Income annuity

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Income Annuity

A fixed or variable annuity that pays a certain monthly or (rarely) annual sum for the term of the annuity. The payments begin as soon as the annuitant buys the annuity. Usually, the annuity's term is the remainder of the annuitant's life, and sometimes the life of his/her surviving spouse, depending on the nature of the particular contract. An income annuity is usually purchased for a lump sum, and is designed to provide a stable income for the annuitant, generally in retirement. See also: Lifetime annuity, Pension.

Income annuity.

An income annuity, sometimes called an immediate annuity, pays an annual income, usually in monthly installments.

Your income is based on the annuity's price, your age (and your joint annuitant's age if you name one), the term length, and the specific details of the contract. It's also dependent on the annuity provider's ability to meet its obligations.

You might buy an income annuity with assets from your 401(k) plan, or your plan may buy an income annuity on your behalf. In that case, the annuity provider guarantees an income that will satisfy your minimum required distribution.

References in periodicals archive ?
New York Life will continue to pay out a dividend on its Mutual Income Annuities in 2018.
The product offering includes deferred variable annuities, immediate fixed income annuities, fixed deferred annuities with guaranteed life withdrawal benefits and deferred income annuities.
QLACS, which are income annuities that start on or before age 85 to protect against running out of money if a participant lives longer than he expected;
In 2016, fixed immediate income annuities grew 1 percent to $9.
These plans can now purchase deferred income annuities where an annuitized payout can start as late as age 85.
Now, however, some well-prepared clients have a new option in using deferred income annuities to double the otherwise available payouts late in life, when the risk of outliving savings is the greatest--by choosing a no-refund deferred income annuity.
The emergence of deferred income annuities over the past few years is a perfect example.
Do consider immediate annuities and deferred income annuities (''longevity insurance''), though, which can work well in some retirement plans.
As boomers approach retirement and life expectancies increase, longevity income annuities can be an important option to help Americans plan for retirement and ensure they have a regular stream of income for as long as they live," Iwry said.
An official with the Treasury said, 'As boomers approach retirement and life expectancies increase, longevity income annuities can be an important option to help Americans plan for retirement and ensure they have a regular stream of income for as long as they can live.
And deferred income annuities really do the best job at maximizing money today for future income later.
In an otherwise muted annuity sales market, deferred income annuities are a growing, albeit still small, niche.