Annuity

Annuities – Tax Implications

admin — Thu, 15 Oct 2009 05:40:00 -0700

Annuities can be a good choice for savers looking for both a tax-deferred investment now and a steady income stream in retirement.

Annuities are a popular way to guarantee a steady flow of income for retirees, but they also function as a safe vehicle for tax deferral. Consumers in a high income tax bracket may want to consider an annuity as part of their portfolio of investments.

Phases of Annuities

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Understanding an Annuity Contract

admin — Tue, 05 May 2009 09:14:00 -0700

Annuity contracts come into existence when you purchase annuities. An annuity contract stipulates the obligations that the annuity provider (usually an insurance company) and you, as the contract owner, have to each other. Basically, when you purchase an annuity, you provide the company with a lump sum of money in exchange for a regular income which the company will supply you over a number of years.

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Lifetime Annuity: Preparing for Retirement

admin — Fri, 03 Apr 2009 07:09:51 -0700

The current average lifespan in the United States and in other industrialized countries is 77 years old. There are still many, however, who live vigorous, healthy lives in their 80’s and 90’s and even 100’s. This means that if you’re like most people, you’re going to live for quite a number of years after your retirement at age 65. This highlights the need to prepare well for the years you ought to live comfortably after you’ve been in the labor force for so long. Annuities are common options for those who want a steady flow of income when they retire.

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What Is a Variable Annuity?

admin — Wed, 11 Mar 2009 06:01:27 -0700

Variable annuities are insurance and investment products that are joined together to create a unique product for retirement. Annuities offer tax deferred savings plans that are insurance like – using an insurance policy to provide the deferral of taxes. Together, insurance and investment provide you with:

Tax deferrals on earnings in the annuity.

The ability to name your beneficiaries who will receive the balance of the variable annuity upon your death.

Annuitization, which means that you will receive payments for the rest of your life based on your life expectancy.

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FIXED ANNUITY RATES VS. VARIABLE ANNUITY RATES

admin — Sat, 28 Feb 2009 04:59:46 -0800

SECURITY VS. RATE OF RETURN

So which is it: a fixed annuity or a variable annuity? Many people who are contemplating about purchasing an annuity have trouble deciding between the two. Is a fixed annuity safer? Will the rate of return be larger with fixed annuity rates or with variable annuity rates? This article will attempt to answer these questions and the usual ones that you ask regarding these two kinds of annuities.

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Top 4 Reasons to Buy an Annuity

admin — Mon, 16 Feb 2009 13:52:02 -0800

Why buy an annuity? Check out these top 4 reasons for doing so.

Safety of investment or principal

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The Basics of Annuity Interest

admin — Mon, 19 Jan 2009 04:23:08 -0800

Money invested in an annuity accumulates as it earns interest. Annuity interest rates depend on the type of annuity. Before discussing the types of annuity based on the interest rates, it should be made clear that an annuity has two phases: the accumulation phase and the annuity phase. In the accumulation period, the invested money basically remains untouched as it is allowed to grow. The rate of increase of the account’s value depends on the interest rate.

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Annuity Companies: Choosing the Right One

admin — Mon, 12 Jan 2009 06:10:11 -0800

While searching for the correct annuity is imperative so you won’t get stuck with a wrong annuity for life, it is equally important to research on annuity companies. You have to assess the financial stability of an annuity company so as to ensure that it will be able to deliver its promises to you. Fortunately, you don’t have to pore over a company’s financial papers to determine its financial strength. Several independent rating organizations have done the job for you.

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Lifetime Annuity: Preparation for a Lifetime

admin — Wed, 07 Jan 2009 06:34:57 -0800

The current average lifespan in the United States and in other industrialized countries is 77 years old. There are still many, however, who live vigorous, healthy lives in their 80’s and 90’s and even 100’s. This means that if you’re like most people, you’re going to live for quite a number of years after your retirement at age 65. This highlights the need to prepare well for the years you ought to live comfortably after you’ve been in the labor force for so long. Annuities are common options for those who want a steady flow of income when they retire.

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What Types of Annuities Are There?

admin — Fri, 02 Jan 2009 04:38:34 -0800

When it comes to investing and planning for the future, there are many different choices. The same can be said about annuities, as there are many different variations and types of annuities for investors to choose from. The most common types of annuities that you may have heard of include immediate annuities, deferred annuities, fixed annuities, variable annuities, single pay annuities, multi-payment annuities, straight life or joint annuities, and survivor or cash refund annuities.

