An annuity is typically part of a retirement investment.
Immediate annuities can provide dependable financial security by providing a stream of income payments guaranteed to continue for the rest of your life or for a period you select. If you are about to retire, an immediate annuity may be a good place to put a large lump sum of money accumulated through a retirement plan.
To purchase an immediate annuity, you make a one-time payment, and distributions must begin within a year, but typically begin within a month.
Immediate annuities can be fixed or variable.
The principal in an immediate annuity is not generally or readily accessible.
If you need more money than the income provided by immediate annuity payments, you might want to consider other retirement options.
Among the reasons to consider an immediate annuity include:A) The income payments you receive can supplement other income sources.
Such as Social Security and pension payments, which may not provide enough income by themselves.
Whether monthly, quarterly, semiannually, or annually, there’s a payout plan to fit your particular needs.
When you receive income payments, you will be taxed on the portion of the payment that is interest earned.
The portion that is principal will not be taxed if the initial deposit for the immediate annuity was made with after-tax dollars.
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