Most people don't look to immediate fixed annuities until they are at the point of retirement, somewhere around the age of 65. They are designed specifically to benefit people who have a large amount of money up front to invest but are concerned that they could outlive their retirement savings.

This is a reality that many people face when they retire at 65 and consider the possibility of living another 20 to 30 years. Immediate annuities also should be considered by those who need a monthly payment amount to supplement their retirement income so they can cover their living expenses.

Immediate annuities are considered a very low risk investment as they give a guaranteed return that is not affected by outside market forces that could quickly jeopardize a retirement portfolio. They well suit the conservative investor who simply wants a guaranteed income stream over their lifetime in return for their money.

Before making any decisions, there are a variety of factors that help in choosing the right immediate annuity. Interest rates differ significantly between each insurance company so the investor should take the time to get an immediate annuity quote from a variety of companies to ensure they are choosing the best rate. It is very important to choose a reputable insurance company that has been in the market for a long time and has proven itself to be trustworthy.

There are organizations who provide ratings on companies that provide financial services that should give a reflection on how financially sound each one is known to be. Finally, annuity contracts can have a number of different factors potentially including provisions for beneficiaries, early withdrawal penalties and annual management fees. It is important for the purchaser to do their homework, shop around and choose a contract that best suits their needs.