Many people who draw on investments to help pay regular expenses are worried that low yields and volatile stock and bond markets are complicating their efforts. My advice: Buy “immediate” annuities. In exchange for a lump-sum ­payment to an insurance company, you’re promised fixed payouts for the rest of your life or for a defined period at rates typically higher than you would get for certificates of deposit (CDs).

However, because new annuities today still lock you into historically low payouts, you need to build a ladder of immediate annuities, evenly splitting up the amount you intend to devote to annuities and buying a new one ­every one to five years. If interest rates rise, your future annuity purchases will provide bigger payouts…and even if interest rates stay the same, your payout rates increase with each new ­annuity because rates improve as your life expectancy grows shorter.

Example: A 65-year-old man buying a $100,000 lifetime annuity today might receive $532.65 a month (6.4% annual yield because each payout ­includes a partial return of the purchase price). At age 69, he would get $575.42 based on the higher age from a new $100,000 annuity plus an additional amount if interest rates have risen.

Steps to take…

Get free quotes from multiple providers at my own information website ( or at

Consider adding features to your annuities, such as annual cost-of-living adjustments and an installment refund, which pays benefits to your heirs after you die until the equivalent of the lump sum you gave the provider up front has been paid out.

Buy your annuities from several highly regarded insurers to protect you in case any of the companies goes out of business and fails to make payments to you.

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