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Part: 5 Here's Our Advice > Glossary - Pg. 295

Glossary 295 single-premium annuity An annuity paid for in one single premium in advance rather than in annual premiums over a period. single-premium deferred annuity A deferred annuity purchase with one lump-sum premium payment. Single-premium deferred annuities offer the tax benefit of building up in value tax-free until distribution takes place. Thus, an investor could pay a large single premium, have the investment build up free of taxes over a period of years, and then receive taxable annuity payments at retirement. A single-premium deferred annuity is more flexible than an individual retirement account (IRA), but, unlike contri- butions by some individuals to an IRA, a premium to purchase a deferred annuity is not deduc- tible for tax purposes. small-company fund A mutual fund that seeks capital appreciation by investing primarily in stocks of small companies, as determined by either market capitalization or assets. spousal IRA An individual retirement account in the name of a nonworking spouse. A spousal IRA may be funded by the working spouse up to a maximum amount established by law, currently $2,000. Annual contributions are limited to the earned income of the working spouses. Standard & Poor's 500 Composite Stock Price Index (STP) is compiled by Standard & Poor's Corporation, a large financial service company that also publishes credit ratings. The stocks in the S&P 500 repre- sent approximately 70 percent of the total market value of all publicly traded U.S. corporations. The S&P 500 is a popular indicator of overall stock market performance because it measures such a broad segment of the equity market. The index contains large companies as well as some smaller companies and is divided into four major industry groups and approximately 90