Life Annuities – An Annuity That Guarantees a Lifetime Income
If you are retired or nearing retirement, a life annuity should be a retirement income strategy that you give serious consideration. Life annuities are essentially a Single Premium Immediate Annuity (SPIA) with a lifetime payment option. They provide a dependable and secure stream of income payments that are guaranteed to continue for the rest of your life.
The income payments you receive from fixed life annuities will never change and are based on the amount of your premium deposit, your gender, your age at issue and the interest rate environment at the time of purchase. To purchase a life annuity, you make a one-time premium payment and distributions typically begin within a month, but can be deferred for up to one year.
A single life annuity provides payments for the rest of one individual’s lifetime. Whereas a joint life annuity is based on the lives of two people, usually spouses, and provides payments for as long as either joint annuitant is living.
Please watch this short video for additional details and an overview of using life annuities to create your own private pension:
Life annuities can be purchased with funds from a variety of possible sources, including tax qualified accounts like IRAs, as well as non-qualified accounts such as bank certificates of deposit (CDs), mutual fund, brokerage, savings or money market accounts. Under current tax law, a portion of each payment received from a non-qualified life annuity is tax free until your total premium is recovered; this is called an exclusion ratio. The remainder of each payment not excluded is taxed as ordinary income in the year received.
Many investors and retirees have benefited from life annuities, although selecting the right insurance company, with the highest payout and ratings, based on your unique requirements is very important. If you think a life annuity may be a good solution for you, and you’d like us to provide you with actual quotes from the top insurance companies in the country, please visit our Immediate Annuity Quote page.
If you have further questions, please feel free to give us a call. One of our licensed Annuity Specialists would be happy to talk with you and patiently answer all of your questions, without any hype or sales pressure. Our services are always free and you will never incur any type of sales charge, load or fee.