Annuities
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Annuities and Retirement Planning Sep 5, 2008
You may have heard that IRAs and employer-sponsored plans (e.g., 401(k)s) are the best ways to invest for retirement. That's true for many people, but what if you've maxed out your contributions to those accounts and want to save more? An annuity may be a good investment to look into. |
Annuities; Traps for the Unwary Sep 5, 2008
Annuities are fairly straightforward products as far as taxation is concerned. To the extent that a distribution is considered a return of your investment in the contract, no income tax is due; to the extent that a distribution is considered earnings, income tax is due (ordinary, not capital gains). In addition, a distribution taken before age 59½ is subject to a 10 percent early withdrawal penalty tax on the earnings.
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Annuity Basics Sep 5, 2008
An annuity is a contract between you, the purchaser or owner, and an insurance company, the annuity issuer. In its simplest form, you pay money to an annuity issuer, and the issuer pays out the principal and earnings back to you or to a named beneficiary.
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Annuity Distributions Sep 5, 2008
Annuity distributions are categorized in two ways: withdrawals or annuitization (guaranteed income stream). The annuity contract itself explains the annuitization payout options available to you, including when they begin, whether the amount can be fixed or variable, and how long the payouts will last.
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Fixed Annuity Contracts Sep 5, 2008
Traditional deferred fixed annuities have been around for a long time. And although these contracts can take several forms (some of which are relatively new), they all have common traits. |
Fixed vs Variable Annuities Sep 5, 2008
Annuity products have grown more sophisticated over the years to meet the demands of today's more sophisticated investors.
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