MORE INFORMATION
An annuity is a contract sold by life insurance companies
that guarantees a fixed or variable payment to the annuitant (person holding
the annuities) at some future time, usually retirement.
In a Fixed
Annuity, the amount will ultimately be paid out in regular installments,
varying only with the payment method elected. This can be in the form of cash
or reinvestment.
In a Variable Annuity, the payment is based on a
guaranteed number of units; unit value and payments depend on the value of the
underlying investments. All capital in the annuity grows tax deferred.
There are two methods for tracking annuities in Money: Simple and
Comprehensive. With the Simple method, the value of the annuity is updated when
you receive your statement. With the Comprehensive method, the value of the
annuity can be updated on a regular basis, based on shares quantity and current
price, or from the most recent statement.
Simple Method
- Set up an Asset account, and set the starting balance equal
to the current value of the annuity.
- Every month when you get your statement, follow these
steps:
- Click the Balance button.
- Enter the new balance and statement date.
- Choose a category.
- Click OK.
For more information about how to create an Asset account, see
Microsoft Money Online Help.
Comprehensive Method
Set up a tax-deferred Investment account with an associated cash
account. Set up an investment for each subaccount (investment) in your annuity.
If this is for an existing annuity, then set the balance of the cash account
equal to the current value of the annuity. For a new annuity, set the value to
zero.
Note In an annuity, the insurance company refers to each investment as
a subaccount. In Microsoft Money, each subaccount is referred to as an
investment.
Every time you make an annuity payment, transfer the
funds into your associated cash account. When you get your statement, enter a
buy for each investment with the correct share amount and dollar price to
reflect new purchases made by the insurance company. Many statements do not
clearly communicate all this information, so the process may involve some
computation on your part.
To keep track of the annuity's value on a
regular basis, update the price of each subaccount (investment). Because the
investment account will contain the proper number of shares for each
subaccount, the account value will reflect changes in the prices of the
subaccounts.
In Money you can enter an Estimated value for an
investment account. This would be a good way to handle Asset Allocation funds.
Then, as value changes, edit the details to update the estimated value. For
more information about how to set up investment accounts and investments, and
how to update investment prices, see the Microsoft Money Online Help.
For additional information about how to begin tracking an existing, click the
following article number to view the article in the Microsoft Knowledge Base:
142084
Money: How to Start Tracking Existing Investments in Money