For example, suppose that a person purchases an immediate annuity on July 1 providing for monthly payments beginning August 1. The annuity starting date is July 1 (the first payment is for the one-month period beginning July 1st.)
Payments under settlement options usually commence immediately rather than at the end of the month or other payment period; hence the annuity starting date is the date for the first payment.
Source: This is an excerpt from 2009 Tax Facts On Insurance & Employee Benefits, a reference annual published by the Professional Publishing Division of The National Underwriter Company, Cincinnati, Ohio, p. 12. Click here to learn more about this reference book.