Annuity Quotes
Annuity Quotes
Annuity quotes may be one of the most important quote you ever received in your investment career. The reason is simple. According to current mortality tables, if you are the average 65 year old American, you will live an additional 18 years.
Statistics show that a large number of retirees will live much longer. Because Americans are living longer, they are very concerned they will outlive their retirement income. Given the current state of affairs in the stock and real estate markets, these people have very real reasons for concern.
Money market funds, certificates of deposit and savings accounts are now what is called low income sources. In other words, the high interest rates they once paid have either evaporated entirely or been drastically reduced.
Annuities, on the other hand, have continued to pay a higher rate of interest than these products and coupled with offering lifetime guaranteed income are once again rising in popularity. And, annuities come in a number of varieties.
However, for our purposes, only two types of annuities will be considered. The deferred and immediate annuities are also the two most popular and for good reason.
An immediate annuity starts your payment within 12 months of purchase and pays for a specific number of years or your lifetime. You select the time frame for which you want the income.
A deferred annuity, on the other hand , has two phases. The first phase is called the accumulation phase. In this phase, you let your money grow for a time frame suitable to your goals and objectives. During accumulation, your money grows tax-deferred until you take it out. At that time you pay taxes on the income.
The second phase is called the payout phase. It begins when you decide to take income from your annuity. As your needs dictate, you can take partial withdrawals, completely cash-out, or insurance terms surrender, your annuity, or convert your deferred annuity into a stream of income payments. In insurance terminology this is called annuitization.
Regardless of which type of annuity you are considering, do your homework and get annuity quotes from multiple companies. You will be surprised at the different rates and terms.