In case of deferred annuities, you have to deposit your funds by the means of investing in either equity indexed annuity, longevity annuity, variable annuity, or fixed annuity with an annuity company. Any kind of withdrawal that you make before you reach 59.5 years will have to face a 10% penalty tax along with the additional income tax which you generally need to pay. In your contract for deferred annuities, you will have an option to convert your deferred annuity to an immediate annuity after a particular period of time. How these deferred annuities work for you is, these let you defer your earnings till such a phase where you would like to convert your investment into such a stream of income which is guaranteed. There are a huge number of features associated with deferred annuities. All of these features of course come at a price. The features of these deferred annuities are a great source of giving the annuity holder specific kinds of benefits in terms of death benefits and also guarantees in terms of future income. Annuity rate calculator is a very helpful tool for everyone who already has an annuity, or is planning to take up an annuity.
There are many annuity rate calculators which are easily available online. There are different kinds of calculators which can be used for calculating the annuity rate, such as the immediate value calculator, the future value calculator, and the likes. Choose whichever calculator you wish to. Just ensure that it gives you accurate results for you to make your decisions on.
Deferred annuities are of different kinds. Choosing the one which best suits you is an interesting and challenging task. Fixed deferred annuity is something which will work the similar way as a certificate of deposit. However, the only difference would be, instead of claiming the interest income on the basis of your tax return on a yearly basis, here the interest gets deferred till a time when you make a withdrawal of any kind from this annuity contract. You will be told by your insurance company about the guaranteed rate of interest which your fund will get for you when you buy such a kind of deferred annuity. Variable deferred annuity is another kind of deferred annuity. This kind is almost the same as owning a group of mutual funds. When these mutual funds are in an annuity, they are referred to as sub accounts. These sub accounts would include both the equity investments as well as the bond. The returns which you can get out of your investment will depend on the performance of these various sub accounts which are underlying the main deferred annuity account.
Calculate your annuity rate properly and carefully decide on which kind of annuity you would like to go for. Also decide on which deferred annuities are suitable for you, and select accordingly. A savings of any kind is meant for a lifetime and beyond, so make sure you take your call judiciously, after having thoroughly researched on which kind of annuity suits your needs the most.