Guaranteed Income For Life, Using a SPIA

One way to beat the 10% penalty tax on retirement plan distributions prior to age 59½ is to use a Single Premium Immediate Annuity that guarantees an income that cannot be outlived.

The Policy is technically called a Single Premium Immediate Annuity, or SPIA.

How it works:

  1. The policy owner pays a single premium based on the life of the annuitant (the owner and annuitant may be the same person)
  2. The insurance company issues an annuity policy that guarantees payments for a number of years, for life, or for a combination of both.

The types of payments the policy owner may select can include several options, such as:

  • Life Only
  • Period Certain from 5-30 years
  • Life with a Period Certain from 5-20 years
  • Joint & Last Survivor with 50%, 60%, 66.6%, 75%, or 100% paid to the survivor, with or without a period certain period of 5-20 years
  • Joint & Spouse with 50%, 60%, 66.6%, 75%, or 100% paid to the spouse, with or without a period certain period of 5-20 years
  • Installment Refund
  • Cash Refund

An Immediate Annuity may also have built in inflation protection in the form of a Cost of Living Adjustment rider, or COLA rider. These riders may be available with either a simple or compound annual interest adjustments, with the most common options ranging from 1% to 5%.

Liquidity Options: Many modern Single Premium Immediate Annuities include liquidity options, such as partial and full surrender of the policy, commonly called a Commutation Benefit.

In addition to the peace of mind you'll have knowing that you'll never outlive the income for the period you choose, you also won't have to worry about managing those funds to be sure your future income doesn't change. You have the security of knowing that an insurance company guarantees the single premium you pay for the immediate annuity, and that your income payout is not subject to the fluctuation of stock markets and bond markets.

Safety of principal, security of future income payments, and simplicity of function are all hallmarks of a Single Premium Immediate Annuity. The income that cannot be outlived is a unique benefit only available from an insurance company.


A Single Premium Immediate Annuity is a customized policy for each annuitant. If you would like to get a quote to find out what a Single Premium Immediate Annuity can do for you, call today (800) 680-5596 or click This email address is being protected from spambots. You need JavaScript enabled to view it.to send an email.

The information we need to provide you with an accurate proposal:

  • Name
  • Gender
  • Date of Birth
  • State
  • Premium that you want to pay OR the monthly income that you need
  • Source of funds:  Before Tax (IRA, Roth IRA, SEP IRA, SIMPLE IRA, 401k, 403b, 457 plan) OR After Tax (cash, bank CD, other investment)
  • Optional: Tax Rate - This helps you see how the Exclusion Ratio on an After Tax Single Premium Annuity is a great tax advantage

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