What are its advantages?

Immediate annuities start paying out right away, and can prevent retirees from outliving their nest egg.

Plus, with a fixed immediate annuity you lock in an income stream for your entire life (or a specific number of years, if you choose). Knowing you can count on a guaranteed income stream can be a boon for retirees who don't want to worry if they will have enough money to pay the bills each month.

Plus, the payments can be higher than you would normally be able to get by putting your money into safe investments on your own.

With a variable immediate annuity you have the potential of keeping the buying power of your lifetime payments ahead of inflation by divvying up your investment among a variety of mutual-fund-like portfolios.

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