Immediate annuity is one of the ways to save for retirement days. This is indeed a veritable instrument of saving planning for retirement. This package allows receiving a steady stream of income right away. Some immediate variable annuities even guarantee that your monthly payments will never fall below a percentage of your initial payment.

When you buy an immediate variable annuity, you pay a lump sum to an insurance company and start receiving monthly payments right away. As with any variable annuity, your payments will rise or fall depending on the performance of your investment. You can be guaranteed lifetime income and a death benefit paid to your beneficiary when you die.

For some investors, immediate variable annuities are a more attractive option than immediate fixed annuities because you are not stuck with receiving the same amount of cash each month. If what you have invested grows, you can get a bigger check month and beat the cost of inflation, which you will do if you have a fixed annuity.

The average consumer searching to invest in an immediate variable annuity is someone approaching retirement age with a large sum of money who wants steady income while earning additional money in the stock or bond market, according to Mark Mackey, president of the national association of variable annuities (NAVA) Immediate variable annuities have been around for more than a decade, but they have grown in popularity only during the end of 1990s. According to some professionals who track variable annuities, they predict that immediate variable annuities will cast a shadow on immediate fixed annuities in sales and popularity because they appeal to aging baby boomers that are generally willing to take on more risk. That willingness may come out of necessity.

Immediate variable annuities offer a number of benefits guaranteed income, the chance to earn money in the stock market, and a death benefit, But the more benefits that are guaranteed, the higher the charges are going to be. The fees for immediate variable annuity vary by company, but they generally fall around 1.8 percent.

Most advisors opine that people who are not of retirement age should not invest in immediate variable annuities. It will be far cheaper for youthful people to maximize their 401(k) plans first. If you need help covering living expenses and are comfortable with a non-guaranteed rate of return, then immediate variable annuities are the right place for you to invest in.
Immediate variable annuities in a very special way offer guaranteed lifetime income with the potential for market growth. This is a valuable combination today’s time, when retirement plans are remiss not to cover living expenses for 20-30 years past the age of 65.

Currently, an average healthy American male’s life expectancy is put at 85 years with a 25% chance of living until the age of 92. The main advantage of an immediate variable annuity is its ability to insure against retirement savings going empty. And, it offers this insurance with greater growth potential than a fixed rate instrument like a fixed annuity.