Should I turn some of my savings into an annuity when I stop working?

In United States

Annuities are optional. The SEC classifies them as immediate (income typically starts within a year) or deferred, and lists fixed, fixed indexed, registered index-linked and variable types; taking the money out early can mean surrender charges, taxes and tax penalties.

If an insurer fails, each state’s life and health insurance guaranty association covers annuities, within limits — check your own state’s association. Before buying an annuity, consider whether delaying Social Security gets you the same thing more cheaply: each year of delay past full retirement age adds 8%, up to 70, and the benefit rises with inflation.

In Canada

Annuities are optional, and an RRSP can be used to buy one by the end of the year you turn 71. Canada’s regulator describes life annuities (paid as long as you live, with optional joint-and-survivor payments) and term-certain annuities (paid for a set period). Your income depends on your age, sex, health, the amount, interest rates when you buy, the type and the provider — and once bought, the terms cannot be changed.

Canadian life insurers must belong to Assuris, which protects 100% of monthly annuity payments up to $5,000 and 90% of payments above that if an insurer fails. Delaying the CPP to 70 (up to 42% more) is a form of inflation-linked income worth comparing.

In United Kingdom

You do not have to buy an annuity. From a pension pot you can take cash, buy an annuity for life or a fixed term, or move it into flexi-access drawdown and take an adjustable income — and you do not have to buy your annuity from your own provider. Payouts reflect your age, sex, the pot, interest rates and sometimes your health, so a health condition can mean a higher rate.

If you are over 50, Pension Wise offers a free appointment about your options. Annuities from UK-regulated insurers count as long-term insurance, which the FSCS protects at 100% with no upper limit.

In Europe

There is no EU-wide rule on annuities. Whether part of a workplace or personal pension must be taken as an income, what annuities are available and how they are taxed are all decided nationally, and practice varies a great deal between countries.

The EU’s voluntary Pan-European Personal Pension Product sits alongside national schemes, and EIOPA keeps a register of each country’s rules for how a PEPP pays out. What to check locally: whether annuitisation is compulsory for any of your pensions, whether payments can rise with inflation, how the income is taxed, and what protection applies if the insurer fails.

In Australia

Annuities are optional and can be bought with super (once you meet a condition of release) or other savings, from a life insurer or friendly society. You choose a fixed number of years or the rest of your life; payments can rise by a fixed percentage or with inflation, or be investment-linked. Terms generally cannot be changed after the cooling-off period, and most cannot be cashed in.

The common alternative is an account-based pension, which is flexible but has no set lifetime. An annuity counts in the Age Pension income and assets tests, and Moneysmart notes that lifetime annuities can be treated more favourably. A Services Australia Financial Information Service officer can work out the effect for you.

In New Zealand

Nothing in New Zealand requires you to buy an annuity: KiwiSaver savings can be withdrawn in full at 65. For most people, NZ Super already provides a base income from 65 that does not depend on income or assets.

We could not find official New Zealand guidance on private lifetime annuities, so we do not describe the market here. If you are offered one, the questions in the general section above apply: whether it is for life, whether it rises with prices, whether it can be cashed in, and who stands behind it.

In Singapore

For most Singaporeans an annuity is the default, not a choice: CPF LIFE pays monthly for life from your own CPF savings, and citizens and permanent residents born in 1958 or later with at least $60,000 in retirement savings are included automatically.

• Escalating Plan — starts lower and rises 2% a year for life.
• Standard Plan — level monthly payouts.
• Basic Plan — starts low and falls once your CPF balances drop below $60,000.

Deferring to 70 raises payouts by up to 7% for each year. Any premium balance left when you die goes to your loved ones with your other CPF savings.

In Hong Kong

Annuities are optional. The HKMC Annuity Plan, from a company wholly owned by the Government through the HKMC, is open to Hong Kong permanent residents aged 60 or above, with a single premium from HK$50,000 a policy up to HK$5,000,000 per insured person, and pays a fixed monthly amount for life. It allows one withdrawal in your lifetime of up to the remaining premium balance, capped at HK$1,000,000, for medical-related expenses.

Premiums for qualifying deferred annuity policies share a tax-deduction cap of $60,000 a year with MPF tax-deductible voluntary contributions. MPF itself can be taken in instalments from 65 rather than bought as an annuity.

In Japan

Japan’s public pension already works as a lifetime annuity: once payments start, the rate you chose stays for the rest of your life, and delaying from 65 up to 75 raises it to as much as 184% of the age-65 amount.

iDeCo savings must be claimed before 75, either as a lump sum or as an annuity paid over 5 to 20 years — a fixed term, not for life. We could not find an official regulator guide to private lifetime annuities in Japan, so we say no more about them here; the questions in the general section above apply to any you are offered.

In India

In India, buying an annuity can be compulsory. Under the NPS exit rules as amended in December 2025, a non-government subscriber at normal exit must use at least 20% of the corpus to buy an annuity (previously 40%), and can take up to 80% as a lump sum. Government-sector subscribers still annuitise at least 40%. In both sectors a corpus of ₹8 lakh or less can be taken whole, and one of ₹8 lakh to ₹12 lakh can avoid an annuity by taking up to ₹6 lakh as a lump sum and the rest in instalments over at least six years. Exiting NPS early requires at least 80% to be annuitised unless the corpus is ₹5 lakh or less.

A level annuity loses buying power every year prices rise, so check whether any increasing option is offered, and compare the income with what the same money could provide if invested.

In Malaysia

Malaysia does not require you to buy an annuity. At 55 your EPF savings merge into Akaun 55, which you can withdraw in full, in part, or as monthly payments of at least RM100 a month; at 60, savings can again be taken as a lump sum or monthly.

Monthly EPF payments last only as long as the balance does — they are a drawdown, not income for life. We could not find official Malaysian guidance on private lifetime annuities, so we say no more about them; the general questions above apply to any you are offered.