What is a single premium immediate annuity and when does it make sense?

A single premium immediate annuity, or SPIA, is a contract where you hand an insurer a lump sum and they pay you a guaranteed income, usually monthly, starting almost right away and often for life. It's the simplest, lowest-cost type of annuity and works like buying your own private pension. A SPIA makes sense when you want to guarantee that essential expenses, like housing, food, and insurance, are covered no matter how long you live or how markets behave. The downsides: you generally give up access to that lump sum, most versions aren't inflation-adjusted unless you pay extra, and low interest rates lower the payout. Shop quotes from several highly rated insurers.