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Invest Sensibly for Securing Better Returns

By Robert Jhonson Subscribe to RSS | March 12th 2012 | Views:

Are you on the verge of retirement? Well, is so then, it is time that you consider investing in financial schemes for generating an income for the rest of your life. In your pursuit to guaranteeing a stabilized income throughout life, you can rely upon the scheme of tax-deferred annuity for securing the financial life at its best.

In this context, it is important for you to understand the terms of an annuity. Well, an annuity is nothing, but a contract between an annuitant and a financial institution that ensures a financial support to the individual until his or her death.

Tax-Deferred Does Not Necessarily Imply being Tax-Free

Annuitants opting for a tax deferred annuity scheme most often live with the confusion of the tax-deferred properties like, IRA and 401(K) being tax-free. However, the actual concept determines the fee of these assets being late, most often until the money is taken out. Usually, the annuitant begins earning a specific amount with the purchase of an annuity scheme.

However, if you wish to postpone the process of interest payment then, opting for tax-deferred annuities stand as the best choice. An individual opting for the plan can simply defer the payment procedure for a specific period. What works for the plan best is the fact that you can save on some on a taxable sum.

Additionally, it is also to be remembered that you can choose a payment rate that suits your interest the best in the scheme of tax-deferred annuity. You can either opt for a fixed rate of interest or depend on the variable interest rates that are market-oriented.

Invest Better with Deferred Annuities

When it comes to retirement planning, especially to save finances for your future then, purchasing deferred annuities stand to be the most feasible choice. In this plan, the claimant of the policy pays a specific amount in lieu of a specific income until the contract is over.

Well, such scheme of deferred annuities is categorized in the sections of variable annuities, fixed annuities, and indexed annuities. Well, the terms of each plan varies with different insurance company. You can purchase such annuity either through a joint venture or as individual contracts.

The insurance agency invests a specific amount on the behalf of an annuitant for a certain period, which is often termed as accumulation period by the insurers. In case of variable and fixed annuities, the period ranges between four and ten years while, for the indexed schemes, the period can continue up to 25 years.

Robert Jhonson - About Author:
Robert Jhonson is a Financial consultant who has good information on deferred annuities and tax deferred annuity. For more information, he recommends you to visit

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