Retirement Annuities

There are several different types of annuities. There are deferred annuities that are purchased to be annuitized (provide income) in the future. The other type is an immediate annuity in which the income begins within the next month.

Deferred annuities can be based on a interest rate determined by the insurance company each year or can be based on the change of Wall Street Indexes such as the S&P 500. Refer to the issuing company for information concerning the workings of these index options.

Immediate annuities can be for a set period of years such as 5 or 10 years.  Usually they are for full life time.  They can be for one life or for two such as husband and wife so that they can not outlive the income.

If the funds for an immediate annuity come from a Qualified Plan (Pension IRA etc.) all benefits are subject to income tax.  If funds come from another source then part of each annuity payment is considered a return of the premium and is not taxable until all contributions are returned to the annuitant.