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Immediate Annuity: Why Do You Need Immediate Annuity

Annuity for retirement had several forms. One popular form is immediate annuity. It is like any other annuity offered by financial institutions but as the name suggests, it can begin right after you signed the annuity contract.  Eventually, this financial contract became synonymous with its plan of payment, which was known as an annuity. During the 20th century, majority of annuity contracts were the model of annuities today. The annuity holder will enter the first part of the contract called accumulation phase. It is where he or she is obliged to pay where company is expected to invests contribution made. After the accumulation phase, it is expected to enter the distribution phase, where the company will then make a payout to the holder for the rest of the holder’s life.

The difference between immediate annuity and deferred annuity is the process of when the payment is given. The deferred annuity may need at least one year before the payment is given. The one-year delay is needed to give insurance company ample time to invest your money. However, with immediate annuity, you may get the payment right after signing a contract. You are then expected to receive payments in monthly, quarterly, or yearly basis.

Distribution Process of Immediate Annuity

The distribution process for this type of immediate annuity is known as lifetime distribution. The annuity holder will continuously receive payments as long as he or she is alive. However, when the holder dies, all of the undistributed funds are forfeited in the favor of the company.

The forfeiture in immediate annuity is the process of counterbalance in a situation where in the holder outlives all the funds that are paid. However, to counteract the distribution process, other features are added in the plan. Now, an immediate annuity holder can name one or two beneficiaries, which may get the money if the original claimant had died expectantly. In some occasion, the company will select beneficiary but all the pay benefits will end after the second beneficiary dies. Some arbitrary issues may result in immediate annuity when the first claimant unexpectedly dies. To solve this issue, annuitant is given the option to avail a higher immediate payment than a lower but lifetime payment. However, those who choose low lifetime payment may also choose other funds.

Using Immediate Annuity Calculator

 Immediate annuity calculator is available to help you have a free quote of the first lump sum premium, rates and your possible life expectancy. The life expectancy of the person may be hypothetical but it will give you the bird’s eye view of what you should expect in contrast with your lump sum.

The immediate annuity is also affected by some external factors like taxes and inflation. Your money may have higher or lower value depending on these external factors.

Who Should Buy Immediate Annuity?

For one they have the urgency to receive payments right after their first payment. They see these as investment instruments that will benefit them. Second, retirees who want to convert their retirement money to a regular stream of income, which will be able to give them comfortable life right after their retirement.

For more information, enter your ZIP and provide answers to some basic questions to receive a free quote today.

How to Use an Immediate Annuity for Retirement Security

Everyone desires to live a comfortable life, such that the standard of living during active working years can be maintained even in retirement. This highly informative article will give you all the tips you require to get an immediate annuity for retirement security.

Basics and Benefits of an Immediate Annuity

An immediate annuity is one unique type of annuity since it gives the investor the opportunity to make payout withdrawals soon after they make a lump sum investment. This type of annuity is also referred to as Single Premium Immediate Annuity (SPIA) and is usually a very good form of investment for people who inherit or just stumble into large amounts of money. Investment of such funds in annuities can really save you lots of tax dollars, as this type of annuity is tax free at the time of investment.

The biggest benefit attached to immediate annuities is that you can invest all the funds you have and begin to receive guaranteed payout immediately after, either for a lifetime of specified number of years depending on the contract signed with the insurance provider. For instance, if you invest your terminal benefits or gratuity in an immediate annuity, you will be able to earn an appreciable and steady income for a reasonable length of time, therefore making it possible for you to seamlessly transit into retirement without financial stress.

Immediate Annuity Rates

The rates offered when you invest in an immediate annuity will differ for different people depending on your specific situation. These rates will vary depending on your age, how soon you intend to start receiving payouts, initial principal investment, and whether you will have a joint annuitant. Below, we have provided you with links to different sources where you can enter these details and compare rates from leading insurance companies offering immediate and other annuity plans.

To get the best value, ensure that you compare rates from all the different providers and read the fine print in order to understand the silent benefits attached to each plan.

