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 ?
Pensions, Institutional Income Annuities, Structured Settlements and other institutional retirement product areas.
This year also marks the third anniversary of paying dividends on participating Mutual Income Annuities. Income annuities have grown to become a core retirement solution for millions of Americans.
Symetra Life Insurance Company has said that it has entered into a reinsurance agreement with Resolution Re under which the financial responsibility for all of Symetra's structured settlement annuity contracts and a smaller block of income annuities will be transferred to Resolution Re.
Such contracts have been called immediate annuities, although they now may be labeled income annuities or payout annuities because those labels may be more appealing to consumers.
* 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 $9.2 billion.
These plans can now purchase deferred income annuities where an annuitized payout can start as late as age 85.
The different types of deferred annuities and income annuities are also described.
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.
Indexed annuities, single-premium immediate annuities (SPIAs) and deferred income annuities (DIAs) are the strongest contenders in the fixed market, according to IRI.
The emergence of deferred income annuities over the past few years is a perfect example.
The Department of the Treasury and the Internal Revenue Service (IRS) have issued guidance designed to expand the use of income annuities in 401(k) plans.