(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:
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 free annuity quote and find out what you can do! Or, get a free consultation from a