How a SPIA Is Taxed: The Exclusion Ratio Explained With a Real Example
A Single Premium Immediate Annuity turns a lump sum into guaranteed income — but not all of that income is taxed the same way. Part of every payment is a tax-free return of your own money; part is taxable earnings. The percentage that’s tax-free is called the exclusion ratio, and it’s set once, at the […]
SPIA Payout Options Compared: Straight Life, Cash Refund, Installment Refund, Period Certain
SPIA Payout Options Compared A Single Premium Immediate Annuity is built to do one thing extremely well: maximize what you get for the risk of living a long time. Through mortality pooling, the longer you live, the better a straight-life SPIA performs for you — that’s the entire mechanism. Choosing a payout option is really […]
What Actually Determines a SPIA’s Payout Rate? (It’s Not Just an Interest Rate)
What Actually Determines a SPIA’s Payout Rate? What Actually Determines a SPIA’s Payout Rate? (It’s Not Just an Interest Rate) Two quotes. Same age. Same premium. Same payout option. Different checks. If you’ve started shopping for a single premium immediate annuity (SPIA), you’ve probably already run into this. You give two carriers the exact same […]