An Immediate Annuity can be the solution to many of your income requirements. The combined guarantee, security and flexibility offered by an immediate annuity make it a viable financial solution for many situations. If you're searching for a simple and easily manageable way to maintain your retirement income, an immediate annuity can relieve your financial concerns with a one-time premium.

One of the great advantages of an immediate annuity is that it provides protection for you from the possibility of outliving your assets. Even if you plan on retiring at age 65 instead of 55, you should be planning on managing your assets for income for at least an additional 20 to 30 years - an immediate annuity can ease the surrounding those numbers and scenarios because it offers stability - you'll never outlive the benefit payments and they do not fluctuate. The only thing you'll need to concern yourself with will be managing your retirement income.

So, how, exactly, does an Immediate Annuity work?

You contribute a lump sum and receive monthly income for the rest of your life. Straightforward, right? There are some details and particulars you should be aware of. First, the income is determined by your age, which is to say it is really determined by life expectancy. If you've got a lump sum that has accumulated in another savings plan (a 401k, for example), you can, upon retiring, take the lump sum and annuitize it, thus creating your own pension where the amounts of the payments are up to you. One thing of importance to note regarding immediate annuities - if you want your money, in the event of your death, to be deferred to a specified relative or beneficiary, you'd need to exercise this option when you're setting up the annuity, if not, the money you contributed would be relinquished to the insurance company.

There are actually several different pay-out options with immediate annuities that can be tailored to meet your needs and lifestyle requirements:

Fixed period - You choose on how many years you want to receive income payments.

Fixed amount - You choose how much you want your income payment to be. The calculation of how long the payments last will be done for you.

Life - You will receive payments for the remainder of your life. There is of course a slight risk with this choice; you could die before receiving the full-accumulated value of your investment, thus you would lose some of the value of your investment.

Life (with period certain) - Equal amount payments are made to you throughout your life or, in the event of your death, to your beneficiary for a guaranteed period of time.

Life (with refund) - You receive a lifetime income. If you don't live long enough to receive all your premiums back, it will be refunded to your specified beneficiary.

Joint and survivorship - This option provides for payments over the lives of two individuals.

There is also the possibility of opting for what is referred to as a period certain guarantee. What this means is, instead of guaranteed lifetime payouts, you can instead choose monthly payments for a pre-determined length of time, in addition to paying you for as long as you live. If you were to die during the pre-determined time period, your named beneficiary would receive the payments for whatever period of time is still remaining from the determined time period.

When you are considering an annuity, it is important to remember the necessity of not using all of your available money towards it - leave some funds separate for emergencies or any other potentialities. Life does happen, and usually when we least expect it.