4 Annuity Rules You Should Know by Heart
Some people shy away from annuities because compared to other investment options, they can be complicated and difficult to understand. But if you're looking to secure additional income in retirement, and have already maxed out your options for funding an IRA or 401(k), an annuity may be your next best bet. Before you purchase one, however, it's critical that you familiarize yourself with some of the rules involved. Here are a few you should be aware of.
One of the reasons traditional IRAs and 401(k)s are so enticing is that you get an up-front tax break for contributing. In the case of an IRA, you fund your account and then get to deduct that amount on your tax return. With a 401(k), you tell your employer how much you want to contribute, and that amount is taken out of your paychecks, pre-tax, and used to fund your account.
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Source: Fool.com
