Immediate Annuity

An annuity with payouts that commence shortly (within months) after the annuity has been purchased. Immediate annuities are purchased with a single (lump sum) premium payment. Immediate annuity payments can be either fixed or variable. The payout period can be a certain amount of time such as 10 years, or can be guaranteed for the duration of the annuitant’s life (a life annuity). With an immediate annuity: 1) money goes in immediately as a single premium payment; 2) the money can be invested at a guaranteed rate or a variable rate, and; 3) payments from the annuity start right away.

Comparison Shopping for Annuities

A good question and answer piece from the Chicago Tribune. The reader had just purchased a $400,000 immediate annuity at a relatively young age. The purchase was also made from one insurer in a relatively low interest rate environment. Having both a pension and Social Security (both are lifetime annuities), I would not have committed half my portfolio to an income annuity at the relatively young age of 63 and during a period of low interest rates . It does not appear that the annuity came with...

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Consider Inflation Protected Immediate Annuities for Estate Planning

Financial planning and estate planning have been brutally difficult over the past decade. High levels of market volatility , the possibility of deflation , and now threats of inflation have complicated the financial lives of millions of people. Almost anyone in or nearing retirement is faced with incredibly complex decisions. If, for example, you retired in 2000 yet remained fully invested in the S&P 500 you would have watched well over a third of your retirement nest-egg evaporate. Do you...

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Inflation Protected Immediate Annuity

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Inflation Protected Immediate Annuity

Consider Annuity Ladders to Meet Retirement Objectives

An annuity ladder basically involves spreading annuity purchases over time. For example, instead of taking $100,000 to purchase an immediate annuity today, a person might purchase five different $20,000 annuities over a seven year period. This approach has a number of advantages: The approach helps avoid the risk of purchasing an annuity at a less then optimal time--for example when interest rates are very low. In this sense, it is somewhat similar to dollar cost averaging when investing . The...

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Annuity Ladder

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Annuity Ladder

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Top Financial Planner Comments on Immediate Annuities, Longevity Insurance and Long Term Care

One of the nation's top financial planners is bearish on the recent upsurge in immediate annuity sales. An advocate of maintaining options and flexibility with retirement planning , this financial advisor sees immediate annuities as too restrictive for many financial plans. In contrast to the views on immediate annuities, longevity insurance or longevity annuities are discussed in light of the income and asset allocation options they create for retirees: "Of all the products that are out there...

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Advanced Life Deferred Annuity

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Advanced Life Deferred Annuity

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Consider Annuities to "Build a Pension and Salvage Your Nest Egg"

An in depth and very worthwhile article in the Wall Street Journal discusses annuities in the context of the financial crisis. Surging demand for annuities--particularly fixed--is a natural reaction to the volatility and pain experienced over the past couple of years. That said, would-be buyers need to inform themselves and consider the pros and cons associated with the entire landscape of options. Topics addressed in the article include: 1) The notion of creating a personal pension 2) Annuity...

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Advanced Life Deferred Annuity

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