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Annuities FAQ

admin — Tue, 25 Nov 2008 06:17:25 -0800

When it comes to investing and your future, there are plenty of questions that you probably have, and there should be. Investing in your future and your retirement is a very important decision and should never be taken lightly. There are many different ways to save for the future, plan for retirement, and make investments to make like a little easier, however choosing between which investment method is best for you can be quite confusing and stressful.

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What Is a Fixed Annuity?

admin — Fri, 21 Nov 2008 04:24:03 -0800

A fixed annuity is the most common type of annuity. Basically, you give an insurance company a lump sum of money (either saved over a period of time or in one lump sum) and in exchange, the insurance company pays you a fixed income each month for a specific period of time. If you are doing a single premium immediate annuity (one lump sum payment of funds to the insurance company) the payments begin right away.

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Variable Annuities: Fees and Charges

admin — Mon, 20 Oct 2008 06:25:56 -0700

Investing in a variable annuity will incur certain charges. Understanding these is important, because each of them will reduce the value of your annuity account.

To find out exact details about the types of fees and charges you’ll incur as the owner of a variable annuity, you can check the prospectus for any annuity you’re interested in. Depending on your specific annuity the charges might include the following:

Surrender Charges

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The Best of the Retirement Annuities

admin — Tue, 07 Oct 2008 14:35:34 -0700

Like everything that deals with money and savings, the best annuities that you can choose for retirement should be started early and built upon as much and as often as possible. That’s a given and the part that most of us know about. However, the accumulation of funds for those golden years is a lengthy process and muddling through all the various options might seem a little daunting at first since you need to know which has the highest interest yield and which ones are the better tax shelters.

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What are Annuities?

admin — Wed, 01 Oct 2008 05:50:27 -0700

It was once thought that annuities were something only the very wealthy invested in, but that has changed in recent years. In fact, annuities are one of the most popular and frequently used forms of retirement investing within the United States today. Annuities provide real advantages including competitive interest rates, tax deferral advantages of compounding principal and interest over extended periods of time, and guaranteed income for life.

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Variable Annuities: Death Benefits and other Options

admin — Tue, 16 Sep 2008 06:42:42 -0700

A variable annuity constitutes a contract between you and an insurance company. Under the terms of the contract, the insurer will make you periodic payments, usually starting at some date in the future. Variable annuities offer some additional advantages over fixed annuities, one of which is that the variable annuity has what is called a death benefit. Other optional extras include a guaranteed minimum income benefit.

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Series 6 and Annuities

admin — Thu, 11 Sep 2008 07:12:16 -0700

Most professions require individuals to take certifying exams before they can practice their trade; selling annuities is no exception. For an individual to be able to sell mutual funds and variable annuities, he or she needs to take an exam called Series 6.

Series 6: What it Covers

Series 6 is an exam administered by the National Association of Securities Dealers (NASD). As of August 2006, taking the exam cost $75.00. There are 100 questions, and the exam lasts about 2-1/2 hours. To pass the Series 6 exam, you need a score of at least 70%.

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Using annuities to supplement savings and investment

admin — Sat, 23 Aug 2008 04:50:24 -0700

Trying to build a nest egg to help you enjoy your retirement isn’t always easy, and it’s highly recommended that you maintain a diverse portfolio of savings plans and investments to ensure that you have enough money to live comfortably when you finally retire. While many people are familiar with traditional savings accounts and certificates of deposit as well as retirement funds and investment plans, annuities can also serve as a wonderful addition to a retirement plan.

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Stretch Annuity / Legacy Annuity

admin — Mon, 18 Aug 2008 06:35:22 -0700

A stretch annuity is not that well-known, only because not many financial firms offer it. It does have distinct advantages.

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Preparing for the Future with Annuities

admin — Mon, 18 Aug 2008 06:30:42 -0700

We never know what the future might hold, so a little wise planning can be a life-saver as we get older. A good rule of thumb when preparing for the future with annuities is to determine where you plan to be in twenty, thirty or even forty years. If you have a good income, but expect it to improve as time goes by, you may want to consider a smaller annuity for now and add a larger one as your ability to afford it increases.

