retirement annuity

<h1 align="center">  <em>retirement annuity</em></h1> <h4> <align="center">  <em>Aspects of Retirement Annuities</em></h4> <h4>Individual Retirement Annuities</h4> <p>An individual retirement annuity operates much like a traditional individual retirement account (IRA). The main difference is that an individual retirement annuity involves purchasing an annuity contract or an endowment contract from an insurance company. An endowment contract is an annuity that also provides life insurance protection.</p> <p>An individual retirement annuity must be issued in the name of the owner. The owner or the owner's surviving beneficiaries are the only ones who can receive benefits or payments from the annuity. The annuity contract must also meet all of the following requirements:</p> <p>The owner's entire interest in the annuity contract must be nonforfeitable (i.e., fully vested). <br> </p> <p>The requirement that an individual retirement annuity be nonforfeitable does not prevent forfeiture of the account as part of a criminal proceeding. <a href="http://www.retirement-financial-advisor.com/fixed_income.htm">http://www.retirement-financial-advisor.com/fixed_income.htm</a>. Remember that crime (or at least getting caught) really doesn't pay.<br> <br> </p> <p>The contract must provide that the owner cannot transfer any portion of it to any person other than the issuer (i.e., the insurance company). <br> </p> <p>An individual retirement annuity should not be used as collateral for a loan. If used as collateral, the contract is disqualified and ceases to be an individual retirement annuity as of the first day of the tax year in which the loan or pledge occurred. At that time, the fair market value of the annuity contract is considered to be distributable and, more importantly, taxable to the owner of the contract.<br> <br> </p> <p>The contract must allow for flexible premiums so that if the owner's compensation changes, the amount of payments can also change. <br> Yearly contributions cannot exceed $3,000 for 2002 through 2004, which mirrors the yearly contribution limits set for traditional IRAs. <br> </p> <p>As with traditional IRAs, additional contributions can be made by those age 50 and over beginning in 2002. For 2002 through 2005, an extra $500 can be added to the contribution limit for the year. For 2002 through 2004, that means the maximum that can be contributed each year by those age 50+ is $3,500.<br> <br> </p> <p>Any refunds of premiums can only be used to pay for future premiums or to buy more benefits before the end of the calendar year after the year the refund is received. <br> Distributions from the annuity must begin to be made by April 1 of the year following the year the owner reaches age 70.5. <a href="http://www.retirement-financial-advisor.com/protecting_iras.htm">http://www.retirement-financial-advisor.com/certified-financial-advisor.htm</a></p> <p><br> Endowment contracts. Endowment contracts issued before November 6, 1978, can qualify as individual retirement annuities. For those that purchased an endowment contract, it is important to note that that no deduction is allowed for amounts paid under the contract that are allocable to life insurance. <a href="http://www.retirement-financial-advisor.com/asset_protection.htm">http://www.retirement-financial-advisor.com/asset_protection.htm</a>. For purposes of making the allocation, the cost of the current life insurance protection under a qualified endowment contract is the product of the net premium cost (determined by the IRS) multiplied by the excess of the death benefit payable under the contract during the taxable year over the cash value of the contract at the end of the year.</p> <p>Hopefully, the insurance company that issues the endowment contract can break this down for you. An example is provided below, though, to show you how this would work out.</p> <p></p> <p></p> <p></p> <blockquote> <p><em>If you are searching for any of the following topics:</em><ul> </ul> <p><em>You can find much more <strong>information by visiting</strong> <a href="http://retirement-financial-advisor.com">retirement-financial-advisor.com</a>. Please <a href="http://retirement-financial-advisor.com"><strong>click</strong></a> to visit our site. Here is why you should visit us:</em></p> </blockquote> </body>