Nevada Annuities

What is a Lifetime Annuity?

Lifetime Annuity

A lifetime annuity, which is also known as an immediate annuity, starts out with a lump sum payment. In most cases the initial deposit or lump sum payment is made by the annuitant. The annuitant is the individual who will be receiving the monthly payments made by this type of annuity.

With Americans living longer, many have gained justified worries they’ll outlive their retirement income. Recent past events have certainly added even more credibility to those fears. Far too many retired couples have seen their stock investments and/or 401(k)’s, not to mention various other pensions ravaged by the recent market volatility.

With those who sought the sanctuary of money market funds and certificates of deposit having all but seen their entire income evaporate as well.

Fortunately lifetime annuities can help provide some stability to this unfortunate fact of today’s money game. As mentioned earlier these products will make sure you receive a check every month as long as you’re on this side of the grass. A guarantee more people should be including in the plans for their future.

When you purchase a lifetime annuity, you hand over a chunk of money to the insurance company for the guarantee that you’ll receive a monthly check for the rest of your life. You can also set these annuities up for shorter amounts of time as well. They are referred to as period certain annuities and are generally structured to pay out for anywhere from five to thirty years.

One other version of this annuity is known as joint and last survivor annuity. This type of lifetime annuity is generally purchased by married couples. The payments are made for as long as one of the annuity owners is alive. Annuity owners can choose a reduced payment for the surviving spouse, which increases the payments while both are alive.

The size of the monthly checks you will receive depend on several factors. Things like your life expectancy, the expected rate of return on your investment and size of your lump sum deposit. One thing you should keep in mind is not to obligate your entire retirement to one of these products.

You are bound to the terms of the contract. I.e. you are locked into one monthly payment. Ever rising costs can make that monthly payment insufficient, so make sure to have other financial vehicles in place as well.

Lifetime annuities are a very sound vehicle and can help you ensure you’ll have an income that you won’t outlive. They can also provide a supplemental income for some period of time. Make sure when you’re planning your future you include something with a guarantee. After all, no one has ever said they regretted having extra income streams from a lifetime annuity in their golden years.