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.
Educational disclaimer. Everything on WealthSerene.com is educational and is not investment advice. Projections and calculations are illustrative; actual results depend on market conditions, your situation and factors outside this tool’s scope. For a decision specific to your situation, consult a qualified financial professional. View full disclosures