fixed annuities ask policyholders to pay flat premium each month to an
insurance company in order to avail lump sum payments at defined date. On the
other hand, the variable annuities let a policyholder to decide the way
insurance company invests his premium. Insurers create subaccounts which
include basket of equities from which a policyholder can choose his assets.
However, policyholders can’t obtain dividend directly from such investments. Go
through following points to know about does annuity subaccounts offer any form
Things to know –
The variable annuity holders can
receive the dividend indirectly as insurers prefer to reinvest the dividend and
any appreciation in price in the subaccount. As a result of that the
policyholders are rewarded with higher payments when they begin withdrawing
funds from their policy.
Tax considerations –
Policyholders who have annuity
subaccounts usually save substantial amount of money on taxes owed as compared
to the stocks or mutual funds.
Other Benefits –
According to the guidelines
mentioned by the Internal Revenue Service, annuity holders can swap out their
annuity contract with other insurers. Though investors may run out of funds at
the time of their retirement, annuity subaccount holders can avail regular
monthly payout after retirement.
Variable annuity holders may have
limited benefits with subaccounts as compared to the investors who may choose
from bunch of funds in US that pays dividends. The policyholders will not only
face difficulty in withdrawing their funds before the age of 59 ½ but they also
have to bear tax penalty of 10%.
you want to avail more information on retirement savings plan such as Thrift Savings Plan, then click on http://governmentbenefitadvisors.com/.
It is dedicated source which helps all Federal Employees to understand their
benefits. Government Benefit Advisors like Russell
Armstrong advises hundreds of Federal employees every year on their
individual benefit options and guides them on how to manage their benefits for
retirement purpose. So, get in touch with Russell
to know every single detail about TSP.