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Five Things You Might Not Know About Annuities

admin — Mon, 11 Aug 2008 06:52:09 -0700

With all the talk about annuities providing you the retirement option of our choice, you ought to be able to easily decide whether to get that annuity or not. The question is: is that annuity really the kind of retirement option you need? Annuities are great and loaded with features and benefits, but if they are not what you wanted in the first place, you don’t achieve your retirement objectives and your annuities are no good to you then.

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Immediate Annuities

admin — Fri, 01 Aug 2008 14:07:54 -0700

Immediate annuities are an agreement between an insurance company and yourself (the insured) that basically says that you will pay the insurer a lump sum of money in which the insurer will begin making regular payments to you, and will continue to do so for the rest of your life. Immediate annuities start paying right away; at the most within the year after depositing a lump sum of money, after you’ve signed the insurance contract with the insurance company.

Annuities offer a great number of benefits:

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How Do Indexed Annuities Work?

admin — Fri, 01 Aug 2008 14:04:14 -0700

When it comes to the stock market, it can be a dog eat dog world. Entire lives can be changed, for the good or the bad with the click of a mouse engaging a single trade or transaction. The reason for this is that individuals can attain an incredibly high return on one trade, but at the same time, they engage themselves in a risk if they make the wrong investment. One wrong decision can devastate a person or a business financially in the same manner that it can provide high returns.

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Steps in Choosing an Annuity Program

admin — Sun, 27 Jul 2008 04:31:29 -0700

Before you can choose the best annuity program for you, you need to answer a few basic questions first. Try to get as objective as possible answers to the following set of questions about yourself.

1. After social security and other pensions or savings, how much monthly or annual income will I need after I retire?

2. Will this income be used to support only myself or my wife and child as well?

3. Do I have money to pay for premiums now? If yes, how much?

4. Will I need the money sometime soon or can I park it in my annuity over the long-term?

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6 Steps in Evaluating an Annuity

admin — Fri, 18 Jul 2008 06:54:07 -0700

1. Evaluate the annuity’s past performance

Before you choose an annuity, check out that annuity product’s track record and past performance. Past trends of profitability and yield are measures of an annuity’s strength. The longer the annuity product has been in the market, the more its patrons, the better the sense of how it will fare in future economic conditions.

2. Check out the annuity issuer’s track record

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Deferred Annuities

admin — Mon, 07 Jul 2008 07:41:43 -0700

Annuities are retirement savings plans in their most simple explanation. The goal of any annuity is to give you a steady income flow when you’ve retired. Deferred annuities are different from immediate annuities – deferred annuities have two parts – savings and investment, then payout. Immediate annuities are a single lump sum investment and then it begins paying out immediately.

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How Annuities Can Help Plan Your Future

admin — Mon, 07 Jul 2008 07:40:04 -0700

Before you can decide or learn how annuities can help plan your future, you should have a clear and good understanding of what an annuity is. Annuities are actually one of the widely used forms of investment products today and are one of the most widely used in the United States. The main reason that annuities are so popular is that they can actually build more value over time and ensure a safe way to plan for the future.

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How to Sell or Cash Out Annuity Plans

admin — Thu, 26 Jun 2008 05:45:45 -0700

For people in their retirement years, investing in an annuity makes the most sense from a long-term growth and low risk perspective. However many people are unsure of the ins and outs of how annuities work, and thus, because annuity plans are not as popular as other investment products, some people are still wary of them. This wariness stems from the fact that many people about to retire are still unsure about how they will benefit from the annuity plans once they are ready to retire. Knowing how to sell annuity plans is critical for you if you are looking into investing in annuities.

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Annuity Terms & Definitions

admin — Tue, 10 Jun 2008 06:29:32 -0700

First, let’s establish what an annuity is. An annuity is a financial product that is sold by a financial institution. The purpose of an annuity is to receive monies from an individual, make those monies grow, and then provide him a regular source of income later in life, usually at retirement. This income can be in the form of a fixed annuity or a variable annuity. The person agrees with the financial institution how long he will receive these payments, regardless of whether he’s still living or not. For instance, an agreement can be entered into for a fixed period of 20 years.

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Choosing Annuities

admin — Tue, 03 Jun 2008 05:41:02 -0700

How many ways can you use annuities?

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