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. Reinsurer

    A company that provides financial protection to insurance companies. ...
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. What Are Deferred Annuities?
    Retirement

    What Are Deferred Annuities?

  4. Explaining Types Of Fixed Annuities
    Bonds & Fixed Income

    Explaining Types Of Fixed Annuities

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center