What is the main purpose of an annuity?
An annuity is a long-term insurance product that provides guaranteed income. Annuities are a common source of retirement income because they provide a steady stream of payments at regular intervals and because their earnings grow tax-deferred1 until you withdraw funds.
What is the primary purpose of an annuity quizlet?
The basic function of an annuity is to systematically liquidate a principal sum over a specified period of time. An annuity is usually purchased as a means to save for retirement. The benefit of purchasing an annuity is that the cash accumulation in the account grows tax deferred.
What is considered an annuity?
An annuity is a contract that requires regular payments for more than one full year to the person entitled to receive the payments (annuitant). You can buy an annuity contract alone or with the help of your employer.
What is the most important thing to note about annuity?
Withdrawal Rate.\n\n This is the percentage of income you can withdraw from your annuity annually, typically for life, even if the cash value of the contract is eventually exhausted if you live a long time. It is based on the so-called income base,not the cash value of the contract. It is the most important thing to know.
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