Immediate vs deferred: when should your income start?

When you buy a pension annuity, you choose when the checks begin. Start now (immediate) or later (deferred). It's a simple choice with a real trade-off, and the right answer depends on when you actually need the income.

Immediate: income starting now

An immediate annuity (SPIA) begins paying within about a month of your deposit. It's the choice if you're retired or retiring soon and need the paycheck now. The check is what it is today — no waiting, no growth phase.

Deferred: a bigger check later

A deferred income annuity lets the money grow for a set number of years before payments start. Because the insurer holds and invests it longer — and pays for fewer years once income begins — the eventual check is larger. It's the choice if you don't need the income for, say, five or ten years and want to lock in a higher future payout now.

How to choose

The question is simply: when do you need the money? Need it now → immediate. Have other income covering you for a while → deferring can meaningfully raise the check. Many people even blend the two: an immediate annuity for today's bills and a deferred one that kicks in later to offset inflation. The calculator lets you slide the income-start date and watch the number change, so you can see the trade-off for your own situation.