Annuities used to fund retirement annuity pension benefits plans (those under Internal Revenue Code Sections 401(a), 401(k),
403(b), 457 or 414) defer taxes on plan contributions as well as on interest or investment income. Within the limits set by the law, you
can use pretax dollars to make payments to the annuity. When you take money out, it will be taxed.
You can also use annuities to fund traditional and Roth IRA's under Internal Revenue Code Section 408. If you buy an annuity to
fund an IRA, you'll receive a disclosure statement describing the tax treatment.
Pension annuity plan provides guaranteed lifetime income for retirement without annuitization. Pension consultants.Only an annuity can pay an income that can be guaranteed to last as long as you live.
Life Only - The company pays income for your lifetime. It doesn't make any payments to anyone after you
die. This payment option usually pays the highest income possible. You might choose it if you have no dependents, if you
have taken care of them through other means, or if the dependents have enough income of their own.
Life Annuity with Period Certain - The company pays income for a long as you live and guarantees to make payments for
a set number of years even if you die. This period certain is usually 10 or 20 years. If you live longer than the period
certain, you'll continue to receive payments until you die. If you die during the period certain, your beneficiary gets regular
payments for the rest of that period. If you die after the period certain, your beneficiary doesn't receive any payments from
your annuity. Because the "period certain" is an added benefit, each benefit, each income payment will be smaller than in
a life-only option.
Joint and Survivor - The company pays income as long as either you or your beneficiary lives. You may choose to
decrease the amount of the payments after the first death. You may also be able to choose to have payments continue for a
set length of time. Because the survivor feature is an added benefit, each income payment is smaller than in a life - only