Annuities Brett Hickey Adam Greenberg

What is an annuity? How do annuities work? Annuity: Distribution of money earned from profits from investments. Annuities are a long term investment, usually through an insurance company. The profits made from the annuity come to the owner as a monthly payment and can be used as their paycheck. An annuity can be set up as in inheritance for a designated family member, but if not, the annuity ends when the owner dies.

Who should invest in annuities? The most common people to invest in annuities are using it as a retirement fund. This way they still have a guaranteed form of income even after they stop working. Annuities can also be altered so that it provides income for two. an-annuity.htm

What are annual premiums? Annuity Premium: Series of payments that you make in order to buy your annuity. Do you pay taxes on annuity payments? Yes, fixed annuities have a fixed tax payment while variable ones are a percentage based on earnings The original payment for the annuity is tax-deferrable, but any payouts you receive from the annuity will be taxed.

When are you eligible for annuity payments? 62 to collect annuity payments. By the age of 72 ½, you must start collecting payments from the annuity. How do annuities make money? Insurance companies sell you annuities with a promise that they will do something with the money. The profits then are sent to you. And are collectible at 62 as a monthly payment.

Are annuities insured? Annuities are not insured and can only last as long as the company you got them from stay in business. What are the different types of annuities? There are fixed and annual annuities. income/2008/09/15/are-annuities-at-risk.aspx

What are the tax benefits of annuities? The earnings are tax deferred. What are the advantages of annuities? They are a long term investment that can act as a monthly income once you retire, a variable one has a chance to make a lot. income/2008/09/15/are-annuities-at-risk.aspx

Do all annuities have high fees? No. Some investment companies sell annuities without charging a sales commission or a surrender charge. These are called direct-sold annuities, because unlike an annuity sold by a traditional insurance company, there is no insurance agent involved. With the agent out of the picture there is no need to charge a commission. _basics.moneymag/index6.htm

What fees are associated with annuities? The surrender charge for ending an annuity, and paying the commission for the person selling you the annuity. If you remove your annuity before the age of 59 ½, a 10% penalty is instated in addition to income taxes paid on the investment earnings. The surrender charge is typically 7% for withdrawing an annuity after one year and the surrender charge decreases the longer you wait to withdraw the annuity. How do you open an annuity? You open an annuity through an annuity broker at the insurance company. index.htm

What investment options do annuities have? Fixed annuity: you collect a set of income that never changes. Variable: you collect money based on how well the investment does. What payout options do annuities offer? Period of time, lifetime, one lump sum, quarterly.

What if I decide to withdraw the money? If you decide to withdrawal money from the annuity you have to pay a penalty fee and taxes. How do I know if buying an annuity is right for me? If you max out 401k, IRA plans, or want a tax free investment and can afford to not see a large sum of money for a while.

How will I know the company will keep true on its payments? The best way is to check their credit history and other peoples satisfaction that already hold an annuity in the company. What happens to my annuity if the company closes? You lose the rest of your investment.

Should I exist my existing annuity for a new one? If necessary you can do so however it is risky and there are penalty fees. What if I bought an annuity that ii no longer want? You can surrender an annuity and get some money back or you can switch to another annuity. Annuity exchanges are known as 1035 swaps, after the section of the IRS code that regulates them.

Question Who sells the annuity? Are annuity long term or short term investments? Are annuities insured? What happens to your annuity when you die? Why buy an annuity?

answers Insurance company Long term No It ends Can serve as an alternative retirement plan and can help guarantee some extra income.