Full List of Annuity Types
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Immediate Annuity
An annuity with payouts that commence shortly (within months) after the annuity has been purchased. Immediate annuities are purchased with a single (lump sum) premium payment. Immediate annuity payments can be either fixed or variable. The payout period can be a certain amount of time such as 10 years, or can be guaranteed for the duration of the annuitant’s life (a life annuity). With an immediate annuity: 1) money goes in immediately as a single premium payment; 2) the money can be invested at a guaranteed rate or a variable rate, and; 3) payments from the annuity start right away.
Types of Annuities
The tough thing about classifying annuities is that the three common features described in the previous chapter can be mixed and matched to create a bewildering array of options.
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Laddering Annuity Purchases
Laddering is a term that refers to staggered purchases over time.
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Immediate Annuity Downsides
Submitted by tom on
A fairly prominent recent article in the Wall Street Journal discusses the recent attention paid to immediate annuities in the wake of the Obama Administration's "middle class task force" initiatives.
There are some very good scenarios describing the payouts and comparative merits of immediate annuities.
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The Dangers of Buying an Annuity When Interest Rates are Low
Interest rates are the raw material used in manufacturing annuities. Rates are currently very low--the 10 year treasury note is hovering around 3.4 percent and 30 year...
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