Qualifying Annuity

AAA

DEFINITION of 'Qualifying Annuity'

This type of annuity is similar to any other, except that it has been approved by the IRS for use within a Qualfied Retirement Plan or IRA. Qualifying Annuties can be either fixed, indexed or variable, depending upon the investment objectives of the plan sponsor. Contributions made into a Qualifying Annuity are tax-deductible according to ERISA guidelines, unless the plan or annuity has a Roth feature.

INVESTOPEDIA EXPLAINS 'Qualifying Annuity'

Qualifying Annuities are not tax-deductible plans in and of themselves; they must reside within a Qualified Plan or IRA in order to enjoy this status. Qualifying Annuities can be either the sole vehicle inside the plan or account, or they can be one of several other choices that are offered as well. In many cases, the Qualifying Annuity is a variable contract and is the only vehicle offered within the plan, with the variable subaccounts constituting the choices available to plan participants.

RELATED TERMS
  1. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  2. Qualified Joint And Survivor Annuity ...

    An annuity payment from a qualified plan or 403(b) account that ...
  3. Employee Retirement Income Security ...

    The Employee Retirement Income Security Act of 1974 (ERISA) protects ...
  4. Individual Retirement Annuity

    A retirement investment vehicle that is structured similarly ...
  5. Annuity

    A financial product sold by financial institutions that is designed ...
  6. Subaccount Charge

    Fees charged for the management of an investment fund.
Related Articles
  1. Retirement

    The Hidden Costs Of Investing In Mutual Funds

    Find the hidden fees in your portfolio, so that you can increase your rate of return.
  2. Home & Auto

    An Overview Of Annuities

    These contracts provide a guaranteed income stream. Learn how they work and their benefits.
  3. Options & Futures

    Getting the Whole Story on Variable Annuities

    Variable annuities are another way to save money tax-deferred - but don't jump in blindly!
  4. Options & Futures

    Live Longer, Retire Younger: Can You Do It?

    Use this vehicle to make sure your payout lasts as long as you do.
  5. Options & Futures

    Personal Pensions: Repackaging The Annuity

    Discover an investment that can provide a stable income once you've left the work force.
  6. Retirement

    Are You Buying Annuities Or Mutual Funds?

    Investing a client's money in variable annuties is becoming a target for criticism.
  7. Professionals

    Retirement Bliss? Not So fast: When Savings Lag

    Most people aren't saving enough for retirement. Here are some tips savers and financial advisors can use to change that.
  8. Professionals

    Multiple Accounts? Here's How to Calculate RMDs

    Ever wondered about how to calculate required minimum distributions on multiple accounts? Here's a quick primer.
  9. Professionals

    Monthly Pension Or Lump-Sum: Which Is Better?

    When a client is faced with the choice of a monthly pension or a lump-sum payment, which one is better? Here's a quick guide on how to decide.
  10. Professionals

    Financial Planning Tips And Resources For Veterans

    Veterans or all kinds have special needs when it comes to financial planning. Here are some tips as well as a comprehensive list of online resources.

You May Also Like

Hot Definitions
  1. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  2. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  3. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  4. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  5. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  6. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
Trading Center