What is a Deferred Immediate Annuity?
Deferred Immediate Annuity, or Deferred Income Annuity (DIA), is a financial product designed for long-term income planning. It allows individuals to invest money and defer receiving payments until a future date. This type of annuity is particularly beneficial for retirement planning.
Key Features of Deferred Immediate Annuities
- Investment Period: Money is invested for a predetermined period before income payments begin.
- Income Delay: Payments are deferred to a future date, often aligning with retirement.
- Guaranteed Income: Provides a stable, predictable income stream in the future.
- Tax Benefits: The investment grows tax-deferred until income payments start.
Examples of Deferred Immediate Annuity in Retirement Planning
- Pre-Retirement Investment: A 50-year-old invests in a DIA, planning to start receiving payments at age 65.
- Supplementing Pension: Someone nearing retirement invests in a DIA to supplement their pension income later.
Comparison of Deferred Immediate Annuity and Immediate Annuity
|Deferred Immediate Annuity (DIA)
|Future Date (e.g., post-retirement)
|Almost immediately after investment
|Long-term (e.g., 10-15 years)
|Short-term or none
|Tax on income as received
|Long-term retirement planning
|Immediate income requirement
A Deferred Immediate Annuity, or Deferred Income Annuity, is an effective financial tool for securing a stable income in the future, especially for retirement purposes. It offers the benefit of tax-deferred growth, with income payments starting at a later, predetermined date. This makes it an ideal option for individuals looking to plan their financial future in advance. Contact us today for a free quote.
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