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Liz Weston: Why retirees may want to buy an immediate annuity now
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FILE - This undated file photo provided by NerdWallet shows Liz Weston, a columnist for personal finance website NerdWallet.com. When you purchase an immediate annuity, you’re paying a lump sum now in exchange for a stream of payments over a fixed period or for your lifetime. That money can round out your retirement cash flow plan, along with Social Security, retirement plan withdrawals, other investments and a pension if you have one. They’re particularly attractive now, because payouts are the highest seen in a decade. But the decision can’t be undone, so take time to research and choose. The payout varies depending largely on how much you invest, your age, interest rates and the payout option chosen. - photo by NerdWallet via AP, File
An immediate annuity is an insurance product that provides guaranteed income: You give an insurer a chunk of money, and the company gives you a stream of payments that can last for life. The payments begin within 12 months of purchase. Now may be a good time for retirees to buy an immediate annuity, since payouts are the highest they’ve been in a decade, says Rob Williams, managing director of wealth management at Charles Schwab.