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Return To Annuity FAQ Archive   Search the Archives What are deferred and immediate annuities? Answered By Ammon Yorke, Editor Deferred annuity is a pay-out plan offered to investors who are willing to receive payments at some later date, commonly at the retirement of the investor. This type of pay-out is advantageous for long-term retirement plans on the following reasons: Deferred income taxes payment until withdrawal of the money No limits on yearly annuity contributions Death benefits are readily available. If the investor died before he collects his annuity, the beneficiaries get the amount you have chip in plus investments earnings. In an immediate annuity, the investor automatically begins to receive lump sum pay-outs immediately upon investing your money. Payments start usually a month after you have invested into the annuity. This offers financial security in a sense that you will receive income payments for the rest of your life. Also, this annuity permits you to: Add your pay-outs received in your current income Pay taxes on the portion of the annuity payments that are considered to be earning. Immediate annuities can be fixed or variable. Fixed immediate annuity payments are attached to the amount that you have contributed, your age, and the existing interest rate at the time you have purchased the annuity. These said payments are already fixed. Variable immediate annuities vary according to the type of investments you purchased. --- permission must be obtained from editor Ammon Yorke to re-publish --- keywords: Annuities | Annuity | Taxes | Investment Annuity Broker

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