What is an annuity?

Question

How does it continue to make yu money over your lifetime. Like the 800lb gorrilla says on the commercial?

Answer 1

An annuity is generally a horrible investment for most people... unless you're retired. Even then, it's generally a bad investment where insurance and investment companies make charge high commission fees and you make very little money... paying only a little better than a good savings account. Thus why they can afford such strong advertising!

Stick with a good mutual fund from Fidelity Investments or Charles Schwab if or when you invest.

Good luck!

Answer 2

Annuity
Definition 1

A contract sold by an insurance company designed to provide payments to the holder at specified intervals, usually after retirement. The holder is taxed only when they start taking distributions or if they withdraw funds from the account. All annuities are tax-deferred, meaning that the earnings from investments in these accounts grow tax-deferred until withdrawal. Annuity earnings are also tax-deferred so they cannot be withdrawn without penalty until a certain specified age. Fixed annuities guarantee a certain payment amount, while variable annuities do not, but do have the potential for greater returns. Both are relatively safe, low-yielding investments. An annuity has a death benefit equivalent to the higher of the current value of the annuity or the amount the buyer has paid into it. If the owner dies during the accumulation phase, his or her heirs will receive the accumulated amount in the annuity. This money is subject to ordinary income taxes in addition to estate taxes.

Definition 2

More generally, a series of payments of set size and frequency, often to a retired person.


Related Terms

deferred annuity, hybrid annuity, immediate payment annuity, joint life annuity, life annuity, single-life annuity, single-premium deferred annuity, qualifying annuity, equity-indexed annuity, preretirement survivor annuity, qualified joint and survivor annuity

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Answer 3

Annuity;

The highest generating commission product for the financial counselor.

Over 95% of annuities sold are inappropiate for the investor. Number one type = Variable Annuity.

There are many proffessionals that think a variable annuity should be against the law in a retirement account (IRA's).

There are little to no tax advatages to variable annuities because the hidden, internal fees wipe out the tax deffered benefit. It's better to be taxed at a capital gains rate than to be taxed at an "earnings rate" like a variable annuity.

Answer 4

Try this link:

http://en.wikipedia.org/wiki/Annuity