Reviewing The Benefits Of The Fixed

Business If you’re planning for retirement, leaving a position and rolling your pension or 401(k) or simply want to start a safe secure investment, you’ll find the fixed annuity is perfect for your situation. There so many different uses for a fixed annuity that it works for almost everyone’s financial plan at some point in their lifetime. Fixed annuities are versatile and although the wording might be confusing at first, once you understand a few phrases, you’ll easily understand the fixed annuities. Fixed annuities are qualified or non-qualified, immediate or deferred and .e in a variety of different names that describes the .pany or entices you to purchase the product. The term fixed is an indication of how the principal acts. Unlike a variable product whose principal fluctuates daily. The fixed annuity is like a CD or savings account. The principal only grows as you add interest to it. A fixed annuity can be an IRA, pension, 403(b), 401(k) or rollover IRA, which makes the product a qualified annuity. Qualified annuities and non-qualified annuities can be the same product. The difference between the two is the paperwork used to identify that the government recognizes its pension money, and therefore gets special tax consideration. If you thought an IRA was a special product, think again. It can be any type of investment with the papers to show the funds for an IRA. If make an annuity an IRA, it a qualified annuity. Fixed annuities are either immediate or deferred. Immediate annuities are ones you select when you wish to begin an in.e from a lump sum of money. You purchase the fixed annuity and at the end of one payment period, you receive your first check from the insurance .pany. Of course today, most people have the in.e directly deposited into their checking or bank account to avoid the hassle of taking a check to the bank or the worry of someone stealing the check from their mail. A deferred annuity is like the bank CD; you simply use the account to grow your funds. The difference between bank products and a fixed annuity is that you have tax sheltering in fixed annuities. You can have fixed annuities, which are single payment annuities and others that allow you to make as many payments into the product as you wish. Single payment annuities are ones that don’t allow any more payments after the initial deposit. If the annuity doesn’t identify itself as a single payment annuity, then it’s a multiple payment product. Products can be single payment, deferred and qualified all at the same time. You can .bine the different names for the annuity as long as you don’t use two opposing titles, such as immediate and deferred. Immediate or deferred annuities can be either qualified or non qualified. Immediate annuities, however, must be single payment. Once you understand those few words, you’ll understand most of the basics for a fixed annuity. There are differences to all annuities in interest rate, guarantee periods for the initial rate and minimum guarantees. There are also differences in the length of the surrender period. The surrender period is how long you must hold the policy before you can cash it out without a penalty. The final term is the penalty free withdrawal. The penalty free withdrawal is the amount the insurance .pany allows you to remove before the surrender period ends, without any penalty. Some .panies only allow interest while others allow a ten percent per year cumulative withdrawal. If you understand all the terms mentioned, you have a good grasp on what a fixed annuity is. However, it always pays to .pare products before you purchase and one of the easiest ways to .pare is to use an online quoting site. These sites show products from many different .panies, which allow you to find a fixed annuity perfect for your needs. About the Author: 相关的主题文章: