Classically used as a method of increasing retirement savings, the SPDA provides a guaranteed amount once the investor has retired and instructs the insurance company to make payment.
A SPDA is usually best for the investor who has a long-term accumulation plan in mind. It can also be good for a high net-worth investor or one who has maxed out other tax-free retirement vehicles such as a 401(k) or IRA.
Options exist for payment to the investor and his or her spouse, or for payments after the death of the original owner.
The SPDA annuities are considered risk-averse investments that are most suitable for people entering or nearing retirement.
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