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| Deferred Annuity EZ quote |  |
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| | A Single Premium Deferred Annuity (SPDA) is a widely-used product in the retirement planning process. Few savings or investment vehicles offer the security and tax-deferred income of an SPDA. An SPDA is an interest earning, annuity contract between you and an insurance company. In return for an initial investment, the insurance company promises to pay you the investment plus accrued interest on the Maturity Date of the annuity. You can choose to have the interest rate fixed for the life of the contract or reset at a time interval chosen by you (Adjustable Rate).
Under current federal income tax laws, you pay no tax on the accrued interest until it is withdrawn. However, this withdrawal must occur after the age of 59½, in order to prevent an IRS penalty. As a result your money grows faster. An SPDA (even one purchased at a bank) is not guaranteed by the Federal Deposit Insurance Corporation (FDIC) or the federal government. Therefore it should be of critical importance to you to choose a company with strong credit quality. Berkshire Hathaway Life Insurance Company of Nebraska, your annuity provider, has the highest credit ratings. In most cases, an SPDA contract may be cancelled prior to its maturity, although there is a penalty associated with the cancellation. | | |
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