Categories: Income

Term Life Insurance vs Deferred Income Annuity: Understanding the Differences

Term life insurance and a deferred income annuity are two financial products designed to provide retirement income. Term life insurance is a type of life insurance policy that provides death benefit payments to beneficiaries in the event of the covered individual’s death. A deferred income annuity is an annuity product that allows the buyer to defer income payments until a specified future date.

Both products offer retirement income security and both have advantages and disadvantages. Term life insurance provides coverage for the time period the policy is purchased for and pays out a designated death benefit. Its major drawback is that the death benefit does not provide income to the purchaser. A deferred income annuity, on the other hand, provides income payments effective on a predetermined date, and these payments are guaranteed for life. However, there are also drawbacks associated with deferred income annuities, such as a lack of liquidity and the inflexibility of the terms of the contract.

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Categories: Income

roth ira Income Limits: Understanding the Restrictions

A Roth IRA is a retirement savings account that allows individuals to save for retirement after-tax. The amount that can be contributed to a Roth IRA is limited by an individual’s income, filing status, and tax filing year. For 2021, single filers with Modified Adjusted Gross Income (MAGI) between $125,000 and $140,000 are eligible to contribute a reduced amount to a Roth IRA, while those with an income above $140,000 are not eligible. Joint filers with MAGI between $198,000 and $208,000 can contribute a reduced amount, while those making above $208,000 are ineligible for Roth contributions.

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