An immediate annuity provides a secure, stable way to turn your money into retirement income. You give a lump sum of money (called a "premium") to an insurance company which, in turn, promises to pay you a steady stream of income for as long as you live, or for a period of time you specify. The payments from an immediate annuity are made in periodic (monthly) installments to you, usually within the first year of deposit.

Unlike income from financial products that can fluctuate, annuity income payments are guaranteed for a certain period of time or for your lifetime.

The amount of each payment installment you receive from an immediate annuity is determined by an interest rate (locked in at time of purchase), your life expectancy, and the initial premium payment amount.