Annuities 101: The Basics

March 11, 2011 - PRLog -- Annuities 101 : The Basics

Written by SE of The SE Agency
March 11, 2011

An Annuity is a Financial Contract, generally sold by an Insurance Company.

Annuities are designed to provide payments to the holder (annuitant) at specified intervals.  These payments can begin immediately  (Immediate or CD Type Annuity), or payments can be made at a later time or date, as specified in the contract ( Deferred Annuity).

Annuities are tax-deferred, meaning that earnings from investments
within an annuity, are not taxed until withdrawn. This is commonly
referred to as tax-deferred savings.

Annuities are classified based upon their specific financial
characteristics. We have briefly discussed Immediate and Deferred
Income, above.   A Key Example of a Deferred Annuity, is a

Retirement Plan.
You contribute money into your account, with the intention of obtaining
investment income and creating a Savings Plan, to be withdrawn later during
retirement.

In addition an Annuity can be Fixed or Variable.  This pertains to the
type of funds you choose, to create investment income:
Fixed Annuities guarantee a certain payment amount or interest rate.
Variable Annuities do not, but during stable financial times have the
potential for greater returns.

Other Key Financial Characteristics of an Annuity Include:

Pay-Out: Fixed Period or Life Time.

Tax Status: Qualified (pre-tax) or Non-Qualified (after-tax).

Premium Payments: Single Premium or Flexible Premium.


Before deciding to invest in an Annuity, we strongly suggest
sitting down and talking with a licensed professional.

Try to find a local broker, who offers a complimentary consultation.

Please make sure to also do your homework on the specific
features of your annuity plan.  Take a good look at applicable
Surrender Charge Tables, and ways to avoid these fees.  In addition,
when considering a Fixed Annuity, inquire about Guaranteed Interest
Rates, Cash Bonuses and Liquidity Options.

Sincerely,

The SE Group
http://rolloversandannuities.com

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The SE Group: 215-622-0052
Annuity & Retirement Plan Advisors
IRA, 401k, 403b Rollover Specialists
http://rolloversandannuities.com