Deferred annuity
Certified Financial Planner glossary · Certified Financial Planner
Definition
An annuity whose income phase begins at a future date, permitting tax-deferred accumulation.
Deferred annuity in plain English
Premiums go in now, and paycheck-like income is scheduled to start years later. A deferred annuity is an annuity whose income phase begins at a future date, permitting tax-deferred accumulation until then. Immediate annuities begin income within about a year of purchase. Surrender charges, beneficiary taxation after death, and ordinary-income character on gains still apply. If the stem emphasizes accumulation before annuitization, you are in deferred-annuity territory.
Related Certified Financial Planner terms
Certified Financial Planner practice questions · Certified Financial Planner flashcards · Certified Financial Planner study guide