iXray Annuities

What is an Annuity

Picking a bad annuity is like burning money

What is an Annuity – educates you so you can make informed decision. Generally, an annuity is tax deferred.  The money in an annuity grows tax deferred like a retirement account.  As with an IRA, (Individual

Retirement Arrangement – as named per IRS document 590) the money in an annuity is ear-marked for use after age 59 ½.

What is a Fixed Indexed Annuity?

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What is an annuity

In reality an annuity is a contract with an insurance company to allow you to either grow your money tax deferred or at some point in the future (even immediately) start an income stream. The income generally will last as long as your or your spouse.  The modern annuity does not have the pitfalls of the original annuity.  That is may be possible for money to continue on to your family.  Be sure to ask about what happens to any money you and your spouse have not used before you die.  What options will your beneficiaries have?

As such, annuities are not to be used without careful consideration.  Points to consider are:

* What are the surrender charges?

* How long you must I hold the annuity  to get full value or principal back?

* How will my annuity earn credits or interest?

All of these points are covered on this web site.


Choosing a suitable vehicle for your retirement is not an easy task. With the numerous choices, which product is better suited for your needs? On one hand, you might want the guarantee of principal and past earnings. On the other hand, many prefer the potential of higher returns by being linked to the equity markets.

Premium options

Flexible premium – Most annuities will allow for additional principal (premium) to be added to the contract.  This is called a flexible premium annuity.

Single premium – Some annuities will only allow for a single premium payment to be made to an annuity.  These are called single premium annuities.

Annuity Phases

Accumulation phase:

Money is added to annuities and allowed to grow income tax deferred.  This stage is called the accumulation phase.  Again, some annuities may allow more premium(s) to be added to a contract during this phase.

Annuitization phase:

During an annuitization phase the contract is unable to be altered.  Annuitization has also been coined as “annuicide”.  There are a few different ways to annuitize a contract.  From a high-level you may annuitize:

* For the remainder of a person’s or some persons’ lives,

* For set period of time

* Or for a combination of the two.

Income phase:

Different products address this differently. For the most part, you might have a classic annuity that only allows for annuitization. On the other hand, you might or you have an annuity with a rider allowing for greater income options without committing “annuicide”.

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