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2012年9月24日 星期一

Charitable Gift Annuity - Immediate, Deferred, College, Flexible Annuity


For some people, a Charitable Gift Annuity (CGA) is a convenient way to donate funds to an educational, religious or other charitable organization. A Charitable Gift Annuity works very similar to other annuities you might purchase through your insurance company, but in this case you will receive an annuity payment directly from the organization. Typically, you donate a monetary amount to the organization of your choice and then begin receiving payments either immediately or at a predetermined date in the future.

Donations to charities are subject to the charitable tax deduction, and you are entitled to make this deduction on your income tax return for each year you make a new donation. You can choose to receive your annuity payments yearly, quarterly, or monthly, although most people choose quarterly payments. Quarterly payments from a Charitable Gift Annuity are received on the last day of the quarter, not the first.

Similar to other annuity options, Charitable Gift Annuities are subject to state and federal regulations. The American Council on Gift Annuities (ACGA) sets uniform gift annuity rates for use by charitable organizations. These rates set the recommended limits for payout rates to the donor.

If a charity stays at or below these rates, they are not required to justify that their rates are within state regulatory laws. If the charity chooses rates above those set by the ACGA then an actuary is necessary to ensure compliance to the individual state laws. Rates are determined by the age of the annuitant and when the withdrawal period for the annuity begins.

A charity may spend a portion of a donation immediately but must retain enough money in its reserve to satisfy its annuity agreement with the donor. The agreement for Charitable Gift Annuities states that the annuitant will receive fixed payment amounts for their lifetime only and not an additional period of time thereafter for their beneficiaries.

This means that once an annuitant dies, payments cease and the remainder of the annuity is absorbed by the charity. The donor can opt to extend the annuity agreement to an additional annuitant, as with the joint and survivor or two lives in succession options, but the annuity payments will be split between the two individuals and will cease after both parties have died.

DIFFERENT TYPES OF CHARITABLE GIFT ANNUITIES:

IMMEDIATE GIFT ANNUITY

1. If you choose an Immediate Gift Annuity, payments will begin in the payment period immediately following the final contribution date. As mentioned previously, the annuitant can choose to receive payments annually, quarterly, monthly, etc. Depending on when the contribution was made, you can request your first payment to be for the full, and not prorated amount.

DEFERRED GIFT ANNUITY

2. With a Deferred Gift Annuity, the annuitant is allowed to receive payments at a future date predetermined by the donor. The date chosen must be at least one year from the contribution date, but the payout schedule offers the same flexibility as the Immediate Gift Annuity.

COLLEGE ANNUITY

3. A parent or grandparent may want to establish a college fund for a child to offset the rising cost of higher education. In this case, they would donate money for a College Annuity which will only pay out over the lifetime of the child (annuitant). Payments usually begin at age eighteen, or when the child/annuitant is old enough to attend college. The annuitant may choose payments for life or receive larger payments spread out over the number of years they attend school.

FLEXIBLE ANNUITY

4. A Flexible Annuity allows the annuitant to decide the starting date for payments. Usually the annuitant chooses retirement or another date of importance to begin receiving payments. Keep in mind that one factor for the annuity payment rate is age, so you will receive larger payments if you wait until you are older.

HOW DOES A CHARITABLE GIFT ANNUITY WORK?

You may be asking how this works in a real life example. Let's assume you just turned seventy-five and have $25,000 that you would like to donate to your alma mater as a Charitable Gift Annuity. You opt to receive immediate annuity payments on a yearly basis, and your calculated annuity rate is eight percent. Based on your annuity agreement with your alma mater, you will receive a payment for $2000 every year for the rest of your life, and an immediate tax deduction of over $9000!

This is only an estimate, and your actual deduction will vary according to changing tax laws and changing rates established by the ACGA. You should always consult with a knowledgeable financial advisor such as Estate Street Partners before donating or investing large sums of money to guarantee your rights are protected.




Author bio - Rocco Beatrice, CPA, MST, MBA
Award-winning estate planning & trust expert
MS - Taxation, Master of Science Taxation
MBA - Management / Taxation
BSBA - Management / Accounting
CPA - Certified Public Accountant
-----
Irrevocable Trust Asset Protection, Medicaid Asset Protection
Private Annuity Trust
71 Commercial Street #150, Boston, MA 02109
tel: +1.508.429.0011 fax: +1.508.429.3034





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2012年9月16日 星期日

Are Tax Deferred Investments Worthwile?


If you haven't retired yet you've probably been told by somebody that you should be putting some of your funds in tax-deferred investments. Yet you may wonder if it is really a good idea to put a large percentage of your income in such vehicles. The truth of the matter is that there are advantages to such instruments but there are also some disadvantages that you should be aware.

Tax-Deferred is Not Tax-Free

The biggest myth about tax-deferred investments such as 401ks, annuities and IRAs is that they are tax free. Nothing could be further from the truth these investments are tax-deferred which means taxes are postponed until you take money out.

If Kermit's federal income tax rate was 25% and he took $10,000 out of his IRA he would have to pay $2,500 of those funds to the IRS. So this money is obviously not tax free. If Kermit were under 59? years old he'd have to pay more because the IRS charges a 10% tax penalty on all funds withdrawn from such vehicles by people under that age. That means Kermit would end up pay $3,500 to the IRS because 10% of $10,000 is $1,000. The 10% penalty is charged on top of your regular taxes.

Now there is another kind of Individual Retirement Account (IRA) or 401k out there called a Roth. A Roth IRA or 401k is not tax deferred it is actually tax free. The drawback to a Roth 401k or IRA is that you have to pay income tax on the funds you deposit at your normal rate. The advantage to this arrangement is that you never have to pay federal income tax on that money again. Unfortunately the IRS will charge the 10% tax penalty on Roth withdrawals for people under 59? years old.

Limitations to Tax-Deferred Investments

There are some serious limitations to tax deferred investments. In most cases people that are under 59? years old will be charged the 10% tax penalty on withdrawals. There are exceptions to this rule, the IRS allows for some hardship exemptions and Tax Sheltered Annuities (TSAs) a special investment available to some government employees and public school teachers are exempt as well.

There is also a limit on what most people can place in tax-deferred investments. Most people will not be able to put more than $1,500 in an IRA or 401k account a year because of federal law. This applies to both employer matches and your regular contributions.

There are some tax-deferred investments that you can put unlimited amounts of money into. There are no limits to the amounts that you can contribute to deferred annuities. Therefore you can put as much as you want in such a vehicle. Unfortunately deferred annuities are subject to the 10% tax penalty for withdrawals by persons under 59? years old.

