SPIA-Single Premium Immediate Annuity

[@myvenusheeler]

Good video.

[@Salveo-]

I purchased a SPIA using about 10% of my investable assets, period certain for 8 years to get me to Social Security at age 70. I did not go for lifetime payments as this reduced the monthly amount received and did not account for any adjustment for inflation. Reducing Sequence of Return Risk was a big factor for me. This helps me sleep better at night knowing that my base expenses are covered. I am not concerned with liquidity as the annuity represents a small percentage of my total. I can also be more aggressive with the rest of my portfolio as I will only use these funds for one time expenses or other discretionary purposes. I figured I had to live on something so getting a regular check without worrying about market conditions was the primary driver. This will also lower my future RMD's and the internal rate of return was slightly better anything I could do with CD's.

[@BigPoppa-t3z]

Its a product that has been around since the Roman era. Its solid

[@Bigwilli123]

A single premium immediate annuity (SPIA) for retirement income might seem appealing due to its guaranteed payments. However, it's crucial to weigh the potential drawbacks.

[@Singh11304]

While SPIAs provide a steady income stream, one major concern is the loss of liquidity. Once you invest a lump sum, it's committed, and you may face challenges accessing funds for unexpected expenses.

[@Jonesmatsunaga]

I've personally experienced this drawback. After purchasing a SPIA a few years ago, I found myself in a tight spot when unexpected medical expenses arose. The lack of liquidity became a significant challenge.

[@Sanchyfab]

I can relate. It's essential to carefully assess your financial situation and consider potential future needs before committing to a SPIA. It's not a one-size-fits-all solution, and the lack of flexibility can be a significant downside.

[@Thomas-ff7wn]

He appears to be well-read. I ran a GOOGLE search on his name. Thanks for the tip

[@Thomas-ff7wn]

And a valid point. I've been researching SPIAs, and the inflation concern has been a major factor in my decision-making process. It's crucial to balance the desire for guaranteed income with the need to hedge against inflation for a secure retirement.

[@fjk6657]

Another great video! I would love to know the tax liability that?

[@myvenusheeler]

Depends on your tax rate as well as the standard deduction. It's just income. Get on taxcaster and play with your numbers.

[@mohamoudismail9101]

You guys have so many variations of income streams that I wonder why other investment Companies don't inform clients about the numerous options you offer.

[@josephjuno9555]

I am 62 single male, dont need to leave a legacy. I have pension of $1800 p mo. A 5 yr SPIA would last until 67 so i can delay SS? My pension will not grow.

[@stevebc957]

Or take one for eight years and get your max SS at 70 - there are a lot of online annuity calculators so you can crunch the numbers without having to talk to a salesman.

[@myvenusheeler]

This is the second time I have watched this video and I have a question. If the couple or even a single person purchased the life annuity with a 20-year period certain Spia with an IRA, 401k, etc. and passed away in say year 8, how would the remaining 12 years of that be distributed due to the Secure act?? Would the payments continue to the heir for the next 12 years or would it be a cash disbursement??

[@myvenusheeler]

Five months later and still no answer.

[@Savannah-ed4rv]

I wish I had done this years ago and I wish that the offerings were better years ago. I have one financial advisor told me I could hand over $200,000 and I would get $200 a month. I laughed and said that doesn't even buy groceries for a month. It's so hard to figure out all these things out and I think that's why a lot of people end up not having enough money in retirement

[@stevebc957]

That would be hilarious if it wasn't so sad, you could have distributed $200 a month to yourself for 1000 months (83 years) even with no growth in the accounts... sounds like your advisor was a used car salesman in a previous life. Glad you laughed at him as that was the only appropriate response.

[@g.ajemian4968]

I would think the a myga for the period of time needed with a 10% withdrawal provision at the current rates would be a better option because you will have principal returned to you at the end of the term where as a SPIA Returns 0 at the end. Your thoughts?

[@CardinalAdvisors]

A MYGA works for the social security replacement 5 year example and will get you close to an extra 1% interest. It takes about double the money of the SPIA. Seldom do we write a 5 year SPIA all by itself. Social Security kicks in at 70 to replace the SPIA income. Many times we write a Deferred Income Annuity to kick in about the same time. Then we manage the rest of the money taking risk because the income is guaranteed. Thank for your input.

[@mohamoudismail9101]

Question: I retired March, 1/2023; I am 76yrs. I have a 3:57 ($80k) employer sponsored traditional ira with TIAA. It has to come out in 9 years. Does it qualify for a Life Annuity with 10 or 20 year survivor benefits? Thank you. Ismail

[@CardinalAdvisors]

Not enough info to answer the question. Please email me at [e-mail] so I can ask questions. Thank You. Hans

[@MarkInChicago]

What happens to the amount that was initially invested ($55013.20) at the end of the five-year period? Does that principal get returned to the investor?

[@myvenusheeler]

You have gotten every dime of it back along with the interest that the time limited immediate annuity generated for your income needs.