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Single-Premium Deferred Annuity (SPDA)

[SING-guhl PREE-mee-uhm dih-FURD uh-NOO-i-tee]

What is the definition of Single-Premium Deferred Annuity (SPDA)?
A financial product similar to an Individual Retirement Account (IRA), into which an investor makes a one-time, lump-sum payment. The funds are invested in either fixed-return or variable-return instruments and grow tax-deferred until distributions are taken.
Using Single-Premium Deferred Annuity (SPDA) in an Example

An individual nearing retirement invests a lump sum into a Single-Premium Deferred Annuity, choosing a fixed-return option. The investment grows tax-deferred, meaning no taxes are paid on the interest or earnings until the individual begins to withdraw funds after retirement.

Using Single-Premium Deferred Annuity (SPDA) in a sentence

Our financial advisor recommended considering a Single-Premium Deferred Annuity as a way to manage our retirement savings more efficiently and benefit from tax-deferred growth.

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A person whose spouse has died within the tax year and who may file a joint tax return for that year. Additionally, the surviving spouse can file joint returns for the next two years if they remain unmarried and maintain a household as the principal residence for a dependent child.
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A financial contract in which two parties agree to exchange streams of payments over a specified period, based on different indices such as interest rates, foreign exchange rates, or equity indices, applied to a notional amount. Swaps typically do not involve the exchange of principal.
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