Annuity vs CD.? - annuity vs cd
My mother has) a substantial income (drawing 3% per year, on which I have to pay tax when they die. She wondered whether the money and take it to a CD, with annual interest of 2.5%. She receives no pension sufficient funds to pay taxes and doubt whether you will pay taxes on money withdrawn from the pension. Is this a wise decision?
Saturday, January 23, 2010
Annuity Vs Cd Annuity Vs CD.?
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4 comments:
But do not put on a CD to withdraw. CD not beat inflation, so your money does not have the same purchasing power when you need it. Investments in mutual funds in an IRA. depending on your needs, can be as good long-term or short term. It seems that you need assistance in the short term, and some funds to pay dividends monthly or quarterly. not invest in stocks, but investing in riskier bonds over the medium term. Money markets can not beat inflation will be kept away from them. If your concern about taxes Govt give almost anything or to invest.
You do not say whether it was his mother, interest, or not win. Is to develop the interests and do not pay taxes on their income, then no problem. That the recipient has to pay taxes on all interest accrued but not yet retired. All the money is taken as the primary interest. The pension is transferred to the beneficiaries, bypassing probate court. Inheritance tax is on the CD so that it pay money anyway. Another point is to examine whether it would be a disgrace to the House in the vicinity.
Are you sure about paying taxes when you die? Annuities are insurance products. If you are in any form of payment of death benefits, the tax should be free, in context.
In general, if a pension is usually just better to leave him alone. Often, they have all sorts of crazy redemption fee if you leave early.
I can not decide which is worse. I can tell, these are the worst two options. A savings account is a good choice, as the other. A money market fund is a low risk option almost as efficient or better, and better access to a CD. An investment fund is better to invest long term.
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