Life insurance including universal, whole and indexed policies is tax deferred. Life insurance policies are also subject to the 10% penalty for persons under 59?. It can also be hard to get money out of life insurance policies even when they provide cash value.

The bottom line is that tax-deferred investments are not a good deal for most persons under a certain age. People under 45 should only put fund that they know they will not need in the near future in such a vehicle because of the tax penalties. Many people would be better off waiting and putting their funds in a tax-deferred annuity when they get older. They will have to pay taxes on the funds but they can avoid the 10% tax penalty that way.




Steven Hart is a freelance writer and a Financial Advisor from Cary, IL. He writes about Annuity topics like Annuity Calculator, Annuity Interest Rates, and Annuities Good or Bad.





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2012年9月3日 星期一

Fixed Deferred Annuity Tax Treatment


With tax reform continuously in the picture, the insurance industry's deferred annuities are quickly becoming a more attractive investment alternative for certain circumstances.


Deferred annuities to serve as an investment alternative

They are especially helpful for those individuals whose incentive to continue to make IRA contributions is greatly weakened by tax rules. Although contributions to a deferred annuity are not tax deductible, earnings do accumulate tax deferred. Advantage over an IRA: There is no limit to the amount of money you can invest in an annuity.


Replacement for investments that received tax benefits

A variable annuity could serve as the ideal replacement for investments that used to receive the benefit of favorable investment tax credits and accelerated write-offs. The reason is that long term gains from investments in stocks, which are currently taxed, can grow tax-deferred in a variable annuity. That income, from gains and dividends, is not taxed until you withdraw your money from the annuity. There are tax implications associated with early withdrawals and surrenders. Withdrawals may be subject to income taxes and, prior to age 59 ½, a 10% federal penalty may apply. Also, a deferred sales charge may be assessed if surrendered during the first years of the contract.

Many variable annuities offer the policy owners a choice of investment accounts with the right to switch funds from one to the other. Thus, funds could be in the growth oriented stock fund during employment years and switch to a more conservative account nearing retirement.

Taxation and Exchange of Older Contracts

If the contract surrendered in the exchange is a pre-TEFRA contract (that is, the contract was issued before August 13, 1982), withdrawals from the contract will be subject to favorable FIFO treatment. The income first rule will not apply. It is not clear, however, how the 10% penalty tax can apply to the contract if withdrawals are not subject to tax. It may be that the penalty will not apply until the investment is withdrawn.

Investors should consider the investment objectives, risks, charges and expenses of variable annuities and their underlying funds carefully before investing. The prospectus contains this and other information and should be read carefully before investing.

Withdrawals or loans will reduce the value of the contract as well as reduce the death benefit. There may be additional costs associated with options or features of a variable annuity that are not typically associated with other investments. Please check the prospectus for details on costs and conditions. The prospectus can be obtained from the financial representative offering the product.




William Bowyer is a self-proclaimed expert in all things financial, and specifically deals with fixed deferred annuity contracts. Visit him online at The Fixed Annuity Guide and learn more about tax treatment of fixed annuities.





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Defer Worries With Deferred Annuity


Retirement allays come in various avatars as the market introduces more and more alternatives pertaining to the same. The different opportunities have their own separate benefits to render. The objective of the fund vehicles is the same, to benefit the retired and resolve their monetary issues. However as every beneficial thing has a flip side to it same is the case for the retirement schemes as well. The numerous companies that have mushroomed in the market all providing the same facilities often confound the individual into making a wrong choice of the insurance company in concern. The annuity proposals of all these companies be it the deferred annuity or the life annuity are very apparently lucrative. Therefore making a correct choice is very important in case one wishes to reap the benefits of the same.

The annuity in general is a very beneficial option as it leads to creating a financial aid for the retired without any mortgages. Annuities in general have two prominent cycles that operate in order to generate the desired income and results. The phases are namely, investment phase and the income phase. In the former one; one invests in the insurance company and in the latter phase the individual reaps the dividends of his or her timely investment plans. The annuity is generally of two types the deferred annuity and life annuity. The different categories have slight variations with the general benefits of annuity in common.

The life annuity refers to the scheme wherein the individual enjoys the benefits of this finance option as long as one lives. In the present times with the advent of various life saving drugs the life expectancy of the individuals in general have gone up. This is the reason why the life annuity has become all the more important in the contemporary times. Owing to the enhanced life expectancy there remains the risk of running out of the financial aid in the advanced years, however with this scheme the uncertainties of the retired individuals have been resolved completely. It allows the retired individual to have a peaceful life up to his or her last breath.

The deferred annuity on the other hand refers to the scheme which allows the individual to delay the date when the income phase of the individual will initiate. Therefore the deferred annuity allows the individual to avail for an annuity offer that will last comparatively longer. Apart from the obvious benefit of rendering an added income to the individual in the twilight days it also provides the individual to save more as the investment made in annuity is tax exempted.

The only thing that the individual seeking annuity, whichever be it the deferred annuity or the life annuity needs to keep in mind is that of selecting the correct insurance company. One needs to check the standing and reputation of the insurance company before opting for it. In case the insurance company closes down the entire amount invested by the individual is lost, as the insurance company is not liable to make any payments after that. Hence to earn the fruit of one's investment, one needs to make a prudent choice.




Mike Anderson is a business consultant who has good information on deferred annuity. For more information visit http://www.totalreturnannuities.com/





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2012年9月2日 星期日

Is a Fixed Deferred Annuity a Good Investment?


The fixed deferred annuity is a solution of the insurance industry to loss protection needs and long-term savings. Annuity holders receive interest on their deposited funds just like the owners of liquid accounts at financial institutions and banks.

In addition to the benefits of ordinary deposit accounts, life insurance coverage is also offered as an added benefit by annuities. Besides this, the funds invested in deferred annuities are free from immediate tax. However, the absence of temporary taxation has a major drawback of Illiquidity.

Confusion of terminology clarified

Fixed and variable are two basic categories of annuities. Fixed annuities offer a fixed rate of return on investment while rate of return on variable annuities fluctuates greatly.

Fixed annuities ensure guaranteed return for a particular amount of time. In simple words, minimum final investment value is assured to the annuity owner or the policy holder.

Annuities vs. Other Investments

Most of the times, the returns offered by annuities are much better than other investments like money market accounts or certificate of deposits. This is mainly because your money is invested for a longer period of time.

The power of compound interest combined with time makes your ending balance much higher compared to other investment options.

