Income for a fixed number of years (5-20) with payments continuing to a named beneficiary should a death occur prior to the end of the period certain. Cannot pay out past the age of 100 for the owner or annuitant.
Single Premium Immediate Annuities (SPIAs)
Regular Retirement – Income Now And For Life
Immediate annuities can turn your assets into regular payments beginning now and lasting for the rest of your life or for a specified period of time. At retirement, you can use distributions from defined contribution plans, 401(k)s or IRAs to fund an immediate annuity to create a personal pension.
Immediate annuities are single-payment annuities. Any large sum of cash from an inheritance, legal settlement, sale of a business or home can be converted into an income stream for the duration you specify. Immediate Annuities are not intended to offer liquidity or growth potential. Once purchased, immediate annuities have no cash value, no payments other than the scheduled payments guaranteed under the contract are available.
Why should I consider buying an Immediate Annuity?
What are its advantages to me?
These are a many advantages that immediate annuities can provide to the buyer. Here is a list of just a few:
- Security- the annuity provides stable lifetime income which can never be outlived or which may be guaranteed for a specified period;
- Simplicity– the annuitant does not have to manage his investments, watch markets, report interest or dividends;
- High Returns– the interest rates used by insurance companies to calculate immediate annuity income are generally higher than CD or Treasury rates, and since part of the principal is returned with each payment, greater amounts are received than would be provided by interest alone;
- Preferred Tax Treatment– it lets you postpone paying taxes on some of the earnings you’ve accrued in a “tax-deferred” annuity when rolled into an immediate annuity (only the portion attributable to interest is taxable income, the bulk of the payments are nontaxable return of principal);
- Safety of Principal– funds are guaranteed by assets of insurer and not subject to the fluctuations of financial markets; and
- No sales or administrative charges
Single Premium Immediate Annuities (SPIAs) are particularly suitable for the following situations:
- Retirement from Employment
- Terminal Funding or Pension Terminations
- Retired Life Buyouts
- Structured Settlements for Personal Injury, Estate or Divorce cases
- Professional Sports Contracts
- Credit Enhancement and Loan Guarantee Transactions