An income annuity is an insurance product that has a unique advantage – it can provide income you can’t outlive. It’s funded by a single premium that is converted into a steady stream of guaranteed* income payments now or in the future that can last for the rest of your life.
To begin determining the type of annuity that is best for you, first choose when you want income payments to start. Income annuities can either be:
- Immediate Income – your income payments can begin within a week of buying the annuity or within 13 months of the purchase date.
- Deferred Income – your income payments start 13 months or decades in the future after issue.
Next, determine if you would like your payments to be fixed income with or without growth potential.
- Single premium immediate annuity – Your income starts immediately, and the rate is fixed. The payments will not fluctuate and don’t have the potential for growth.
- Single premium Portfolio Immediate Income Annuity – Your income starts immediately, and the rate has a lower fixed floor with potential growth though dividends.
- Single premium deferred income annuity – Your income starts in the future, and the rate is fixed. The payments will not fluctuate and don’t have the potential for growth.
- Single premium Portfolio Deferred Income Annuity – Your income starts in the future, and the rate has a lower fixed floor with potential growth through dividends.
Income annuities may be appropriate if you want to protect yourself from market risk while leveraging some of your retirement savings to provide a predictable and guaranteed stream of income during retirement.
Either way, income payments can last as long as you live, are guaranteed* and offer these benefits:
- Stability – They provide a steady, fixed amount of income that is not subject to market volatility.
- Dependability – You can budget and plan your life around this steady stream of retirement income.
- Simplicity – There are no health or age restrictions, issue fees or annual expenses.
Once you’ve decided when to start your income payments, you have to choose the income payment option that’s right for you. We offer a variety of income payment options.
Note: Not all income plans are available in all types of annuities. Please review the annuity contract or prospectus or consult your financial representative for further details.
When the time comes to create (receive) income from your annuity, determine how long you will need the income to last.
- Lifetime: If your objective is to always have a steady stream of income that you can't outlive, you'll want to choose a lifetime income option.
- Period Certain: If your objective is to have income last for a certain number of years or a specific period of time, you’ll want to choose a period certain option, typically ranging anywhere from 5 to 20 years.
Choose from a variety of income plans that provide guaranteed income for your life or the lives of you and another person (a spouse or partner, for example).
- Single Life: Pays an income as long as you, the Annuitant, are alive; income stops when you die. This option gives you the largest amount of income because it is based on the life of only one person.
- Single Life with Period Certain: Income is paid as long as you, the Annuitant, are alive, but if you die within the period certain, typically set between 5 and 20 years, the income will continue to a named beneficiary for the remainder of the period certain.
- Joint Life or Joint Life with Survivor: Income is paid for your lifetime as the Annuitant or the lifetime of the Joint Annuitant, whichever is later. You can further specify the amount of the income payment (all, 2/3 or half) that will continue to the Joint Annuitant if he or she is still living when you die. You can also decide whether or not the reduction will also apply for payment to the Annuitant if the Joint Annuitant is the first to die.
- Joint Life or Joint Life with Survivor and a Period Certain: Income is paid for your lifetime as the Annuitant, the lifetime of the Joint Annuitant or for the period certain you choose, whichever is later. You can further specify the amount of the income payment (all, 2/3 or half) that will continue to the Joint Annuitant if he or she is still living when you die. You can also decide whether or not the reduction will also apply for payment to the Annuitant if the Joint Annuitant is the first to die.
Learn more about the different income annuities offered by Northwestern Mutual.
*All guarantees are based solely on the claims-paying ability of the issuer.