What is a Lifetime Annuity?
A lifetime annuity is a financial product designed to provide steady income for the rest of an individual's life, usually purchased with a lump sum payment at or near retirement.
Key Features:
- Guaranteed Income: Ensures a reliable income stream, protecting against the risk of outliving your savings.
- Payment Options: Payments can be structured monthly, quarterly, or annually, depending on the contract terms.
- Variety: Lifetime annuities can be fixed or variable, with fixed providing stable payments and variable allowing for growth based on underlying investments.
Benefits:
Lifetime annuities are particularly appealing to retirees looking for financial security. They can help budget for essential expenses and provide peace of mind against market volatility and inflation.
Considerations:
While beneficial, it is crucial to carefully evaluate fees, payout structures, and potential inflation impacts before purchasing a lifetime annuity. Consulting with a financial advisor is recommended.
The selection of a lifetime annuity should align with individual retirement goals and overall financial strategy.