My mom was talking with some Rude Jerk guy about that and how much my brothers and sister would get after she goes to heaven. So i was wondering What does it mean and what a annuity is?
Answer1:an annuity is a savings account. its like any other account, except you can not withdraw from it until you reach retirement age. the idea is that it accumulates faster because it does not pay income tax, and when you draw money from it you are retired so your income is less and you dont pay as much tax on the money. depending on how its loaded (if they charge you money to set it up-thats how the "Rude Jerk" gets paid) it can provide you with a lot of money. a savings account draws interest-the longer it draws interest the more it makes.just round numbers---at 10% interest your money will double a[approximately every 10 years.lets say you start with $1,000 at age 20 (and never put any more in)at 27 youve got $2,000at 34 youve got $4,000at 41 youve got $8,000at 48 youve got $16,000at 55 youve got $32,000at 62 youve got $64,000at 69 youve got $128,000at--well you get the ideainterest doubles your money-the higher the interest the faster it doubles if you put additional money in it also doubles. it doesnt care how much is in it doubles itif its $1.00 you get 2 if its one million you get two millionyou only pay taxes on the money as you withdraw it from the account
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