Question

What is the purpose of investing a lump sum and immediately annuitizing it?

1) To provide lifetime income
2) To generate fixed or variable income
3) To require a significant lump-sum investment
4) All of the above

Answer 1

Investing a lump sum and immediately annuitizing it serves the purpose of providing lifetime income, generating fixed or variable income, and requiring a significant lump-sum investment.

Step-by-step explanation:

The purpose of investing a lump sum and immediately annuitizing it is all of the above. An annuity is a financial product that provides a regular income stream for a predetermined period or for the rest of your life. By investing a lump sum in an annuity, you can ensure lifetime income, generate fixed or variable income depending on the type of annuity, and require a significant lump-sum investment.