Annuities

Fixed Indexed Annuity-Brief overview

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The origin of annuities can be traced to the founding of the United States of America. The first recorded use of annuities was by the Presbyterian Church who used annuity concepts to provide for widows and retired ministers. Benjamin Franklin used annuities to provide for funds over a long period of time for his wife and for the cities of Boston and Philadelphia.

America owes much of its success to the far-reaching use of long-term savings provided by annuities.

Babe Ruth, the famous baseball player, while enjoying a lifestyle of extravagance and excess, kept the majority of his money in annuities. The crash of 1929 left many people broke and without funds but the Babe’s money was safe and secure.

A true testament to the proper use of annuities! Click on image to read pdf.

Traditional Annuity Types: Immediate and Fixed

With an immediate annuity, your income payments start immediately. You decide whether you want income guaranteed for a specific number of years or for your lifetime. The insurance company calculates the amount of each income payment based on your purchase amount and your Life expectancy.

A tax-deferred annuity (fixed annuity) has two parts: the accumulation where you let your money grow, and the payout. During accumulation, your money grows tax-deferred until you take it out, either as a lump sum or as a series of payments. You decide when to take Income from your annuity and therefore, when to pay the taxes.

The payout phase begins when you decide to take income from your annuity. As your needs dictate, you can take partial withdrawals, completely cash-out (surrender) your annuity, or convert your deferred annuity into an immediate annuity.