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Annuities
Annuities are financial products designed to grow an individual’s funds and later, upon annuitization, to distribute payments back to the individual over a specified period of time. It is mainly used to secure a steady flow of cash during retirement.
849 Questions
How long does an annuity pay out?
You can choose your payout period, typically; 5, 10, 15, 20, or Lifetime.
How do you use annuities in a sentence?
Here are some sentences.
Their annuities paid them dividends.
Everyone contributed to their annuities.
What is the accumulation period for an immediate annuity?
Immediate annuities can be annuitized immediately upon issue.
Which Political Party decided to start giving annuity payments to immigrants?
According to the social security website:
Neither immigrants nor anyone else is able to collect Social Security benefits without someone paying Social Security payroll taxes into the system. The conditions under which Social Security benefits are payable, and to whom, can be found in the http://wiki.answers.com/../pubs/10024.html.
The question confuses the Supplemental Security Income (SSI) program with Social Security. SSI is a federal welfare program and no contributions, from immigrants or citizens or anyone else, is required for eligibility. Under certain conditions, immigrants can qualify for SSI benefits. The SSI program was an initiative of the Nixon Administration and was signed into law by President Nixon on October 30, 1972.
An explanation of the basics of Social Security, and the distinction between Social Security and SSI, can be found http://wiki.answers.com/../pubs/englist.html.
Is a annuity check taxed differently than a pay check?
No. You never have any taxes withheld from your NET take home paycheck.
After the end of the year when you enter all of your gross worldwide income on your 1040 federal income tax return and you determine your TAXABLE INCOME amount on the 1040 page 2 line 43 where your federal income tax liability amount will be determined on line 44 by your marginal tax rates for the year on your TAXABLE INCOME.
The NPV assumes cash flows are reinvested at the?
The NPV assumes cash flows are reinvested at the:
A. real rate of return
B. IRR
C. cost of capital
D. NPV
How does an equity indexed annuity differs from other annuities?
It differs from other annuities in the fact that it follows a market index. Usually the S&P 500. The amount of interest you earn is not fixed, but can vary depending on market conditions. You can enjoy gains from the stock market, but take minimal losses.
What is the difference between a tax defered annuity and a income annuity?
Deferred tax means you have invested money into a plan and it is earning some income for you free from income tax until the time that you choose to start taking distributions from the annuity.
When you start receiving distributions from the annuity it will become a income annuity to you.
Depending on the type of the Annuity the distribution amounts will have have a gross distribution amount and a taxable distribution amount included in each distribution.
When you decide you want to start taking distributions from the annuity you will need to be careful because the seller of the annuity will probably have a set number of years before you can start taking your distribution from the plan without paying them a penalty for any early distribution amounts before the number of years end.
The IRS could also have a early withdrawal penalty of 10% of the taxable amount of the distribution unless you meet one of the exceptions to 10% early withdrawal penalty amount.
You can some information about this by going to the IRS gov web site and using the search box for ANNUITY
This is a type of plan that will make scheduled payments of income to you over a period of time that you choose by making an investment into the annuity plan.
You can find some information about the taxation of the distributions amounts from an annuity by going to the IRS gov web site and using the search box for ANNUITY
What happens to variable annuities when the insurance company goes bankrupt?
Generally, when an insurance company goes bankrupt, the guarantees that are being offered on the contract are gone. For instance, if you have a death benefit, or a income guarantee, those will usually be lost. As for the money you've invested in the variable annuity, if your money is invested in the sub-accounts (the various investments that are usually managed by mutual fund management whose names you will usually recognize), that money is still being managed by those companies, and is separate from the now bankrupt insurance company. That is the long way of saying, your money in the sub accounts is safe. However, if you have money in the fixed interest account, that is usually held by the insurance company, and that money may be in jeopardy.
Is there a difference between a reverse mortgage and a reverse annuity mortgage?
The terms are similar and both relate to reverse mortgages, however a reverse annuity mortgage often refers specifically to reverse mortgages where the borrower chooses to receive monthly payments from the lender rather than getting a lump sum of cash upfront or a line of credit.
What is the difference between dividends and interest?
It is very important that the self directed investor understands the difference between dividends and interest.
-Dividends- Dividends are generally paid to shareholders of a publicly traded company.
-Interest- Earning interest would be from loaning your money. If you put your money in the bank or buy bonds you are actually loaning your money.
The single most important reason for knowing the difference is tax. Dividends are taxed at a different rate than interest earned. It is suggested to seek professional accounting advice on how these tax rates affect you.
Can I Roll over a non-qualified annuity to another company?
Yes. It is called a 1035 Exchange. We do it all the time. I suggest reviewing your policy every 2 to 3 years to make sure it is still doing what your advisor promised.
How do you compute the present value factor of an annuity due?
well, you take a look at the % (aka the estimated rate) and the number of periods you'll be paying the anuity and look it up on this table. For example if the rate is 8% and you'll be paying 20 periods the number is 10.6036. take 10.6036 and multiply that by the payment and you should find the present value of your annuity due. right that table could be found here... http://www.principlesofaccounting.com/ART/fv.pv.tables/pvforannuitydue.htm
Why is the present value of any future amount greater when the discount rate is lower?
The present value of a future amount is greater when the discount rate is lower because a lower discount rate reduces the impact of time on the value of money. Essentially, a lower rate means that the future cash flows are discounted less steeply, leading to a higher present value. This reflects the principle that money has the potential to earn returns over time; thus, a lower rate indicates a lower opportunity cost of waiting to receive that future amount.
What internal revenue code does a tax deferred annuity fall under?
Hello, I recently purchased one and the money you invest is not tax deductible. It is not taxed if it grows in value or generates revenue, within the annuity. When you do start taking money out, it is treated as ordinary taxable income. However you do not pay taxes on the original contribution, just on the gains. This is a simple answer to a complex question-- if you need more details, you need an expert.
Is the annuIty received from an insurance co is taxable?
It grows tax deferred. If you take an income stream or annuitize the annuity, the money is taxed as ordinary income.
Yes you can. You will most likely pay a variety of fees and taxes depending on your age and how long you have been collecting on the annuity. There are applicable surrender fees, but you can cash it out if you want to.
