Sentences with phrase «interest during the accumulation period»

Fixed interest rate annuities provide that the contract earns interest during the accumulation period at a rate of interest set by the insurance company based upon the performance of the company's general portfolio account.

Not exact matches

If the member in receipt of the TRIS decides to cease receiving the TRIS during the pre-commencement period but maintains the remaining value in an accumulation interest in the fund, the fund may need to start using the proportionate method to calculate the income tax exemption.

Assets will cease being segregated current pension assets in the pre-commencement period when the fund gives effect to value transferred by a member during that period which results in the fund starting to have assets that support both accumulation and retirement - phase interests.

This not only means lower taxable income for you during the accumulation period, but also additional accumulated interest thanks to the power of compounding.

Second, the tax treatment describe here applies only to deferred annuities (contracts that have an accumulation period, during which your money earns interest; immediate annuities, which provide an income beginning within one year of purchase, get very different tax treatment and do not present the issues described here.

With a deferred annuity, you make regular premium payments to an insurance company over a period of time and allow the funds to build and earn interest during the accumulation phase.

During this growth period, or accumulation period, the rate of interest is not taxed, which allows for a greater accumulation of funds.