immediate annuity

noun

1. an annuity bought with a single premium, with payments to the annuitant to begin at the end of one payment period, as a month or a year.

immediate annuity

noun

1. an annuity that starts less than a year after its purchase Compare deferred annuity

Example Sentences

A single-premium immediate annuity sold by insurers and brokerage firms — where you hand over a lump of money and the company invests it — can also provide monthly lifetime income.

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A manufacturing employer with lower-income employees could adopt an immediate annuity at age 67 as a default.

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Now may be a good time for retirees to buy an immediate annuity, since payouts are the highest they’ve been in a decade, says Rob Williams, managing director of wealth management at Charles Schwab.

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But buying an immediate annuity — also known as an income annuity or a fixed immediate annuity — is effectively irreversible, so you’ll want to choose carefully.

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If you don’t have enough guaranteed income to cover essential living costs, though, an immediate annuity could fill in the gap, says Wade Pfau, author of “Retirement Planning Guidebook.”

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