An annuity is a retirement vehicle that is a contract with an insurance company or financial institution that provides annual payments for a specific number of years or until your death. Annuities are not substitutes for retirement plans. First, the money you contribute to buy the annuity is not tax deductible. Secondly, even though you are not taxed on the investment income from the annuity until you withdraw it, this does not compare favorably with 401(k)s, 403(b)s, IRAs or Roth IRAs. Next, the financial institution that manages your annuity usually charges high fees. Finally, the average return on an annuity is 3.27%, well below a retirement plan invested in the stock market, so it is best to discuss your retirement options with your accountant.
Introduction
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Your First Big Job: How to Get It
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Flourishing in Your Job and Well-Being in Your Life
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The Importance of Behavioral Economics
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What is Money?
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Analyzing Your Current Financial Situation
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Budgets and Saving
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Credit Cards, Auto Loans, and Other Personal Debt
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Student Loans
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Understanding the Time Value of Money
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Banks and Financial Institutions
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Buying a Home
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Insurance: What Do You Need?
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Investing Fundamentals
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Investing in Mutual Funds
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Saving for Retirement
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Fiscal Policy and Monetary Policy-Government Intervention in Your Life
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