What is a Deferred Income Annuity?

As you’re learning about options for your retirement, know that New York Life Insurance and Annuity Corporation is here to help.


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Have you ever wished you could draw an additional income check that comes every month for the rest of your life, like social security? Deferred income annuities can make that wish a reality. Fixed deferred income annuities offer a fixed amount of money every month. The funds used to purchase the annuity are turned into a stream of income payments for life, similar to a pension.*

Once your income payments start, your checks are guaranteed to keep coming, no matter how long you live, even if you end up collecting far more than you put into the annuity.

Sound good? Here are some facts about deferred income annuities to help you decide if this option is right for you:

The longer you wait to start your income, the higher your payments will be

As the name suggests, with this type of annuity you put off (or defer) taking income payments from the annuity for a set period of time that you choose. The longer you wait to receive income, the larger your monthly payments will be.

You can add more money over time to increase your future income

With deferred income annuities, you can add more money to your annuity over time, which in turn increases your future monthly check. In most cases, you can add money as often as you like up until a couple years before your future income payments begin.

Once you start receiving payments, the amount will stay the same for the rest of your life

Unlike retirement savings options that are tied to interest rates or market fluctuations, fixed deferred income annuities have a guaranteed payout rate, determined by a number of factors (see below for more details). What does this mean for you? It means that you’ll receive a set, predictable amount every month for the rest of your life, which can help you budget for fixed expenses – freeing up the rest of your savings for unexpected expenses, travel, spoiling your grandkids, or whatever else you like.

One of the most important things to understand about deferred income annuities is how your monthly payout amount is determined. The amount you’ll receive is based on a number of factors, such as:

  • The total amount you put into the annuity
  • Your age when you make the purchase
  • The date you choose to start receiving income
  • The type of deferred income annuity you choose
  • Your gender
  • Interest rates at the time of purchase

What else you should know about deferred income annuities

Once you’ve made the decision to purchase an annuity, you can receive a personal income quote to find out how much guaranteed income you could receive in the future.

The bottom line is that deferred income annuities can make a lot of sense if you are currently saving for retirement and don’t need to receive payments right away. And down the road, you’ll have a guaranteed source of retirement income to help you pay bills and maintain your standard of living, no matter how long you live.

Learn more about annuities in the New York Life Learning Center, or call 1-800-313-6841 to have your questions answered by a knowledgeable representative.

If you have questions, New York Life is here to help.


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