“This may be the most misunderstood investment ever created…”

From Grant Wasylik and Tom Dyson in The Palm Beach Letter: Imagine investing $100,000… with a contract that will pay you a guaranteed amount of money regularly—say, $500 per month—for the rest of your life.

That’s the benefit of a Single Premium Immediate Annuity (SPIA). (You turn over a chunk of your money to an insurance company for the annuity. It invests it, and that annuity will pay you a guaranteed amount for the rest of your life.)

You’ll get that $500 every month, no matter what the stock market does. Any market crash won’t affect your payments.

The burden is on the insurance company to pay you.

Your $500 per month payment is higher than regular interest payments. That’s because these monthly payments are a combination of interest and return of principal (some of your $100,000).

So, if you’re managing your money wisely, a SPIA is a great tool to help you fund an “income floor” (a baseline, guaranteed amount of regular income) for your retirement.

This enables you to pay your base expenses for as long as you live…

Plus, SPIAs have low commissions and no annual fees. They are “instant pensions” starting 30 days from the contract date. They’re simple to understand and set up.

You can sleep well every night while your friends sweat out market gyrations.

  Consider the example of Leo…

He’s a retired 65-year-old man living in Florida with his wife, Mona. They’ve paid off their house and plan on living a simple retirement.

They have $2,600 per month coming in from Social Security. But Leo needs to generate another $400 in monthly income to cover his remaining fixed expenses.

Even though they’ve got $100,000 in cash, Leo is hesitant to actively manage it.

He’s been sitting in cash ever since the 2008 financial crisis cut his retirement portfolio in half.

If Leo put his $100,000 into a SPIA, he’d get fixed, stable income. He could enjoy his retirement without having to track the markets and actively manage his account.

We had our annuities expert obtain SPIA quotes for Leo from 18 high-quality insurance companies. Here are the top seven…

Financial Institution
 Premium
 Monthly Income
 Monthly Taxable Portion
 Year 1 Yield (Pretax)
 Credit Rating
Company #1
 $100,000.00
 $547.03
 $130.19
 6.56%
 A+
Company #2
 $100,000.00
 $544.82
 $128.03
 6.54%
 A++
Company #3
 $100,000.00
 $543.45
 $126.62
 6.52%
 A
Company #4
 $100,000.00 $542.12
 $125.23
 6.51%
 A+
Company #5
 $100,000.00 $537.87
 $121.02
 6.45%
 A
Company #6
 $100,000.00 $535.95
 $119.52
 6.43%
 A
Company #7
 $100,000.00 $535.90
 $118.97
 6.43%
 A+

The highest quote came from Company #1. If Leo forked over $100,000 to the insurance company, it’d promise to pay him $547.03 in monthly income.

And the best part is, due to the nature of annuities, only $130.19 of that monthly income would be taxable. That’s a 6.56% pretax distribution rate.

The $547.03 monthly sum would be paid out to Leo for the rest of his life.

Palm Beach Letter subscribers can click here to access the full details on how to set up a safe and profitable annuity. It includes the contact information of “America’s top annuities expert.” He’s offered to answer your additional annuity questions, for free.