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##### Asked by: Ilidio Gompers

personal finance retirement planning# How are deferred annuities calculated?

Last Updated: 1st January, 2020

**deferred annuity**based on an ordinary

**annuity**(where the

**annuity**payment is done at the end of each period) is

**calculated**using ordinary

**annuity**payment, the effective rate of interest, number of periods of payment and

**deferred**periods. where, r = Effective rate of interest. n = No.

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People also ask, how does a deferred annuity work?

A **deferred annuity** is an insurance contract designed for long-term savings. Unlike an immediate **annuity**, which starts annual or monthly payments almost immediately, investors can delay payments from a **deferred annuity** indefinitely. During that time, any earnings in the account are tax-**deferred**.

Similarly, what's a deferred annuity? A **deferred annuity** is a contract with an insurance company that promises to pay the owner a regular income, or a lump sum, at some future date. **Deferred annuities** differ from immediate **annuities**, which begin making payments right away.

Similarly, it is asked, what are the benefits of a deferred annuity?

Save more now, pay fewer taxes later Regardless of which type of **annuity**—or what mix of **annuities**—is best for a client, these products offer a big **advantage** for investors: All income that a **deferred annuity** earns during the accumulation phase is tax **deferred**: The funds grow tax-free until they are withdrawn.

What is a deferred fixed annuity?

With a **fixed deferred annuity**, a guaranteed interest rate is locked in for an initial period. After that, interest rates may be adjusted periodically, generally each year. **Fixed deferred annuities** also provide you with a guaranteed minimum interest rate, regardless of market conditions.