Growth Tied to Market Performance
Variable Annuities: The Basics
A variable annuity is, like all annuities, a contract with an insurance company where they will pay you based on the value of any deposits you have made plus interest accrued. The interest rate for a variable annuity is tied to a market index, usually the stock market in some form or another.
How the Variable Annuity Works
With variable annuities, they have two phases: the accumulation phase and the payout phase. During the accumulation phase, money is deposited and earned in the annuity. In the payout phase, money is distributed in accordance with the annuity contract. There can be many variations on either of these phases of an annuity, so it is wise to seek professional guidance when setting up a variable annuity.
Variable Annuities and Tax Obligations
The variable annuity is a tax deferred, meaning you will not have to pay taxes on interest received until you actually start receiving payments from the annuity. As a rule, you should consider carefully any fees and charges as well as tax obligations when considering removing any finds from your variable annuity. We offer free consultations if you this is a current concern of yours.
Management of Variable Annuities
Although you can manage your own variable annuity, it is not generally a good idea because of the constantly changing laws and regulations. Seek professional guidance for any decisions regarding your variable annuities. We offer free consultations for everyone regarding their variable annuities. The advice is free, the value: priceless.
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