Which Type Is Right for You?: Immediate Fixed Annuities

Get the skinny on an immediate fixed annuity, and see if it's a good choice for you.

Kimberly Lankford's avatar
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Purpose:

An insurance product to help you stretch your retirement dollars.

How it works:

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You invest a lump sum and receive a fixed monthly income for life.

Typical investor:

Retirees age 60 or older who want current income.

Features:

Simple to understand and easy to comparison-shop.

Fixed payouts may not keep pace with inflation.

Monthly payouts of about 7% or more of your initial investment for life.

Once purchased, you can't change your mind.

To see if a deferred variable annuity is a better fit, read Which Type Is Right for You?: Deferred Variable Annuities.

Kimberly Lankford
Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.