Immediate Annuity Quote
A fixed annuity quote is just a phone call or web page away for aging adults considering retirement. Online rate calculators are the quickest solution, giving interested persons an idea of how much money they need to invest now in order to secure a steady, safe retirement cash flow for the future. Before seeking an immediate annuity quote, however, buyers should take some time to learn about annuity options and the pros and cons of such an investment. This kind of plan doesn't work for everyone, but it can be an excellent retirement solution for many, providing a steady income that cannot be outlived.
Usually purchased with a one-time lump sum payment, a fixed annuity guarantees its purchaser regular, unchanging income for an agreed-upon period of time, usually until the annuitant's death. The amount of each monthly, quarterly, or yearly disbursement depends upon the initial amount paid to the insurance company, the annuitant's age and life expectancy, the age and life expectancy of his spouse (if applicable), and a few other factors. A fixed annuity quote will let interested purchasers know what to expect based on individual circumstances and help them to determine whether an annuity is a good option for their retirement plan. Generally, the older a person is and the larger the one-time payment he is able to make, the higher his periodic payments will be, which means that this kind of retirement plan is a good choice for persons with a reasonable life expectancy and probably a poor choice for persons who plan to stop working early and enjoy a long retirement. If a person has a very large amount of money to invest and does not want to be responsible for managing his own retirement allowance, he should consider a fixed annuity.
An immediate annuity means that the fixed payments begin within a month of purchase, so if a buyer does not want to retire for several years, he should choose the deferred option. An immediate annuity quote, however, will help those ready to retire now to decide how much money their lifestyles will require based on their ability to pay a certain one-time amount. In this way, the buyer is able to create his own retirement pension using money he has saved during his working years without the responsibility of managing it himself or the anxiety of not having enough money to finish out his retirement comfortably. There is a great deal of consolation in knowing that one's periodic payments are unchanging and will not stop coming until one's death, no matter how the economy is doing. A secure, steady income in one's retirement years can alleviate much of the stress involved in aging.
As the results of a fixed annuity quote will reveal, however, this option does have some drawbacks. It may not provide sufficient income for one's preferred lifestyle, for one thing; not everyone can consistently live on the same conservative amount every month, especially as the economy changes and adjustments must be made for inflation. A big concern is that purchasers are trapped in the income structure once they've bought: fixed annuities are irrevocable and cannot be cashed in. Also, if a person dies shortly after making the agreement, the insurance company gets to keep all of his money; fixed annuities cannot be transferred to heirs. In some cases, heirs can receive the balance of the initial payment or can receive the deceased person's periodic payments for a certain period of time, but certainly will not reap the full benefits of the investment.
Financial advisors often advise retirees to not place all of their funds into annuities, as these may not provide enough money when the economy is bad, will not benefit heirs, and do not have as much potential for increase as other alternatives. Annuities are very helpful because they provide steady, safe income until death, but there are other means of investment with more potential for profit. Still, most agree that getting an immediate annuity quote is an excellent idea for persons who are ready to retire and need assurance of security. They are largely tax free, relieve buyers of the burden of worrying about retirement funds, and enable many people to enjoy their retirement years without fear of outliving a savings account.
Before jumping online for a fixed annuity quote, buyers without much knowledge of economic and investment principles would benefit from doing some research. First, one might call an insurance helpline and ask for a full description of retirement options, technical terms, and the processes involved in securing pensions. Often, these organizations will mail the caller a guide to help them understand everything discussed over the phone. Next, one should consider all the options, compare the pros and cons of each, and perhaps even consult with a trusted financial advisor. The Bible says, "Where no counsel is, the people fall: but in the multitude of counsellors there is safety" (Proverbs 11:14), and this is certainly true when the security and comfort of one's elderly years are at stake.
An immediate annuity quote can be obtained over the phone or online, whichever method the buyer is more comfortable with. There are websites that will allow interested persons to compare quotes from several different insurance companies at once in order to determine which company offers the most beneficial plan for an individual. Of course, buyers need to be sure to only do business with a company that has a long-standing, solid reputation--a business that will be around long enough to provide all of one's retirement funds. With enough research, foresight, and careful planning, retirees can find a retirement plan that will give them confidence and freedom to enjoy the reward of many years of hard work.
