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What Are Annuities?
An annuity policy sold by a life insurance company is a contract
between the buyer of the annuity policy, commonly referred to as the
"annuitant", and the life insurance company. An annuity policy
provides the buyer with an income, usually for retirement purposes. Before
the income begins, the buyer must pay premiums to the life insurance
company. These premiums are paid on an installment basis or a one time
basis Annuity policy premiums paid to life insurance companies are much
like deposits in a savings account. The premiums paid earn interest before
the income (annuity) starts. After the income starts, interest continues to
be earned on the balance left after each income payment. U.P.E.C. offers
what is termed a Flexible Premium Deferred Annuity and a Single
Premium Annuity.
SIGNIFICANT ASPECTS OF ANNUITY POLICIES
Deferred Annuities are Tax Sheltered
1. The deferred annuity premiums earn interest on a tax
deferred basis
2. The interest on the interest is tax deferred
3. Interest is earned on the money saved by not paying current taxes on the
annuity policy earnings
Flexible Premium Deferred Annuity
The U.P.E.C. Flexible Premium Deferred Annuity policy is purchased
on the installment basis in order to accumulate cash values until the time
income begins. The buyer may vary the premium payments.
TRADITIONAL IRA
Contributions to the traditional IRA may be made up to $4,000. If
over age 50 an additional $500 May be contributed. Some limitations may
apply.
If the participant qualifies, taxable income for the year of the
contribution may be reduced by the amount of the contribution, therefore
the participant will pay less in taxes every year a contribution is made.
Contribution deductibility is based on participants AGI (Adjusted Gross
Income) for the year of the contribution.
Non working spouses also may be able to make contributions to their
own traditional IRA.
Penalty free withdrawals may be made after the participant reaches
the age of 59½ or for a first time home buyer up to
$10,000 and also for higher education expenses.
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