Single-Premium Deferred Annuity - SPDA

AAA

DEFINITION of 'Single-Premium Deferred Annuity - SPDA'

A type of annuity contract that is established with a single lump-sum payment by the owner. The annuity then grows on a tax-deferred basis until annuitization. Single-Premium Deferred Annuities (SPDA) can be either fixed or variable, and distributions are only taxed when you take them. There is no investment limits regarding how much you wish to invest in a SPDA.

INVESTOPEDIA EXPLAINS 'Single-Premium Deferred Annuity - SPDA'

Single Premium Deferred Annuities (SPDA) differ from immediate contracts in that they grow tax-deferred for a period of time before annuitization. They also differ from flexible-premium contracts where the investor makes multiple payments into the contract over a period of time while the assets grow. SPDA is appropriate for investors who need steady income and have a lump-sum balance to invest.

VIDEO

RELATED TERMS
  1. Annuity

    A financial product sold by financial institutions that is designed ...
  2. Variable Annuity

    An insurance contract in which, at the end of the accumulation ...
  3. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  4. Deferred Annuity

    A type of annuity contract that delays payments of income, installments ...
  5. Premium

    1. The total cost of an option. 2. The difference between the ...
  6. Convertible Insurance

    A type of life insurance that allows the policyholder to change ...
Related Articles
  1. Immediate Annuities: More Income and ...
    Retirement

    Immediate Annuities: More Income and ...

  2. Passing The Buck: The Hidden Costs Of ...
    Bonds & Fixed Income

    Passing The Buck: The Hidden Costs Of ...

  3. Explaining Types Of Fixed Annuities
    Bonds & Fixed Income

    Explaining Types Of Fixed Annuities

  4. An Overview Of Annuities
    Home & Auto

    An Overview Of Annuities

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center