An employee can deduct up to 15% from his salary to a personal retirement account on monthly basis but not more than $11,000 per year. The employer contributes to this account a certain percentage of the employee's deductions - usually 30-50% but sometimes even 100% also on monthly basis. Taxes are already paid on the entire amount received in retirement.
“The demand for annuities to be included in retirement plans such as 401(k) plans comes from the concern of future retirees, - says Clark Kendall, president and CEO of Kendall Capital Management. - Many people want to have a secure income for the rest of their lives in old age.”
Retirement option (annuity) is a sequence of insurance payments that the life insurance company makes to the client in equal installments for life or for the period specified in the insurance contract.
Annuity payment is carried out in the amount, within the terms and on the terms determined by the parties to the insurance contract and drawn up by an additional agreement (or annex) to the insurance agreement.
Insurance contract may provide for the following types of annuity:
• Annuity for a certain period;
• Life annuity.
In the US, after the first payment in the form of an annuity is made, the type of annuity cannot be changed.
Additional options can be added to annuity for a certain period or lifetime pension, namely:
• Option with capital security;
• Option to transfer payments to another person (a pension option with right of inheritance).
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