Deferred annuities are long term investment plans

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Deferred annuities are long term investment plans

Posted On : Dec-27-2011 | seen (561) times | Article Word Count : 412 |

Tax deferred annuity plans are very popular with retired people. It is a great way of maintaining a regular source of income even after retirement and meeting the monthly expenses in a smooth manner.

People who plan their lives well usually do not face any kinds of problems in the future. This is particularly applicable for people who think about their retirement quite in advance and start preparing for that period of life quite in advance. For them retirement is the time to relax and enjoy life and to see the fruits that are results of years of hard work. To achieve this goal, it is important that due plans are made in time so that all your wishes and dreams get fulfilled then. Investing in deferred annuities is one of the ways to prepare for the retirement life in a nice way.

It is quite evident from the name of the annuity plan ‘tax deferred annuity’ that the investment in this plan is for a long period of time. Not only that during the period of investment, the entire amount remains tax free. But once the amount is withdrawn after the maturity, taxes might be imposed on it if applicable. Therefore it is a good tax saving plan as well. The earlier the investments in deferred annuities, the higher amounts of returns are expected from that. Many people start investments in these plans from the day they get their first salaries. Usually people with foresightedness invest in these kinds of plans.

There are two distinct periods in deferred annuities and they are clearly marked. One is the investment phase and the other is the return or the income phase. In the investment phase, people make investments in the tax deferred annuity plan. The investments can be as and when you wish. While you can make monthly investments, you can also make lump sum investments as per the money that is available with you. Rates of interest are provided on that amount and the money gets accumulated. No taxes are imposed on the accumulated amount till the time it is not withdrawn. In the return or the income phase, it is time to withdraw the money and use it.

You are also given the choice in the way you want to withdraw the tax deferred annuity amount after retirement. You can either take the money at one time in lump sum or take it in the form of monthly installments. While taking it in lump sum might lead to taxation on the amount, but taking the money on monthly basis will save from taxes as well.

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<h1>Deferred annuities are long term investment plans</h1> Author: <a href='http://www.articleseen.com/profile_Robert Maddy Cooks.aspx'>Robert Maddy Cooks</a> People who plan their lives well usually do not face any kinds of problems in the future. This is particularly applicable for people who think about their retirement quite in advance and start preparing for that period of life quite in advance. For them retirement is the time to relax and enjoy life and to see the fruits that are results of years of hard work. To achieve this goal, it is important that due plans are made in time so that all your wishes and dreams get fulfilled then. Investing in deferred annuities is one of the ways to prepare for the retirement life in a nice way.

It is quite evident from the name of the annuity plan ‘tax deferred annuity’ that the investment in this plan is for a long period of time. Not only that during the period of investment, the entire amount remains tax free. But once the amount is withdrawn after the maturity, taxes might be imposed on it if applicable. Therefore it is a good tax saving plan as well. The earlier the investments in deferred annuities, the higher amounts of returns are expected from that. Many people start investments in these plans from the day they get their first salaries. Usually people with foresightedness invest in these kinds of plans.

There are two distinct periods in deferred annuities and they are clearly marked. One is the investment phase and the other is the return or the income phase. In the investment phase, people make investments in the tax deferred annuity plan. The investments can be as and when you wish. While you can make monthly investments, you can also make lump sum investments as per the money that is available with you. Rates of interest are provided on that amount and the money gets accumulated. No taxes are imposed on the accumulated amount till the time it is not withdrawn. In the return or the income phase, it is time to withdraw the money and use it.

You are also given the choice in the way you want to withdraw the tax deferred annuity amount after retirement. You can either take the money at one time in lump sum or take it in the form of monthly installments. While taking it in lump sum might lead to taxation on the amount, but taking the money on monthly basis will save from taxes as well.About the Author: Robert Cook is a business consultant who has good information on <a rel="nofollow" href="http://www.immediateannuities.com/content_pages/lesson.htm">deferred annuities</a>. For more information on <a rel="nofollow" href="http://www.immediateannuities.com/library_articles/taxation_of_nonqual_annuities.htm">tax deferred annuity</a> he recommend you to visit <a rel="nofollow" href="http://www.immediateannuities.com/">www.immediateannuities.com/</a>. Article Source: <a href='http://www.articleseen.com/Article_Deferred-annuities-are-long-term-investment-plans_125168.aspx'> http://www.articleseen.com/Article_Deferred annuities are long term investment plans_125168.aspx</a>

Article Source : http://www.articleseen.com/Article_Deferred annuities are long term investment plans_125168.aspx

Author Resource :
Robert Cook is a business consultant who has good information on deferred annuities. For more information on tax deferred annuity he recommend you to visit www.immediateannuities.com/.

Keywords : Tax Deferred Annuity, Deferred Annuities,

Category : Finance : Investing

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