Flexibility In Your Annuity

In any financial transaction, whether a debt or investment, flexibility should always be sought out. As with certain debt programs, there are annuities that are highly flexible.

One of the really good things about annuities as a money management and financial planning tool is that there are quite a variety of different forms that they can take to meet individual needs. One of the really good forms is the FPD Annuity. Its main advantage is, well, it is flexible. Since an annuity is a financial contract and is regulated by various laws and by the Internal Revenue Service regarding taxation issues, flexibility is an attractive option.

The FPD Annuity basically allows you to make payments into it when and if you are able to make them. There will be limitations and minimum and maximum deposit levels, but the payments are generally not on a set schedule. If you have a sudden windfall or find yourself with some excess investment capital, you can add it to your annuity. If you pass through a particularly hard period and are short of funds, no payment is necessary at all.

When the annuitization time arrives and withdrawals are going to be made, the amount of the payouts will, of course, be determined by how much you deposited into the annuity and how well it was invested by the Insurance Company that manages it. Most Insurance Companies that have these annuity plans have several different types designed to meet various retirement and investment goals. This allows even more choice for the purchaser, but also requires that he carefully review his own financial goals to be able to best determine the proper package.

The deferred part of the annuity refers to the taxation issue. As with most annuities, the earnings on the money invested are not taxed as they occur. This is a tremendous advantage of an annuity. The fact that the investment earnings are not taxed at the time they are realized means that the amount that would have normally been paid in taxes remains invested. Since an annuity is a long term investment, this means that this extra earnings saved from the tax man is reinvested and compounded over the entire life of the annuity. This can result in a substantial increase in income when compared to a normal savings account.

The only drawback of the annuity is that it does require a bit of self discipline in the individual to realize its best potential. When a person is faced with a mandatory deposit or has funds withdrawn from his paycheck for deposit into an IRA or 401 K plan, it is usually easy and painless. However, a person who is serious about financial planning and determined to make the most of his earning potential to insure security for his family and funds for his retirement can benefit from the flexibility of this kind of investment. As is the case in all annuities, your Insurance Agent will be able to guide you to the plan that is best able to meet your personal budget and goals.

Read more annuity information at UFCAmerica.com