Conclusion

It pays to act wisely when it comes to financial investments. Immediate annuities are often considered as a risk free investments that may guarantee you a payout every month and provide you with peace of mind when compared into investment in bonds and stocks. If you have some cash stashed away and can hardly prevent yourself from spending it, an immediate annuity for retirement or other purposes may be a good way to get the best value from your fortune.

To get started, enter your zip code on the top of this page, and then answer some basic questions. This will help you to compare annuity plans from multiple providers for FREE to determine your highest eligible rate. It is important to provide accurate questions to these answers as our pool of providers will provide you with different rates depending on your individual circumstance and situation.

How to Prevent the IRS to Take 20-30% of Your Company Retirement Account

Annuity for retirement is one way to avoid IRS from taking twenty to thirty percent of your retirement. Ordinarily, people are so excited to retire. We cannot blame retirees since they have spent all their life in saving to make sure that they will have a good life after they reach their retirement age. For most people, it is the retirement plan the biggest income they may have for their entire life.

Since it came from your hard-earned money, it is important that you also get the value of your money. You should ensure that IRS does not take a percentage of your retirement. However, the question is how can you avoid the IRS from taking taxes to your hard-earned money?

It is important that you know your options to other retirement plans that may be available for you especially if it involves tax computations of your retirement plans. Knowing your options will allow you to decide which retirement plan is good for you.

RetirementPlanRetirement Plan Distribution

There are two-phase in retirement plan. One is accumulation phase where you will need to allot a part of your earnings and deposit it to your retirement plan. The accumulation usually takes seven to eight years. After the accumulation period, you will get a payback when you finally reach your retirement age. Your retirement age may differ according to your birth year but most prefer to retire at age sixty-two years of age.

The retirement plan accumulation and distribution process works the same; however, in process and financial value, they are both different. The retirement plan often charges twenty percent. This twenty percent is withheld automatically because the payout is considered as an income. Being part of your income, it means that it is taxable. Aside from the twenty percent, other charges for federal and state income, tax are also withheld and this is based on your tax bracket.

For most cases, another ten percent penalty is charged to the owner and this is aside from the existing taxes that are deducted to your earnings. Likewise, if you are 59 years of age and below, you will also be penalized for withdrawing too early.

To avoid being penalized, it is recommended that you open IRA within the period of 60 distribution days and you may keep the eighty percent to yourself. The remaining twenty percent will be your payment for tax liability.

However, the best way to avoid penalties and to get your investment one hundred percent is to set up Direct Rollover IRA. Your distribution check will be directly deposited to a new IRA, this process will allow you not to hold your money but it will make it safe from any tax deductions. Your money from your retirement plan will be tax deferred and you may withdraw any cash when you need it.

How this Will Work With Annuity

Annuity for retirement is insurance product, which is related to bonds and securities. You may buy an annuity and the money that you pay for the annuity will be reinvested to securities. This financial instrument is tax deferred unlike other investment products. Not all your deposits are being taxed, thus, giving you the opportunity to grow your money. However, like other investments, it will be tax upon your withdrawal but there are ways to avoid the twenty to thirty percent tax charges. You may decide to reinvest it to direct rollover IRA or other investments.

To know more about this, you need to enter your ZIP at the top of this page and answer some basic questions to receive a free quote from our trusted annuity providers. The free quote will help you compare with the providers that offer the highest rate in the market.

How Can I Be Economical With My Retirement Plan Savings

How can I be economical with my savings?

There are many ways of avoiding spending all your savings on useless things. One of these ways is investing in annuities. Annuities are a good form of investment for people who are targeting long-term goals. Not only do they provide you with the option of receiving an income every month but also they may provide you with financial security on your investments. Incurring high costs in annuities can be prevented by looking over carefully the terms of conditions of each annuity. This greatly helps you to not only know about the benefits of the product but the charges of any fees the annuity may cost as well. In addition, you can also prevent high costs in annuities by making sure that you are buying an annuity that best meets your need. For example, if you want to purchase an annuity for long term then it may be the best that you purchase an immediate annuity.

