Single premium immediate annuity, often abbreviated SPIA, is an annuity contract funded with a one-time lump sum that begins paying a guaranteed stream of income within one year of purchase. Payments can be structured for life, for a fixed period, or for life with period certain, and may be level or include cost-of-living adjustments. The insurance company assumes investment and longevity risk, pooling outcomes across many annuitants. SPIAs are often used to convert a portion of retirement savings into predictable income that cannot be outlived, acting like a personal pension. In exchange for the guarantee, the purchaser gives up liquidity and, in most designs, access to principal after annuitization.

Advisors use single premium immediate annuities in retirement income plans when clients value guaranteed lifetime income, want to cover essential expenses, or need mortality credits that can outperform bonds at advanced ages. They compare SPIA payout rates across carriers, evaluate options such as joint-life, period certain, and refund features, and model how SPIA income interacts with Social Security and other sources. Suitability and best-interest reviews ensure clients understand the trade-offs between guarantee strength and loss of flexibility. SPIAs can also serve in legal settlements or structured income arrangements. Understanding single premium immediate annuities helps advisors position them as foundational income tools rather than speculative investments.