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.
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.
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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.
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