What Is an Annuity?

An annuity is a contract with an insurance company that is funded by the purchaser and designed to generate either Taxed deferred growth or an income stream in retirement. It is a flexible financial vehicle that can help protect against the risk of living a long time because it provides an option for a lifetime income.

Two advantages of annuities are that the funds accumulate tax deferred and they can be distributed in a variety of ways to the contract owner.

There are many different types of annuities. Immediate annuities are designed to provide income right away, whereas deferred annuities are designed for long-term accumulation. Some annuities offer a guaranteed rate of interest, whereas others do not.

Most annuities have surrender charges that are assessed during the early years of the contract if the contract owner surrenders the annuity. Withdrawals of annuity earnings are taxed as ordinary income and may be subject to surrender charges, plus a 10 percent federal income tax penalty if made prior to age 59 1/2.

Withdrawals can reduce annuity contract benefits and values

There are various types of Annuities., Fixed, Equity Index, Variable and each carries different moving parts that can accomodate anyone persons needs or goals. 
Annuities are back with a bang they are coming on stronger than ever.

Retirement planning has focused mostly on helping workers accumulate savings for the later years in life, but recently the Treasury Department now is tackling another aspect in making sure retirees don't run out of money.

The department last week in 2012 proposed two regulations to make it easier for workers to get annuities through their workplace plans.

Is this not pre 1974 when every...one received a Pension and the pension was nothing more than a funded Annuity, pre 1974 people were extremely excited about a Pension, and that Pension was an Annuity.

It's no secret that we are living longer and that many Americans are troubled by the economic roller coaster of the Market and more and more Investors are flocking to the safety of Annuities.

If you are considering Retirement Planning, call for a free consultation today.

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