The Deferred Annuity

There are several types of retirement accounts to choose from such as various 401(k)s and IRAs but there are also deferred annuities. There are annuities for those who like to have their money in a safer investment, but if you are the type who tolerates risk well there are also annuities that will cater to you, too. Payments to you and the taxes owed on the interest are deferred until after you retire and you begin receiving payments. It is an option that many people are choosing to take part in over the traditional retirement accounts that have been mentioned above.

Fixed Deferred Annuity

The fixed annuity offers a fixed interest rate that is credited to your account for a specified term. After this term is over this account is susceptible to market conditions, but there can be a minimum rate specified at which the annuitant, owner of the annuity, can bail out of the fund to avoid clinging to an investment that is not performing well.

Variable Deferred Annuity

The variable annuity is a more aggressive type of annuity which can fluctuate according to market conditions. With this account a fixed rate is never guaranteed. Because it is such an aggressive account the potential to make large sums of money exists.

Index Deferred Annuity

The next type of annuity is the index annuity. This annuity is related to a particular index such as the S&P during the accumulation phase. This annuity is also protected with a minimum amount below which the interest cannot fall. This prevents the capital in your account from being lost should the S&P lose a significant amount of value.

CD Deferred Annuity

The last type of annuity is the CD annuity. These annuities are like certificates of deposit (CDs) and can range from one to ten years in a term. They guarantee an amount of time for the initial interest rate, but like the regular CD there is limited liquidity which means that you may make withdrawals.

Deferred Annuities and Death Benefits

Annuities do not always give the option of leaving what is left in the account when you die to beneficiaries. Three of these annuities, fixed deferred, variable deferred and the CD deferred annuities allow for leaving a death benefit to a beneficiary of your choice.

The deferred annuity can ensure that you will have retirement income for the rest of your life. Learn more about annuities by clicking on the link and visiting the website.

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