LYCOS RETRIEVER 
Annuities: Money
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Annuities are a means of funding your retirement. An annuity is a contract with an insurance company that allows you to save for retirement; it is ... a way to guarantee that you don’t live longer than your money lasts. Annuities can be a valuable part of your financial plan.
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Withdrawal: Annuities will come with differing withdrawal options; ... most carry a surrender charge assessed if you withdraw money prior to the end of your annuity quote time. Unlike traditional retirement plans, there is no limit as to the amount you can set aside, but all payments are tax-deferred once you receive your annuity quote.
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Annuities come in two different basic types: an immediate annuity and a tax-deferred annuity. With immediate annuities, you give a lump sum of money to the insurance company. Based on your age, life expectancy, and interest rates, the insurance company calculates how much they'll send you each month - no matter how long you live.
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Many people today are using tax-deferred annuities as the foundation of their overall financial plan instead of certificates of deposit or savings accounts. Although CD's and Annuities are very similar there are significant differences between the two. The most important difference is that annuities allow for the deferral of the taxes due on the interest earned until the interest is withdrawal! By postponing the that tax width a tax-deferred annuity, your money compounds faster because you can earn interest on dollars that would have otherwise been paid to the IRS. Later, if you decide to take a monthly income, your taxes can be less because they will be spread out over a period of years. Like Certificates of Deposits, annuities have a penalty for early surrender... most annuity contracts have a liberal "free withdrawal" provision.
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If you need to simplify your tax reporting, one great feature of annuities is that you don't have to report earnings to the IRS until you begin withdrawing money. In other words, no more 1099s and no more having to compute the cost basis of fractional shares.
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