Unlock Guaranteed Retirement Income With This Simple Immediate Annuity Strategy

Immediate annuities are a type of fixed annuity, where, after a lump sum investment is made, a set series of payments are made at regular dates to the investor, either until they pass or for a specified length of time. Immediate annuities are very much like a life insurance policy, and are mostly used for those about to or in retirement. They are also used as a substitute for a traditional pension. Immediate annuities are also known as income or payout annuities.

Why choose an immediate annuity?

As its name suggests, cash availability is immediate and payments can start as soon as 30 days after investment. It is a great way for retirees to have a guaranteed form of income, and it can be especially good if you’re in good health and are worried about outliving other assets. However, consider that the annuity stops when you pass, and once you’ve invested in the annuity it can’t be reversed or cancelled. If you are not very healthy it may not be the best option for you.

Fixed immediate annuity

Your lump sum investment regularly pays out an agreed amount to you, the investor. It is guaranteed. One drawback is that the fixed amount may be affected by inflation.

Variable immediate annuity

Your lump sum investment is made across a portfolio. Payouts can be higher or lower than for a fixed annuity, depending on your portfolio performance. It can be subject to higher fees also. This kind of annuity works like a mutual fund would.