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Annuities Pros and Cons Fixed Annuities Fixed-Indexed Annuities Immediate Annuities Deferred Annuities
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Harry Wilk

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Sigma Financial Group
Immediate Annuities

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Fixed-Indexed Annuities.
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Deferred Annuities.
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I would like more information about Immediate Annuities.
A Single Premium Immediate Annuity (sometimes referred to as an "SPIA") may be the right annuity for you if you are looking for payments that begin right away and continue for the rest of your life or for a specified period of time. The annuity is purchased from an insurance company with a single, lump sum amount called a premium.
How does an immediate annuity work?
In return for your lump sum, the insurance company promises to make regular payments to you (or to a payee you specify) for the chosen length of time most commonly for the remainder of your life, however long that may be.

In most instances, immediate annuity payments are sent to you starting one month after you buy your annuity. When choosing an immediate annuity, you can choose how frequently you receive payments often referred to as the "mode". While annuity buyers typically choose to receive payments monthly, you may choose quarterly or even yearly instead. In today's immediate annuity marketplace, there are a number of ways the annuity can be customized to suit your specific life situation and concerns. In exchange for the guarantee of payments, you give up the right to demand the return of your original premium. Unlike some forms of life insurance or other types of annuities, you are generally unable to revise or cash in the immediate annuity once the 10-day "free look" period has passed.

You can fund your immediate annuity in a number of ways, including:
  • Cash from a maturing Certificate of Deposit (CD)

  • Exchanging monies accumulated in a Multi-Year Deferred Annuity account

  • Proceeds from the sale of stocks, bonds, a home or a business A lump sum distribution from a tax-qualified defined benefit or 401k, or an IRA account.
Why should I consider buying an Immediate Annuity?
What are its advantages to me? An immediate annuity comes with many important advantages. Here are just a few:
  • Security The annuity provides stable lifetime income which can never be outlived or which may be guaranteed for a specified period. This advantage is crucially important to annuitants who may have previously feared outliving their savings.

  • Simplicity An annuity is pretty much "get it and forget it." Once it is set, the only work you are required to do is collect your regular payments. With an immediate annuity, you do not need to watch markets or track interest rates and dividends.

  • Higher Returns The interest rates used by insurance companies to calculate immediate annuity income are generally higher than CD or Treasury rates. Since part of the principal is returned with each payment, greater amounts are received than would be provided by interest alone.

  • Preferred Tax Treatment An immediate annuity may be a good strategy to defer taxes until later in your retirement when you may be taxed at a lower rate. This differs from other types of annuities for which the tax burden is "front loaded."

  • Safety of Principal Funds are guaranteed by assets of insurer and not subject to the fluctuations of financial markets.

  • No sales or administrative charges Immediate annuities do not have annual account management or maintenance charges. 100% of your premium goes towards your monthly income.
Click here:
I would like more information about Immediate Annuities.
PREVIOUS: Learn about
Fixed-Indexed Annuities.
NEXT: Learn about
Deferred Annuities.

Sigma Financial Group  

Sigma Financial Group
1110 Pivot Rock Road
Eureka Springs, Arkansas 72632

For more information, please call or email us:
(479) 253-7343
(361) 442-6635- Cell
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Sigma Financial Group

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