drron-ga,
Pensions and annuities are both commonly-used and important financial
terms. But they are also fairly non-specific in their meaning, so
that the terms are sometimes used interchangeably, sometimes not.
They are sometimes precisely defined in a particular context, while at
other times, take on a more generic meaning.
The main distinctions between the terms is that a PENSION generally
refers to money received by a worker after they are finished working
-- that is, during retirement.
An ANNUITY, however, is more general in nature...while it may refer to
retirement income, it can also refer to any regular annual payment of
income. For instance, lottery winnings can be awarded in a single
lump-sum payment, or can pe paid out in increments over a number of
years; this latter payment method is referred to as an annuity, as can
be seen at this Powerball lottery site:
-----
http://www.ctlottery.org/powerball.htm
Choose your payout.
When you win a Powerball jackpot, you have 60-days from the time you
present your claim at CT Lottery Headquarters to decide whether you
want your prize as an ANNUITY or CASH LUMP SUM payout. If you don't
make a choice within those 60-days, your prize will automatically be
paid as an ANNUITY payout option.
The CASH LUMP SUM option pays out the prize money all at once. The
CASH LUMP SUM payout option is approximately one-half of the estimated
annuitized jackpot.
The Powerball ANNUITY option includes 30 equal payments paid over 29
years. The annuitized jackpot prize is parimutuel. If you are the only
winner, you'll receive the entire first prize pool. If you are one of
several winners, you'll receive a share thereof!
-----
In other words, an annuity CAN be a pension payment, but it does not
necessarily HAVE to be retirement income.
As you can see above, the Powerball annuity is paid out over a period
of 29 years. However, there are no hard and fast rules for either the
length of the payout term or the amount/consistency of the payments
for either an annuity or a pension.
Either can last for an individual's lifetime, or for a fixed length of
time. Either can have fixed payments, or the payments can vary over
time, usually as a result of adjustments for inflation, effects of
investment results, and other financial variables. However,
"annuities" are commonly thought of as a fixed amount of income
received annually.
I've included a few links below which will provide more definitions
and context for the terms "pension" and "annuity".
I trust this information fully answers your question. However, please
don't rate this answer until you have everything you need. If you
would like any additional information, just post a Request for
Clarification to let me know how I can assist you further, and I'm at
your service.
All the best,
pafalafa-ga
==========
http://www.answers.com/pension&r=67
pen·sion1 (pen'sh?n)
n.
A sum of money paid regularly as a retirement benefit or by way of patronage.
pension...periodic payments to one who has retired from work because
of age or disability. Pensions, originally thought of as charity, are
now viewed as an essential part of the social responsibility of
employers or of the state. In the Roman Empire there was a
well-established pension system to care for soldiers who were disabled
or had grown old....
=================
http://www.answers.com/annuity
an·nu·i·ty (?-nu'i-te, ?-nyu'-)
n.
The annual payment of an allowance or income.
The right to receive this payment or the obligation to make this payment.
A contract or agreement by which one receives fixed payments on an
investment for a lifetime or for a specified number of years.
Annuity
A series of fixed-amount payments paid at regular intervals over the
specified period of the annuity.
Choose your payout.
When you win a Powerball jackpot, you have 60-days from the time you
present your claim at CT Lottery Headquarters to decide whether you
want your prize as an ANNUITY or CASH LUMP SUM payout. If you don't
make a choice within those 60-days, your prize will automatically be
paid as an ANNUITY payout option.
The CASH LUMP SUM option pays out the prize money all at once. The
CASH LUMP SUM payout option is approximately one-half of the estimated
annuitized jackpot.
The Powerball ANNUITY option includes 30 equal payments paid over 29
years. The annuitized jackpot prize is parimutuel. If you are the only
winner, you'll receive the entire first prize pool. If you are one of
several winners, you'll receive a share thereof!
Investopedia Says: An annuity is essentially a level stream of cash
flows for a fixed period of time.
=======================
://www.google.com/search?sourceid=navclient&ie=UTF-8&rls=GGLD,GGLD:2003-43,GGLD:en&q=define%3Apension
Definitions of pension on the Web:
[I've included only a few of the definitions here]
a regular payment to a person that iis intended to allow them to
subsist without working
grant a pension to
www.cogsci.princeton.edu/cgi-bin/webwn
Income received upon retirement. There are two basic types of pension
benefit: a defined-benefit plan and a defined-contribution plan. A
defined-benefit plan is a traditional pension plan usually paid for by
your employer. Upon retirement, you receive a fixed monthly check
based on your age, salary and length of service. A
defined-contribution plan puts the onus on you to contribute a
percentage of your current income to the plan, whereupon your employer
will match part or all of your contribution ? the combined sum to be
received upon your retirement. The typical defined-contribution plan
is a 401(k) or 403(b) plan.
datek.smartmoney.com/glossary/index.cfm
Payments made periodically of (generally) a definite amount for a
specified period (usually life) from an employer-funded plan to
workers who have met the stated requirements. Its primary purpose is
to provide retirement income.
www.hrblock.com/taxes/partners/aol/glossary/tax_glossary_p.html
====================================
://www.google.com/search?sourceid=navclient&ie=UTF-8&rls=GGLD,GGLD:2003-43,GGLD:en&q=define%3Aannuity
Definitions of annuity on the Web:
income from capital investment paid in a series of regular payments;
"his retirement fund was set up to be paid as an annuity"
www.cogsci.princeton.edu/cgi-bin/webwn
An amount paid yearly or at other regular intervals, often on a
guaranteed dollar basis.
www.gehomenow.com/Homebuyer/HomebuyerResources/glossary.asp
(1) a payment of funds, often at a minimum guaranteed amount, made
yearly, monthly or at other regular intervals. (2) a type of policy
offered by insurance companies in which the policy holder makes
payments for a fixed period or until a stated age, and then receives
annuity payments from the insurance company. [OTS] A regular periodic
payment made by an insurance company to a policyholder for a specified
period of time. [Harvey] Investment that produces a level stream of
cash flows for a limited number of periods. [WCSU]
www.garlic.com/~lynn/fingloss.htm
Periodic payments to a person, usually for life.
www.pbgc.gov/glossary.htm
A regular periodic payment made by an insurance company to a
policyholder for a specified period of time.
www.rjt.com/Glossary/glosa.html
Again, let me know if there's anything else I can do for you.
pafalafa-ga
search strategy -- Google searches on:
annuity OR pension
define:annuity
define:pension |
