Immediate Annuity

An immediate annuity lets you convert all or part of your retirement savings to a guaranteed stream of income that you can count on for the rest of your life. This type of annuity gives you the security of knowing you will continue to receive money each and every month – even if you live to be 100 or older.

How an Immediate Annuity Works

You can buy an immediate annuity with funds available from a 401k, IRA, savings account, life insurance policy, inheritance, or even the sale of a home or major asset. An insurance company that you select provides the immediate annuity to you for a set upfront cost, and agrees to make regular scheduled payments to you either by check or automatic deposit to your bank.

You can choose how often you receive a payment from the annuity, such as every month, quarter or yearly. The amount of income you receive is based on the amount of money you initially contribute, plus a number of factors including your age, sex, income option selected, and interest rates at the time of purchase.