Tax deferred annuities are retirement accounts which pay their annuitants, owners of the annuity, income for life. It can be paid monthly, quarterly, semi-annually or yearly. The amount of the payments are determined by the number of years that the account holders are expected to live and also by how much money exists when the payments are to begin.
Anyone who is 15 years from retiring or someone who has a lump sum of money can begin one. But the person who begins with many years left of working can make monthly contributions to the capital until the job ends. The person who has less time before leaving work can deposit a lump sum in the account.
Those who are taking more time to build up their money by making the monthly payments while they work will enjoy the tax deferred option. Because the deposits made to these savings will not be taxed at that time it is called a tax deferral. Taxes will only be taken from these remittances after the annuitant has retired.
There are lots of different kinds of annuities to decide on. There is the fixed to learn about first. With this asset the interest rate is fixed, but it is not permanent. After the time period ends the interest rate will not be fixed again but a minimum interest rate can be set.
There is another which is called the variable. This is something for people who have a strong heart. It will be needed because this vehicles interest rate is allowed to go up and down with the market each day. With this option there is the opportunity to earn more money than from safer ventures.
There is also the index. The money that is deposited is associated with an index like the S&P and vacillates. This is another of the investment vehicles which will permit the investor to appoint a minimum interest rate.
And then there is the CD. It is a lot like the certificate of deposit. What makes it comparable to the CD is the fact that it can be fixed for a period of time that is between one and 10 years. It is also possible to make a few withdrawals before retiring if need be.
With tax deferred annuities there is a greater capacity to increase the amount of money in a retirement account than from other types of financial instruments. This is possible because unlike with other ventures taxes are not taken from the contributions. There is a choice between the fixed, variable, index or CD deferred. After that the investor has retirement income forever.
Anyone who is 15 years from retiring or someone who has a lump sum of money can begin one. But the person who begins with many years left of working can make monthly contributions to the capital until the job ends. The person who has less time before leaving work can deposit a lump sum in the account.
Those who are taking more time to build up their money by making the monthly payments while they work will enjoy the tax deferred option. Because the deposits made to these savings will not be taxed at that time it is called a tax deferral. Taxes will only be taken from these remittances after the annuitant has retired.
There are lots of different kinds of annuities to decide on. There is the fixed to learn about first. With this asset the interest rate is fixed, but it is not permanent. After the time period ends the interest rate will not be fixed again but a minimum interest rate can be set.
There is another which is called the variable. This is something for people who have a strong heart. It will be needed because this vehicles interest rate is allowed to go up and down with the market each day. With this option there is the opportunity to earn more money than from safer ventures.
There is also the index. The money that is deposited is associated with an index like the S&P and vacillates. This is another of the investment vehicles which will permit the investor to appoint a minimum interest rate.
And then there is the CD. It is a lot like the certificate of deposit. What makes it comparable to the CD is the fact that it can be fixed for a period of time that is between one and 10 years. It is also possible to make a few withdrawals before retiring if need be.
With tax deferred annuities there is a greater capacity to increase the amount of money in a retirement account than from other types of financial instruments. This is possible because unlike with other ventures taxes are not taken from the contributions. There is a choice between the fixed, variable, index or CD deferred. After that the investor has retirement income forever.
About the Author:
Andy Albright is the President and CEO of National Agents Alliance the Nation's leading provider of mortgage protection insurance, generating more than $100 Million a year in revenue. For more industry insight and information visit Andy's Personal Blog
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