Single Premium Immediate Annuity: Dependable Stream of Income
You've spent a lifetime growing your retirement wealth. What's next? Single Premium Immediate Annuity (SPIA) converts retirement savings to retirement income — income that can last a lifetime. With a single, lump-sum payment that you select, SPIA's automatic and guaranteed payouts could give you the financial freedom to relax and enjoy a deserved retirement. Simply determine your lump sum premium amount, select the payout option and optional benefits that best suit your needs, then receive a sure stream of income for a period you choose - even as long as your lifetime.
If unlimited access to all assets is not required and dependence on guaranteed income is preferred, a SPIA could be a solution for you. You may enjoy the peace of mind that comes from knowing your payouts won't fluctuate with market volatility and can even increase to address inflation.
Benefits of a SPIA
The daunting concern many retirees face is this: How long will the money you've saved last? Will you have enough to last through your retirement — which could be 20 or 30 years? A Single Premium Immediate Annuity (SPIA) can help provide certainty.
A variety of payout options let you choose an income flow that meets your specific needs.
If the premium is from an after-tax source, a portion of every income payout is excluded from income tax. Known as the "exclusion ratio," this advantage can be an important element to consider in income planning.
Concerned about rising prices and inflation? A SPIA offers an optional guaranteed Increasing Payout Option (IPO). This option increases annual payouts over the length of the income stream by a compounded interest rate of 1 to 5 percent.
Your lump sum payment, or single premium, can come from many sources, including savings, investments, sale proceeds, IRAs, company retirement plans, maturing certificates of deposit or other tax-deferred annuities.
Single Premiums of $10,000 to $1,000,000 can be accepted.
Retirement income and more — a Single Premium Immediate Annuity may be a fit for a variety of needs:
You're entering retirement or are already retired.
You have resources (pension distributions, retirement accounts, brokerage accounts) that you wish to convert into an income stream. (Surrender charges or penalties may apply.)
You're concerned about outliving your income and savings.
You value a guaranteed source of income in retirement.
You want to select among various payout options.
You have other retirement resources that can be invested for growth.
You seek freedom from having to manage your savings to generate income.
You wish to provide income for your spouse or beneficiaries.
Our Single Premium Immediate Annuity is issued for ages 0-95 and can sometimes vary with the Income Payout Option.
With this product, we offer many guaranteed income payout options. You select the one that works best for you as well as the frequency: monthly, quarterly, semiannually or annually depending on your preference.
The ability to access cash in the form of a lump-sum payout from a SPIA is available in specific instances. Commutation benefits can provide valuable liquidity should an unforeseen need arise. Examples of such an event include an unexpected relocation or a health-related matter. Commutation benefits are available while the annuitant is living or after he or she has passed away.
Explore Additional Resources
Learn about our single premium immediate annuity, and determine if it's the best choice for your needs.
Overall, Americans are losing an estimated $24 billion every year in matching employer 401(k) contributions. (CheatSheet, 10 Retirement Statistics That Will Scare the Crap Out of You, Dec. 25, 2016.)
55% of retirees stopped working earlier than expected. Health was the number one reason, followed by job loss. (CheatSheet, 10 Retirement Statistics That Will Scare the Crap Out of You, Dec. 25, 2016.)
36% of American adults over 65 are completely dependent on Social Security. (The Motley Fool, 20 Retirement Stats That Will Blow You Away, Jan. 26, 2016.)
The average out of pocket medical costs for a 65-year-old couple will be $218,000 over the next 20 years. (The Motley Fool, 20 Retirement Stats That Will Blow You Away, Jan. 26, 2016.)
1 year in a skilled nursing facility can cost more than $200,000. (The Motley Fool, 20 Retirement Stats That Will Blow You Away, Jan. 26, 2016.)
Many adults don’t save for retirement because they say saving for retirement is like saving for a stranger. (MarketWatch, “This is why most people don’t save for retirement,” Oct. 22, 2016)
Other reasons include
I don’t make enough money
My employer doesn’t offer a 401(k)
My employer doesn’t offer a 401(k) match so it’s not worth it
Single Premium Immediate Annuity ICC10 ENT-01 0901 issued by Western-Southern Life Assurance Company which operates inDC and all states except AK, ME, NH, NY and RI.
Product and feature availability, as well as benefit provisions, vary by state.
Payment of benefits under the annuity contract is the obligation of, and is guaranteed by, the issuing company. Guarantees are based on the claims-paying ability of the issuer. Products are backed by the full financial strength of the issuing company.
Earnings and pre-tax payments are subject to income tax at withdrawal. Withdrawals may be subject to charges. Withdrawals from an annuity are subject to ordinary income tax, and, if taken before age 59½, may be subject to a 10% IRS penalty.
An immediate annuity is permanent. Owner has no access to premium, which converts to an income payout stream. There is no cash value, no death benefit and the annuity can't be surrendered. Contract terms, such as payment amount and frequency, cannot be changed, unless commutation is available and elected. An immediate annuity should not be purchased if access may be needed to any of the premium for living expenses or other purposes.
Payouts end at the annuitant's death unless a certain period or installment refund option is selected. If a payout for life or for two lives is selected, whether the payouts received are less than or greater than the premium paid will depend on how long the annuitant(s) lives. If death occurs after any guaranteed income payouts have been made, no additional payments will be made to the beneficiary.
The Increasing Payout Option (IPO) is not tied to any outside index or indicator. Once a contract is signed, the option cannot be added or removed, as the income stream is adjusted from the start of the contract.
Commutation is only available with period certain payouts and not available in all states.
Annuityproducts are not bank products, are not a deposit, are not insured by the FDIC, nor any other federal entity, have no bank guarantee, and may lose value.
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