Deferred Income Annuities
What is a Deferred Income Annuity?
Deferred Income Annuities are a simple type of an annuity, similar to Single Premium Immediate Annuities (SPIAs). The biggest difference between a deferred annuity and an immediate annuity is when you start to receive money from the annuity. If you can postpone your income from the annuity for a year or more, you can often get a nice bonus from the insurance company that you sign up with. Deferred annuities are often purchased with one lump sum payment, though there are some companies that will let you purchase an annuity with incremental payments over time. The insurance company then guarantees to pay you a specific amount every year for the rest of your life. Payments do not start immediately but can be annual, quarterly or monthly when they do start.Who should consider getting an Deferred Income Annuity?
- People who want a better return on their money than a bank can provide
- People who want a guaranteed income stream for their retirement that is higher than any other annuity can provide
- People who don't need their income to start immediately
- People who want to grow their money without the volatility of the market
- People who are getting close to retirement
- People who are retired, but have other sources of income for at least a year
- People who want to diversify their portfolios
More Information about Deferred Income Annuities
Deferred Income Annuities are one of the most common types of annuity. In fact, about 50 million Americans have Deferred Income Annuities. Deferred Income Annuities are meant to be retirement planning vehicles, so they are not generally well suited to people who like to move their money around or want to access large portions of it in the near future. Deferred Income Annuities can be designed to allow an income stream that starts as early as one year down the road, but some younger people also use deferred income annuities as a key way to add safety and security to their retirement plans. Deferred Income Annuities are actually a fairly broad category of products, so it is especially important to discuss your situation with a trained professional to make sure you get the product that is best for you. Some Deferred Income Annuities will allow you to add bonus features, like an increased payout if the money is used to pay for a nursing facility. Each Deferred Income Annuity will have a different surrender period, so talk to one of our advisors about when you want to access the money and what you might want to do with the money in your annuity account.