Another way of being economical with your savings is by investing in index funds. Index funds are investments that allow you to put your savings in a group of stocks, which are offered by companies. This type of investment is very viable as it allows you to make money at a very fast pace, risk free and at a low cost. In addition, the best thing about mutual funds is the fact that they provide many profits for all those who invest in them and thus making it a very viable form of investing. This is a very good investment option for all those people who are thinking about retiring as they are guaranteed an increase in income annually.

You can also practice frugality with your savings by investing in international equity funds. Because we are one world economy, it is very important to invest in many types of funds so that you can have a steady flow of income into your retirement funds. Thus by tapping into international equity funds, you are able to make profits and increase your retirement fund. International equity funds are also crucial when we involve taxes into the equation. Research has proven that taxes are different from country to country. Thus if you invest in an international equity fund, it is very possible that you will be charged low taxes than If you invested in equity funds that are local. This reduction in tax rates may help you to save some of your money so that you can use it in other investment opportunities that may occur overtime.

Being economical with your savings is crucial for your well-being. Enter you zip code at the top of this page and answer some basic questions to get free annuity quotes.

Fixed Annuity for Retirement – Pros and Cons

If you have decided to invest in an annuity for retirement, it is important to understand the different types of annuities available in order for you to make the best decisions regarding your investment plan for the future.

Basics of a Fixed Annuity

A fixed annuity is one of the most common types of annuity available on the market from retirement plan providers. Like its name states, a fixed annuity is one with a specific rate of return, leading to a fixed payout either on a monthly, quarterly, or annual basis. Fixed annuities are usually low risk investments since the return is guaranteed over a period of time or for the entire life span of the investor depending on the terms in the contract. However, its interest rate is usually lower or more conservative than market averages.

There are three major types of fixed annuities namely:

•             Fixed Deferred Annuity

•             Fixed Immediate Annuity; and

•             CD Type Fixed Annuities

Pros and Cons of Fixed Annuities

Like everything in life, fixed annuities have its good and bad sides. In our opinion, we feel the good outweighs the bad especially if you consider the fact that fixed annuities offer a guaranteed return on your invested principal and offers peace of mind. One of the greatest benefits of this type of annuity is the tax exemption, which investors enjoy as far as they keep investing it in such products. Taxes are only levied on the gains made on the principal during future withdrawals.

Also, with fixed annuities, a lifetime income and guarantee on the principal invested is secured, as retirees will usually receive a specific amount every month for the rest of their lives or for as long as was specified in the contract. However, it must be noted that the fixed amounts to be received will depend on a number of factors, including the total amount invested, agreed interest rate and length of payout period.

On the down side, the payouts received for fixed annuities are not adjusted for inflation, meaning that you will receive the payout amount specified in the contract for your lifetime, regardless of changes in the economy or benefits accruable to annuity plan provider from the pool of funds. There are a few more cons associated with fixed annuities. It is important that you read the terms of the contracts before signing the dotted lines.

Conclusion

Generally, fixed annuities are very viable for use as an annuity for retirement purposes. The risk involved is low and your principal and a specific interest amount is guaranteed regardless of the economic situation within the country. Usually, this type of annuity is very attractive for retirees that may not have any other source of stable income during retirement.

To get started, enter your zip code on the top of this page, and then answer some basic questions. This will help you to compare annuity plans from multiple providers for FREE to determine your highest eligible rate. It is important to provide accurate questions to these answers as our pool of providers will provide you with different rates depending on your individual circumstance and situation.

Different Types of Annuity for Retirement Plans

Are you looking forward to a comfortable retirement with a stable monthly income and period free of financial worries? Then, one of the options that you could think about is investing in annuities for retirement purposes, regardless of whether you are entitled to gratuities or other terminal benefits. Compare rates from different annuity plan providers and make the best choice.

Annuity Types and Options

Basically, annuities are a form of investment which gives you access to guaranteed payout based on the principal amount invested over a period of time or as a lump sum. The great benefit associated with this type of investment is the fact that you can receive payouts for the rest of your life on a periodic basis. Most people refer to annuities as an investment vehicle that ensures that you never miss earning a regular stream of income till death.

