First, let’s discuss a general definition of annuities. Annuities are insurance products that function as an agreement between an individual and a financial institution. The person agrees to make a lump sum payment to an insurance company, who makes regular payments back to the person throughout the life of the annuity. Annuities are long term products designed to supplement retirement income and product guarantees are backed by the financial strength and claims-paying ability of the issuing insurer.

There are two basic kinds of annuities, deferred and immediate, that determine how these payouts occur. Deferred annuity payments start at later date and time while immediate annuities can start payouts almost immediately.

For those in need of steady income payments within a short amount of time, immediate annuities can be a suitable choice. Another attractive feature of these annuities is they feature tax-deferred growth, which means you aren’t required to pay taxes on any potential increase until the money is withdrawn. Although these payments will be tax deferred, any distributions may be subject to ordinary income tax and, if taken prior to age 59 1/2, an additional 10% federal tax.

There are many companies out there that sell immediate annuities, providing you with a lot of options. By working with Grace Advisory Group, you’ll gain access to many of these companies and have options available to you for immediate annuities.