Immediate vs. deferred annuities

It is necessary to understand these two sub categories of fixed annuities in order to make well informed investment decisions.

When you invest in an immediate annuity, you start receiving money shortly after investment. The process of periodic payment continues for a particular amount of time or for your entire life. A continuous cash flow is possible because of the accumulation of interest on the unpaid residual portion of your initial investment.

On the contrary, a deferred annuity rewards the investor after a certain time limit. The investor has to wait for a specified number of years to receive a lump sum or periodic payments after making the initial investment. Due to the accumulated interest over the years, the value of your investment grows substantially to a significant amount.

The common features of immediate and deferred annuities are as follows.

-Guaranteed rate of return and principal preservation

The original value of the investment will never fall except when the insurer becomes insolvent. The investor is assured of minimum return on the investment. Since the investor is assured of receiving a specific amount of money after a specified time, he is in a better position to plan financially for the long term.

-Guaranteed rate of return

Since the minimum rate of return is guaranteed on investment, the investors are able to plan their financial future in a better way.

-Death Benefit

Just like life insurance policies, annuities feature loss protection which enables the beneficiaries to receive a lump sum amount in case you die. On the contrary, if you have invested in conventional deposit accounts or CDs, your beneficiaries will only receive the initial investment and the accumulated interest going forward.

-More flexible withdrawal options

On maturity of annuity, the investor can withdraw the whole amount or opt for periodic receipts. This choice is not offered by any other investment options. The investor can either choose to reinvest the complete amount immediately or accept a lump-sum disbursement to absorb any tax effects.

Advantages of Deferred Annuities

Deferred annuities offer a major benefit in the form of tax deferral. Though you are required to wait for a specified amount of time to receive any funds, you receive the added benefit of tax relief as your investment grows.

Don't underestimate this great benefit with a fixed deferred annuity. Since the rates of taxes are high, it can take a huge part of your savings. For example, if you are eligible for a tax of 35 percent and the return on annuity is 5 percent, you will be able to realize the full 5 percent return due to tax deferrals.

On the other hand, if your returns are taxed immediately, the returns are reduced to 3.25 percent which is just above the yearly US rate of inflation of 3 percent. Thus, when a person whose investments are subjected to immediate tax retires, his or her investments hardly increase in terms of real money.




Jay Grieco is a publisher with an informational website concerning many types of annuities. Use this website as a research tool to find out more about the various kinds of annuities and how they may benefit you. Visit: http://www.annuityexplainedcenter.com





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2012年9月1日 星期六

What is a Tax Deferred Annuity - Everything You Need to Know


We should all live life to the fullest. And in order to do so, one needs money. But money is a commodity which has a very volatile nature. Today, you may be in a cushy job making a handsome amount of money or running a thriving business and enjoying all the pleasures of life. However, as the recent recession has shown us, the success could be momentary because you never know when the market could crash.

However, there are ways to ensure that you have a steady source of income in lean periods as well. One way of ensuring this is to invest money in safe financial products. One of the safest financial products in the market today is annuity. In an annuity, you pay a certain amount over a length of time and then the insurance company pays you a sum of money in return as an interest on your investment.

There are various kinds of annuities but one of the most popular types of annuity is a tax deferred annuity. So what exactly is a tax deferred annuity?

A tax deferred annuity, speaking in financial terms, defers the tax payments on your investments until the time of withdrawal. Tax deferred annuity can be explained further as follows. A tax deferred annuity requires you to invest a certain amount of money periodically over a certain length of time.

The length of time and the amount to be invested is decided at the time of buying the annuity. After you have bought the annuity, you cannot the lock in period or the amount decided. Once the lock in period is over, you can start withdrawing the amount.

But while withdrawing amount too, the tax deferred annuity does not allow you to withdraw the entire amount all at once. You can withdraw only a certain percentage of amount at one go. No the advantage of tax deferred annuity is that in the lock in period, when you are investing your money, the investment is not subjected to any tax deductions. This makes your investment grow much more than other financial products.

However, there is a common confusion people have when it comes to a tax deferred annuity. This kind of annuity is not tax free, it is just tax deferred. The tax deductions take place only on the withdrawals you make.

This type of annuity can be fixed annuity or a variable annuity. A fixed annuity offers you a fixed rate of interest which is determined by the insurance company. A variable annuity on the other hand is linked to the market and the interest rate is decided depending on the market conditions.

A tax deferred annuity is a perfect choice for people who have many years to go before they retire. The large time gap allows your investments to grow to the maximum, thus ensuring a comfortable, happy, peaceful and an independent old age. And we all know that being independent is of paramount importance in today's world.

Click on the link below to learn more about Annuities.




Visit http://www.annuitycampus.com for more Annuity and Life Insurance Tips and Tricks.

Call Robert Eldridge directly at 800-643-7544.

Robert Eldridge holds over a decade of experience as a multiline agent in multiple states and currently serves on the membership council of the National Association of Insurance and Financial Advisors





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Deferred Annuity - A Guarantee for Your Prosperity


An unwise decision during heydays has cascading effects in the twilight years especially when it comes to making financial arrangement. Once we retire from job, the source of income becomes limited. We have to meet with what we get as pension. Unless and until we are pushed to the corner, we are reluctant to use our savings account. So, meager pension fails to close the chasm between the required and received. But for those who make the hay while it shines had better go for the deferred annuity to ensure easy going.

Like all other annuity varieties, a deferred annuity is too an agreement between the annuitant and insurer to ensure the best possible return on the investment. You can either make regular payment or at-a-time investment to buy an annuity. The choice depends on your financial strength and objectives. The insurance agencies guarantee the consistent flow of income after regular interval. The option of payment deferment of the deferred annuity policies helps your investment enjoy the extra growth during the accumulation period.

An annuity is a product sold to the individuals by the insurance agencies with an objective of earning profit. At the same time, the individuals buy the annuities for a better tomorrow. So, both the parties use the annuities for money-spinning. However, among all the annuities on offer, the deferred annuity makes the preferred choice for the customers. The annuitants are allowed to postpone the income payment and set a new date of income disbursement. As long as the money is not withdrawn, interest accrues to the investment fund, thereby making the income swell more with the passage of time.

A deferred annuity may be of two varieties - fixed and variable. Both have a unique set of pros and cons. So, prior to buying a policy, the individuals must have nitty-gritty of the advantages and disadvantages of both the policies. Fixed deferred annuity refers to a variety which is attached to a fixed interest rate during the growth phase of your investment. The fixed type brings you a guaranteed figure of income, comes hell or high water. So, whatever be the economic condition, you can always expect to get the same volume of installment throughout the specified time. Annuity calculator is a handy option to determine how much you will earn provided all the requisite details are supplied.

