Liz Weston: Why retirees may want to buy an immediate annuity now
When you purchase an immediate annuity, you’re paying a lump sum now in exchange for a stream of payments over a fixed period or for your lifetime
By LIZ WESTON of NerdWallet
Published - Sep 18, 2023, 07:03 AM ET
Last Updated - Sep 18, 2023, 07:03 AM EDT
An immediate annuity is an insurance product that provides guaranteed income: You give an insurer a chunk of money, and the company gives you a stream of payments that can last for life. The payments begin within 12 months of purchase.
Now may be a good time for retirees to buy an immediate annuity, since payouts are the highest they’ve been in a decade, says Rob Williams, managing director of wealth management at Charles Schwab.
But buying an immediate annuity — also known as an income annuity or a fixed immediate annuity — is effectively irreversible, so you’ll want to choose carefully.
WHY YOU MIGHT WANT TO CONSIDER AN IMMEDIATE ANNUITY
