21 August 2009
An annuity offers benefits like tax deferral and flexible payout options to eliminate the chances of outliving your savings.
Annuity Advantages
- Guaranteed Income
A life insurance company can provide you with a guaranteed lifetime income no matter how long you live.
- Unlimited Contributions
Unlike other tax-advantaged investments such as IRAs, you can contribute an unlimited amount of money to an annuity during the year, whether in periodic installments or a lump sum. Individual insurance carriers may place a ceiling on the total amount you can put into an annuity without approval.
- No-Penalty Rollovers
Tax qualified money can be transferred from company pension, 401k's or other Ira's with out incurring any IRS penalties.
- No probate in case of death, as long as you specify beneficiaries.
the proceeds are paid directly to the named beneficiary.
- Shelter Investment Earnings
Retired people can use annuities to shelter investment earnings that would otherwise lead to taxation of Social Security benefits.
- Withdrawal and Early Withdrawal
Similar to Ira's, withdrawal before age 59 and 1/2 the IRS will impose a 10% penalty. There are certain exceptions to this rule. Also, because life insurance companies invest long term, most will apply a surrender charge in the early years of a policy. Many companies will allow an annual 10% surrender free withdrawal or taking and annual IRS Required Minimum Distribution surrender free.
The Insurance Shoppe offers Single Premium Immediate Annuity, Flexible Premium Deferred Annuity, and Single Premium Deferred Annuities.