On the other hand, variable deferred annuity comes with different sets of interest rates. In fact, the interest rate is determined after feeling the pulse of the market scenario. Higher interest rate is paid when the investment fund is doing well. No wonder, you will have considerably lesser volume of interest if the financial condition is not showing the sign of promising growth in near future. In that case, you may have to rue your decision in investing in the deferred annuity. However, you will also get to gain a lot in the event of buoyancy in the market. Fixed type is the better choice for the risk-averting adults whereas the variable one is the best option for those who dare to invest risk for higher return.




Mike Anderson is a business consultant who has good information on annuity calculator and deferred annuity. For more information visit http://www.totalreturnannuities.com/





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2012年8月31日 星期五

Immediate versus Deferred Annuities


An annuity is a contract between the insured and the insurance company to provide income for retirement. It typically offers regular payments made over time. Annuities have existed for over two hundred years. They are paid out over the recipient's lifetime or for a set amount of time. They are usually issued by insurance companies through licensed agents. Simply put, an immediate annuity is set up when you want the income now and a deferred annuity builds value over time and is converted to income later on. One key difference between immediate and deferred annuities is that deferred annuities can be bought with a lump sum payment or a series of regular payments.

A deferred annuity accumulates value over time and helps you save for things like retirement. This works to grow your assets. A fixed deferred annuity comes with some nice guarantees: it is guaranteed against loss by the insurer, it is guaranteed a minimum rate of return, and it has guaranteed annuity payout factors. Some benefits include tax advantages, no limits on contributions, and safety of premium so risk is minimized in a market downturn. A variable deferred annuity allow for more growth potential in return for a higher level of risk. Its value fluctuates, depending on how the investment options perform.

Deferred annuities allow for a lump sum payment rather than the payments over time. However, there are no stipulations for a lifetime guarantee. There are deferred annuities where you can withdraw money during the accumulation period - although there are limitations on the amount you can withdraw in a one year period.

An immediate annuity works particularly well for someone who might have come suddenly into a good deal of money and needs a better way of managing it without having to deal with investing it. Most people choose a fixed immediate annuity because of the guaranteed annuity payments promised. However, there is an increased interest in variable immediate annuities because of low interest rates and potential for strong equity ability.

Immediate annuities can be set up for payment over the course of a specified period of time (like 10 or 20 years) or indefinitely (like for a lifetime). There are some great benefits to choosing an immediate annuity such as security in future income, simplicity as the annuitant does not need to manage an investment portfolio, high returns (higher than CDs), and preferred tax treatment to name a few.

There are many different forms of immediate annuities. The most simple are the straight life or non-refund immediate annuity which guarantees the payments over the lifetime of one person. Other forms include period certain annuities where benefits are paid by the insurer for a specified period of time (like 10 or 20 years), straight life annuity where benefits are paid out only for the lifetime of the annuitant, joint and survivor annuities where fixed monthly income payments are made for the lifetime of two or more people.




Samuel Towers' writes to expand possibilities on the financial side of life. Currently he is examining what's possible in the world of structured settlements and annuities. What he learns, he'll share in his articles.





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Tax Deferred Annuities


Deferred annuity is a type of annuity contract that delays payments of income, installments or a lump sum until the investor elects to receive them. This type of annuity has two main phases, the savings phase in which you invest money into the account, and the income phase in which the plan is converted into an annuity and payments are received.

Tax-deferred annuity is regarding receiving payments usually at retirement or at some future date. However in most cases, there are systematic withdrawal of payments beginning thirty days after the purchase of your annuity, up to 10% per year. With deferred annuity, one have the option of paying in the lump sum that is all at once. Otherwise periodic statements could be made either fixed or variable. These funds mature as tax-deferred until for one is ready to receive payments. If one does not need immediate income from annuity, then tax deferred annuity is generally recommended. It makes up a large majority of all annuity sales.

This annuity is basically meant for earning additional interest on the money that would otherwise have been paid as taxes. The main importance of tax deferred annuity is that it allows to delay paying taxes on the growth in an annuity until you actually withdraw your funds.

Deferred annuity considered best for people who want to save on a tax-deferred basis for many years. On contrary to an immediate annuity, Tax on deferred annuity do not become payable until some years after its purchase. Converting build up capital into an annuity, the single premiums or regular premiums are capitalized during the deferred period. Deferred annuity typically stipulate that payments be made to the Annuitant at a later date when the annuitant reaches a certain age.




Nick Jameson is a well known author who writes on Immediate Annuities for the website www.fixedannuitylibrary.com.





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The Advantages of A Flexible Premium Deferred Annuity


People who are looking for insurance solutions and information to help them make informed decisions will benefit from this article, which covers flexible premium deferred annuity Insurance. Annuities can make for really good retirement tools you can use to defer paying taxes on money you don't use; furthermore annuities guarantee an income you will not outlive.

What Is Flexible Premium Deferred Annuity (FPDA)?

Insurance companies sell contracts which have variable premium payments and payments amounts. Premium payments can be monthly, quarterly, semi annually or annually throughout the life of the policy holder, for 2 or more people. It can also be for a predetermined time period.

Flexible premium deferred annuity accepts ongoing small deposits of even $50 per month. The interest rate guarantee period on each deposit is for one year; at the end of the guarantee period the depositor can benefit from competitive renewal rates, which are based on current market conditions.

The Advantages of Flexible Premium Deferred Annuity

- One of the main advantages is that each contract comes with a principal guarantee; this guarantee ensures that a client does not receive any amount which is less than the total premium payment due.

- Each contract has a 9 year surrender charge period and there are a number of ways by which the client can access funds before the 9 year surrender charge period. The distinct advantage to the client is the surrender charge does not have to be paid. At the end of the surrender charge period there is no fixed time period in which the client has to decide upon restarting the surrender charge or discontinuing the annuity.

- As a savings medium flexible premium deferred annuity is an ideal choice for anyone who is looking for flexibility on continuing premium deposits and tax deferred financial growth. It is a very good method by which to enhance retirement savings plans, which can be used to fund your IRAs, SEPs and other plans.

- A truly great advantage of this method is that irrespective of any economic fluctuations the client will never receive anything less than the total premium payment due (minus any loans or withdrawals). This type of annuity comes with a principal guarantee most investment mediums do not offer.

