An immediate fixed annuity is something a person puts money into to provide them a set income throughout their retirement. Simply put, this is a contract that you and the insurance company put together stating that it will pay you a set amount of income per year for life. It does not matter how long you live. Depending how much you invest and at what age you do this could have an effect on the payments paid out to you however. It is like a pension plan that you set up for yourself to pay yourself.

You pay the insurance company an amount of money that you are comfortable with. In exchange, they guarantee that you will receive a certain amount a month for life. This can be a supplement to your other retirement accounts or investments that you may already have in place. Another thing you really need to consider is that once you agree to a contract it is usually non-refundable. Meaning, you will not get your money back. So make sure this is the right choice for you.

Once you have said yes this is for you and have made the investment, you will start to receive payments. Your payments can come in a number of ways, i. E. Monthly, quarterly, etc, but they are usually on a monthly basis. Your payments can also vary depending on how much you invested, etc. You would have to ask your financial planner/advisor about this when setting up your annuity.

Keep in mind that these types of annuities are not for every one. It depends on your situation. There are financial calculators online that can help with calculations of investments you might be looking to make. Remember, these are just calculations and they can and do change once real money is put into play. Once you get an overall picture of where you are and where you would like to be, you should seek professional advice.

Making a list is always good. List the things you want to get out of your retirement. Adding some numbers to that list will also help. Then check and see if your current retirement investments will make this possible for you. If not, figure out how much more monthly income you may need to reach that goal. Once you have this overall picture you can make a clearer, better financial decision.

You will also want to know about any tax breaks and/or penalties that can be involved with said annuity. Certain investments have penalties for early withdrawal, etc. This is a definite need to know. You do not want to be penalized on top of everything else. A little more research about this ahead of time can help. When you sit down with someone you will have a detailed list of questions to go over. You do not want to miss anything important.

Do not invest in this or anything else if you are unclear what will happen to your funds. You should always, always seek professional financial advice when thinking about investing large sums of money. Ask questions. If the answers are not plain or you do not fully understand, ask again. It is your money.

This is just an overview and there is lots of information out there to be had with a push of a button. I cannot stress enough the importance of doing your homework first and foremost. Get an idea of what you want. See if an immediate fixed annuity is the right choice for you.

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