An immediate annuity is an insurance product that provides guaranteed income: You give an insurer a chunk of money, and the company gives you a stream of payments that can last for life. The payments begin within 12 months of purchase.
Now may be a good time for retirees to buy an immediate annuity, since payouts are the highest they’ve been in a decade, says Rob Williams, managing director of wealth management at Charles Schwab.
But buying an immediate annuity — also known as an income annuity or a fixed immediate annuity — is effectively irreversible, so you’ll want to choose carefully.
In my latest for ABC News, learn why retirees may want to buy an immediate annuity now.