- No surrender charge will be levied for clients who wish to take early retirement provided they have held the annuity for a period of 5 years and reached the age of 59.5 years at the time of surrendering the annuity.

- Flexible premium deferred annuity is a dependable savings option for people who do not wish to take risks with their money for fear of losing a part or all of it.

- Annuities are one of the best methods by which you can provide a steady source of income for yourself after retirement, when the fear of your money running out begins to haunt you.

- With annuities your investments grow tax free - this is probably one of the best benefits for people in the retirement stage of their lives.

- Anyone can contribute any amount to the flexible premium deferred annuity plan as there are no restrictions on investments.




Robert Eldridge holds over a decade of experience as a multiline agent in multiple states and currently serves on the membership council of the National Association of Insurance and Financial Advisors. Robert has the unique blend of in-depth knowledge in the Medical, Life, Annuity and Mortgage industries. He is also a true philanthropist who works extensively to raise money and awareness for the Shriner's Hospital for Children.

Robert's clients value his insight into recognizing optimal solutions to their healthcare and financial needs in this evolving financial market. Staying current with changes in the industry, coupled with his experience and insight into excellent customer service, his philosophy is never selling a product unless it brings an added benefit and true value to you and your family. Please visit http://www.annuitycampus.com for more annuity information.





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2012年8月30日 星期四

Investment Benefits in Tax Deferred Annuity and Deferred Annuity


All annuities can be said as tax deferred. Tax deferred annuity is referred to as such a policy in which tax is charged when the annuity holder starts getting periodic payments and not at the time of investment period. A person can avail this policy thinking of the dangerous impacts that he might likely face in any circumstances. It certainly plays a protagonist's role if the annuity holder suffers financially.

In a tax deferred annuity, a person is not only provided with higher return on investment but it also promises to be a good income source constantly. A better quality lifestyle can be lead by this income. It relieves a person from thinking about the financial support for him and also his family. However, it should be noticed that the person under this policy cannot draw the whole amount at once. But its best part is tax a deduction is not charged during the investment. As a result, it helps the investments grow higher and higher.

Tax deferred annuity is no doubt a resourceful scheme after retirement which assures the annuity holder of stability in future. Similarly, there is deferred annuity for the people which serve as a benefit for post retirement period. Under this policy, a person deposits money for a fixed period either in lump sum amount at a time or can pay the amount in installments. One of its advantages is that if the annuity holder expires, then the premium that the person was paying either on monthly or quarterly basis becomes refundable provided the amount is taxable or not is decided then only.

Apart from the above mentioned advantage, there are other advantages also if invested in deferred annuity plan. Usually, the plan has two phases: the first phase consists of the savings and investment phase and the second phase consists of retirement income phase. A person should use annuity calculator during the first phase to check what returns he is drawing from the investment. If the returns are higher, then the urge to invest here is natural. In this phase, the person saves the money and accumulates it so that the amount increases with time. In the retirement phase, the person can decide of withdrawing the money either at once or in monthly installments.

Therefore, deferred annuity is a convenient plan that a person can avail. It is a great way to save for retirement.




Robert Cook is a Financial consultant who has good information on deferred annuity. For more information on Tax deferred annuity, he recommends you to visit immediateannuities.com.





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2012年8月29日 星期三

Withdrawing From a SEP-IRA or a Tax Deferred Annuity


Technically, you can ALWAYS withdraw from your Simplified Employee Pension (SEP-IRA) or your Tax Deferred Annuity. However, it is not advised to withdraw funds prior to reaching the age of 59 1/2.

Likely Consequences For Early Withdrawal - 10% Penalty If you are under the age of 59 1/2, there may be significant tax consequences from withdrawing. Specifically, you are likely subject to a 10% IRS penalty for early withdrawal of both a Simplified Employee Pension (SEP-IRA) & a Tax Deferred Annuity. This 10% penalty is in addition to the ordinary income tax rate you would normally pay.

General Example For instance, if, of the total $10,000 value of the two plans, $2,000 is taxable, you would be subject to ordinary income tax (i.e.~35%) of the $2,000 or $700 and an ADDITIONAL IRS Penalty of 10% of $2,000 or $200, bringing your total taxes to $900.

However, there are certain exceptions for early withdrawal of each retirement plan in which you would NOT be subject to the 10% IRS tax rule.

No Penalty Exceptions - Simplified Employee Pension (SEP-IRA) The exceptions to the 10% IRS penalty rule are if the withdrawal was:

1. Death/Disability - upon death or having developed a disability

2. Payment Plan - part of "substantially equal payments" over your lifetime

3. Medical Expenses - for payment of un-reimbursed medical expenses exceeding 7.5% of your adjusted gross income

4. Medical Insurance - for payment of your medical insurance or your spouse & dependents medical insurance. The withdrawal must occur during these scenarios:

a) if they lost their job,

b) have received unemployment for 12 weeks straight,

c) receives the unemployment on the following year or

d) receives distributions no later than 60 days after re-employment.

5. Higher Education Expenses - for qualified higher education expenses

6. Home Purchase - for the purchase, build or renovation of a first home for the first $10,000

No Penalty Exceptions - Tax Deferred Annuity The exceptions to the 10% IRS penalty rule are if the withdrawal was:

1. Death/Disability - upon death or having developed a disability

2. Older than 55 - when you were 55 or older and you retired or left your job

3. Payment Plan - part of "substantially equal payments" over your lifetime

4. Medical Expenses - for payment of un-reimbursed medical expenses exceeding 7.5% of your adjusted gross income

5. Divorce - required by a divorce decree or separation agreement ("qualified domestic relations court order")

Another Option - Rollover Tax Free Another option instead of withdrawing funds from either of these two accounts, is rolling them into another retirement plan tax-free such as a traditional IRA or other qualified retirement plan. Other plans, such as a Roth IRA, may provide additional tax benefits to you.

Final Note - 2010 Traditional IRA Conversion into a Roth IRA In 2010, Traditional IRA conversions into a Roth IRA are allowed for everyone, even if you don't currently qualify for the conversion. Remember, Roth IRA's are funded with After-Tax Dollars BUT Grow Tax Free and are NOT subject to tax following withdrawal after the age of 59 1/2. Please note that the additional income taxes due to the conversion, can be spread over two years (i.e. 2011 and 2012 returns).




Ryan S. Himmel is the founder of the website BIDaWIZ - the online marketplace for trusted answers from licensed business professionals (i.e. CPAs, CFAs, CFPs & More).

Visit us at BIDaWIZ to ask retirement planning questions or any financial concern.





