Chapter 2. Immediate annuities
“The question isn’t at what age I want to retire, it’s at what income.” | ||
| --George Foreman | ||
Immediate annuities are a financial product designed to provide you with an income stream for life. They are bought with a single lump-sum payment and begin to make payments to you right away. Instant gratification. What could be more American than that? For example, you give the insurance company, say, $100,000, and it pays you $600 per month for the rest of your life. Immediate annuities can either be fixed rate or variable rate.
Fixed rate annuities
The fixed immediate annuity pays regular payments at a specific locked-in interest rate on either a monthly, quarterly, semi-annual, or annual basis. Each payment consists of a ...
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