Can I Start An Annuity With $5,000?
Yes, you can start an annuity with $5,000. However, it’s recommended to purchase a flexible premium deferred annuity. This type of annuity allows you to make additional contributions after your initial investment. It is beneficial if you plan to invest more money over time. Deferred annuities also offer tax-deferred growth, meaning you don’t pay taxes on the earnings until you withdraw them.
Understanding Flexible Premium Deferred Annuities
1. Initial Investment: A minimum of $5,000 to start.
2. Additional Contributions: Flexibility to add more funds.
3. Tax Benefits: Earnings grow tax-deferred.
4. Withdrawals: Taxed at regular income rates upon withdrawal.
5. Investment Options: Variety of choices depending on the insurer.
This annuity type suits those who wish to grow their investment over time and are looking for tax advantages.
Starting an annuity with $5,000 and opting for a flexible premium deferred annuity can be a smart financial move. It offers the flexibility of additional contributions and tax-deferred growth.
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