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Understanding Deferred Annuities


Investing in annuities are a way for you to plan for the future by making sure you have money for your retirement by engaging in a contract between you and the annuity insurance. Annuities have been around for a long time but today you have several different options of annuities available for you to choose from such as the immediate annuity, index annuity, variable annuities and the deferred annuities.

Each one has their own unique features that make them appealing to different people depending on their financial needs. For instance, the immediate annuity is normally used by investors that have suddenly received a large amount of money they that they now need to manage. The deferred annuity is often the choice used when planning for your future retirement. So exactly what are deferred annuities? A deferred annuity will delay the date when your income installments begin. The money you invest will build in value over time so it can be converted into income later.

When you invest in a deferred annuity it will be set-up so that your income payments will start at a later date. This date is called the maturity date and will be determined when you first set-up the annuity. The deferred annuity can be set up for regular monthly payments or one lump sun of money, whichever you choose.

How Deferred Annuities Work

The deferred annuity has two periods to go through to complete the agreement. They are as follows:

1.Accumulation Period

2.Payout Period

During the accumulation period you will be making scheduled payments or make a one lump sun payment to the annuity account. When the annuity matures or when you reach age 65 the payout period will start where you will be receiving the income in the way it was prearranged with the annuity company.

Each annuity has it own unique features that make them more appealing to different people. For example, the fixed annuity offers you some nice guarantees while the variable annuity has more growth potential but is a higher risk level because it fluctuates as the economy changes.

The deferred annuity will accumulate with time and is great for a retirement plan. Some deferred annuities will even allow you to take out money during the accumulation period, with limitations of course.

Deferred Annuity Options

The deferred annuity has two options to choose from, they are the variable and the fixed annuity. There is a big difference between the two. Both offer the tax deferred option where the money that is invested will not be subject to taxes until you begin receiving the income payments. However, the fixed deferred annuity is more stable and therefore safer than the variable deferred annuity.

The deferred annuity is the best option for anyone that is mainly interested in creating a retirement plan they can depend on. This type of annuity will become payable after a few years at the specified time in your contract. To make sure you get the best annuity rates you should always take the time to get annuity quotes from different companies. This way you can have the best future possible for you and your family.




Looking for the highest deferred annuity rates? Search and compare annuity rates with licensed financial retirement planners.





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Types of Deferred Annuity


As we mentioned in other articles, the government only represents about 30% of our retirement income,, the company retirement pension plan offers another 30 % and many of us do not have one. It is up to individuals to invest wisely short and long term in order to make up for the short fall if he or she would like to live comfortably after retirement without giving up some retirement plan. Now you have reached your retirement age, there are some important investment options for your RRSP or 401k plan. In this article, we will discuss characteristics of deferred annuity.

Deferred annuity is a contract that delays payments of income, installments or a lump sum until the investor elects to receive them. This type of annuity has two main phases, the savings phase in which you invest money into the account, and the income phase in which the plan is converted into an annuity and payments are received.

1. Fixed deferred annuity

a) A fixed interest deferred annuity is a product that is designed to help you accumulate funds for your retirement.

b) The money in your annuity earns a fixed rate of interest and the fund in deferred annuity accumulates on a tax-deferred basis.

c) You do not pay taxes on your earnings until you actually withdraw them from your policy.

d) You can choose to lock in your interest rate for different periods in this type of annuity and the money can be used to provide guaranteed lifetime income.

2. Variable deferred annuity

Variable annuities invest in the stock market with the tax advantages and other security including bonds, money market funds. At the request of the annuitant the money can also be used to provide income for the rest of annuitant life.

3. Equity index deferred annuity (EIA)

a) Equity index deferred annuity earns interest based on performance of stock market index such as the S&P 500.

b) An EIA guarantees that your principal investment will not go down in value.

c) In any given year, if the stock market go up, you as owner of EIA will enjoy additional gains. If the index goes down, your principal investment will not go down in value.




I hope this information will help. If you need more information of insurance or series of articles of the above subject at my home page at:

[http://medicaladvisorjournals.blogspot.com]

http://lifeanddisabitityinsuranceunderwriter.blogspot.com/

All rights reserved. Any reproducing of this article must have the author name and all the links intact. "Let Take Care Your Health, Your Health Will Take Care You" Kyle J. Norton I have been studying natural remedies for disease prevention for over 20 years and working as a financial consultant since 1990. Master degree in Mathematics, teaching and tutoring math at colleges and universities before joining insurance industries.





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2012年8月28日 星期二

Tax Deferred Compounding - Understanding Why Its Important


Growing your investments depends on the compounding rate. Einstein said, "The most powerful force in the universe is compound interest." The higher the rate, the faster your investment grows. But that's only half the story because you don't need to double the rate to earn twice as much. Increasing the rate from 6% to 8% will produce more than that 33% increase in your investment over the years as the table below indicates. That's the magic that amazed Einstein! And that's why tax-deferred investments are such an advantage. Let's take a look at some results...


Per Cent Greater Accumulation for 8% over 6% Compound Rates of $10,000


Year 6% 8% % more


5 13,382 14,693 10%

10 17,908 21,589 21%
15 23,966 31,722 32%
20 32,071 46,610 45%
25 42,919 68,485 60%

30 57,435 100,627 75%



Most investment choices generate interest or dividend earnings that are taxed annually. If your investment return is 10% and your income tax bracket is 28%, then 28% of that 10% (i.e. 2.8%) of that investment return goes to taxes. But what if we could defer the yearly taxation and give even more horsepower to Einstein's most powerful force? The ability to eliminate or defer taxes is critical for any investor.

This is critically important to retirees who may be interested in accumulating a larger next egg aside to purchase an immediate annuity in later years in case they live longer than the expected. The table shows the taxable earnings rate you must receive to achieve a compounding rate equal to the tax-deferred compounding rate based on various tax brackets.


Taxable Earning Need to Compound Equally to Tax-Deferred Earning


Federal Income Tax Brackets 10% 15% 25% 28% 33% 35%


Equivalent Taxable Earnings


Tax-Deferred Earnings 8% 8.89% 9.41% 10.67% 11.11% 11.94% 12.31%

7% 7.78% 8.24% 9.33% 9.72% 10.45% 10.77%

6% 6.67% 7.06% 8.00% 8.33% 8.96% 9.23%

5% 5.56% 5.88% 6.67% 6.94% 7.46% 7.69%

Want to put the power of tax deferred compounding to work in your portfolio? Just use the deferred annuity calculatorto see what can be accomplished.

