Deferred annuity is a great investment plan for long periods of time
By: Mike Anderson
Submitted: 2011-06-14 23:58:30 | Word Count: 559
If you are a person who loves planning everything in life, deferred annuity is just the plan for you. An investment in deferred annuity is particularly done for your post-retirement life. A person who is planned and has foresight will definitely invest in something which will give him guaranteed returns after retirement. Investing in deferred annuity is the best plan for that. You can easily calculate the returns on the investment from an annuity calculator and decide accordingly as to the amount of investment. There are many advantages and benefits of investing in deferred annuities, which can easily make your life easy after retirement.
In a deferred annuity, money is deposited over a fixed period of time. You can either deposit lump sum amount of money at one time or you can pay the money in installments, whichever seems convenient to you. But this can be done for a fixed period of time. The specified span of time is known as deferred time and hence the name of the annuity, deferred annuity. You can actually calculate the return amount which you will get from the investment with the help of an annuity calculator. You just need to feed certain information in the calculator and you will be shown the results immediately. You should always calculate on the annuity calculator before investing in deferred annuity.
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In a deferred annuity, if the annuitant expires in the deferred period, the premiums that he was paying on a monthly, quarterly or half yearly basis becomes refundable. However, whether the refunds will be with or without tax is decided at that point of time. Not only that, if a family member of the deceased annuitant wants to surrender the annuity, that facility is also available. In such cases also the annuity calculator is used to calculate the amount of fund that is to be refunded etc. Apart from this, there are more advantages of investing in a deferred annuity plan for retirement.
There are usually two phases in deferred annuity plan. The first phase is the savings and investment phase and the second phase is the retirement income phase. It's almost like sowing the seeds to reap the harvests. You must use an annuity calculator in the first phase to see what returns you draw from the annuity investment. When you see that the returns are high and guaranteed your urge to invest in deferred annuity will become natural. In the savings and investment phase, you save and accumulate the money so that it grows with time. A fixed rate of interest is guaranteed in a fixed deferred annuity.
In the retirement income phase of a deferred annuity, you can decide the ways in which you can withdraw the money. You can either withdraw the money at once, or you can get payments on a monthly, quarterly or half-yearly basis. The best part about this investment is that it is deferred from taxes till the time you do not withdraw the money. Once you withdraw, it might become taxable – depends on the amount of money. On the whole deferred annuity is a great way to save up for retired life.
