Immediate-Income Annuities

A Do-It-Yourself Pension for a Do-It-Yourself World

Who is not concerned about having enough money in retirement? Few people have plans that guarantee income for life.


There is a way to guarantee income for life: the immediate-income annuity. The income annuity functions, as Kiplinger’s once called it "a do-it-yourself pension for a do-it-yourself world.”


Here’s how it works: you buy an immediate annuity from an insurance company. The insurance company gives you monthly checks for the rest of your life (or for a specified period, if you prefer).


The size of your monthly income checks is based on your age, gender, and how much you invest.


The payouts are guaranteed for your life or for the life of you and your partner.


It’s not an all or nothing deal: you can split your money between the annuity and any other investments. Up to you, depending on your needs.


If you do split your money among investments, the diversification reduces the stakes if the market slumps.


In these days where pensions are rare, annuities give you the kind of security pensions once provided.