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==== ==== When considering the formula for present value of an seven percent return annuity, there are many factors to investigate along the way. While some may consider this to be a cumbersome activity, history suggests that investigating the present value of an annuity due will pay often off if not immediately then down the road. For example is one considering the purchase of an existing annuity due, or is one considering the sale of an existing annuity due, or the purchase of a new annuity? Or is one considering evaluating an existing annuity for estate tax purposes? What discount rate assumptions are proper and what financial crediting factors are appropriate? http://www.sevenpercentreturn.com ==== ====

Annuities are an interesting investment option for a lot of people close to retirement or those who are looking to supplement their income with regular payments at some point in time. Despite all the ads on TV and the mentions by financial advisors and investment agents, many people don't really know what annuities are and how they work. Annuities are an investment contract between you and an annuity provider. You make payments to the provider on a sum of money all at once or over time, and they agree to make regular payments to you for the rest of your life at a specified rate of return. There are a number of advantages to investing with annuities, the first being that annuities provide guaranteed payments for the rest of your life. Even if you live well beyond what your original investment called for, the annuity provider will still make payments until you eventually pass away. Some annuities also have provisions where your spouse, children or some other beneficiary will receive payments until the end of their life as well. Annuities provide a couple of options when it comes to your investment, fixed annuities and variable annuities. Fixed annuities provide a guaranteed rate of return based on a specified annuity rate. Typically this rate isn't large but it provides you a rate of return that you can count on, unlike stocks and mutual funds which jump up and down in a volatile market. The other main type of annuity is a variable annuity which works the same as a fixed rate annuity, except your rate of return is tied to an investment vehicle like stocks, bonds, mutual funds or money markets. This allows you to take advantage of a strong market which in times of prosperity should provide a higher rate of return than fixed annuities. Another great benefit of annuities is that the income is tax deferred. These days political spending is at an all time high and everyone seems to be willing to hike up your taxes to pay for it. Because of this, it is important to understand the tax implications of your investments or your rates of return might not be what you thought they were. By deferring taxes on your investment, as your annuity grows you don't pay taxes on it until you start receiving payments. Once you receive payments the money you invested initially is not taxed, but any investment return is taxed at your regular tax rate.


Overall annuities are an interesting investment option and have a lot of benefits for the right investor. If you would like more information about annuity rates or just want to understand the pros and cons of annuities in greater depth visit us today at Annuities-Explained.net.

Article Source: http://EzineArticles.com/?expert=Jeff_Williamson

==== ==== When considering the formula for present value of an seven percent return annuity, there are many factors to investigate along the way. While some may consider this to be a cumbersome activity, history suggests that investigating the present value of an annuity due will pay often off if not immediately then down the road. For example is one considering the purchase of an existing annuity due, or is one considering the sale of an existing annuity due, or the purchase of a new annuity? Or is one considering evaluating an existing annuity for estate tax purposes? What discount rate assumptions are proper and what financial crediting factors are appropriate? http://www.sevenpercentreturn.com ==== ====


7% investment annuity return