Annuity Contract - 401k Retirement Glossary

401k Participants have seen growth rates of 50% over the past 7 years. Long Term Contributors saw their savings grow from $67,785 in 1999 to $102,014 in the year 2005.
Fact: Employee Benefit Research Institute and the Investment Company Institute (EBRI).

401k Poll

Do you rely on a Professional Financial Manager to help you make 401k investment decisions?

No
Yes

View results

¶ Link to Us & Contact

¶ 401k Resources

Annuity Contract - 401k Retirement Glossary

An annuity contract is an official paper agreement between an insurance company and an investor outlining the details and covenants of the annuity plan. Some of the details and covenants could include:

- Structure of the annuity (whether it is a fixed or variable annuity)
- Any early withdrawal penalties or fees
- Beneficiaries of the annuity plan upon death of current holder
- Coverage and rights of spouse

Annuity contracts are one of the three contracts that are offered by 403b plans. 403b Annuity Contracts are also known as "tax-deferred annuities."

What is the importance of an annuity contract? To make sure you have a safe and secured retirement, an annuity contract makes it mandatory for the insurance company to pay you annuity payments (based on the variable or fixed structure) every specified period (monthly, quarterly, semi-annually or annually). Upon your death, your beneficiary (spouse or your kids, family, etc) will receive the annuity payments.