Claims Pay a bill
Log in
  • Resources...
  • Investing & retirement
    • piggy bank

    Investing & retirement resources

    What is an immediate annuity?

    When you need income you can count on

    An immediate annuity is the most basic type of annuity. You make one lump-sum contribution. It’s converted into an ongoing, guaranteed stream of income for a specified period of time (as few as five years) or for a lifetime. Withdrawals may begin within a year.

    Learn more about immediate annuities

    What are the benefits?

    Tax advantages

    Its tax-deferred status allows you to benefit from compounded growth.

    Also, if you fund your immediate annuity with money you’ve already paid taxes on, you’ll have a source of income that’s partially tax-free.

    Immediate income

    You begin receiving guaranteed payments after the first year.

    Customized guaranteed income

    Create income for either one or two people for a specific period of time or for life.

    Income steadiness

    On some products, for an additional cost, you may opt for a cost-of-living adjustment (to protect against inflation) or a liquidity feature (to allow lump-sum withdrawals in the event of a financial emergency).

    What should you consider before purchasing?

    Designed for income security

    This product may not be right for you if you:
    • Have enough income to maintain your cost of living and don’t need income security or
    • Have little retirement savings and need immediate access to cash

    COST-OF-LIVING ADJUSTMENT (COLA)

    To offset inflation, this feature automatically increases your annual payment amount by 1%, 2%, 3%, 4% or 5% compounded annually.

    chat icon
    Want to work with a financial professional?
    Find a financial professional

    Related topics & resources

    Learn about the different types of investments
    How much should I contribute to my 401(k)?
    Retirement savings by age
    Nationwide investing & retirement programs
    More investing & retirement resources

    An annuity is a contract you purchase from an insurance company, designed for long-term investing. The values will fluctuate based on investment option performance. Annuities have restrictions and limitations, and fees and charges will vary based on the product. You may be charged a penalty if you take your money out early. Withdrawals may be subject to ordinary income taxes, and if you are under age 59½, you may pay a 10% federal tax penalty. Please remember that investing involves risk, including possible loss of principal. All guarantees and protections are subject to the claims-paying ability of the issuing insurance company.