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An annuity can be a good investment under the right circumstances, however most annuities are designed to be sold, not bought. They are often the investment of choice offered by banks and other commissioned based investment companies as they are among the highest commission paying products. Brokers can earn more than 10% commissions on annuities, which is why there is normally a substantial surrender fee should the investor decide to cash out early. However, there are some annuities that don't have any sales charges, and therefore don't have any early surrender fees. Before making any investment decision, consult a financial advisor to be sure that the advice you are getting is appropriate for your individual situation.
What else can I help you with?
Is a vanguard variable annuity a good investment?
A Vanguard variable annuity does seem be a good investment in the current market. As with any investment, there are no guarantees of profitable returns.
Is a variable annuity a good 403B investment?
Fees are higher in a Variable annuity than they are in say a fixed Index Annuity.
When is an investment an annuity?
When an investment is made with the sole purpose of getting a fixed sum of payment each year can be termed as annuity investment.
How can one find the annuity payment for a given investment?
To find the annuity payment for a given investment, you can use the formula: annuity payment investment amount / present value factor. The present value factor is calculated based on the interest rate and the number of periods the investment will last.
Where might one find good advice about buying an annuity?
There are a number of good places to look for advice when buying an annuity. Some examples include your local branch bank, a financial planner or online investment forums.
How does one purchase annuity?
To purchase an annuity you need to go to an insurance or investment broker. They can be found at SunLife and ManuLife. The minimum annuity cost is $3,500.
Who bears all of the investment risk in a fixed annuity?
In a fixed annuity, the insurance company bears all of the investment risk. This means that the insurer is responsible for ensuring that the promised returns and payouts to the annuity holder are met, regardless of market conditions. The policyholder receives a guaranteed interest rate and fixed payments, providing them with a sense of security and stability. Consequently, the investment performance of the annuity's underlying assets does not directly impact the annuity holder's returns.
What is the best place to find good advises on selling annuities?
Selling an annuity is, by and large, not a good idea. It is possible to sell one's right to future payments from an annuity in exchange for a cash sum. However, that market has some operators in it that may not give you a very good deal. If one is considering selling one's annuity, paying for advice from an Independent Financial Advisor could be a good investment
Which type of annuity accumulates funds in units that are tied to the value of an investment portfolio?
The type of annuity that accumulates funds in units tied to the value of an investment portfolio is called a variable annuity. In a variable annuity, the investment returns fluctuate based on the performance of the selected investment options, which may include stocks, bonds, or mutual funds. This allows for the potential of higher returns compared to fixed annuities, but it also comes with increased risk. Investors can typically adjust their allocations among different investment options to align with their financial goals and risk tolerance.
What is unrecovered costs from an annuity?
Unrecovered costs from an annuity refer to the portion of the initial investment that has not been recouped through periodic payments received from the annuity. In the context of tax reporting, unrecovered costs can impact the taxation of annuity distributions, as the investor may not be taxed on the portion that represents a return of their original investment. Essentially, this concept highlights the difference between the total contributions made to the annuity and the amount already received in payouts.
Which investment option guarantees payments at regular intervals after retirement?
Annunity
Should annuity be wrap into a IRA or Roth IRA?
An annuity certainly can be purchased in an IRA, but one of the benefits of an annuity is tax deferral which you already have with an IRA. So as long as you understand that there are no additional tax benefits when placing an annuity in an IRA it may be an appropriate investment.
