Is it better to buy a life annuity now, or wait till age 62?

Dear Mr Tan,

I like to seek your advice if it is better for us to purchase annuity at 55-year (with deferred payment till 62) or at 62-year old with the following amounts:

1. Female:
Available fund at 55 = $115,000
Available fund at 62 = $150,000

2. Male:
Available fund at 55 = $120,000
Available fund at 62 = $160,000

In addition, we wonder what is the difference between Income's Classic Annuity and Guranteed Life Annuity Plans?

N

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Dear N

I think that it is better to invest in the annuity now, rather than wait for age 62. Based on our current rate of bonus, you will get a slightly higher payout at age 62, if you buy the annuity earlier. (But, I must mention that the bonus rate depend on future investment return, and is not guaranteed.

You can read about the annuity from this FAQ:

http://www.income.coop/insurance/glannuity/faq-lifeannuity.asp
Life Annuity

The Classic annuity is designed specifically for CPF minimum sum. You are only allowed to withdraw your money from age 62.

The Guaranteed Life Annuity can be taken at any time, and the payment commences immediately.

Tan Kin Lian