3- to 5-year MYGA if you want a fixed rate and access to the money by your mid-70s (A-rated 5-year MYGAs paid about 5.50% to 6.05% on October 14, 2026, per public carrier rate sheets).
An immediate annuity (SPIA) if you want the most guaranteed lifetime income per dollar, which rises with age because payments are priced on a shorter life expectancy.
Avoid long-surrender indexed or variable annuities with income riders at 70: the fees and the penalty period run too long against the time you have. Keep emergency and care money out of any annuity. Guarantees are backed by the claims-paying ability of the issuing insurer.
Quick take: At 70, the math favors SPIAs more aggressively (mortality credit kicks in), shorter-surrender MYGAs (avoid lockup past 80), and avoiding long-deferral income riders (rider fees compound too long against you). Specifics below.
Rates expire like milk.
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CD vs MYGA, after tax
What $100,000 earns in 5 years: CD vs MYGA, after tax
Rates used: CD 5.00%, the top nationally available 5-year CD (Bankrate, October 14, 2026); change it to the rate you are offered. MYGA 5.95%, the best A-rated rate we track as of October 13, 2026: Delaware Life Pinnacle Plus 5-year (AM Best A-, negative outlook, 7/31/2026), $100,000 and up, effective October 6, 2026 (Delaware Life rate sheet).
| CD, interest taxed every year | $121,081 |
|---|---|
| MYGA, tax-deferred, before tax | $133,507 |
| MYGA after paying tax on all the interest at withdrawal | $126,136 |
| Tax deferral alone adds about | $674 |
| MYGA ahead of the CD, after tax | $5,055 |
Assumes 22% federal and 0% state income tax, no withdrawals, rates held for the whole term. MYGA interest is taxed as ordinary income when you withdraw it, not as capital gains. Gains taken before age 59 1/2 can owe a 10% IRS penalty, and cashing out early can cost a surrender charge.
In an IRA both grow tax-deferred, so the edge there is the rate alone. Bank and credit union deposits are FDIC or NCUA insured up to the limits; a MYGA is backed by the issuing insurer's claims-paying ability and your state's guaranty association up to its limits, not the FDIC. General education, not tax, legal or financial advice.
Why 70 changes the calculus
- Social Security is maxed: no benefit to deferring further; you should already be claiming (or claim now)
- RMDs hit in 3 years (at 73): any IRA-funded annuity needs RMD-friendly liquidity
- Life expectancy at 70 male = 15 yrs; female = 18 yrs; couple = 22+ yrs (one spouse alive)
- SPIA payout factors jump: every year after 65, mortality credit increases dramatically. A 70M SPIA pays ~7.5% of premium vs 6.0% at 65.
Strategy 1: SPIA for guaranteed income (best math at 70+)
Why this wins: The "mortality credit" (the math advantage from pooling longevity risk) increases sharply after 70. A 70-year-old SPIA buyer captures significantly more lifetime income per dollar than a 65-year-old.
Example math:
• $200K SPIA, 70-year-old male, life-only → ~$15,300/year for life
• $200K SPIA, 65-year-old male, life-only → ~$11,400/year for life
• 5-year delay = $3,900/year more in lifetime income (a 34% increase)
Top picks for SPIA at 70:
• EquiTrust SPIA: top payout factor (B++)
• Mutual of Omaha SPIA: A+ rating, conservative carrier
• Penn Mutual SPIA: A+ mutual, transparent
Variants to consider at 70:
- Period certain (10 or 20 years): guarantees minimum payout to heirs if you die early
- Cash refund: heirs receive remaining principal if you die before recovering it
- Joint life (couples only): payout continues at 100% or 50% to surviving spouse
Strategy 2: Short-surrender MYGA ladder (avoid lockup past 80)
Why: At 70, locking money in a 10-year MYGA means age 80 before exit. That's a long time to be illiquid. Stick with 3-5 year MYGAs.
Example allocation for $300K:
• $100K → Oxford Multi-Select 4 (A, 5.25%, 4-yr, exits at 74)
• $100K → Aspida WealthLock 5 (A-, 5.75%, 5-yr, exits at 75)
• $100K → Delaware Life Pinnacle 5 (A-, 5.55%, 5-yr, exits at 75)
Result: All money accessible by age 75, A/A- ratings, blended yield ~5.55%.
Important MYGA decision at 70: RMD planning
If MYGA is IRA-funded, you need to take RMD starting at 73. Make sure the MYGA offers either:
• 10%/yr free withdrawal (most A-rated MYGAs) → can fund RMD without surrender penalty
• Interest-only free withdrawal → also works for RMD
Avoid 0%/0% free-withdrawal MYGAs (Wichita, Farmers, Revol One base) for IRA money at 70+. You'll pay surrender charges to take RMDs.
Strategy 3: QLAC for deferred income (defer RMDs to 85)
What it is: A Qualified Longevity Annuity Contract (QLAC) is a deferred income annuity bought INSIDE an IRA. It defers the RMD on that portion of your IRA until age 85.
