Are single premium immediate annuities for you?

You have several options on how to convert your cash into regular income when you retire. One of them is through single premium immediate annuity.

17:59 26 February 2013

Single premium immediate annuities are financial products offered to would-be retirees. Through this, you can easily turn your money into a fixed monthly income for a specified number of years. You can buy these from any licensed agent or from the insurance companies. 

The good thing about SPIA is that they are low risk saving vehicles and they are supported by tough state regulations and backed by insurance companies. 

 

The amount of your monthly income will depend on several factors. These include your own funding amount, the length of time you wish to receive income, and the account’s return rate. If you want higher income, you will need to have to put more money and if possible, shorten the span of time that you’ll draw money from this account. 

 

Let me give you an example so you can better understand how it works. 

 

Say, you invest £250,000 in your SPIA account at 5per cent interest rate and you plan to take monthly income for the next 30 years. With these number, you’ll most likely to receive about £1,350.00 each month.