Planning for retirement is a process that takes years of preparation, strategy, and savings. While there are many well-known tools for preparing for the future, including IRAs, 401(k)s, long-term disability insurance, and more that could all be integrated into your retirement plan, for some people, investing in an immediate annuity also makes sense. Immediate annuities are designed to provide a stream of income to the annuity holder for a period of time and can help to supplement retirement savings. Here’s what you should know about immediate annuities and how you can learn more by working with our team at Top Investment Solutions.
An immediate annuity is a type of contract between you and a financial institution or an insurance provider in which you make an initial lump-sum investment, and in return, you receive income payments for a set amount of time or for the remainder of your life. An immediate annuity is a type of annuity in which the monthly annuity payments begin nearly immediately after the lump-sum payment is made by the annuity holder.
All annuities are designed to provide the annuity holder with a stream of income to support them for the remainder of their life or a set amount of time. But annuities can be immediate or deferred. As mentioned above, an immediate annuity is one in which the payments to the annuity holder begin immediately. On the other hand, with a deferred annuity, payments are typically delayed for at least a year, if not longer.
Immediate annuities (as well as deferred annuities) may also be variable, fixed, or indexed. Here’s a brief overview of each of these immediate annuity types:
Immediate annuities do not make sense for all annuity holders. Usually, immediate annuities are most appropriate for those who are at retirement age and need to start receiving money right away. For those retirees who don’t have other sources of guaranteed income, an immediate annuity can be especially useful.
To learn more about immediate annuities and the benefits of choosing an immediate annuity, call Top Investment Solutions directly today. You can reach out to us by phone or online at your convenience to get started.
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