Annuity (disambiguation)

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• Annuity (finance theory)

An annuity maximizes the use of your money and guarantees it to last your lifetime or longer, depending on which distribution plan you choose. The purpose of an annuity is to provide an income for life right away (immediate annuity) or the accumulation of a sum of money for future use (deferred annuity).

The market for annuities is comprised of individuals from the ages of 0 to 90, depending on the type of annuity. The following are some categories of individuals who might benefit from an annuity: Young Adults • Recognize the power of tax-deferred compound interest over time • Working and have discretionary income to save toward retirement • See pension plans being discontinued with alarming frequency • Have the advantage of a long accumulation period Aging Baby Boomers* • Still working • Want a safe, secure method of accumulating money on a tax-deferred basis • Want a second or third source of retirement income • Feel they will receive little or no Social Security benefit at retirement • May be saving for college education for children or grandchildren

• “Baby Boomers” is a term referring to people born between the years 1946 and 1964.

Recently Retired • Retired early • In their late 50’s–early 60’s • Adjusting to a lower income • Want to convert accumulated funds into guaranteed income stream • May be saving for college education for children or grandchildren Senior Citizens • Represents policyholders over age 60 • Could have Medicare Supplement, Long-Term Care, Home Health Care program • May be saving for college education for children/grandchildren • Individuals with funds currently in certificates of deposit (CD’s) • Concerned with safety of principal • Wondering if they will out-live their assets • Willing to convert their assets into an immediate annuity with income they cannot outlive • These individuals possess proportionately the highest percentage of already accumulated dollars • They desire to make their dollars: o Grow tax-deferred o Provide an inexhaustible income o Create a legacy for the next generation or a favorite charity with as little formality as possible