Why Purchase An Immediate Annuity?

Comments

2 responses to “Why Purchase An Immediate Annuity?”

1. 

   December 6, 2014

   Jim Winkler

   That is a great question! Generally the purpose of an immediate annuity is to provide an immediate supplement to one’s income. They are often funded by money received through a settlement, inheritance, or some other form of large windfall. A way to stretch that windfall and prevent blowing through or outliving it is to put it into the annuity, and receive it in regular payments. It is a good way to protect yourself, and the money. Thank you for asking!
2. 

   October 24, 2014

   David Pipes

   An immediate annuity is the option for someone who wanted to convert a lump sum into an income stream that they could not outlive. According to the annuity, withdrawals must start within 13 months and be substantially equal payments. A benefit of an immediate annuity is that it has a blanket exemption from the 10 percent early withdrawal penalty. Immediate annuities are sometimes used when the investment portion of the retirement income plan is not meeting expectations.