You want income starting now
If you’re already retired and ready to begin receiving payments, a SPIA gets you started quickly.
What is a single premium immediate annuity (SPIA)?
A single premium immediate annuity (SPIA) is a way to turn your savings into steady income. After one lump-sum payment, you’ll start receiving income – usually within a month. It’s a reliable option for those approaching retirement and looking to make their money work for them right away.
How do immediate annuities work?
It’s as simple as funding the account, selecting a payout option and then receiving income.
You can open an immediate annuity with a minimum contribution of $5,000. Your lump-sum payment can come from a retirement account like a 401(k) or IRA – or from other sources of income, such as a savings account or inheritance. However you fund it, you’ll be turning that money into guaranteed income in as little as 30 days.
First, you’ll choose when you want your payments to begin – they can typically start within 30 days to one year of your purchase. Then, pick the payout option that works best for you:
- Lifetime income: Guaranteed payments for as long as you live.
- Fixed period: Guaranteed payments with a guaranteed payout period.
- Life with period certain: Lifetime payments with a guaranteed minimum payout period.
- Joint and survivor: Guaranteed payments for your spouse if you pass away.
You can choose to receive payments monthly, quarterly, semiannually or annually. Once you’ve selected your structure and frequency, your payments begin. And with no ongoing account maintenance, you can enjoy your guaranteed income without the hassle.
Is an immediate annuity right for you?
SPIAs offer income with minimal upkeep – making it a smart way to turn your savings into immediate retirement income
You want simple, low-maintenance retirement income
After your one-time contribution, there’s nothing more you need to manage.
You’re okay giving up access to the lump sum
In return, you’ll receive steady income you can count on.
You value stability over market swings
SPIA payments are not affected by the volatility of the market – they’re predictable from start to finish.
You are planning for your spouse’s future
With a joint option, payments can continue for your spouse after you’re gone.
Other annuities to consider
An immediate annuity isn’t right for everyone. But that doesn’t mean an annuity isn’t right for you.
| I want the flexibility to make contributions over time | I don’t need income now but want to grow my wealth |
|---|---|
| Consider an Amica Flexible Premium Deferred Annuity (FPDA) | Consider an Amica Multi-Year Guaranteed Annuity |
What are the terms of a SPIA?
Choosing how to fund your retirement is one of the most important financial decisions you’ll make. Understanding how an immediate annuity works is key to making your choice.
Minimum premium: You can get started with a $5,000 minimum contribution. This makes a SPIA accessible whether you’re rolling over funds from a retirement account or using personal savings.
One-time payment: Once you’ve made your single contribution, there are no ongoing payments or account management required.
Income start date: You choose when your payments begin, usually within 30 days to one year of purchase. This flexibility allows you to time your income to match your retirement needs.
Payout frequency: You can decide how often you’d like to receive your payments. Choose from monthly, quarterly, semiannual or annual payouts – whatever works best for you.
Payout options: Your SPIA can be tailored to support your specific goals with payment options for lifetime income, fixed-period payments, life with period certain, or joint and survivor benefits.
Access to funds: SPIAs are built for long-term income stability. That means once your income stream begins, you won’t have access to the original lump sum.
Death benefit: Depending on the payout option you choose, a death benefit may be included.
Availability: Product features may vary by state.
Tax considerations of a SPIA
When you receive payments from a SPIA, part or all of that income may be subject to taxes. How your income is taxed depends on how you funded your annuity – whether with pre-tax or after-tax dollars.
Qualified annuities are funded with pre-tax dollars, like money from a 401(k) or IRA rollover. In this case, your payments are fully taxable as ordinary income.
Non-qualified annuities are funded with after-tax dollars, such as personal savings. Each payment includes both a taxable interest portion and a non-taxable return of your original premium.
There is more to learn about annuities
Discover the ins, outs, and everything in between.
Pros and Cons of Annuities
What Is a Deferred Annuity?
Ready for a Retirement Lifestyle? These Steps Can Help You Prepare
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ALIC21926 expires 07/28