Should You Buy an Immediate Annuity?
- If you’re less than a year from retirement, then an immediate annuity can be right for you
- You should have $250,000 of savings accumulated before you buy an immediate annuity
The immediate annuity (also known as single premium immediate annuity or SPIA) is like a pension you can buy for yourself from an insurance company using your retirement savings, generating a guaranteed income that lasts as long as you do. It’s a great way to diversify your portfolio, and make sure that all, or most, of your basic retirement expenses will be covered for as long as you live. It can be hard to get good advice on whether you should buy an immediate annuity. But, we choose to act as a fiduciary and we’ll never suggest you a buy a product that isn’t right for you. After years of working with clients, we’ve built an easy checklist so you can know generally if an immediate annuity is a good fit for you:
- Social Security and/or pension benefits won’t cover your regular expenses
- You’re about to retire or are already in retirement
- You have accumulated at least $250,000 in retirement savings
- You have average or above-average health
- You’re seeking greater certainty in retirement and more of an insurance product
If you can check off the boxes that appear below, on the other hand, an immediate annuity is probably not a good fit for you and you might be better off with a Personal Pension (or no guaranteed income at all):
- Social Security and/or pension benefits will cover your regular expenses in retirement
- You’re years away from retirement
- You have less than $250,000 saved for retirement
- You have below-average health
- You’re seeking market exposure for growth, and more of an investment product
This checklist is a good outline, but we know that it’s sometimes easier to sort through the specifics of your financial future with someone over email or phone. We’re always here to help! You can contact us at [email protected].
Ready For Immediate Annuity Quotes?
If you would like to get your personalized immediate annuity quotes, use our immediate annuity calculator now by clicking below: