How The Split Annuity Can Combine The Benefits Of Immediate And Deferred Products

A split annuity can help you to combine the benefits of different annuity products, and to reduce the risk involved to the lowest possible level. It is important to understand right at the start that annuities are designed to be the most secure of financial instruments, and that they are not meant to be high gain speculative vehicles. You need to take some time to decide whether investing in annuities as a whole is right for you, before you can decide whether or not to split the annuity.

Annuities are becoming increasingly popular, largely due to the fact that they can replace the pensions and other financial instruments which are becoming ever less reliable. As the average age of the population increases, so the burden on pension funds becomes ever greater. Combine this with the fact that inflation continues to erode the value of saved money, and you can easily see why the fixed annuity has become such a popular option. Before you rush in, though, there are several important facts you need to consider.

A split annuity will combine the strength and solidity of a single premium deferred annuity, which will grow with time in a very tax efficient manner, and a single premium immediate annuity, which begins paying you a monthly income straight away. The vast majority of investments are taxed on an annual basis. Everything which the investment has earned in a particular tax year will become liable for taxation at the end of that year. Annuities confer the great benefit of being able to defer taxation until the money is taken out again during retirement.

The idea behind this combination of investments is that the immediate annuity provides this income right from the start of the investment program, while the standard deferred annuity replaces it and keeps the principal intact. Obviously, this is an over-simplification, and nothing is quite this simple in practice. There is a continual need to reevaluate interest rates to make sure everything is working as it should. It is also important to remember that inflation will still erode the spending power of any money you are able to withdraw using this system.

One of the most effective ways of using a split annuity is in providing the income to meet mortgage payments. This is because mortgage payments are relatively easy to calculate into the future, and are less subject to wild fluctuation than many other prices. The annuity can be used to pay the mortgage over time, while the equity continues to build in the property as the years go by. Done properly, this split annuity investment can result in a retiree having their home bought and paid for, and also a fixed monthly income as well. There are many advantages to this use of the split annuity.






 

Annuities News:

 

Imperial Holdings Announces President Jonathan Neuman, Takes Leave of Absence
BOCA RATON, Fla.--(BUSINESS WIRE)--Imperial Holdings, Inc. (NYSE: IFT), a specialty finance company ...

J.G. Wentworths Peachtree Settlement Fundings Alledged Attempt to Thwart Competition with RSL Funding LLC Stricken .
A Texas appeals court dissolved and reversed a temporary injunction against structured settlement purchasing company RSL Funding LLC that had prevented RSL from competing with Peac..


Foreclosure Deal to Benefit Troops
Servicemembers who were improperly foreclosed on will receive six-figure settlements as part of a secondary agreement to the $26 billion foreclosure abuses settlement announced last week...


Food, Money and Structured Settlements Oh My
As I wrote yesterday, we have become an instant gratification society, which has manifested into Americans being increasingly overweight, in-debt, and lacking self-control. Cheap fast food, buy now pay later deals, and cash now for your structured settlement all target the same weakness - a lack of discipline. Structured settlements are a form of imposed self-control, which allow plaintiffs to ...


Ringler Associates Names New Board Members
Ringler Associates, Inc, the largest structured settlement company in the nation, is pleased to announce the election of two new members to the Ringler Board of Directors. Cindy Chanley, CSSC, based in the Ringler Associates Louisville, Kentucky office and John Machir, Senior Vice President of Marketing at Ringler Associates, located in Bethesda, Maryland, have been chosen by a vote at the ...


Ozark Funding Partners With Lead Agent To Increase Online Visibility
Ozark Funding, one of the fastest settlement funding companies, teams up with Lead Agent, internet marketing consultants in a collaboration to reach more potential annuity owners looking to sell their payments.Cherry Hill, NJ (PRWEB) February 09, 2012 Ozark Funding, one of the fastest settlement funding companies, teams up with Lead Agent, internet marketing consultants in a collaboration to ...


Imperial Holdings, Inc. Announces President and COO, Jonathan Neuman, Takes Leave of Absence
Imperial Holdings, Inc. , a specialty finance company with a focus on providing liquidity solutions on individual life insurance policies and purchasing structured settlement payments, announced today that its president and chief operating officer, Jonathan Neuman, has voluntarily taken a four month leave of absence from Imperial, effective January 27, 2012...


Hennepin County judge: Texas firm must provide records
Hennepin County District judge found "reasonable grounds to believe" company that bought structured settlements violated law...


Woodbridge Pre-Settlement Funding, LLC Announces Strong 4th Quarter
Woodbridge Structured Funding started the pre-settlement operation in the second quarter of 2011 and has seen great results and strong growth.Boca Raton, FL (PRWEB) January 25, 2012 Woodbridge Pre-Settlement Funding LLC, a specialty finance company active in the lawsuit advance industry, has closed out 2011 with a bang. Sister company, Woodbridge Structured Funding started the pre-settlement ...


QuoteMeaPrice.com Funds Its 100th Structured Settlement Factoring Transaction
Website provides marketplace where funding companies compete to buy structured settlements.Sacramento, CA (PRWEB) February 16, 2012 More and more annuitants are being subjected to EURcash nowEUR commercials, baiting them to cash out their structured settlement payments. QuoteMeaPrice.com has been able to help over 100 clients get the most money possible for their future structured settlement ...





 

Many, if not all of the links on this website are affiliate links which means that we will be compensated if you choose to buy at some point in the near future. Please accept our sincere thanks for your support.


Technorati Tags: , ,