Why it matters at 70: You can put up to $200,000 of IRA money into a QLAC (2024 limit, indexed), defer all RMDs on that portion, and start receiving income at age 85 with longevity-credit boosted payouts.
Example math:
• 70-year-old man, $200K QLAC, defer income to 85
• Monthly income at 85: ~$3,800/month for life ($45,600/year)
• Lifetime payout if you live to 95: ~$456,000 on $200K input
Top picks for QLAC:
• Mutual of Omaha QLAC
• New York Life QLAC
• MassMutual QLAC
When QLAC makes sense:
- You don't need that $200K of IRA money for 15 years
- You have other money to cover Years 70-85
- You want to maximize the longevity insurance hedge
- You want to reduce RMD pressure starting at 73
What 70-year-olds should AVOID
❌ 10-year deferred income riders
At 70, deferring income to 80 with a rider fee of 1.05%/yr compounds against you for 10 years. The rider math usually wins for younger buyers (50-65); at 70+ the breakeven extends too long.
❌ Long-surrender bonus products
A 14-year surrender at 70 means age 84 before exit. Don't do it.
❌ Variable annuities with M&E fees
2-3%/yr fees eat your savings. At 70 with a 15-year horizon, that's 30-45% of your money to fees alone.
❌ Putting Social Security check directly into an annuity
SS is already an annuity. Don't double up unless you're truly trying to defer cash flow.
What about hybrid life + LTC?
At 70, hybrid life+LTC is harder to get (underwriting tightens at 70+) and more expensive. If you've been considering it, do it by 65. After 70, the math typically favors traditional LTC or self-funding.
If you are closer to 75
The same three tools work at 75, with tighter limits.
- Cap the term at 3-5 years. A 4- or 5-year MYGA bought at 75 exits at 79-80. Skip 7- and 10-year MYGAs, fixed indexed annuities with 10-year surrender schedules (exit at 85+), long-surrender bonus products and income riders deferred 10+ years. Some indexed annuities stop issuing at 75 or 80 anyway.
- RMDs are already running, so check the free-withdrawal clause. The Uniform Lifetime divisor is 24.6 at 75, 23.7 at 76, 22.9 at 77, 22.0 at 78 and 21.1 at 79 (IRS Publication 590-B, Table III). That is an RMD of 4.07% of the prior year-end balance at 75, rising to 4.74% at 79. On a $200,000 IRA MYGA, the age-75 RMD is $200,000 / 24.6 = $8,130. A contract with a 5% yearly free withdrawal covers that through 79; 10% covers it with room to spare. A MYGA with no free withdrawal forces a surrender charge to take the RMD.
- SPIA income per dollar is higher than at 70 because payments are priced on a shorter life expectancy. If income is the job, 75 is where a SPIA usually beats a bond or MYGA ladder by the widest margin. Quote life-only, cash refund and 10-year certain side by side; the refund and certain options pay less in exchange for money to heirs.
- A QLAC still fits if you will not need part of the IRA until 85: buying at 75 is a 10-year deferral, and that money is left out of the RMD math until income starts.
The big decision at 70
The single biggest question: do you want guaranteed income for the rest of your life (SPIA / QLAC) or principal preservation with flexibility (MYGA ladder)?
There's no wrong answer, but you should know which one your money is solving for. Most 70-year-olds end up doing 60% income-focused / 40% principal-focused, but the right mix depends on your other income sources and risk tolerance.
213-414-2808 for an analysis tailored to your savings, current income sources, and family situation.
About Hans Goldstein: Independent retirement income specialist. CA Life License #4273294. NPN #20602398. Reviews 30+ carriers. Phone: 213-414-2808. Email: [email protected].
Goldstein Complexity Index
Every annuity I review gets a complexity score from 0 to 100. Higher means harder to understand. Complexity is where buyers get hurt: riders they didn't know they were paying for, surrender charges that surprise them, and income "benefit bases" they took for cash. SPIAs and MYGAs score low. Products that stack a bonus, an income rider, an MVA and several crediting options score high.
This product's score: 8/100, Grade A+ (Transparent)
Easy to understand. Few moving parts. The buyer can fully explain the product to a friend after one read of the contract.
Score breakdown
| Dimension | Score (1-10) | What this measures |
|---|---|---|
| Riders | 1/10 | How many riders, optional or built in (income, death benefit, LTC). Each one adds cost and one more thing to understand. |
| Crediting strategies | 1/10 | How many index options (cap, spread, participation rate, step rate, volatility-controlled indices). More choices are harder to follow. |
| Surrender complexity | 1/10 | Length of the surrender period, plus any MVA and bonus recapture. The longer and more layered it is, the harder it is to know what leaving early costs. |
| Benefit-base separation | 1/10 | Whether there is a separate income base ("PIV") that is not cash but looks like it. This causes more buyer confusion than anything else. |
| Bonus structure | 1/10 | A premium bonus with a recapture schedule. The bonus is real, but you can lose part of it if you leave early. |
How to read this
- A+/A (0-40): Easy to understand. A pure accumulation FIA, a MYGA or a SPIA. Little room for mis-selling.
