TAX DEFERRAL
Give Your Money More Time to Work
Before Taxes Come Due.
Tax deferral is a simple idea. Instead of paying taxes each year on interest credited to your annuity, you generally wait until you begin taking money out.
In the meantime, your money has more time to stay invested and grow.
How Does Tax Deferral
Work in an Annuity?
The basic mechanics are straightforward.
While your money is growing inside the annuity, you generally do not pay taxes each year on the interest it earns. Taxes are typically postponed until you begin taking taxable withdrawals.
That can give your money more time to grow along the way and give you another option to consider when deciding where your retirement income will come from and when you’ll need it.
Tax-Deferred Does Not Mean Tax-Free.
And the difference is important.
Tax deferral means putting taxes off until later. It does not make them disappear.
When you begin taking money out of an annuity, how that money is taxed can depend on how the annuity was funded and the type of withdrawal you take.
So the conversation is about more than delaying taxes. It is about understanding when taxes may come due, where there may be opportunities to reduce your taxable liability, and how it all fits within your retirement income plan.
Want to explore ways to potentially reduce taxes or create tax-free retirement income?
Where Can Tax-Deferral Fit?
Tax deferral can be useful when you want more of your money to stay invested today while planning for when you may need that money later.
A tax-deferred annuity may help you:
Give your money more time to grow
without paying taxes each year on credited interest.
Build another source of retirement income
for the years when your regular paycheck is behind you.
Think ahead about when taxes come due
as you decide how and when to draw income in retirement.
Add another layer to your retirement strategy
alongside money you may be using for growth, emergencies, or other goals.
The bigger question is how all of those pieces work together. We help you understand where tax deferral may fit and whether an annuity makes sense within the retirement plan you are building.
A Better Tax Conversation Starts With the Bigger Picture.
When you need income, where that income will come from, what you already have, and what you want your money to support all shape the conversation.
We’ll help you understand where tax deferral fits within that bigger picture and how it may work alongside the rest of your retirement plan.