When do payments typically begin with an immediate annuity?

Payments from an immediate annuity are typically structured to start immediately without delay, meaning that they begin right after the initial investment is made. This product is designed for individuals who are looking to convert a lump sum of money into a stream of income right away, often at or nearing retirement age.

The term "immediate" signifies that the first payment occurs soon after the annuity is purchased, often within the first month. This characteristic is what distinguishes immediate annuities from deferred annuities, where payments begin at a future date. The focus on immediate cash flow is particularly attractive to those who need access to their funds quickly.

In the context of the other options, within a year or after a specific time frame like five years or after retirement does not align with the principle of an immediate annuity, which is focused on providing income without delay upon purchase.