Annuity Flexibility

Annuities are one of the most flexible savings vehicles today. You can use after-tax money to deposit into an annuity, or you can fund your annuity by rolling-over qualified money.

For example, traditional IRA and 401(k) owners can transfer their accounts into a qualified annuity, which maintains their tax-preferred status. In some cases, annuities will offer fixed interest rates, added death benefits, or other features from the insurance company that are not available in a qualified retirement plan.

Non-qualified (or "after-tax") annuities are just as popular. Because no rollover from another account is involved, non-qualified annuities often require less time to establish. In addition, when you withdraw funds, you'll only pay taxes on your accrued interest, since your principal was already taxed once before (when you earned it).

Up until this point, we've focused primarily on options available during the accumulation phase. But what about the payout phase, when the annuity returns its value to you?

Fortunately, annuities can also provide incredible flexibility during the payout phase, as well.

When the payout phase begins, you can opt to receive your annuity's value in one lump-sum, or you can elect to receive a steady stream of payments in regular intervals (e.g. monthly, quarterly, etc.).

If you decide to opt for a regular stream of payments, many insurers will allow you to have annuity payments last for a set amount of time (such as 10 or 20 years). Many contracts also allow you to receive payments for as long as you and your spouse live.

For many annuity owners, having indefinite payments for the rest of your life provides a predictable source of income. Some variable annuities will even let you choose between fixed payments, or payments that fluctuate based on the performance of mutual fund investment options.

I bought two annuities this year and was extremely satisfied with the service from Immediate Annuities.com each time. In short, their staff was courteous, professional, and prompt. I would recommend them to anyone who wants to buy an annuity.

Christine Newson

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As a rule of thumb, the longer your payment period, the smaller your payments will be. These conditions are clearly spelled out in the terms of the annuity.

The fine print will also tell you if your annuity will allow you to withdraw money from your account once periodic payments have begun. Be sure to look closely, and read the terms very carefully. And if you have any questions, do not hesitate to ask your SaveWealth Annuity Specialist.

Want more flexibility? Some annuities are designed to be immediate annuities. Immediate annuities have no accumulation phase whatsoever. They begin paying you in regular increments the moment you purchase the contract.

Source: savewealth.com