This weekend I visited my family back in Cincinnati and got to meet my Dadâs new iPad for the first time. I donât have enough money for this fancy technology so Iâve never really used an iPad before.
Deferred Annuities. A deferred annuity grows tax deferred until the contract is annuitized (put into a payment stream) or surrendered (paid out as a lump sum). This type of annuity is a vehicle for accumulating savings for a future goal, such as retirement, and eventually distributing the value.
For example, with an immediate annuity, you pay a lump sum to an insurance company, which pays a fixed amount every year for life, starting -- that's right -- immediately. Deferred-income annuities (also known as longevity insurance) are a close cousin: You pay a lump sum in exchange for a higher payout that starts several years in the future.