What Are Deferred Annuities?
a deferred annuity is a type of contract in which the investor pays premiums to an insurance company in order to receive a regular income stream at a specified time in the future. annuities are commonly used as a way to set up a steady source of income during retirement. rick will like to contribute money to a deferred annuity account in addition to his 401(k) retirement plan contributions at work. he starts at a deferred annuity because he wants the security of knowing that he will receive regular income once he retires. a deferred annuity has two phases. in the savings phase, rick contribute to his annuity on a regular schedule and let an insurance company invest rick's premiums. this happens for several years. during this time rick's investment grows especially because with the deferred annuity rick doesn't have to pay taxes on his contributions. they are deferred until he starts receiving payments from his investment. the income phase takes place when rick retires and he is ready to receive his payments. at this point rick will receive a regular check from his insurance company which is taxed as income each year. rick's retirement plan may sound foolproof but there are some drawbacks to this type of investment. some annuities charge high fees from management and broker commissions along with additional fees for canceling the annuity or moving it to another financial institution. rick is also restricted on when he can withdraw his money. if he wants to retire early and starts withdrawing his funds before he turns 59 and a half, the irs may slap ? a tax penalty. deferred annuities provide a dependable income during retirement, but rick should talk to his financial adviser to help him decide whether this investment's right for him.
- deferred annuity・・・据置年金