- How Long Does It Take to Cash Out an Annuity?
The time it takes to cash out an annuity depends on the type of annuity it is, the withdrawal method and the company processing the request. Lump-sum withdrawals may take a few days to several weeks, depending on administrative requirements and potential surrender charges, whereas structured payouts follow a predetermined schedule and cannot be expedited.… read more…
- How Do Interest Earnings Accumulate in a Deferred Annuity?
A deferred annuity is a long-term investment that grows tax-deferred and provides income in retirement. Interest earnings accumulate without immediate taxes, allowing savings to grow. Taxes are paid when withdrawals begin, often at a lower rate after retirement. A financial advisor can help determine how a deferred annuity fits into your retirement plan and recommend… read more…
- 12 Annuity Terms Every Investor Should Know
Annuities can be a good option for investors seeking steady income during retirement. To get started, it’s important to learn some basic annuity terms. These 12 key terms will help you understand how annuities work and whether they fit your retirement plan. A financial advisor can also help you evaluate an annuity contract for your… read more…
- Should I Take a $78,000 Lump Sum or $650 Monthly Annuity Payments?
When faced with the decision of taking a lump sum pension payout or receiving monthly annuity payments, your course of action will depend on your individual circumstances. Key factors include your life expectancy, others sources of income and how soon you will be paid the lump sum. Speak with a financial advisor before making significant… read more…
- How Are Fixed Annuities Taxed?
Fixed annuities are popular for their stability and guaranteed returns, but it’s important to understand the tax implications of this type of annuity when using it as part of your financial planning. The funds you contribute to a fixed annuity typically grow tax-deferred, meaning you won’t owe taxes on the interest earnings until you start… read more…
- How Are Non-Qualified Annuities Taxed for Beneficiaries?
Non-qualified annuities offer tax-deferred growth, providing financial benefits during the annuity holder’s lifetime. When the annuity holder passes away, their beneficiary inherits the annuity, which comes with some specific tax implications. Understanding how inherited non-qualified annuities are taxed to beneficiaries is an important part of effective estate planning and tax management. Consulting with a financial… read more…
- What Is the Minimum Annuity Investment You Can Make?
Annuities offer a reliable income stream for retirees. But if you’re wondering how much it takes to buy an annuity, the minimum investment required can vary. Generally, the initial investment for an annuity starts around $5,000 to $10,000, depending on the type of annuity and the provider. Fixed annuities often have lower minimums compared to… read more…
- What Is a Trigger Rate in an Annuity?
Annuities can be a valuable tool for ensuring a steady income stream and managing financial risk, particularly during retirement. One important aspect of certain annuities is the trigger rate, which plays a significant role in determining the growth and performance of the investment. Understanding how trigger rates function within annuities is important for investors, as… read more…
- 6 Questions to Ask Before Buying an Annuity
Annuities can offer financial stability through a steady stream of income, but they can also impact your long-term financial health. Therefore, you should consider the fees that can erode your investment to the payout rates and the trustworthiness of the issuing company, which can all play a pivotal role in determining the suitability of an… read more…
- Types of Annuities for Seniors to Consider
Annuities can provide steady income for as long as you live, which is one reason a senior might purchase one. These contracts with insurance companies come in many different varieties, which can help address seniors’ specific financial needs. However, their variety and complexity can make annuities confusing compared to relatively straightforward investments such as mutual… read more…
- What Is a Life Insurance Annuity?
A life insurance annuity is a benefit payment option for a life insurance policy. If you are a beneficiary of a life insurance policy, you may have the option to receive your payout in the form of a life insurance annuity. In this case, when the policyholder dies, the insurance company will place your payout… read more…
- What Is a Guaranteed Lifetime Annuity?
Ensuring that you have enough income to cover your living expenses and support your lifestyle is one of the central financial challenges of retirement planning. Guaranteed lifetime annuities are designed to help retirees do just that, providing a stream of guaranteed income for life. However, like all investment products, they come with their own set… read more…
- Is It Better to Take Annuity Payments Monthly or Once Per Year?
