A joint and survivor annuity is held by two or more individuals, usually by husband and wife, under an arrangement wherein annuity payments are made in full while both the contract holders are alive, and at a pre-specified percentage (50-100%) of the full amount after the death of one of the annuity holders. One of the annuity holders is the primary annuitant while others are joint annuitants. For the purposes of this discussion, we assume a joint and survivor annuity with 2 annuitants, one primary and the other joint.
Charitable Gift Annuities
A charitable gift annuity (CGA) provides a structured way to give to charity while securing your own future. A gift annuity purchaser secures immediate tax relief, in addition to a tax free post retirement income stream. The way this works is that in return for a lump sum gift contribution, the charity guarantees you a steady income for the rest of your life, either immediate or deferred.
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Equity Indexed Annuities
One of the key issues facing every investor is to find the right balance of risk as opposed to gain. If you play it safe, you get back minimal returns, with some pre-specified interest. If you go for high profit margins, the risk factor is something that you learn to live with. Faced with these opposing current, the insurance industry has come up an innovative solution in the form of equity indexed annuities, which give an investor the best of both worlds – A percentage share in profits, if any, from investments in the stock market, coupled with the security of a guaranteed minimal amount.
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State Regulations of Annuities
Most types of annuities are governed by a comprehensive state regulatory framework. The primary reason is that all life insurance companies, and all agents and brokers who sell annuities, must have a life insurance license issued by their state of residence. State laws govern the licensing of insurance companies, and state insurance departments oversee insurance company operations.
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Annuities vs. Bonds & Fixed Income Investments
In today’s economic climate with money market funds yielding next to nothing, constant fear of inflation and concern over government spending is making retirement planning even more complicated. This fear over dwindling returns with safe secure money should be a primary concern for any retiree or person with limited resources. This rings even truer if maintaining a current lifestyle is an important goal. In times like these, many planners are turning to the bond market but are there better alternatives?
Choosing the Right Annuity
In its simplest definition, an annuity is an amount payable annually. There are, however, many types of annuities, giving you the ability to choose an annuity that is tailored to your specific financial situation and/or retirement goals. While we strongly suggest you discuss your options with a financial professional, here is a basic overview of the options you have: