3 Tips to Help Decide if an Immediate Annuity is Right for You

Posted on April 15, 2015

Immediate annuities are a great choice when looking for a way to secure your financial future but they are not right for everyone.

Here are 3 tips to help you decide if an immediate annuity is the right choice for you and your family:

  1. Age

If you are very close to retiring or have already retired, and are looking to have immediate income, an immediate annuity could be a fit for you.

When an immediate annuity is purchased the payments are level for your lifetime. So, for example, if you invest $100,000 at age 56, you will get a lower payment per month than if you invest $100,000 at age 70.  Why?  Simple…at age 56, you are expected to live longer.

In the end, the rate of return on your annuity is directly tied to your length of life. If you live significantly beyond your normal life expectancy the rate of return would exceed the return on other traditional investments.

If you are looking to delay your payments for 3 or more years you would want to consider a deferred income annuity or fixed index annuity instead of an immediate.  If you are interested in learning more about these options reach out to us and set up a time to talk.  We can explain everything in more detail and how it applies to your situation.

  1. Existing Liquid Assets

An immediate annuity converts a lump sum of money into a guaranteed regular payment.

This is why the first requirement for an annuity is having cash to invest. To accomplish this, you may be converting a portion of savings, moving money in accounts or transferring funds from another area such as a 401K.

Unless there are extenuating circumstances, the money that goes into an immediate annuity cannot be withdrawn. When you are considering what you want to invest you need to be sure to calculate how much money you can really afford to have unavailable.

  1. Beneficiaries

We all want to provide for our families so that they have the lifestyle they are accustomed to even when we are no longer there to provide for them.  There are a variety of ways to provide for your beneficiaries by purchasing an immediate annuity with a term certain or refund provision. These would allow your beneficiaries to continue to receive payments until the end of the term you selected in most cases.

It is critical to consider how you want to provide for your beneficiaries when you are deciding on the details of your annuity and when you are deciding the amount of money that you will be setting aside.

If you are interested in learning more about the options that are available to you and what would be the best fit for you and your client’s  family goals, we would be happy to set aside some time to speak with you. If that’s of interest, please click here  (hyperlink to sign up for an annuity consultation). Click here to sign up.

John Bulbrook, Bulbrook Drislane – IN-FORCE ™ Secondary Market, Finance and Investments, Secondary Market, Annuities, Fixed Term Annuities, Life Insurance, Structured Settlements, Previously Owned Annuities, Pre Owned Annuities, Immediate Annuities, Factored Structured, Settlement Secondary Market Annuity, Aftermarket annuity, Inforce fixed term annuities, Inforce fixed term annuity, Inforce annuity, Deferred Variable Annuity, Inherited Annuity, Equity Annuities, Straight Life Annuity, Non Qualified Annuity, Mutual Fund Settlement, 20 Year Annuity, 10 Year Annuity, 5 Year Annuity – Click here for his Facebook,TwitterLinkedInGoogle Plus



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