In surveys the number one fear of seniors is the fear of running out of money. To combat this fear, many turn to single premium immediate pay annuities.
How to Get a Ballpark Estimate on the Payout of a Single Premium Immediate Pay Annuity
Go to http://www.immediateannuities.com
Fill in the data as shown with your own info: (CLICK IMAGE TO ENLARGE).
Here we have put in $100,000 and the ages of 65 for the annuitant and his wife. Click "calculate." The first and most basic option pays $626/month ( as this is written) as long as the annuitant lives. If the annuitant dies the day after signing the contract, the insurance company keeps the $100,000. If the annuitant lives to be 120, the insurance company has to make monthly payments over that entire period.
You'll notice added features on the page. Whenever something beneficial is added, the payout decreases. In general, annuities are not heir friendly. To add features that leave something to heirs reduces the monthly payout. Also notice the payout for females is less. The reason is simple--women live longer.
Three points worth knowing and remembering:
-the payout depends on interest rates. As rates rise, the payout will increase.
-putting some portion of assets in an annuity in retirement reduces the risk of running out of money in old age.
-the long-term financial viability of the insurance company issuing the contract is important.
Thoughts and observations for those investing on their own or contemplating doing it themselves.
If you are seeking investment help, look at the video here on my services. If you are seeking a different approach to managing your assets, you have landed at the right spot. I am a fee-only advisor registered in the State of Maryland, charge less than half the going rate for investment management, and seek to teach individuals how to manage their own assets using low-cost indexed exchange traded funds. Please call or email me if interested in further details. My website is at http://www.rwinvestmentstrategies.com. If you are new to investing, take a look at the "DIY Investor Newbie" posts here by typing "newbie" in the search box above to the left. These take you through the basics of what you need to know in getting started on doing your own investing.
Friday, July 23, 2010
Single Premium Immediate Annuity
Posted by Robert Wasilewski at 6:53 AM
Labels: Annuities, DIY investing
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