Services: Annuities

Tax Deferral

Funding Your Retirement With a Tax-Deferred Annuity

Developing a sound retirement strategy involves preparing for the future. You’ve put a lot of effort into saving up money for your retirement. Now, what’s important is making sure that money is safe and that you won’t run out in the future. You may be looking for strategies to lessen the impact of taxes on your retirement savings. If that’s the case, we may know of some options that can help you. A tax-deferred annuity comes with tax benefits that many other options don’t.

If you put your money into an annuity, it will remain protected while earning interest–if you purchase a fixed indexed annuity (FIA) it can earn indexed interest at a reasonable rate** while also staying protected–However, until you make a withdrawal, you do not need to declare any income or file any tax forms. This way, your earned interest is not taxed immediately. You pay taxes only when you withdraw funds. If you’re worried about the impact of taxes on your retirement funds, this could be highly advantageous.

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Annuities Vs Traditional Retirement Accounts

There are other accounts that offer tax deferral, too. For example, 401(k)s and IRAs. There are, however, a few more advantages to selecting an FIA. For instance, unlike these accounts, an FIA has no contribution limit. So, an FIA could help you save even more money for retirement if you’ve already maxed out your existing accounts. The main draw of an FIA, however, is that it comes with a degree of protection* that many other options do not. The issuing insurance company protects the money you contribute, even in the event of a market crash.

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Early Retirement With a Tax-Deferred Annuity

How can a tax-deferred annuity benefit you if you want to retire early? Depending on your circumstances, you may be eligible for bonus tax advantages. Contact us if the following requirements apply to you:

  1. You are under the age of 59 1/2
  2. You have been provided a lump-sum payment from a 401(k) plan
  3. The payment was part of a severance or early retirement package

If all of these apply to you, you might be interested in an FIA as an option. Contact us to find out more.