What is an Annuity?

An annuity is a legal contract between you and the insurance company. You make a single premium payment or periodic payments over a period of time.

The insurance company promises to return your principal plus specified contracted yields, paid in a lump sum, or over a specified period of time or guarantee a lifetime income to you that you can never out live.

Two types of annuities are available: Immediate and Deferred.

An Immediate Annuity derives its name because it starts payments immediately or with in one year. Immediate Annuity payments are guaranteed for a fixed period, for instance 10 or 20  years. Or you can choose to take a lifetime income that you can not out live. Insurance companies also offer period certain payments that are guaranteed. If you were to die prematurely, payments would be paid to your beneficiary for the balance of the period chosen.  For instance if you set up an immediate annuity with a 10 year certain, and were to die a year later,  then your beneficiary would continue to receive payments for the balance of ten years, or 9 more years.

If you are married, you can also take a joint period certain, that is based on both you and your wife.

Check out -- Immediate Annuities

A Deferred Annuity, unlike an immediate annuity that starts making payments to you, deferred annuities are designed for accumulation. Deferred annuities are also tax-deferred during the accumulation period, until you start receiving payments.

There Two types of deferred annuities Fixed and Equity Indexed Annuities. Click Below.

Should You Buy an Annuity?

This would depend on your individual needs now or some point in the future.

As a CD holder, if you continually roll over your CD, you are subject to current income tax. Plus, CDs are subject to the expensive and time-consuming probate process

CDs vs Annuities

With an annuity you can take advantage of deferred growth. And like a CD, with a fixed CD-Type annuity you an choose annuity deferral periods. Also, some annuities allow you to take a portion of your annuity as income during the deferral period. But unlike CDs an annuity can avoid probate taxes.

Power of the Deferred Annuity

If you have a pension/401k plan, an annuity can offer a safe place to harbor your money. It continue to grow tax-deferred. Or, if you are ready for retirement, you may want to choose guaranteed income that you can not out live.

Maybe you have an inheritance you want to invest, or money from the sale of a home or business. You might consider a bonus annuity that could immediately increase your balance as much as 10%.

Perhaps you want to start accumulating money for retirement. A flexible premium deferred annuity allows deposits as little as $25 per month.

So whether you have millions to invest or as little as $25 per month, there is an annuity designed to fit your needs.

Which Annuity is Right for You?

If you are near retirement and/or wish to turn your 401(k), IRA, or sale of a home into a secure, guaranteed income stream, an Immediate Annuity might be right for you.

On the other hand, if you are still saving for retirement and want to grow your money with the power of tax-deferred compound interest, consider the following deferred annuities.

If you are a CD buyer, consider a CD-Type annuity. Annuities not only provide a higher return than CDs do, but the interest grows tax-deferred and most CD-Type annuities have a surrender-free withdrawal provision, so unlike a CD, you can withdraw money without an interest penalty. With CD rates at an all time low, and dropping, annuities offer a strong and safe alternative.

By combining different annuity strategies you can create customized solutions that meet your individual needs.

Let us help by providing you a no-obligation personalized annuity quote based on your needs.