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Inflation and interest rate expectations may affect the type of annuity an investor chooses, as will the investor's wishes for his or her dependents and heirs. A deferred annuity is a type of annuity that delays monthly or lump-sum payments until an investor-specified date.
A tax-deferred annuity (TDA), commonly referred to as a tax-sheltered annuity (TSA) plan or a 403 (b) retirement plan, is a retirement savings plan available to employees of certain public education organizations, non-profit organizations, cooperative hospital service organizations and self-employed ministers.
A Variable Annuity is a personal retirement account in which the investment grows tax-deferred until the investor is ready to withdraw the assets. Another important feature of the variable annuity is the family protection, or death benefit, that often comes along with such contracts. This guarantees that, should the investor die during the ...
A 403 (b), commonly referred to as a Tax-Deferred Annuity (TDA) or Tax-Sheltered Annuity (TSA) plan, is a retirement savings plan available to employees of certain public education organizations, non-profit employers and cooperative hospital service organizations, as well as to self-employed ministers.
An annuity is a contract whereby an investor makes a lump-sum payment to an insurance company, bank or other financial institution that in return agrees to give the investor either a higher lump-sum payment in the future or a series of guaranteed payments. The typical annuity investor begins receiving payments after the surrender period expires ...
The presence of the contingent deferred sales charges means that the investor must pay a $400 fee upon the sale of the investment ($10,000 x .04). Ideally, the earnings from the investment should more than make up for the contingent deferred sales charges. In this example, the fund must therefore return 14% in one year to reach $11,000 in value ...
A 401 (k) plan meets the tax-deferral requirements of Section 401 (k) of the IRS tax code, hence its name. The plan invests contributed funds in a securities portfolio. The composition of the portfolio may vary depending on how plans are managed by the company and on the risk preferences of the employee. In most cases, employees may choose from ...
Example of a Variable Annuity. Let's assume you put $300,000 into an annuity at age 60 and the insurance company offers to pay you $1,000 per month for the rest of your life. $300,000 / $1,000 = 300 months. 300 months / 12 = 25 years to recover investment. According to our math, you will have to live until age 85 to break even on the investment ...
If the fixed annuity is at 8%, for example, the $175,000 earns 8% per year no matter what, and when it comes time to start receiving your $1,167 per month, the insurance company is obligated to pay 8% on the money remaining in the account. There are two kinds of fixed annuities: life annuities and term certain annuities.
An annuity is a contract whereby an investor makes a lump-sum payment to an insurance company, bank, or other financial institution that in return agrees to give the investor either a higher lump-sum payment in the future or a series of guaranteed payments. The choice to receive a series of payments is called annuitizing. If the owner of the ...