(See also annuity
insurance.)
The insurance
company is
responsible to see that you get paid the agreed upon amounts. Annuity
definition.
If you are a
lotto winner, and you receive money
in equal
installments, then that is an annuity also (because someone else
invested the money).
First,
there are two
basic
types of
annuities: Deferred or immediate.
• Deferred: Lets your money grow until you are
ready to retire
(after age 59 ½). The interest you make is tax deferred until you take
money out.
• Immediate: Provides income right away to you—as
fast as within
a month of the start of your investment.
Annuities
can be paid out in two basic
ways:
a.
Ordinary: The payments occur
at the
end of
a period.
b. Annuity
Due: The
payments occur at the beginning
of each period. (An example is a lease payment
due at the beginning of
each month.)
Second, the interest
can either
be fixed or variable:
• Fixed: Provides a guaranteed interest
rate for a specified
term.
• Variable: Allows you to make
choices on how your money gets invested. One benefit
is that you can switch funds
to different
investment options without worrying about taxes or capital gains.
Third,
some features
and
benefits overall:
• Tax Benefits:
Your annuities are not
taxed until payouts begin.
• Sell
or Cash Out: Under
the right conditions, your
annuities may
be sold or cashed out.
There are companies to help
you do this.
Immediate
Or Deferred?
Do you want to
defer
your annuity and let it grow to a large
retirement reserve?
Or, do you
want to acquire immediate
monthly income in the near future?
Get a great
annuity quote and
find out what you can do!
Or, get a
free consultation from a Certified
Financial Planner
to help you
make the best
decision for your needs.
"You'll
be glad
you did the
right thing!"
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