Immediate annuities are typically funded with a one time payment. Distribution or payment of income typically begins within a month. The income payments you receive from fixed, immediate annuities are based on the amount you contribute, your age and the interest rate environment at the time of purchase. Immediate annuities can provide dependable financial security: a stream of income payments guaranteed to continue for the rest of your life or for the period of time you select. If you are about to retire, an immediate annuity may be a good place to put a lump sum of money accumulated for retirement through another savings or investment vehicle. You also can convert your deferred annuity into an immediate annuity to start receiving income. What are my income options?   Advantages of an immediate annuity: Among the reasons to consider an immediate annuity are the following: An immediate annuity is a financial vehicle that can provide guaranteed income for life. The income payments you receive can supplement your other income sources, such as social security and pension payments, which may not provide enough income by themselves. You choose how often to receive your income payments. Whether monthly, quarterly, semi-annually or annually, there's a payout plan to fit your particular needs. You pay income taxes only as you receive your payments. When you receive income payments, you will be taxed on the portion of the payments that is earnings. The portion that is principal, which represents your initial deposit made with money that had already been taxed, is not taxable. You may lessen your financial worries. Financial management can be a burden in your retirement years. Because you don't know how long you'll live, it's hard to be sure your resources will last as long as you need them. If you withdraw too much of your nest egg, your future income can suffer or you may run out of money entirely. If you are too thrifty when it comes to spending your nest egg, your level of living may suffer. Immediate annuities can remove some of these burdens by providing you with a predictable fixed payment for life, so you can concentrate on enjoying your hard-earned retirement.