Note that annuities once annuitized cannot be surrendered for value. Income from deferred annuities is taxed as ordinary income and withdrawals prior to age 59 ½ are subject to a 10% penalty. Income from annuitization is taxed part as ordinary income and part as return of capital. Any guarantees are based on the claims paying ability of the insurance company. Annuities should be considered long term investments. Annuities are insurance products and subject to insurance related fees and expenses.




See more articles on maximizing your retirement income and retirement investing choices.





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Deferred Annuity Is a Great Investment Plan for Long Periods of Time


If you are a person who loves planning everything in life, deferred annuity is just the plan for you. An investment in deferred annuity is particularly done for your post-retirement life. A person who is planned and has foresight will definitely invest in something which will give him guaranteed returns after retirement. Investing in deferred annuity is the best plan for that. You can easily calculate the returns on the investment from an annuity calculator and decide accordingly as to the amount of investment. There are many advantages and benefits of investing, which can easily make your life easy after retirement.

You can either deposit lump sum amount of money at one time or you can pay the money in installments, whichever seems convenient to you. But this can be done for a fixed period of time. The specified span of time is known as deferred time and hence the name of the annuity, deferred annuity. You can actually calculate the return amount which you will get from the investment with the help of an annuity calculator. You just need to feed certain information in the calculator and you will be shown the results immediately.

The premiums that he was paying on a monthly, quarterly or half yearly basis becomes refundable. However, whether the refunds will be with or without tax is decided at that point of time. Not only that, if a family member of the deceased annuitant wants to surrender the annuity, that facility is also available. In such cases also the annuity calculator is used to calculate the amount of fund that is to be refunded etc. Apart from this, there are more advantages of investing in a deferred annuity plan for retirement.

The first phase is the savings and investment phase and the second phase is the retirement income phase. It's almost like sowing the seeds to reap the harvests. You must use an annuity calculator in the first phase to see what returns you draw from the annuity investment. When you see that the returns are high and guaranteed your urge to invest in deferred annuity will become natural. In the savings and investment phase, you save and accumulate the money so that it grows with time.

In the retirement income phase of a deferred annuity, you can decide the ways in which you can withdraw the money. You can either withdraw the money at once, or you can get payments on a monthly, quarterly or half-yearly basis. The best part about this investment is that it is deferred from taxes till the time you do not withdraw the money. Once you withdraw, it might become taxable - depends on the amount of money. On the whole deferred annuity is a great way to save up for retired life.




Mike Anderson is a business consultant who has good information on annuity calculator and deferred annuity. For more information visit http://www.immediateannuities.com/





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Deferred Annuities Offers to Minimize the Hassles of Retirement


Saving money or anything in any form which only money can buy is always good for the future. Everyone will face a bleak future with the possibility of hunger and deprivation, unless they fail to save money for their future. Elders seek some safer and smarter investment options in order to sustain life in a glorifying fashion.

As everyone, we try to save some money by any means and avoid paying taxes. One of the favorite options of investment for the retired persons is the Annuities. It brings stability in the life of the elderly citizen since he can able to learn a lot about the possible invest options in an annuity from various sources.

The Deferred annuities are said to be the safest options for the retired person's and they continue to maintain a link with the possible opportunism that the elderly person will get the best possible return of their investment. Many annuity rates are fixed for a certain period of time, to give the investor a much higher return devoid of market risk of the rates being continuously fluctuated. It also offers the investor, tax at the withdrawal of the principal amount. As long the amount remains invested the returns are fixed to take up other challenges of family life, like the ever-expanding medical expenses.

Annuity rates vary from scheme to scheme. You can seek the advice of any independent financial planner in order to get hold of the best possible return of your hard-earned money. It has become somewhat as a craze among most financial companies to attract the maximum amount of investor in to its fold by offering attractive annuity rates. There is also a chance of getting the best return by choosing the insurance company all by you with the help of the internet and the online assistance provided many financial planners.

The deferred annuities with their attractive tax saving tag are always seen as the only source of getting the best from this unstable financial market. The Deferred annuities will give a surfeit option of giving the best possible return on investments than any other comparable financial product. The annuity rates are very much variable to the market and will offer a more comprehensive knowledge about the things making round in the world of annuity rates and which insurance company is moving which way. With the online assistance available almost round the clock, the investor can make their choice as they wish. Certain sites also graphically explain the maximum possible return possible with a certain amount of money.




Robert Cook is a business consultant who has good information on Deferred annuities and annuity rates. For more information on these he recommends you to visit www.totalreturnannuities.com/.





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2012年8月27日 星期一

Deferred Annuities


In recent years, one investment option that is becoming very popular, especially among more 'prudent' investors, is an annuity. This is because annuities allow people to reap the benefits that trading in the stock market can bring without incurring the risks involved in stock trading. As a result, there have been different types of annuities that have been developed to cater to different markets. Some of these include retirement annuities and indexed annuities that cater to people nearing retirement and young investors, respectively. Among these types, people have other options with the structure of the investment plan, including the option of having the taxes deferred on the earnings from the investment plan. These annuities are called tax-deferred annuities.

How do they work?

If you decide to invest in a tax-deferred annuity, you do not have to pay taxes on the earnings you get from your investment until you decide to take out your money from the investment plan. This means that as time goes by, the income from the investment plan will grow faster as compared to annuities that do not defer tax payments. This is because this set up allows you to compound your earnings and reduce the taxes you would have to pay in the long run. People who invest in tax-deferred annuities also have the option of either paying for the investment in lump sum (single premium) or in monthly installments (flexible) without affecting the guaranteed earnings they receive.

Types of Tax-deferred Annuities

There are three types of tax-deferred annuities: the fixed annuity, the equity indexed annuity, and the variable annuity. The first two types are designed to guarantee you a minimum rate of interest on your investment without experiencing any loss on your principal investment. On the other hand, variable annuities are greatly dependent on market conditions, which means that it is the riskier option because you run the risk of losing your principal investment when the market does not perform well.

In recent years, a preferred investment option is to invest in annuities, which can be very profitable for all types of investors. Among the different types of annuities, one type that has become very popular is the tax-deferred annuity, which allows a person to defer tax payments on earnings up until he takes out money from the investment, which, in the long run, means higher growth potential of a person's accumulated earnings.




Annuity Buyer [http://www.e-AnnuityBuyer.com] provides detailed information on Structured Settlement Annuity Buyer, Annuity Buyer, Annuity Buyer Payments, Annuity Buyer Guides and more. Annuity Buyer is affiliated with Condos For Sale.





