Hmm...honestly I don't quite remember, I think it was either 65 or 75? I actually wasn't that young either, I was in my 40s but to them that was still too young.
Generally, annuities can be purchased at any age if there is a need for it. Structured settlements for children is an example. The type of annuity would matter as the judge would be in charge of making sure the appropriate annuity is needed
Most companies would rather you wait until at least the age of 50. Most will sell at age 45. There are a variety of annuities:
1. Straight annuities - money is held in the general account of the company and generally receives a low interest rate.
2. Variable annuities (VA) - money is held in a separate account and cannot be used to pay the company's liabilities. The money is invested in "Investment" funds that work like mutual funds. The difference is that with mutual funds, you are the shareholder of the stocks of the funds. The VA Investment funds stocks are owned by the insurance company. Also, dividends are generally not passed back to your accounts in VAs but are in Mutual funds.
3. Indexed annuities (IA) - The separate account investment is based on the growth and value of an index like the S&P500 index. With these, you may receive all or a portion of the growth. There are also caps to how much they grow too as well.
4. Hybrid annuities - A mix of a VA and an IA.
5. What is the best for you would depend upon if you wanted immediate income or as an investment leading up to taking income out during retirement.
6. There are benefits as well that you may purchase - Guaranteed life time income, death benefit, other benefits. Benefits all cost an additional fee.
Your VA's often will have annual fees between 3% and 4.5%. But, if you want a guaranteed income, the fee really won't matter in the long run. Be aware that there are surrender charges in the first few years if you take money out early. And, there are commissions paid to the agents which are more than they receive for mutual funds. The difference with the commissions is that a mutual fund front load has break points meaning the more you invest the lower the commission fee (load) will be. For a million dollars, the fee would be 1%. For annuities, they are no front loads meaning all you invest goes into the investment. The agent still is paid up front and much more than with mutual funds. For a million dollar annuity, the agent may still be paid up front $3% or more. If you take the money out early, the surrender charge will cover the commissions for the insurance company.
If you are in California, I can be of an assistance as I've been doing this for 40 years. Any specific questions?
