Retirement
What is an immediate annuity? Should you consider it? Why? Why not?
What is an immediate annuity? Should you consider it? Why? Why not?
An immediate annuity is an insurance product that promises to pay you a certain amount of money (usually on a monthly basis) based on the chunk of money you give them and the time period you have requested.
This is basically like buying a pension and could be an option for those who like the idea of a fixed amount of income each month in retirement. You will pay an upfront fee (keep it at 2% or less) and then the insurance company pays you until the time period ends or you do (death).
If you are a Vanguard investor and this option is something of interest, sign in and search for immediate annuities. Incomesolutions is an insurance company on Vanguard’s platform that will provide you a quote based on your individual circumstances. Learn more on this issue by reading my third book, Graduation!