Increasingly, financial firms are offering variable-payout immediate annuities, tied to stock market performance. Instead of a steady income stream you’ll receive lifelong income that may rise, over the long term, but also may drop if stocks stumble.
Some immediate variable annuities come with a floor for downside protection. An annuity that starts out with a $400 monthly payment might never go below $320, for example.
Some financial firms offer a combination of fixed and variable annuity income payments. Recipients have the option of revising their income choices as their needs change.
In addition, some immediate annuities offer you access to your principal, in case you change your mind, but such annuities often provide lower payments to annuitants.
