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Lifetime Income payout with Single Premium Immediate Annuity or SPIA.
This approach is all about peace of mind. The SPIA provides an income stream, which can't be outlived - a definite concern of many seniors.
The fixed income investors are looking for ways to safely increase their income. The Fixed Annuity is a great solution to their problem.
Payments on lifetime annuities are also subject to a portion of each payment being received tax-free.
The chart below gives some idea as to the portion of each payment, which is tax free (assumes male).
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Age
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Tax Free Portion
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60
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53%
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65
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58%
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70
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62%
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75
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70%
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80
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75%
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85
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80%
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Once the annuitant reaches the life expectancy, all future payments are fully taxable. Why? Because the entire original principal has been paid out. Future payments consist 100% of "earnings�. Had any other investment been used, payments would have stopped. Because the insurance company guarantees lifetime payments, those payments will continue till death.
Peter and Linda decided to achieve a more comfortable, secure retirement. They called a financial professional to learn more about Immediate Annuities. The financial professional also worked with tax accountant to determine the best way to make annuity investment.
After talking it over Peter and Linda chose to sell their taxable bonds and close taxable CD and invest in an annuity that paid them every month. This monthly income is guaranteed by Annuity Insurance company for as long as one or both of them live.
They are receiving guaranteed income that supplement their Social Security check each month.
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