Immediate Income AnnuityFor some retirees, a single premium immediate annuity (SPIA) might be the best option for comfortable, stress-free investing and guaranteed income. There are many types of annuities, including fixed or lifetime period, nonqualified or qualified, deferred or immediate, and single or flexible premium. The SPIA in particular offers the annuitant the chance to receive their funds with interest via monthly payments immediately. "Deferred" postpones the payments to a much later date, possibly a decade or more away. The SPIA is called "single premium" because the annuitant must deposit a lump sum with the insurance company. In some cases, this is the best means to ensure that one has available income for the future. In other cases, this may not be the best option. A little research and professional advice will lead to the best decision.
A 64-year-old man wins a lawsuit and is awarded a lump sum of $105,000. He would like to retire and live off of the funds. His best bet could be an immediate income annuity or SPIA. A month after he drops the funds into the annuity, a monthly payment is deposited into his bank account. These equal monthly payments can continue for a set period of time such as 10 or 15 years (fixed) or can continue for the remainder of the man's life (lifetime). The choice between fixed and lifetime depends on the single premium amount, the age of the annuitant, and the interest that the insurance company agrees to pay. In this case, the 64-year-old with such a large single premium would best benefit from a lifetime annuity.
A 55-year-old woman wins $250,000 in the lottery after taxes. She is thinking about getting a single premium immediate annuity, so she can be retire early and still receive an income plus her pension. Yet, she owes $187,000 on her house and another $32,000 in credit cards and personal loans. "The rich ruleth over the poor, and the borrower is servant to the lender" (Proverbs 22:7). Truly, if this woman wants to stop being a slave to her debtors, she will want to spend this money getting out of debt and staying out of debt. With her debt erased, she can spend just a few more years working and then retire completely debt-free with her pension. In this situation, a SPIA isn't the best option.
Each situation is unique, but there are common threads in the need for an immediate income annuity. The person should already be retired or ready to retire immediately. Since this product is a very hands-off form of investing, some retirees may not like it. They might prefer to build a portfolio and actively buy and sell stocks to build up retirement. Also, the income from the annuity should be sufficient enough to support the retiree's needs. For most immediate annuities, the recipient needs to be at least 55. Additionally, many retirees decide to obtain a SPIA because they don't have a retirement plan or pension in place. It may be best to consider the benefits and disadvantages to weigh whether or not a SPIA would work for one's individual situation.
The benefits of a single premium immediate annuity are usually what attract people to them. If a large savings account is maintained, it must be claimed annually for tax purposes. On the other hand, a SPIA funds, depending on if they're pre-tax or not, can be tax-deferred or tax liability will be less overwhelming as it is paid in smaller installments. Another benefit is that the annuitant can be guaranteed a certain interest rate, and the payments are in a set amount that never decreases. Therefore, this option offers a sense of security for retirees. Not only that, annuitants don't have to stress over the stock market or worry about their money disappearing. Lastly, some companies won't charge fees for their investment products or services.
While there are benefits to obtaining an immediate income annuity, there are also some disadvantages. Annuities are tough to undo, and payment amounts are usually written in stone. Should some unexpected financial emergency occur, those funds placed into the annuity are virtually inaccessible. It is possible to sell an annuity to a settlement funding company, but this process can be costly and require the services of a financial professional or an attorney. Therefore, the annuitant should have an emergency fund or some easy-to-access investments in case something unexpected comes up. Although the tax advantages are a great perk when it comes to annuities, it may be wiser from a tax-savings standpoint to go with another plan. By meeting with a tax professional, the retiree can make sure that they actually will save on taxes in the long run.
As with any investment or retirement plan, retirees need to do their research and be sure that the plan is what's right for them. People and their situations are unique which explains why there are so many options besides the single premium immediate annuity. It's best to talk with a financial professional, even if his counsel costs a small fee. The financial professional should specialize in retirement investing. This person can usually lead a retiree to a reputable insurance company that offers a sound plan. Those who prefer not to meet with a financial counselor can research online and discuss possibilities and interest rates with different insurance companies. Whether it's an immediate income annuity or some other retirement investment, it's important to select a company that has a solid, long-standing reputation of excellence in investing.