Immediate Fixed Annuity Popularity
Sales of immediate fixed annuities have skyrocketed recently because of the peace of mind they offer retirees with guaranteed income for life, according to “An Annuity that Pays Now and Forever” by Kathryn Walson of Kiplinger’s Retirement Report. Insurance research group LIMRA International stated that sales of these annuities were up 23% from the 4th quarter of 2007 to the 4th quarter of 2008. These annuities are best suited for retirees or those nearing retirement since payments begin immediately. The payouts are based on the amount invested, the purchaser’s age, and current interest rates.
What some might consider drawbacks to immediate fixed annuities can be avoided entirely by the annuity you actually purchase. If you are worried that you might die before you get your investment back, you can purchase a joint life annuity so that your spouse will continue to receive payments until their death. Although current low interest rates may go up without you reaping the benefits, you are completely protected against downturns like we are experiencing now and against living so long that you run out of money. That is peace of mind worth purchasing. You can also purchase an inflation-adjusted annuity if you are concerned with fixed monthly payments. That way, your payments will increase 3% yearly. There are many important reasons that immediate fixed annuities are very popular right now.
