Immediate Annuities

Guaranteed Income For Life

Most of us will live many years into retirement.  In fact, the average 60 year old will live on for an additional 22 years.  The percentage of retirees living longer, healthier lives continues to grow and as medical technology continues to improve, the expectation is that these numbers will widen. 

Recent surveys have indicated that the number one issue concerning retirees is the fear of outliving their money.  Events in recent years have raised those fears as many retirees have seen their life savings either greatly reduced or lost due to bubbles, corruption or volatility in the markets.  For those who have sacrificed risk and invested in CD’s, money markets or other cash equivalents have realized that their income will evaporate as their principle dissolves. 

Immediate Annuities provide a solution as they guarantee a steady stream of income that you cannot outlive.  It insures that you will receive a check every month for the rest of your life.  In so many words, Immediate Annuities provide security. 

When you buy an immediate annuity from an insurance company, you are exchanging a lump sum of money for the guarantee that you will receive payments for the either the rest of your life or a specific period of time.   The amount you receive is calculated by your age, gender and how much you invest.  It is also calculated on whether you select payments for life only, lifetime with a guaranteed period, (all will not be lost if you die prematurely), or a shorter specified period (i.e. - 10 yrs, 20 yrs, etc). 

Things to consider before buying an immediate annuity: 


Most immediate annuities provide a level payment for the rest of your life or the selected payout period.  Thus a dollar today is worth more than the same dollar years from now as inflation erodes the value of currency over time.  As a result, most companies offer a cost of living rider which can be selected at the time you purchase your immediate annuity.  This will allow your payments to increase over time; therefore, keeping pace with inflation.

Access To Your Money

Financial advisors, planners and economists’ all agree that you should only use a portion of your retirement savings to purchase an immediate annuity.  Reason being:  once you purchase an immediate annuity, you hand over the proceeds and give up control to the insurance company.  Having other cash and investments on hand allows for liquidity should emergencies arise.  Simply put….an immediate annuity cannot be cashed in, you may not access cash from it, it is irrevocable once done.

Immediate annuities are a sound financial planning tool, but they may not be suitable for all investors.  Our professional staff will work with you to determine if an immediate annuity is appropriate for your situation.