Even at a hypothetical 4 percent, inflation cuts a dollar's purchasing power in half in 18 years. Although the money deposited in a nonqualified annuity is not tax-deductible, all of the earnings accumulate tax deferred until you start taking withdrawals.
Withdrawals reduce the cash value and minimum guaranteed death benefit.
You can purchase annuities with a lump sum, periodic fixed sums, or variable sums at irregular intervals. This flexibility lets you tailor your annuity purchase payments to your circumstances and investment opportunities. You can choose between fixed or variable. A fixed annuity earns a guaranteed interest rate and provides a specific payout when you take withdrawals. With a variable annuity , you construct your portfolio from the investment options available in the annuity contract and at payout have the option of a fixed or variable payout.