Sell Your Annuity

When you made the decision to purchase you annuity, you may have intended for it to be an important part of your retirement income, and you needed a method, which enabled you to save money and taxes. Maybe you wanted to eliminate the possibility you might outlive your savings. So you basically entered into a contract with an insurance company. You may have given the insurance company the money in a lump
sum or you may have made a series of payments.
The insurance company in return was to make payments to you either immediately or starting on a specified date later on in the future. Usually annuities will give a taxdeferred increase of your earnings. The insurance company may have included a death benefit, which will pay your beneficiary a guaranteed minimum amount, which may be the total sum of the purchase amount.
Before you consider transferring or selling your annuity, there are several factors to take into consideration. One of them being the amount of taxes you will pay on the annuity
when you sell it. Another is the type of annuity you purchased; will it be to your advantage or disadvantage to sell your annuity. You will also want to take into consideration the reason you are thinking about selling your annuity. Once you have made the decision to buy an annuity, you will find there are three major types of annuities to pick from, the fixed, variable, and equity-indexed annuity. In case
you are unfamiliar, here are the different annuities described.
A fixed annuity is very popular method, which is used as a savings and retirement tool.
The fixed annuity is good for long-term investors who like the stability of a guaranteed return at no risk. You will never lose your principal. With a fixed annuity the insurance
company will invest in low-risk assets, which will provide a guaranteed return of the investment.Other than the guaranteed, steady growth, a fixed annuity also has tax-deferred benefits. With a fixed annuity you can defer all the taxes on earning and the principal to the future. A fixed annuity is basically structured into two stages. The first stage is the long-term accumulation or growth period. The second stage is the actual payout phase. The fixed annuity will be paid out in monthly installments or a set number of payments.
If you prefer you can roll the annuity over into another annuity with no tax liabilities. The next type of annuity is the variable annuity is different from a fixed annuity because
you are able to choose how to invest your purchase money or payments. You will have several different options to choose from when you make your investments. When it
comes time to pay out, your rate of pay will vary as will the amount of the payments. Everything will depend on the performance of your investment choices.
The equity-indexed annuity is a different type of annuity. During the growth period, whether you make a lump sum or a number of payments, the insurance company will
credit you with profit, which is based on changes in an equity index, such as the S&P 500 Composite Stock Price Index. However, the insurance company guarantees a
minimum return, which will vary. When your annuity has gone through the growth period, the insurance company will make payments to you according to the terms of
your contract or you can choose to receive the value of your contract in one lump. All variable annuities are considered securities, which is regulated by the SEC.
However fixed annuities are not considered securities. Where is the equity-indexed annuity may or may not be considered a security.