Immediate Annuities
Make one lump-sum contribution that will get converted into an ongoing guaranteed stream of retirement income for a specified period of time, or for the rest of your life.
An immediate annuity is an insurance contract funded by a lump sum payment, like money from a savings account, a 401(k) or an individual retirement account (IRA). You decide on the frequency and duration of your payouts, and your initial withdrawal can start as soon as 30 days after purchase and must be taken within the first year.
Immediate annuities may be available infixed or variable formats, so you can choose between a guaranteed stream of retirement income or the potential for market-driven returns.
Immediate annuities may be available in
Immediate retirement income
Immediate annuity payments may start as early as one month after your annuity is issued or can be delayed up to a year.
Consistent retirement income
Consistent payouts mean you are less likely to outlive your retirement savings.
Easy account management
Once you purchase an immediate annuity, there are no additional steps and nothing to monitor.
Tax savings
Immediate annuity earnings are tax-deferred until you start to receive income payments. Then, only the payments you receive are subjected to income tax. But like many people, you might expect to be in a lower tax bracket during retirement, so you could potentially pay at a lower rate.
Immediate annuity payments may start as early as one month after your annuity is issued or can be delayed up to a year.
Consistent retirement income
Consistent payouts mean you are less likely to outlive your retirement savings.
Easy account management
Once you purchase an immediate annuity, there are no additional steps and nothing to monitor.
Tax savings
Immediate annuity earnings are tax-deferred until you start to receive income payments. Then, only the payments you receive are subjected to income tax. But like many people, you might expect to be in a lower tax bracket during retirement, so you could potentially pay at a lower rate.
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Immediate annuity FAQs
Immediate annuities offer reliable retirement income payments that start within a year of purchase.
How does an immediate annuity work?
An immediate annuity is an insurance contract that can turn your retirement savings into a guaranteed income stream. You make a lump-sum contribution, and it converts it into a series of payments for a set period of time. Unlike other types of annuities that have longer waiting periods before you can begin a guaranteed income stream, with an immediate annuity, it’s probably no surprise that you may receive your guaranteed payment right away, or at least within the first year you buy it.
What are single premium immediate annuities (SPIA)?
A single premium immediate annuity (SPIA) is another term for an immediate annuity—the most basic of its kind. By contributing a lump sum, like money from a 401(k) or individual retirement account (IRA) rollover, you get access to a steady stream of income that can start right away, or within the first year of buying the annuity. These payouts continue at a frequency and duration you choose.
What are the pros and cons of immediate annuities?
As the most basic type of annuity, immediate annuities begin paying out right away at an amount, frequency and duration you choose—ensuring consistency and potential long-term tax savings. They also may be set up jointly with your spouse. And they’re relatively easy to manage. But on the flip side, they require a higher lump sum upfront that instantly reduces your liquidity and skips an accumulation phase where your money may have had time to grow. Finally, if you don’t opt for a death benefit or select a specific duration, there may be no payout to your beneficiaries.
What is the difference between an immediate and deferred annuity
While an immediate annuity begins distributing your payments almost right away, your payouts with a deferred annuity are just that: deferred. You may fund a deferred annuity like an immediate annuity with a lump sum, but you have the additional option to fund the annuity with payments over time. You may begin taking money out of a deferred annuity federal tax penalty-free once you reach age 59½.
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Investing involves risk, including the possible loss of principal. The prospectus and summary prospectuses of the variable annuity contract and underlying investment options contain information on investment objectives, risks, charges and expenses, which investors should read carefully and consider before investing. Available at Thrivent.com.
Holding an annuity inside a tax-qualified plan does not provide any additional tax benefits.
Guarantees based on the financial strength and claims-paying ability of the issuer.
Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional.
Holding an annuity inside a tax-qualified plan does not provide any additional tax benefits.
Guarantees based on the financial strength and claims-paying ability of the issuer.
Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional.
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