Tax Deferral

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Tax-Deferred Annuity

Preparing for the future entails crafting a solid retirement strategy. You’ve worked hard to save up money for retirement. Now, it’s important to make sure that that money stays protected and doesn’t run out going forward. You may be looking for a way to lessen the burden of taxes on your retirement money. There are, indeed, products that can help you do this.

Tax-Deferred Annuity With After-Tax Dollars

Purchasing a fixed indexed annuity (FIA) using after-tax dollars may provide you with tax benefits. An annuity works in two different stages: the accumulation stage and the distribution stage. During the accumulation stage, your FIA grows tax-deferred. It’s not until the distribution stage starts and you begin receiving payments that income taxes will apply.

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Man and woman enjoying a hike in the sunshine while discussing tax-deferred annuities.

Annuities Vs Traditional Retirement Accounts

Tax deferrals are also available through other accounts, such as traditional IRAs and 401(k)s. An FIA, however, does come with some additional benefits. For example, an FIA does not have a contribution limit, as these accounts do. If you’ve exhausted the amount you can put into your other accounts, an FIA may be beneficial to you to save away even more money for retirement.

Early Retirement With a Tax-Deferred Annuity

How does a tax-deferred annuity work for you if you retire early? Based on your situation, you might receive a bonus tax benefit. You’re eligible for these benefits if you meet a few criteria:

  1. Under age 59 1/2
  2. Have been provided a lump-sum payment from a 401(k) plan
  3. The payment was part of a severance package or early retirement package
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Retirement Strategies Fitted For You

If these criteria apply to you, then an FIA may be of interest. Reach out to us to learn more.