Top Things to Know About Annuity Funds

Annuity funds are products sold by financial institutions that are designed to generate residual income for individuals. This residual income is generated by a predetermined percentage. They are then paid out in a stream of payments that the individual can save or use when needed.

Top Things to Know About Annuity Funds

• Annuity funds can be a great addition to a retirement plan.




• Annuities are essentially contractual obligations from insurance companies.




• The most basic promise is the insurer's commitment to make regular payments to you.




• Annuities are paid to you for the rest of your life, or even the rest of your spouse's life.




• Money put into an annuity can grow tax free until funds are withdrawn.




• Annuities can be bought and activated right away or over time.




• It is assumed that any earnings that have accumulated in the annuity are withdrawn first, and taxed as ordinary income.