Learning about Annuities West Palm Beach Florida
Here is some basic information about annuities. Annuity for Seniors in West Palm Beach Florida
Annuities are financial products sold by Life Insurance Companies and other financial service companies.The annuity contract is design to provide life time income or income for a specific period of time.
Preparing For Retirement Resource . An annuity is a contract between you and an insurance company, under which you make a lump-sum payment or series of payments. In return, the insurer agrees to make periodic payments to you beginning immediately or at some future date. Annuities typically offer tax-deferred growth of earnings and may include a death benefit that will pay your beneficiary a guaranteed minimum amount, such as your total purchase payments.
Unlike retirement plans, however, there is no limit as to how much you can invest in annuities! The large number of annuity products on the market today can make selecting the most suitable annuity a confusing process. But in fact, there are only a handful of different types of annuities. When selecting an annuity you will be presented with essentially three choices:
- Timing of payout – immediate or deferred: In an immediate annuity, the investor begins to receive payments immediately upon investing. This is for investors who need immediate income from their annuity. In a deferred annuity, the investor receives payments starting at some later date, usually at retirement.
- Investment type – fixed or variable: Fixed annuities are invested primarily in government securities and high-grade corporate bonds. They offer a guaranteed rate, typically over a period of one to ten years. Variable annuities enable you to invest in a selection of sub- accounts, such as securities portfolios, fixed interest accounts, and money market securities.
- Liquidity options – Most annuities allow you to withdraw either your interest earnings or up to 15% per year without a penalty (although any withdrawal from an annuity may be subject to taxes and a 10% federal penalty if taken prior to 59 years of age).
- Fixed annuity: Fixed annuities are invested primarily in government securities and high-grade corporate bonds. They offer a guaranteed rate, typically over a period of one to ten years. The insurance company guarantees that you will earn a minimum rate of interest during the time that your account is growing. The insurance company also guarantees that the periodic payments will be a guaranteed amount per dollar in your account. These periodic payments may last for a definite period, such as 20 years, or an indefinite period, such as your lifetime or the lifetime of you and your spouse.
- Immediate Annuity:Immediate annuity provides immediate income payments that starts immediately .A lum sum initial payment is required to start this type of account.
- Variable annuity: choose to invest your purchase payments from among a range of different investment options, typically mutual funds. The rate of return on your purchase payments, and the amount of the periodic payments you will eventually receive, vary depending on the performance of the investment options you have selected.
- Equity-indexed annuity is a special type of annuity. During the accumulation period – when you make either a lump sum payment or a series of payments – the insurance company credits you with a return that is based on changes in an equity index, such as the S&P 500 Composite Stock Price Index. The insurance company typically guarantees a minimum return. Guaranteed minimum return rates vary. After the accumulation period, the insurance company will make periodic payments to you under the terms of your contract, unless you choose to receive your contract value in a lump sum.
Variable annuities are securities regulated by the SEC. Fixed annuities are not securities and are not regulated by the SEC. Equity-indexed annuities combine features of traditional insurance products (guaranteed minimum return) and traditional securities (return linked to equity markets). Depending on the mix of features, an equity-indexed annuity may or may not be a security. The typical equity-indexed annuity is not registered with the SEC.
Investors need to be careful to understand the annuity into which they may invest. Finally, consider the following:
- The rating of the insurance company issuing the annuity, particularly in the case of a fixed annuity.
- Understand the fees paid to the brokers that market the annuities on behalf of the insurance company.
- Any withdrawal from an annuity may be subject to taxes and a 10% federal penalty if taken prior to 59 years of age
For additional information about annuities you can visit Annuity:Solutions for a very secure retirement- Read More about a Secure retirement Athene Annuity