- B (41-60): Read the contract carefully and get a second opinion before signing. Income riders cause most of the confusion.
- C (61-80): Many owners don't fully understand what they bought. Common mis-sells: a bonus presented as cash, a benefit base presented as account value, surrender charges glossed over.
- D (81-100): Get an independent second opinion before signing. The product may still fit you, but the odds you later say "I didn't know it worked that way" are high.
Why it matters: nobody gets sued for selling a complicated product, but buyers regret them all the time. An annuity that wins your money in year one and confuses you for the next 14 is worse than a simpler one you understood from the start. Simple products are easier to check.
Renewal rate risk: FIA caps can change after year one
The cap you are quoted on a fixed indexed annuity is not locked like a mortgage rate. It covers the first crediting period, usually one year. At each contract anniversary the carrier can reset it anywhere above the contract minimum.
It works much like a high-yield savings rate: the bank can lower that next month, and the carrier can lower your cap next year. The reason is how caps are funded. The carrier puts most of your premium in bonds and uses part of the yield to buy index options.
When bond yields fall, that option budget shrinks and caps get cut. Caps were cut across the industry in the 2010-2021 low-rate years and came back after 2022.
The minimum cap is the only guarantee
Every FIA states a minimum guaranteed cap in the contract. Of the 99 FIAs we found that publish one, 86 let the insurer cut the cap to 1% or less, and some go as low as 0.25%. A few set 2% to 3%, and several insurers publish no number at all (FIA minimum cap data, checked October 4, 2026). Read that number before you sign.
Questions to ask before you buy
- "What is the minimum guaranteed cap in this contract?"
- "Can you show me this product's in-force renewal-rate history for the last 5 years?"
- "What cap are contracts sold in 2020, 2018 and 2015 getting today?"
- "If the cap drops to the minimum, what would I realistically earn each year?"
If the agent can't answer questions 2 and 3 with documents, you don't have enough information to buy yet.
Annuities in plain terms
An annuity is an insurance contract. You pay a premium, in one lump sum or over time, and get one of three things back:
- Lifetime income (SPIA: pay once, get a check every month for life)
- Tax-deferred growth with downside protection (FIA: index-linked interest with a cap and a 0% floor)
- A fixed rate for a set term (MYGA: works like a CD, with the tax deferred)
The carrier pays for these out of its bond portfolio and, for FIAs, an option budget that buys the index-linked credit.
Every annuity trades liquidity and growth for certainty. A SPIA gives the most certainty (income for life), but you give up access to the principal. An FIA protects the downside but caps the growth. A MYGA locks the rate but ties up the money for the term.
Quick FAQ
Q: Are annuities ever "good investments"?
A: Yes, when used for what they do well: income certainty, downside protection or a locked rate. They go wrong when sold for something else, like a SPIA pitched for "growth."
Q: What's the difference between immediate and deferred annuities?
A: An immediate annuity (SPIA) starts paying within 12 months of purchase. A deferred annuity grows for years before payments begin.
Q: Who regulates annuities?
A: State insurance commissioners. (RILAs are also FINRA-regulated as securities.)
Q: What's the state guaranty fund limit?
A: Usually $250,000 to $300,000 per owner per carrier, depending on the state. Splitting a large purchase across carriers keeps each piece inside the limit.
Q: How do I compare annuities side-by-side?
A: Compare the carrier's ratings (AM Best, S&P, Moody's, Fitch, Weiss, KBRA composite), the Goldstein Complexity Index, the carrier's renewal-rate record, its service, and how the structure fits what you need the money to do.
Q: When should I get a second opinion?
A: Before you sign any annuity over $50,000. An independent review costs nothing and can save you thousands.
Get a second opinion before you sign
Talk to Hans Goldstein, a licensed independent insurance producer.
A fixed indexed annuity ties up your money for 7 to 15 years. Cap rates renew annually and can drop. Income riders have separate benefit bases that aren't cash. Get an independent review before you commit your retirement savings to a multi-year contract.
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Rather talk it through? Or book 15 minutes on Hans’s calendar, or call 213-414-2808.
Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
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Disclosure
This review is based on the carrier's public product materials and rates as of the date shown above. Annuity rates, caps, participation rates, payout factors, crediting methods, and long-term care benefit structures change often, sometimes monthly. Confirm current figures in the latest carrier disclosure and the contract before you buy. This is general education, not a personal recommendation or an offer of any product. Hans Goldstein is an independent licensed insurance producer (CA license 4273294, NPN 20602398) appointed with several A-rated carriers. His appointment with the carrier reviewed here may vary, and this review is not an endorsement. No carrier paid for this review. Always read the actual contract and consult a licensed advisor before purchasing any annuity or long-term care insurance product. Past index performance does not predict future credited interest. Annuities and hybrid life+LTC policies are long-term contracts with surrender charges; they are not suitable for funds you may need before the end of the surrender period. AM Best ratings and tax treatment are subject to change. Tax discussion of IRC §7702B, §1035, and the Pension Protection Act of 2006 reflects law as of 2026 and is subject to change.