Annuities

An annuity in arrears is the polar opposite of an annuity in advance (also called an “ordinary annuity”). An annuity in arrears is a regular, identical monetary payment given at the end of equal time intervals, such as a mortgage payment. Mortgage payments, like rent, are due on the first of each month. The mortgage […]

When you retire as a member of a pension fund, pension preservation fund, or retirement annuity fund and choose to take a lump payment, you can take (commute) a lump amount equivalent to one-third of your retirement interest in that fund. The remaining two-thirds of the money will be paid out as an annuity (a

A grantor retained annuity trust (GRAT) is a financial tool used in estate planning to reduce taxes on substantial monetary transfers to family members. An irrevocable trust is established for a specific term or amount of time under these plans. When a trust is founded, the person who establishes it pays a tax. The assets

A reversionary annuity is a reduction in your retirement benefit in exchange for a higher survivor payment for a beneficiary when you die. A reversionary annuity cannot be canceled. What is a reversionary policy? You sell all or part of your house in exchange for a cash lump sum, a recurring income, or both under

The potential for higher interest and premium protection are two of the benefits of indexed annuities. Higher fees and commissions, as well as gains caps, are drawbacks. What are the downside of indexed annuities? Penalty of 10% imposed by the Internal Revenue Service Withdrawing income before reaching the age of 59.5 triggers a 10% IRS

A Roth annuity might provide you with tax-free lifelong income or lower your risk while saving for retirement. Because you won’t pay taxes on the money you remove during retirement, a Roth IRA is a particularly potent retirement savings vehicle. An annuity is a type of investment that provides a steady stream of income. Is

A split-funded annuity is a type of annuity in which a portion of the principle is used to support immediate monthly payments and the remainder is saved to fund a deferred annuity. What is one of the major disadvantages of split dollar plans? Let’s imagine you want to provide low-cost life insurance to a few

In court cases, plaintiffs are given structured settlements. Individuals are able to acquire annuities. If you bought or inherited the annuity, you don’t need court permission to sell it. Annuity payments are generally easier to sell than structured settlement payments. You may be able to take a modest portion of your retirement income without incurring

A temporary annuity is a supplement to your retirement income. It gradually raises your monthly payment until you reach 65 years old or die, whichever comes first. This can help you figure out how much your pension will be before and after you turn 65. What type of annuity is considered a temporary annuity? A

A variable annuity is a tax-deferred retirement vehicle that lets you choose from a variety of investments and then pays you a fixed amount of money in retirement based on the performance of those investments. A fixed annuity, on the other hand, offers a guaranteed payout. What’s wrong with variable annuities? Before you go out