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Immediate vs. Deferred Annuities


Do you want income now or income later?
When you purchase an annuity, you can choose between an immediate annuity - if you want the income right away - or a deferred annuity - if you want the opportunity to build your account value over time and convert it to income in the future.

Immediate Annuity

When you purchase an immediate annuity, you make a single lump-sum payment and set the starting date for the payout to begin sometime within 13 months. The term and the amount you'll receive are determined by the annuity contract.

With an immediate annuity, you control the term: You can choose income for your lifetime (known as a life annuity) or for your lifetime and that of another person (known as a joint and survivor annuity). You can also add a guarantee period to a lifetime income payout option, under which your beneficiaries will receive the payments remaining in the guarantee period should you die before the end of the period. You can also choose between time-specific or amount-specific payout possibilities.

What You Receive:

The size of the monthly payment you'll receive, on the other hand, is set by the annuity provider based on:

* How much you invest in the annuity (annuity principal)

* The payout option chosen

* Whether you have chosen a fixed annuity or variable annuity

Note: Some variable annuity contracts may permit you to choose between receiving annuity payments that are fixed in amount or annuity payments that vary based on the performance of the underlying investment subaccounts.

* Personal factors, including your age and, if it's a joint and survivor annuity, the age of the other person

The Immediate Advantage:

There are certain advantages offered by an immediate annuity that can make it an attractive choice for retirement income.

Principally, an immediate annuity can help ease the concerns people may have about managing a diversified investment portfolio or, even more frightening, of outliving their assets.

As an example, someone who has just received a large sum of money--an inheritance, a bonus, or profits from selling a home or a business--but really needs a steady source of income can choose an immediate annuity. Also, many experts suggest that anyone who expects a lump sum pension or 401(k) distribution might consider an immediate annuity as a way to convert their funds into a stream of income they can't outlive.

How to Choose a Contract:

The primary reason that many people used to choose a fixed immediate annuity was for the guaranteed annuity payments it promised. However more recently, low interest rates and the potential for strong equity performance have created an increased interest in variable immediate annuities.

Because the guarantee of principal and return of a fixed annuity is based on the claims paying ability of the insurer, the reason to choose a fixed immediate annuity usually comes down to which highly-rated fixed annuity company provider will guarantee the largest regular income for the term selected. However, income amounts vary because each fixed annuity company may use different annuity purchase rates for determining the annuity payments they make.

As an example, a 55-year-old widow who buys a $100,000 immediate annuity, and elects to receive monthly annuity payments for the rest of her life, might receive anywhere from $611 to $766 each month depending on the fixed annuity company provider. If she lived for 35 years--to age 90--the difference could amount to more than $65,000.

In choosing a variable immediate annuity, most annuity contracts allow you to choose to have your annuity payments last for a set period of time (such as 20 years) or for an indefinite period (such as your lifetime). During payout your contract may allow you to choose between receiving annuity payments that are fixed in amount or annuity payments that vary based on the performance of the underlying investment subaccounts. There are many factors to take into account, including the potential performance of the investment portfolios in the contracts being considered, the options offered, the annual expenses of the contracts and whether or not you are willing to take the risk that your account may decrease if the underlying investments perform badly. Our planners and financial specialists can provide assistance to evaluate the alternativesand determine what would work best for your personal investment plan.

When you purchase an annuity, you can choose between immediate annuities - if you want the income right away - or deferred annuities - if you want the opportunity to build your account value over time and convert it to income in the future.

Deferred Annuities:

A deferred annuity gives a person the opportunity to build their retirement savings over a number of years. What is being deferred is when the income is received. But in the period between signing the contract and converting the accumulated assets to a revenue stream, the deferred annuities investment has the opportunity to grow in either a fixed account, variable sub-accounts (investment portfolios--depending on investment performance), or both.

Unlike immediate annuities, which can only be purchased with a lump-sum, deferred annuities can be purchased with both a lump sum and or a series of payments. The ability to combine one-time and periodic contributions gives added flexibility in building a retirement annuities account.

In most cases, there is still limited access to the funds in a deferred annuities account until those accumulated assets are converted to a revenue stream. This means there can be some annual withdrawals, or surrender the contract entirely, getting back its then-current value minus any surrender fees. But if there are withdrawals, the money will be gone, and the retirement annuities account will be reduced. There may also be a 10% tax penalty prior to age 59½.

It Can Pay to Wait:

Deferred annuities are especially appealing if a person has "maxed out" their employer's salary-reduction plan but wants to put away more for their retirement. And if a person isn't earning income, deferred annuities are one way for potential earnings on the investments to grow tax deferred.

Unlike employer-sponsored plans and IRA's, there are no annual limits to the amount that can be contributed to non-qualified deferred annuities; therefore more can be contributed when more is available, for example as the result of a big bonus or other windfall.




Russell Hill writes articles for a variety of subjects including fixed annuities, variable annuities, indexed annuities and other retirement investment vehicles. More information on annuities can be found at: http://www.annuity-strategies.com





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Cash For Deferred Annuities


Annuities are contracts between the investors and the insurance companies, where the insurance company sells, with the guarantee of providing a portion of the profit to the investor. Insurance Companies offer four kinds of annuity plans, to choose from. These types include an immediate or a deferred annuity plan that can be fixed or variable. In case of an immediate annuity, the payout starts immediately. The investors planning for deferred annuities are paid at a later period. Fixed annuities guarantee savings and returns, while a variable investment offers payments on the success factors and profit levels of the company.

However, in case of urgent financial requirements, the annuitant may decide to withdraw the invested amount partially or wholly. Often, this is not allowed by the Insurance Companies, once the contract is signed. Penalty fees are charged or a percentage of the repayable amount and are deducted if the annuitant breaks the contract before the ?surrender period? is over. The period agreed on for paying the money is known as the surrender period.

Several financial organizations buy such annuities and pay immediate cash to the annuitants, to fulfill the present needs. Persons who cannot afford to wait for a long term period to get over can opt for such a solution. However, it is important to remember that though these companies pay immediate cash to the investors, they gain much more when the annuity period is over and receive the agreed amount from the insurance companies. Though cash payments serve as a good alternative against the depreciating dollar value, annuitants also lose out a substantial amount of money, which they would have got at the end of the term period. Investors can apply for cash payments against the deferred annuities by choosing a financial company and following the formalities laid out by the company.




Cash For Annuities provides detailed information on cash for annuities, annuity brokers, annuity buyers, annuity payments and more. Cash For Annuities is affiliated with Cash Out Refinancing Scams [http://www.e-cashoutrefinancing.com].





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