Why Purchase An Immediate Annuity?
37376 POINTSview profileDavid G. Pipes, CLU®, RICP®Business Development Officer, T.D. McNeil Insurance Services, Fresno, CaliforniaAn immediate annuity is the option for someone who wanted to convert a lump sum into an income stream that they could not outlive. According to the annuity, withdrawals must start within 13 months and be substantially equal payments. A benefit of an immediate annuity is that it has a blanket exemption from the 10 percent early withdrawal penalty. Immediate annuities are sometimes used when the investment portion of the retirement income plan is not meeting expectations.Answered on October 24, 2014flag this answer
21750 POINTSview profileJim WinklerCEO/Owner, Winkler Financial Group, Houston, TexasThat is a great question! Generally the purpose of an immediate annuity is to provide an immediate supplement to one's income. They are often funded by money received through a settlement, inheritance, or some other form of large windfall. A way to stretch that windfall and prevent blowing through or outliving it is to put it into the annuity, and receive it in regular payments. It is a good way to protect yourself, and the money. Thank you for asking!Answered on December 6, 2014flag this answer
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