It depends....if the annuity is in an IRA, taxes are the same as any asset in an IRA, taxed as removed.

If the annuity is non-Qualified (non IRA) the funds grow tax deferred until removed. This allows for a long term build up of an account without annual tax liability. Once the funds are removed, the accumulated gain is now taxable.....EXCEPT...if the funds are removed as a pre-set payment (10 years as an example) the tax deferred gain is spread out over the payment time period. This is called the "Exclusion Ratio".

As with all important decisions, always consult a licensed professional ebfore making any final decision.

All variable annuities have a mortality and expense charge. Typically it will range from a low of .40% per year on a no-loan annuity, to a high of 1.35% on broker-sold annuities. The prospectus sold with your variable annuity will contain all fees and expenses.

The length of annuity contracts can vary anywhere from one to ten years. (some contracts have no surrender penalties). Just like a bank certificate of deposit, closing an annuity account prior to the end of the surrender period can cause a penalty. Typically the surrender charge will decrease over time which means the more seasoned the contract the lesser the surrender penalty.

Some annuity companies will entice you to purchase an annuity form them by offering a "bonus" or "loyalty" addition. The bonus can be anywhere from 2% to higher. As an example, if the bonus amount was 5% and you deposited initially $100,000 then your beginning value would be $105,000.

Most annuity contracts charge a fee known as a surrender charge which you could incur if you cancel the contract before a specified amount of time. The time period of possible penalties (withdrawal) can vary from contract to contract. Most surrender period are from 2-7 years, but can be longer or shorter. Most companies will allow for a percentaeg of the accumulated value to be withdrawn annually withouy penalty. Generally 10% is allowed.

A beneficiary is the person or persons who is designated to receive the proceeds of a life insurance policy or an annuity upon the death of the insured. The beneficiary is named by the owner of the policy and the owner can change the beneficiary at any time.

An annuity under which the policy's premium is invested in a variety of investment divisions and the accumulated value fluctuates with the performance of the investment divisions. The accumulated value in a variable annuity is NOT guaranteed and can increase and decrease based on market conditions. If you are considering a variable annuity, ask for and read the investment prospectus.

Several points should be considered before considering an annuity.

• Complete a financial statement and determine your liquidity.
• What is your overall financial health?
• How much retirement income do you currently have or will have.
• What exactly do you want the annuity to accomplish?
• After you were to buy an annuity, how much liquid cash would be available to you?
• Are you buying the annuity for income? For tax deferral?

Suitability is essential, make sure you fully understand the benefits and restrictions of an annuity. An licensed annuity agent can assist you in making this determination.

Yes, as long as the annuity contract has a named beneficiary. (designated by the annuity owner) When death occurs, the accumulating funds within an annuity can be transferred to your named beneficiaries, avoiding probate expense, and the public notice of probate. If the annuity contract does not have a named beneficiary or the "estate" is designated, the funds could be subject to probate.

All important decisions affecting your life should be directed to a licensed and authorized professional.

You are 50% right and 50% wrong.

"Variable" annuities have fees which will generally continue for the life of the contract. These fees are for mortality fees,expense fees, administration fees, money management fees, enhanced death benefit rider fees and income rider fees. The total of all these fees could easily be 3% of your annuity value per year. These fees are automatically subtracted from you annuity account value. always consult your broker and read the pro annuity prospectus for details, product vary greatly)

If you buy a fixed (interest earning) or a fixed indexed annuity, there are no fees or expenses. (a few annuity companies may offer an "enhanced" income rider that can have a charge or expense. Ask your agent if the annuity he/she proposes has any fees. Also you cna call the company directly and verify anything which you might question.

Interest rates for annuities are based on the 10 year US Treasury rate. As US Treasuries go up or down, annuity rates will generally follow. Interest rates can also be state specific because the insurance industry is regulated by each state and not the Federal Government.