when i buy an annuity do i get my investment back or does the payout consume my investment?

Answer 1

What happens is whatever the terms on the contract are.

You can purchase an annuity for life and that is it.
You can purchase an annuity that will pay as long an you are alive and still have something left to pass to your heir.
You can purchase an annuity for a set number of years and then have have a final payout or not. There are fixed annuities. There are variable annuities. Just say what you want and somebody will sell it to you. And they will almost always come out of the deal better than yourself.

Answer 2

It depends on the type and term of your annuity, as well as whether you withdraw early from the investment. It also can depend on how long you live. Annuities can be divided into different groups using different methods. One way is to divide them by how long they pay out. A term annuity provides income over a certain amount of time and a life annuity pays out for as long as you live. In the case of a life annuity, it is possible – if you live long enough – to receive annuity income payments after your investment has been depleted.

The answerer before me might be a little cynical but he/she is right that you need to be very careful when buying an annuity. They have higher administrative fees than competing investments such as mutual funds, and sometimes these fees can dramatically impact the relative value of your annuity. You might want to talk with a financial advisor and more than one annuity agent. MostChoice.com has easy-to-understand annuity articles, a downloadable annuity guide, and an article about what to ask before buying an annuity. You can also get free interest rate quotes and talk to local annuity agents without any obligation to buy anything from anyone. You just wait until someone delivers a plan that makes sense to you. If not, then at least you’ve asked questions and gotten reliable answers.

Check it out here:
http://www.mostchoice.com/annuity.cfm

Hope this helps,
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Answer 3

I used to sell fixed annuities. If you take it out before retirement age other than a qualified illness from a doctor you will get your principal but may lose your interest then when it comes tax time you will get dinged there. Most annuites are for 3-7 yrs so you need to make sure that its not money you will ever need for an emergency, to buy a house ect. You can make a lot of money off them but be prepared to wait til retirement to recieve the full benefit.

Answer 4

If you want your money back at some time, the best thing is term deposits or notice deposits.
If you live in UK put as much as you can in ISA accounts annually.

Answer 5

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