What is a Single Premium Immediate Annuity (SPIA)?
The Annuity Man
Single Premium Immediate Annuities (SPIAs) are a personal pension plan that you can contractually customize for your specific situation.
Single Premium Immediate Annuities (SPIAs) provide an lifetime income stream regardless of how long you live. The payments are primarily based on your life expectancy (interest rates play a secondary role) and is a pure transfer of risk that contractually solves for longevity risk (i.e. outliving your money). SPIAs were introduced in the Roman Times to reward the dutiful Roman soldiers and their families with a lifetime income stream. The word "annuity" comes from the Latin word "annua" which means payment.
SPIAs are a commodity product and should be shopped with as many carriers as possible. Quotes expire every 7 to 10 days unless you lock that quote in and move forward with the application. Single Premium Immediate Annuities (SPIAs) have no annual fees, no moving parts, no market attachments, and the commission is paid to the agent from the carrier's reserves...and is a net transaction to you.
You can structure a SPIA payout for a "Single Life", "Joint Life", or "Period Certain." There are over 35 different SPIA ways to customize a SPIA contractual payout, and the annuity company doesn't keep the money unless you structure the contract "Life Only."
SPIA income can start as early as 30 days from the contract issue date and can be deferred as far out as 13 months. COLAs (Cost of Living Adjustment) increases can be added to the contract at the time of application, but the payments will be lowered.
You can contact Stan if you have any questions or want to see quotes on your specific situation.