Immediate Annuities

The main benefit is that with an immediate annuity is that its tax-deferred.

Immediate annuities. Immediate annuities are long-term tax-deferred contracts you purchase from an insurance company that provide immediate regular payments in exchange for a lump-sum investment. Annuities pay out incrementally on a consistent schedule that begins on the date specified in the contract. That means you can reap the rewards of compound growth.

You pay a lump sum aka premium to an insurance agentcompany broker or financial advisor and will receive regular payments. Theyre called immediate because you begin receiving annuity income. And if youve already paid taxes on your immediate annuity then this is an income thats partially free.

When you buy an immediate annuity you convert a portion of your savings into a monthly paycheck that starts within one year and continues for as long as youre alive. Learn more about immediate annuities and how they work. Immediate fixed income annuities.

What are the benefits of an immediate annuity. An immediate annuity is simple and consumer-friendly. Immediate annuities guarantee an income stream within a month of purchase without an accumulation period.

An immediate annuity also called an income annuity or single premium immediate annuity SPIA is a type of annuity designed to provide guaranteed income payments that must begin between one month and one year after purchase. You can also receive a single lump-sum payment. An immediate annuity provides you with retirement income payments.

Whether its a good choice for your particular needs however depends upon your circumstances. Its most often used to provide consistent retirement income. The purchase of an immediate annuity is usually an irrevocable decision that cannot be undone once the free-look period has expired following contract issue.