There are several types of annuities available from the insurance providers. The most common types include:

•             Fixed Annuities

•             Variable Annuities

•             Deferred Lifetime Annuity

•             Immediate Annuity

There are a few other and newer flavors can be added, depending on the term used by the annuity retirement plan provider to couch the plan. Generally, annuities have been described as one of the best types of investment that can double as a retirement plan.

Benefits of Annuities in Retirement

There are several benefits attached to annuities, especially for retirees who do not have any steady source of income anymore. With the payouts that accrue from the plan, retirees and other seniors can relatively maintain the lifestyle they used to live while still in active employment.

Tax rebates on the funds invested have been known as the biggest benefits associated with annuities, because the funds invested in annuities are tax-free. It applies for any type of retirement income of pension payout that is invested in an annuity retirement plan. You must know that such tax rebates can go a long way for a retiree.

Also, there are no limits to investment amounts in annuities for retirement plans. Even if you win a jackpot, you can plough all the money into an annuity plan and save it from several hundreds or thousands of dollars in taxes.

To get started, enter your zip code on the top of this page, and then answer some basic questions. This will help you to compare annuity plans from multiple providers for FREE to determine your highest eligible rate. It is important to provide accurate questions to these answers as our pool of providers will provide you with different rates depending on your individual circumstance and situation.

Selecting a Fixed Annuity: Choose the Right Annuity for You

Not all fixed annuities suit the needs of every individual. Annuities are flexible in ways, which try to cater different individual’s needs and situations.

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There are a number of fixed annuities present for you to choose. In choosing one, there are many factors to be considered such as the financial status of the prospective annuitant at that time and health conditions.

Annuities serve one main goal and purpose. It is to provide income after the retirement or even after the retirement date. Different kinds of annuities are available in the market. Choices can be made between deferred and immediate annuities. Under those two, a selection between fixed and variable is still needed.

If you are a retiree or soon to be retiree, an annuity may be one of your best choice. No matter what annuity you like, it is better to have an annuity than no annuity at all. Still, selecting one is crucial. In choosing the right annuity for you, you have to consider first your financial status as of the moment. Do you need a monthly income? Alternatively, you have sufficient amount of income in the moment and that you do not need your income right now?

First scenario, you need a consistent monthly income. What you need is an immediate annuity. Well, your annuity can either be fixed or variable depending on your choice. Immediate annuity will allow you to receive monthly income consistently.

Second scenario, you do not need the money today and you need to keep it safe for the future. What you need now is deferred annuity. You may save your income at a tax-deferred situation. You will receive payments right after your retirement. You can also decide between fixed and variable.

Fixed annuities offer you a minimum interest rate of your account. Whatever happens to the market or to the investments, the interest rate of your account may not be affected. Variable annuities, on the other hand, will offer your account a sense of flexibility. The interest rate will be subject to fluctuations brought by the market and the investments performances. Now, if you happen to choose fixed annuities, you still need to ponder on some factors.

Deferred fixed annuities and immediate fixed annuities can offer you various and specific types of annuities. Life annuities and term annuities are greatly known in the market. Life annuities give a person a fixed amount of money in a period. These kind of annuities expires when the annuitant die. Term annuities, in contrast with life annuities, do not rely on the life span of the annuitant. It will pay off predetermined amount to the annuitant periodically until the annuity products terminate.

There are several examples of life annuities and term annuities. If you do not have a family or a beneficiary and all you are concerned of is the flow of income after your retirement, then straight life annuity is the right one for you. It is simple and at the same time inexpensive. It will expire the moment after your death. On the other hand, if you have a spouse or children to worry about, you may optionally choose the joint and survivor annuity. This annuity will continue to pay an amount to your spouse even if you die. In case you have serious health problems, there is an annuity just right for you. Here, the money you need to pay to the company depends on your life expectancy. The lower it is, the higher you need to recompense.

Assess yourself, you needs, and your wants now. After that, enter your zip at the top of this page and choose the right annuity for you.