includes ANNUITY talk!

Many of us know that Annuities are extremely good investment vehicles. Those who don't will soon find out that Annuities have many benefits such as help to avoid outliving one's savings or losing that savings through bad investments or inflation.

According to the National Underwriter's article “Obama To Highlight Annuities” by Trevor Thomas, President Obama will be informing Americans about annuities in today's State of the Union Address.

It sounds as though President Obama will be trying to educate all on how annuity products will work to their advantage. If so I say Woo Hoo!!! It is about time that ALL understand how these great investment products can generate retirement income. And get people to think about saving their money as opposed to spend, spend, spend.

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Basic information about Annuities.

Annuities can be a complicated products, we will go over the basics of annuities now and later get into the more specifics about the different annuities available.

An annuity is a contract that provides income for a specified period of years, generally used to provide income for retirement years. Keep in mind annuities are long-term financial products. Annuities are unique in their ability to provide lifetime income, therefore provides protection against the possibility of outliving one's income. The Annuitant is the person who receives benefits from the annuity.

All interest grows tax-deferred, allowing you to potentially accumulate wealth faster than if taxes were due on interest each year. Tax deferral means that any amount earned in an annuity is not taxed until earnings are withdrawn. This means interest, dividends and capital gains can accumulate without being subject to current income taxes. Taxes are paid at ordinary income rates, regardless of how long the annuity has been held. Tax deferral ensures that you do not pay a dime on your interest earnings until the funds are withdrawn. Annuities also outshine CDs and other savings plans in terms of the yield you will see on your investment.

Annuities are investment contracts where you make payments either in a lump sum or in a series of contributions over a specific amount of time to help provide income upon retirement. In addition to being used for retirement income, they can be used for any situation that requires a steady stream of income at some point in the future, such as to fund a college education.

To sum it up – in short. While life insurance protects against premature death by creating an estate, annuities protect against outliving one's income by liquidating an estate. Annuities consist of funds set aside for a certain period of time, then the money is returned in increments as guaranteed income repaid.

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