Tax Deferral Power And Protection

Tax Deferral Power And Protection



Tax Deferral Power and Protection
What is​ a​ Tax-Deferred Annuity? a​ tax-deferred annuity is​ a​ contract between you​ and the​ insurance company with guaranteed interest and guaranteed annuity income options .​
There are no upfront sales charges or​ administrative fees during the​ life of​ your contract.
Advantages of​ Tax-Deferred Annuities include tax deferral,​ stability,​ may avoid probate,​ liquidity features,​ and guaranteed income .​
One of​ the​ primary advantages of​ deferred annuities is​ the​ opportunity to​ accumulate a​ substantial sum of​ money by allowing your premium and interest to​ grow tax-deferred .​
Unlike taxable investments,​ you​ pay no taxes on​ your annuity interest until you​ begin to​ take withdrawals or​ receive income .​
This allows your money to​ grow faster than in​ a​ taxable account,​ because you​ earn interest on​ the​ money that would have otherwise been paid in​ taxes.
Your tax-deferred annuity is​ stable and safe .​
State insurance department laws require insurance companies establish and maintain reserves equal to​ the​ cash surrender value of​ your annuity contract at​ all times .​
In addition,​ state laws require insurance companies maintain minimum amounts of​ capital and surplus for further contract owner protection.
Insurance companies invest your premium dollars in​ a​ diversity of​ investments that are closely regulated by the​ insurance departments .​
These long-term investments ensure the​ stability of​ the​ company and help to​ provide you​ with a​ competitive yield.
In the​ case of​ premature death,​ your beneficiaries have the​ accumulated funds within your annuity available to​ them,​ with most companies and may avoid the​ expense,​ delay and publicity of​ probate .​
Most annuities provide you​ with opportunities to​ withdraw funds at​ any time (subject to​ applicable surrender charges) .​
Most contracts allow some form penalty-free withdrawals after the​ first contract anniversary .​
Some also have available certain riders which increase liquidity in​ the​ event of​ confinement to​ a​ nursing home or​ if​ diagnosed with a​ terminal illness.
Tax deferred annuities provide you​ with a​ guaranteed income with a​ tax-deferred annuity .​
You have the​ ability to​ choose from several different income options,​ including payments for a​ specified number of​ years or​ income for life,​ no matter how long you​ live .​
With non-qualified plans,​ a​ portion of​ each income payment represents return of​ premium which is​ not taxed,​ thereby reducing your tax liability from your income payments.
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