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Immediate Annuity |
Vital Plan, Inc.
| Immediate Annuity |
| Immediate Annuity: Just as the term implies, the immediate annuity provides income, immediately. Originating in ancient Rome where citizens paid a lump sum for a contract that promised an annual or yearly payment for life. Immediate annuities have come a long way since then, though the concept is the same. Similar to a traditional pension, a lump sum is exchanged for a contract that promises payments that are: monthly, quarterly or yearly. There are several choices as to how long the payments can last: Lifetime - payments cease when the annuitant passes. Joint life - Payments continue as long as one of two annuitants are living. Certain - For a specified period of time such as 5, 10, 15 years. Lifetime with 10 years certain - Payments continue as long as the annuitant is alive, however, they are guaranteed to continue for 10 years. If the annuitant passes away before receiving 10 years worth of payments, remaining payments will continue to their beneficiary until they are paid for the full 10 years. EXAMPLE: This can be used at retirement to generate income. Lets say you have saved for your retirement in an IRA or annuity or 401k. Once you retire you want to produce as much income as possible for as long as possible, even though you do not know how long that is going to be. You choose to purchase an immediate annuity for lifetime payments with 10 years certain. You set up your payments to increase by 4% yearly so that you can keep up with inflation. You have lifetime income, with a safety net of 10 years. Remember, even if you live past the 10 years your payments continue for life. |
The above is not intended as legal, tax or financial advice. Please contact an advisor for guidance for your personal situation.
Contents subject to change. Every attempt has been made for accuracy, however, we are not responsible for errors in text.
Contents subject to change. Every attempt has been made for accuracy, however, we are not responsible for errors in text.
Shelly Ballard
Tarkenton Financial Representative
St. Petersburg, FL
Cell: 727-417-6107
shelly@vitalplan.com
Tarkenton Financial Representative
St. Petersburg, FL
Cell: 727-417-6107
shelly@vitalplan.com
Copyright 2008, Vital Plan, Inc. All Rights Reserved
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