Low investment yields have robbed many savings vehicles of their appeal. Besides bank CDs and money market funds, fixed annuities also may fail to generate enthusiasm these days. According to Beacon Research, which tracks the annuity industry, fixed annuity sales in the first quarter of 2013 were down 11.7% from the first quarter of 2012.
Yet one type of fixed annuity bucked this trend. Beacon reported that sales of deferred income annuities (DIAs) were nearly 150% higher in the first quarter of 2013, versus the first quarter of 2012. Looking back further, New York Life recently announced that DIAs were a $50 million market in 2011; this year, the market is $1 billion and growing rapidly.
Invest now, collect later
DIAs are sometimes called longevity annuities. That is, you can buy one that will pay out as long as you live. If you're married, you can buy a joint DIA that will pay as long as either you or your spouse is alive. This guaranteed income stream may help prevent you from running short of money if you live well beyond normal...