Annuity In Arrears


DEFINITION of 'Annuity In Arrears'

An annuity that has periodic payments of either interest and/or principal that must be paid at the end of a set period of time. An annuity in arrears is one of the most common forms of annuities. They are also known as ordinary annuities.

BREAKING DOWN 'Annuity In Arrears'

Annuities in arrears are not marketed as such by most annuity carriers, but they do exist nonetheless. They get their name from the fact that the first full annuity payment is not due until the end of the first term. For example, an annuity that pays out a combination of interest and principal one month from the start of the payment period is an annuity in arrears.

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  1. How liquid are variable annuities?

    Variable deferred annuities and variable immediate annuities are not considered liquid. Variable deferred annuities carry ... Read Full Answer >>
  2. Do variable annuities have RMDs?

    Variable annuities are not subject to required minimum distributions (RMDs) unless they are held in qualified plans, such ... Read Full Answer >>
  3. Can variable annuities be rolled into an IRA?

    Variable annuities are often found in government or nonprofit employer retirement plans such as 403(b) or 457(b) plans. With ... Read Full Answer >>
  4. How do I calculate the future value of an annuity?

    When planning for retirement, it is important to have a good idea of how much income you can rely on each year. There are ... Read Full Answer >>
  5. Are variable annuities protected from creditors?

    Whether your variable annuity is protected from creditors depends on the state in which you live. About three-quarters of ... Read Full Answer >>
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    Variable annuities are tax-deferred. This means an investor does not pay taxes on the interest income from his annuity until ... Read Full Answer >>

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