If a client wants to start an income stream before her next birthday but is open to market risks, which annuity may be suitable?

The choice of an indexed annuity in this scenario is suitable because it provides a mechanism for creating an income stream that can begin sooner rather than later, while also allowing for some exposure to market performance through its linkage to a stock market index.

Indexed annuities typically offer a combination of a guaranteed minimum interest rate along with the potential for additional interest based on the performance of a specified index, which means they carry some market risk but are generally designed to protect against losses. This could appeal to a client who is open to market risks but still wants some level of security in her investment.

In contrast, a deferred variable annuity would not be appropriate for someone needing to start an income stream before her next birthday, as this type of annuity is designed to accumulate value over time before payouts begin. A variable Single Premium Immediate Annuity (SPIA) would offer immediate income but carries the risk associated with the performance of underlying investments, which might not align with the client's specific timing and market risk preferences. A fixed SPIA, while providing a guaranteed income stream right away, does not provide any market exposure or growth potential, which may not satisfy the preference for market risk.

Therefore, an indexed annuity aligns best with the client's desire to begin