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:

 

Comparing JG Wentworth (JGW) & Triangle Capital Corporation (TCAP) - Markets Daily

Comparing JG Wentworth (JGW) & Triangle Capital Corporation (TCAP)
Markets Daily
The Company conducts its operations through two segments: Structured Settlements and Annuity Purchasing (Structured Settlements), and Home Lending. The Structured Settlements segment provides liquidity to individuals with various financial assets, such .

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ASTA FUNDING, INC. (NASDAQ:ASFI) Files An 8-K Departure of Directors or Certain Officers; Election of Directors . - Market Exclusive

ASTA FUNDING, INC. (NASDAQ:ASFI) Files An 8-K Departure of Directors or Certain Officers; Election of Directors .
Market Exclusive
The Company operates through four segments: Consumer Receivables, Personal Injury Claims, Structured Settlements and GAR Disability Advocates. The Consumer receivables segment is engaged in purchasing, managing for its own account and servicing .

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EPS Settlements Group Rebranded Arcadia as Firm Positions for Growth - WorkersCompensation.com (press release)

EPS Settlements Group Rebranded Arcadia as Firm Positions for Growth
WorkersCompensation.com (press release)
Arcadia developed structured settlements to address people's long-term needs using periodic payments. Arcadia is a Greek word meaning an ideal setting in harmony with nature. It connotes a place of shelter where people find peace, security, resolution .

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EPS Settlements Group Rebrands as Arcadia - Insurance Journal

EPS Settlements Group Rebrands as Arcadia
Insurance Journal
Arcadia developed structured settlements to address people's long-term needs using periodic payments. Sullivan is chairman of Gerald J. Sullivan & Associates, the focus company for all members of The Sullivan Group. Arcadia is a Greek word meaning an .

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Custom Structured Settlements Helps Client Avoid Substantial Tax Bill - Benzinga

Custom Structured Settlements Helps Client Avoid Substantial Tax Bill
Benzinga
Custom Structured Settlements, LLC recently helped a customer, aka "Hopson (name changed due to confidentiality)," turn $27,000 into $400,000 in seven days. Hopson was about to owe a $400,000 tax bill. For $27,000, Custom Structured Settlement's .

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Fox's suddenly swift action on harassment claims: 'The pendulum has swung the other way' - AOL

AOL

Fox's suddenly swift action on harassment claims: 'The pendulum has swung the other way'
AOL
Also leaked to the media in the Horowitz matter was the fact that no settlements have been offered. (A federal probe into whether Fox News improperly structured settlement payments to minimize impact on the company's financial disclosures is ongoing.) .

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Texas Insurance Agency Owner Gets 7 Years For $4.6M Fraud - Law360 (subscription)

Texas Insurance Agency Owner Gets 7 Years For $4.6M Fraud
Law360 (subscription)
Ringler Associates of North Texas, the government alleged, would primarily settle insurance claims by selling structured settlements through annuities that were offered for sale through Ringler Insurance Agency. The beneficiaries of the annuities .

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Analyzing JG Wentworth (JGW) and Triangle Capital Corporation . - The Cerbat Gem

Analyzing JG Wentworth (JGW) and Triangle Capital Corporation .
The Cerbat Gem
JG Wentworth (NYSE: JGW) and Triangle Capital Corporation (NYSE:TCAP) are both finance companies, but which is the better stock? We will compare the two .

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EPS Settlements Group rebranded as Arcadia - PR Newswire (press release)

EPS Settlements Group rebranded as Arcadia
PR Newswire (press release)
The company has a rich history as the first structured settlements firm in the world. In more than 45 years in business, Arcadia has helped settle over 325,000 claims involving structured settlement funding of over $40 billion. Arcadia has more than .

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