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Single Premium Immediate Annuity
aka SPIA
What is a Single Premium Immediate Annuity?
A Single Premium Immediate Annuity, or SPIA, is an annuity that can help you get a guaranteed and reliable stream of income. This helps ensure that you will not run out of money in retirement, and can be a useful asset in a retirement portfolio. A SPIA is thought of as one of the easiest and oldest forms of annuities available. With a SPIA, you make a one-time deposit to an insurance company and your monthly payments can begin immediately or within a year. That is why it is called an immediate annuity.
You will generally see lower growth of your investment with SPIAs than other types of annuities that build value for years before your first withdrawal.
SPIA- Pros
• Easy to understand
• Safe
• Predictable
• Guaranteed long-term payments
• No to Lower fees
• Some inflation protection
• Immediate income stream
SPIA- Cons
• Lower liquidity
• Loss of control - immediate annuities are irrevocable.
• Loss of purchasing power - if your SPIA does not offer an inflation adjustment feature it could be losing pace with inflation.
• Large upfront costs
• Inflation risk - the amount the annuity pays each year is fixed.
• Smaller inheritance - depending on the SPIA you select typically once you die the income stream ceases.
Is a SPIA right for me?
A SPIA is a great option for those seeking a guaranteed income stream, similar to how the old pension system worked. A SPIA is an option for those investors who will need an income stream within a year. As with any financial product you have to access what your goals are and if this particular product will help you accomplish those goals.
If I want to learn more about SPIAs, where do I begin?
Individuals interested in learning more about a SPIA should speak to a licensed financial professional for assistance. We would be happy to assist you on your retirement journey. Give us a call at 270-904-6070 for professional help today or click the button below.
Safeguard Insurance, LLC
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Insuring your health, life, and retirement.
Phone: 270-904-6070
Email: education@safeguardky.com
1600 Scottsville Rd, Suite 100
Bowling Green, KY 42104
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