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The Power of Tax Deferral. Annuities Have It. CD's Don't. See For Yourself !
When you buy an annuity, the interest it earns accumulates tax-deferred. You don't pay taxes on your annuity's growth until you withdraw your money, so your annuity grows faster than it would in a taxable financial product. Your money grows three ways: your premiums earn interest, your interest earns interest, and the money you would have paid in taxes earns interest. No other taxable financial product can give you that. Of course, when you take money out of your annuity, you will have to pay taxes. However, not many people withdraw all their money as soon as they retire. Instead, they take only what they need, when they need it and pay taxes on that amount. the rest of the money continues to grow tax deferred until it's withdrawn. Plus, at retirement, many people are in a lower tax bracket than they were during their accumulation years, so their tax bill may be less.
Use this calculator to demonstrate for yourself the power of tax deferral. |