A lot of retirees use annuities to simplify their income stream in retirement but that doesn’t mean annuities are simple. Beyond choosing what kind of annuity to purchase – immediate vs. deferred and fixed, indexed or variable, you’ll also need to consider how to receive your annuity payments. You can receive a lump sum from… read more…
- Differences of Immediate vs. Deferred Annuities
The guaranteed income of an annuity makes this a valuable retirement product for many households. While there are many different kinds of annuity, two of the broadest categories are immediate vs. deferred contracts. With an immediate annuity, you buy the contract in one lump sum and begin receiving payments right away. A deferred annuity, on… read more…
- What Is an Investment-Only Variable Annuity (IOVA)?
An investment-only variable annuity (IOVA) is a specialized type of annuity designed primarily for one purpose: investing. Unlike traditional annuities, which may provide lifetime income, an IOVA is primarily focused on growing your investment portfolio. Think of it as a tax-deferred investment account wrapped in an annuity structure. If you’re considering an IOVA, talk to… read more…
- How an Individual Retirement Annuity Works
An individual retirement annuity can provide guaranteed lifetime income, making it a potentially useful tool in retirement planning. It also comes with tax perks, similar to other retirement planning tools such as an Individual Retirement Account (IRA). However, individual retirement annuities differ from IRAs in key ways, including investing costs and flexibility in selecting investments.… read more…
- Pros and Cons of an Immediate Annuity
An immediate annuity is the most basic type of annuity: You can buy this insurance contract with a single lump sum payment in exchange for a stream of income that is guaranteed over a specific period of time. However, when developing the strategy for your retirement plan, you should compare the advantages and disadvantages before… read more…
- Understanding Bonus Annuities and Their Benefits
Bonus Annuities are a compelling investment option offered by insurance companies, which frequently provide an upfront bonus or first-year interest rate bonus, on your initial investment. These bonuses can typically range from 1% to 10% of your initial investment and hinge on the specifics outlined in the annuity contract. It could be important to speak… read more…
- What Is an Annual Reset of a Fixed Index Annuity?
A fixed index annuity (FIA) or equity indexed annuity is an insurance contract that combines principal protection with potential market-linked returns. If the chosen market index that’s linked to the annuity performs well over the course of the year, the annuity holder enjoys a portion of those gains as interest. An annual reset is the mechanism… read more…
- What Is a Lifetime Payout Annuity?
Lifetime payout annuities can be instrumental in navigating the financial journey to secure a steady income stream during retirement. Essentially, a lifetime payout annuity is an insurance product that an investor purchases from an insurance company that pays out a portion of the portfolio for the life of the investor. The annuity is scheduled to… read more…
- Should a 70-Year-Old Buy an Annuity?
Buying an annuity at age 70 may bring a steady income, but the value depends on your lifespan and the annuity’s terms. The decision to buy an annuity at 70 is complex and hinges on an individual’s unique financial situation and retirement goals. Consider talking with a financial advisor when making any major decisions about… read more…
- How to Use Annuities for Income in Retirement
Your retirement plan can keep you up at night, especially if you are nervous about outliving your nest egg. But many Americans get peace of mind by adding annuities to their retirement plans. This financial product is an insurance contract that can pay you retirement income for a certain amount of years or a lifetime.… read more…
- What Is an Annuity Buyout?
An annuity buyout is a financial transaction where an individual or company sells their annuity, a contract for regular payments from an insurance company, to another party for a lump sum payment. This transaction typically seems enticing when a lump sum is more attractive than periodic payments provided by the annuity. These buyouts have gained… read more…
- Should I Buy an Annuity at Age 40?
Woman managing her personal finances
- Pros and Cons of Adding a Fixed Annuity to Your Retirement Portfolio
A fixed annuity is a popular source of retirement income. This insurance contract can pay you a guaranteed interest rate on your contributions, and your earnings could also grow tax-deferred until you start collecting income. But is this a good investment for your retirement? Let’s take a look at the pros and cons of buying… read more…