Developing a Financial Plan

Maintenance Fees Mortality Fees Investment Advisory Fees These fees should be stated plainly in the prospectus.

Commissions. If the commission is paid in a front-end load, this can reduce the amount of your initial investment. A no or low-load annuity contract is preferable. Penalties. The surrender charges usually only apply for the first 7 years, starting at 7% the first year, declining 1% per year until after the 7th year, when these surrender charges […]

Commissions. Check the broker commissions – even though the insurer is the one who gives you the annuity, the broker may make anywhere from 3 to 8% which can substantially cut into your money. The Company. Make sure that the company that you are buying the annuity from has a good track record. There is no agency […]

Annuity payments to beneficiaries are subject to the same taxes that would have been collected from you.

The tax rates will differ for qualified and non-qualified plans. An annuity that is tax-qualified is one that funds a qualified retirement plan. When this qualified annuity is used it follows the same tax laws as these retirement vehicles, such as: Tax deferral during the gestation period The earnings will not be taxed until withdrawal […]

There are a few choices that you have when choosing to collect your annuity. Some people opt for a lump sum, even though it negates one of the major features of the annuity: payments until death. The amount of the monthly payments that you receive depends on: The amount of money in your annuity contract […]

Single-Premium Annuity. This is where the investment is made all at once in a lump sum. Flexible-Premium Annuity. This annuity can be funded with a series of payments. Immediate Annuity. With this annuity, the payments begin back to the purchaser instantly. Deferred Annuity. Payments will be redistributed back to the purchaser many years later. This is usually used as […]

You will not be able to withdraw any of the money in an annuity during its tax deferred growth period without incurring large fees. You will be charged 10% for tax code and the insurance will usually charge “surrender charges” on top of that.

An annuity is an insurance contract – the insurance company invests in stocks and bonds on behalf of the purchaser with the tax deferred money. When the purchaser turns 65 the purchaser will begin to receive payments, which will fluctuate with the prices of the underlying securities. An annuity will guarantee that the purchaser will […]

The yield is the amount paid annually by an investment. The yield is most commonly a percentage of the market price of an investment, which does not take into account the appreciation. Since money market funds and certificates of deposit don’t fluctuate like stocks and bonds do, the yield would be the same as the […]