Immediate Variable Annuity
The Immediate Payout Structure
Variable annuities come in two flavours of payment option: deferred or immediate. The deferred option keeps income invested for extended periods of time while the immediate option disperses income as monthly paychecks.
An immediate variable annuity starts providing dividends the instant it's purchased, often with a lifetime income guarantee. A lump sum deposit is placed in a portfolio, giving the investor the option of allocating across a variety of asset classes ranging from bonds to international stock. Unlike a fixed annuity, the rate of return isn't lock-in, changing with portfolio performance during any given year.
Immediate variable annuity investments are equity-based: on the downside your investment has the potential of decreasing in value, yielding lower monthly payments; on the upside, it has the potential of increasing in value, yielding higher monthly payments. The immediate nature of this annuity yields instant income at the expense of tax-deferred, compound growth.
Advantages of Immediate Variable Annuities
Immediate variable annuities uniquely offer guaranteed lifetime income with the potential for market growth. This is a valuable combination today's time, when retirement plans are remiss not to cover living expenses for 20-30 years past the age of 65.
Today, the average healthy American male has a 85 year life expectancy, with a 25% chance of living until 92. The key advantage of an immediate annuity is it's ability to insure against retirement savings running dry. And, an immediate variable annuity offers this insurance with greater growth potential than a fixed rate instrument like a fixed annuity.
Prudent retirement planning calls for a hedge against potentially outliving your life expectancy. With an immediate variable annuity you can reap the unexpected boon rather than spreading thin your limited retirement savings.
Don't Just Shop, Implement a Solid Retirement Strategy
Purchasing an annuity is a big decision. Online research is a good start, but prudent investors should discuss all their options and risks with an independent financial advisor. Request a free, no-obligation consultation today, along with a report of current rates on brand-name annuities.Speak with an advisor over the phone about annuities for FREE.
Who Should Buy Immediate Variable Annuities
Immediate variable annuities are designed for retirees looking for aggressive growth as part of a larger retirement package. If you need help covering living expenses and are comfortable with a non-guaranteed rate of return, then immediate variable annuities are right for you.
If you don't need supplemental income, Deferred Variable Annuities are a better alternative because they offer tax-deferral, which compounds interest for increased growth. If you're uncomfortable with a variable rate or potential loss of capital, Fixed Annuities are a good alternative.
Not sure if immediate variable annuities are right for you? Request an actual rate report from the best insurance providers across the country and decide for yourself. Start Now.