Could buying an annuity actually help you live longer? A large new study says the answer may be yes. Researchers who tracked roughly 600,000 retirees found that those who converted their savings into guaranteed lifetime income died at measurably lower rates than those who managed their own withdrawals, and the gap grew wider over time.
The finding does not prove that an annuity is right for everyone. But it adds a striking new dimension to a decision most retirees treat as purely financial: the way you turn savings into income may affect not just how long your money lasts, but how long you do.
- A 2026 National Bureau of Economic Research working paper, “The Effect of Annuities on Longevity,” found annuity owners had roughly 2.5% lower mortality at five years and 3.6% lower at ten years than retirees using market-based withdrawals.
- The study followed about 600,000 Chilean retirees from 2004 to 2022, using a retirement system that forces nearly every worker to choose between an annuity and phased withdrawals.
- Researchers attribute the longevity edge to reduced financial stress and steadier income, which appears to support better mental well-being and more consistent spending on health.
- The results reflect a specific system and do not mean an annuity is the right move for every retiree. Liquidity, inflation, and your own health and pension picture still matter.
- In the U.S., the same guaranteed-income effect is available through products like a SPIA, a deferred income annuity, or a QLAC.
What the Study Actually Found
The research comes from economists Borja Larrain of the Pontifical Catholic University of Chile, Alessandro Previtero of Indiana University’s Kelley School of Business, and Felipe Severino of Dartmouth’s Tuck School of Business. Their paper, circulated by the National Bureau of Economic Research in 2026, analyzed administrative payout records for approximately 600,000 Chilean retirees between 2004 and 2022.
Over a five-year window, retirees who had annuitized were about 2.5% less likely to die than those who chose programmed withdrawals. Over ten years, that mortality gap widened to roughly 3.6%. In other words, the longer researchers watched, the larger the survival advantage for annuity owners became.
What makes the Chilean data unusual is the design of the country’s pension system. When workers retire, they are generally required to choose between two options: a lifetime annuity from an insurer, or a phased-withdrawal plan that pays out of an invested account and fluctuates with markets. Because almost everyone has to make the same either-or decision, researchers could compare two large, similar groups that differ mainly in how they receive their income.
Why Guaranteed Income Might Extend Life
The study cannot run a controlled medical experiment, but the authors point to a consistent theme: the annuity group was shielded from income volatility. A retiree drawing from an invested account watches their balance rise and fall, and every downturn raises the same quiet fear, that the money could run out. A retiree with an annuity receives the same check regardless of what markets do.
That difference appears to matter for health. Chronic financial stress is linked to worse cardiovascular and mental-health outcomes, and the researchers found the mortality benefit was concentrated in ways consistent with reduced stress rather than higher wealth. A predictable income floor also makes it psychologically easier to spend, so annuity owners may be more willing to pay for the things that quietly extend life: regular checkups, prescriptions, dental care, healthier food, and staying socially active.
This is the same logic behind building a guaranteed income floor: cover your essential expenses with income you cannot outlive, and the rest of your portfolio, and your peace of mind, has room to breathe.
The Caveats That Matter
Strong findings deserve honest limits, and this study has several. First, it is set in Chile, whose mandatory, government-run annuity marketplace differs from the voluntary U.S. market. The forced choice is what makes the data so clean, but it also means American retirees face different pricing, products, and tax rules.
Second, a study like this always has to wrestle with selection: maybe healthier people choose annuities in the first place. The authors use the structure of the Chilean system and statistical controls to address that concern, and the widening gap over time is hard to explain by initial health alone, but no observational study fully eliminates it.
Finally, the result is an average across a huge population. It does not mean an annuity is the right choice for you specifically. Annuities trade liquidity for security, most fixed payouts are exposed to inflation over long horizons, and a retiree with a generous pension or serious health issues may reach a very different conclusion. The takeaway is not “everyone should annuitize.” It is that guaranteed income may carry a benefit that never shows up on a rate sheet.
What This Means for U.S. Retirees
You do not need Chile’s pension system to capture the same guaranteed-income effect. Several common U.S. products are built to turn a lump sum into income you cannot outlive:
- A single premium immediate annuity (SPIA) converts a lump sum into a paycheck that starts right away and continues for life.
- A deferred income annuity, sometimes called longevity insurance, is bought now to begin payments years later, often producing much larger checks.
- A QLAC is a deferred income annuity held inside an IRA or 401(k) that can also reduce your required minimum distributions.
None of these are one-size-fits-all, and the right amount to annuitize is usually a portion of your savings, not all of it. If you are weighing whether guaranteed income belongs in your plan, our guide to the situations where an annuity makes sense walks through the trade-offs in plain language.
The Bottom Line
For decades, the case for annuities has rested on math: they hedge the risk of outliving your money. This research suggests the benefit may run deeper. When income is guaranteed, retirees appear to worry less, spend more freely on their health, and, on average, live longer. It is not a guarantee, and it is not a reason to hand over your entire nest egg. But it is a reminder that financial security and physical well-being are more connected than a spreadsheet lets on.
Frequently Asked Questions
Do annuities really help people live longer?
A 2026 NBER study of about 600,000 retirees found that those who annuitized had roughly 2.5% lower mortality at five years and 3.6% lower at ten years than retirees using market-based withdrawals. The researchers link the effect to reduced financial stress and steadier income, though the study reflects an average and does not guarantee a longer life for any individual.
Why would guaranteed income affect longevity at all?
Guaranteed income removes the fear of running out of money and the stress of watching a balance swing with the market. Chronic financial stress is tied to worse health outcomes, and a predictable income floor also makes retirees more comfortable spending on checkups, medication, and healthy living, all of which can support a longer life.
Does this mean I should put all my savings into an annuity?
No. The study shows an average benefit across a large population, not a recommendation for everyone. Most planners suggest annuitizing only a portion of savings, enough to cover essential expenses, while keeping the rest liquid and invested. Your health, pension, and inflation exposure all affect the right amount.
What kind of annuity provides guaranteed lifetime income?
In the U.S., a SPIA starts lifetime payments immediately, a deferred income annuity begins them later for larger checks, and a QLAC does the same inside a retirement account while lowering required minimum distributions. Each converts a lump sum into income you cannot outlive.
Sources
- Larrain, B., Previtero, A., and Severino, F. “The Effect of Annuities on Longevity.” National Bureau of Economic Research, Working Paper w35082, 2026. nber.org/papers/w35082
- “The Effect of Annuities on Longevity.” SSRN. papers.ssrn.com
- “Annuities Linked to Longer Retiree Lifespans.” Money. money.com
- “Annuities Reduce Retirees’ Financial Stress, Academic Paper Finds.” PLANADVISER. planadviser.com
