Deferred Annuity

A deferred annuity contract allows you to accumulate tax-deferred earnings during the term of the contract and sometimes add assets to your contract over time. In contrast, an immediate annuity starts paying you income right after you buy.

Your deferred annuity earnings can be either fixed or variable, depending on the way your money is invested.

Deferred annuities are designed primarily as retirement savings accounts, so you may owe a penalty if you withdraw principal, earnings, or both before you reach age 59 1/2.

An annuity for which one does not become eligible until some future date. Application must be made with the Retirement Systems to receive benefits.