Immediate Annuities: The Real Story

Immediate Annuities: The Real Story

Immediate Annuities: The Real Story

It might come as a shock, but you can get the most out of your money if you wait until you're at least 75 years old to get an annuity.

This kind of product is called an 'immediate fixed annuity'. This this program, you pay a certain amount to your insurance provider, and in return, they give you a specified monthly payment for the rest of your life. Interest rates for annuities have been decreasing steadily lately, so not as many people get them; they're still just as secure as they'v always been, however.

Due to these reduced interest rates, purchasing an immediate fixed annuity after the age of 75 will profit you the most. Your potential life span is calculated into this equation.

There are mortality credits that go towards life expectancy, which is a factor they use to calculate their payments. If you're in your seventies, you are thought to not live longer than someone who is ten years younger than you. An insurance company will make larger payments to a person who is 70 or older based on the fact that they do not anticipate making these payments for a very long time.

Recently, comparisons were made between an insurance company's $100,000 policies for a man of 65 years, and a man of 75 years. The payout for the 65 year old was $7,740 annually. For the 75 year old it was $10,068 annually. If you really wanted to get the biggest return, a man of 85 years would receive almost $15,000 every year.

If you think you can handle it and really benefit from the added money due to good health, wait until you're 75 to get an annuity. The downside of waiting, of course, is that when you do die, all benefits die with you. You'll need to measure the benefits and risks of waiting this long.

Another aspect to take into consideration is that interest rates will probably begin increasing soon. At the moment, all of the money that the Feds invested in these markets is still present. We could easily experience inflation and higher interest rates when the economy picks up. Thus, you may want to wait for interest rates to increase before purchasing an immediate fixed annuity so you can realize higher returns.

If you want the best of both worlds, get an immediate fixed annuity that's set for 5 to 10 years with the same payment rate. If you pass away while this span of time is still active, your family would still be able to receive the benefits of this kind of annuity. Once you live beyond this span of time, you can always purchase another annuity with similar terms, which will likely have even greater rewards.

Before you purchase an immediate fixed annuity, be sure to do some research. Find out which insurance company offers the best terms for a immediate fixed annuity and go with them. AnnuityStraightTalk.com can help you with this.

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