An immediate annuity is a great option for those people that are retiring or are retired that want to have a steady income but don't have a retirement plan from their company or business. An immediate annuity allows an individual to buy an annuity for a lump sum of money that is they invested and earns interest, plus pays out a set amount of money every month. This helps in deferring taxes on a lump sum of money, plus it also helps in budgeting and planning. An immediate annuity is not meant to be a long term deferred payment; rather most will start to pay within 30 days of the purchase of the annuity. Unlike many of the long term investment type of annuities, the immediate annuity is placed in a low risk type of investment that is guaranteed by the insurance company managing the annuity. Buyers do need to carefully select the insurance company, however with a reliable and stable insurance company this is one of the safest options for a steady cash flow throughout the annuity holder's life.