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Split Annuity - What Is A Split Annuity? The Split Annuity is a combination of a particular immediate annuity including a deferred annuity, structured to provide immediate income, much of which is after tax dollars (return of premium), while returning the original premium (before taxes). The income is guaranteed for the length pertaining to the contract, while the deferred dollars grow at current, tax-deferred interest rates. A single premium is used to fund the Split Annuity. Annuity Companies issue 2 contracts, 1 for the guaranteed income including 1 for tax deferred growth. The Split Annuity offers a guaranteed monthly income. The Split Annuity features competitive interest rates, tax-deferred growth including partial withdrawal options. The Split Annuity is flexible. A new income stream may be developed from the deferred annuity proceeds at a later date. The deferred annuity additionally allows for additional partial withdrawals, plus the continued tax-deferred growth eventually “replaces” the immediate annuity premium. What is a Tax-Deferred Annuity? A tax-deferred annuity is a contract between you including the insurance company with guaranteed interest including guaranteed annuity income options. There are absolutely no upfront sales charges or administrative fees during the life of your contract. Advantages of Tax-Deferred Annuities include tax deferral, stability, may avoid probate, liquidity features, including guaranteed income. One pertaining to the main advantages of deferred annuities is the opportunity to accumulate a substantial sum of dollars by allowing your premium including interest to grow tax-deferred. Unlike taxable investments, you pay absolutely no taxes on your annuity interest until you begin to take withdrawals or receive income. the allows your dollars to grow faster than in a taxable account, because you earn interest on the dollars that will have otherwise been paid in taxes. http://HappyRetiree.com/ You might freely reprint the article as long as the author, bio, including live links are left intact.
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