K1.03: Installment Loans
Finance: Savings and Payout Annuities Questions Explored- I would like to make regular deposits into an account at regular intervals for a number of years. How much will I have in the end?
- How much do I need to deposit at regular intervals into an account in order to have a certain amount of money?
- I’d like to be able to withdraw a certain amount every year indefinitely after I retire. How much would I need to deposit at regular intervals in order to do that?
- Savings annuity—an account into which regularly scheduled deposits are made
- Payout annuity—an account with money in it where money is withdrawn regularly, eventually ending up empty
- 401(k)—one example of an employer-sponsored savings annuity
- IRA (individual retirement account) – you can open one of these and make regular deposits into the account for years
- o There are several types of IRAs. Two examples are below. You’d talk to a financial planner about what type would be best for you based on your expected future tax bracket and the type of lifestyle you’ll lead now and in the future.
- Traditional IRA – deposit now, pay taxes later
- Roth IRA – pay taxes on deposits now, withdraw tax-free
- o There are several types of IRAs. Two examples are below. You’d talk to a financial planner about what type would be best for you based on your expected future tax bracket and the type of lifestyle you’ll lead now and in the future.
