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Single premium immediate annuity is when one gives an insurance company an upfront payment or deposit and they straight away begin to pay you a monthly income. One can get them from a number of financial service companies.
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Who would a Single Premium Immediate Annuity be appropriate for?
In most cases a single premium immediate annuity would be suitable for someone wanting to create a monthly ditribution for a certain period of time or for life. The second choice is whether this will be a single monthly distribution for one individual or a joint payout for two individuals with or without a survivors benefit.
S there a penalty for withdrawing from my single premium annuity for a house?
yes
Can a fixed annuity have a minimum interest rate and a flexible premium payment schedule?
Yes. ALL deferred annuities offer a guaranteed minimum interest crediting rate (although in a few contracts, that rate is zero). And all non-variable immediate annuities calculate the annuity payments using an assumed interest rate, so one could say that that rate is actually "guaranteed" (as the payments are). Some deferred annuities will accept only a single premium, and they're called "single premium annuities". Others will accept recurring premiums and are usually called "flexible premium annuities. Immediate annuities typically do not permit recurring premiums.
My mother has a single premium deferred annuity when she dies do her children receive cash from that annuity?
Are the children the beneficiary's of the Annuity? Annuity's are like Life insurance, they have named beneficiary's listed in the contract. If the children are listed, then yes they are going to benefit from this account.
Do you include IRA single premium immediate annuities into a required minimum distribution calculation?
Single premium immediate annuity payouts (monthly or annual) from an IRA account automatically satisfy the IRS required minimum distribution rule. The annuity payouts are calculated based on life expectancy tables, just as RMD distributions are. The total of the IRA/SPIA account can therefore be excluded from the RMD calculation. Of course, ordinary income tax rates must be applied to the IRA SPIA distributions, as they are to any IRA distribution(s). CC, ChFc
What is the definition of annuity?
According Wiktionary, which is public domain, annuity can take on the following meanings: A specified income payable at stated intervals for a fixed or a contingent period, often for the recipient’s life, in consideration of a stipulated premium paid either in prior instalment payments or in a single payment. For example, a retirement annuity paid to a public officer following his or her retirement. The right to receive such an income. The duty to make such a payment or payments.
Understanding Fixed Immediate Annuities?
Annuities are a type of financial contract where an individual gives a bank or other institution money that is deposited into an account and sometimes invested. At some point the person who is paying into the annuity can stop depositing money and will instead start receiving money from the account each month. A fixed annuity is a contract that guarantees a person will receive a fixed amount of money every month for a certain period of time or for the rest of his or her life. A fixed immediate annuity begins paying the policy holder as soon as a single premium payment is made. The premium that is paid on a fixed immediate annuity is usually a very large sum of money. The fixed monthly payments start a few weeks after the premium has been received. The money that is in the annuity that has not been paid out can be invested and can gain interest slowly over the course of the policy. The payments can be made for a set period of time such as 20 years or they can be indefinite up until the death of the policy holder. Many people use a fixed immediate annuity to distribute personal savings over the course of many years after retirement. This is done because the money that is distributed from the annuity is not taxable. Only the interest that the money earns is taxable. This is presents a very favorable tax situation that is superior to some other types of retirement accounts. The tradeoff for this tax incentive is that the money is not available beyond what is paid out each month. Individuals that do attempt to withdraw all of the money in an annuity at once usually face high fees, penalties and taxes. The actual payments that are made to a policy holder are guaranteed by the bank or institution that is distributing the money. This is true even if the money from the annuity is lost in an investment. Alternately, money that remains in an annuity beyond the value of the original premium that was paid can be absorbed by the bank when the policy ends or when the policy holder dies.
Get The Facts On Fixed Immediate Annuities?
While fixed immediate annuities are not designed for maximum return on investment, they do provide an income stream that generally outlives the investor. These are becoming more popular because a great percentage of the population is expected to live well into their 80s. A single premium immediate annuity guarantees a certain monthly income amount, with very little of the money being taxable.Example Of An Immediate Annuity InvestmentIf a healthy male in his early 70s invests $100K in a fixed single premium annuity, he can expect to receive approximately $750 per month for as long as he lives. If he should die prematurely, his beneficiary will receive the balance minus payments already made. He can choose a life payout option instead, meaning there will be no endowment of funds but rather a larger monthly payout of the funds. In this case, he would receive approximately $900 per month on a $100K investment.Taxes On Fixed Immediate AnnuitiesMost of the money invested is actually returned to the individual. It is therefore considered principal and is not subject to income tax. This in contrast to an taxable IRA because this type of investment is with pre-tax dollars. In the example given above, only about four cents per dollar are actually subject to income tax.Many individuals purchase a fixed immediate annuity as part of their Medicaid planning process. The purchase of an immediate annuity essentially removes this amount of money from the estate, meaning that the individual is now eligible for Medicaid because the minimum qualification total has been met. However, this minimum requirement varies from state to state, therefore it is advised that individuals work closely with an estate planner or retirement attorney in order to insure the minimum requirements for Medicaid eligibility are realized.Drawbacks Of Fixed Immediate AnnuitiesAlthough the income stream is steady, it does not take inflation into account. The return on investment is quite conservative, and those who purchase an annuity in any form are removing themselves from the potential purchasing power their money would otherwise provide. Those who purchase a life only option annuity have no means of selecting a beneficiary should a premature death occur. Younger individuals who invest in an annuity will receive a lower payout because their life expectancy is greater. And the current interest rates are fairly low. Many are choosing to wait a few years to see if rates increase, resulting in a larger monthly return on investment. Once a single premium immediate annuity is purchased, the interest rate is locked in for life.
Where can I find information on a single life annuity?
If you are living alone, a single life annuity would be the best. However, if you have a family or a wife/husband, you may want to consider multiple life annuity.
Net single premium and loading compute gross premium. How?
net single premium
You have annuity and a CD can you still get ssdi?
This is a tricky situation, if you take an income stream from your annuity it may put you over the income limits to receive disability income. You should convert the CD in a Single Premium Whole Life product, they won't count it as a liquid asset although it liquid to you.
What is better a full survivor annuity or a single annuity?
It depends on what you are wanting to accomplish. If you want to make sure both parties receive an income even after the death of one of the parties then the survivor annuity is your option. If you are not worried about future payments after the death of the fist party then utilize the single annuity.
