|
|
No Annual Tax Annuities are tax-deferred, meaning the taxes you pay on your premium are postponed until you make a withdrawal. With a tax deferred premium:
The growth potential of an annuity premium is much higher than that of a taxable plan, such as a Certificate of Deposit. For example, a $25,000 premium accumulates to:
At the time of withdrawal, the interest earned on an annuity is subject to income tax. Even so, the net gain from an annuity outperforms the profits from a taxable alternative, such as a traditional savings account or Certificates of Deposit. As with most retirement savings plans, if you make a withdrawal prior to age 59½, the interest earned on the withdrawal is subject to a 10% IRS penalty tax. And, your earnings are considered to be withdrawn first. For example, if your premium is $50,000 and your annuity grows to $60,000, you have earned $10,000 interest. If you withdraw $12,000, $10,000 will be subject to income tax. The extra $2,000 is not part of the interest earned, so it is not subject to income tax. Annuities allow you to maximize your retirement savings. Take advantage of the tax deferral benefit of an annuity.
| |||||||||||||||||||||||||||||||||||||||||||||||||||
|
