Single Premium Deferred Annuities
Single Premium Deferred Annuities
A Single Premium Deferred Annuity (SPDA) is a tax-deferred investment plan in which an individual makes a single payment to a mutual fund or insurance company. Single Premium Deferred Annuities are similar to IRA, but a SPDA has no annual contribution limit.
A single premium deferred annuity is purchased with a single sum payable at the beginning of the contract. A flexible premium annuity allows premiums to be paid at any time while the contract remains in force. One of the additional benefits available with tax-deferred annuities is cost-free access to annuitization options. Annuitization is the conversion of the cash value accumulated in a tax-deferred annuity into an income stream that may be paid out over a fixed period of time, over the lifetimes of one or two individuals, or over a combination of the two.
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