Immediate Annuity Prices Depend on Timing

Many Boston Globe readers have an increased interest in purchasing an immediate annuity, according to Humberto Cruz’s “When you buy can affect how much you will pay for an immediate annuity.”  Immediate annuities turn a lump sum payment into a stream of income you’ll receive over your lifetime.  They are attractive right now with a still volatile stock market.

As interest rates remain low, the price of an immediate annuity is higher than it would be at a time of higher annuity rates.  You have to spend more of your money to get the income needed for your monthly payouts.  Annuity prices are also based on your age and gender, since the longer you are expected to live you will have to pay more.

Immediate annuities tend to be relatively low cost and provide stable income for retirement.  An argument can be made for purchasing now and for waiting until interest rates increase.  By waiting to purchase an immediate annuity, you get more for your money even if interest rates do not increase.  That is simply because you are older and your life expectancy has decreased.  By purchasing now, you ensure that you at least get this interest rate in case they go down.  Many advisors recommend “laddering” purchases, or buying smaller immediate annuities every few years instead of purchasing a large one when rates are lower.

Share Button
Comments are closed.


Copyright © 2020 AFYI Holdings Group, LLC. All Rights Reserved. No part of this article may be reproduced without the express written consent of AFYI Holdings Group, LLC. - Prefooter


Mailing Address:

1165 NE 105 St.
Miami Shores, FL 33138



(866) 223-2121

Follow Us On

Click for the BBB Business Review of this Annuities in Miami Shores FL

Copyright © AFYI Holdings Group, LLC, All Rights Reserved

Share On Facebook
Share On Twitter
Share On Linkedin
Share On Pinterest