Tax Deferred Annuity

Deferring the tax payments on your annuity

A tax-deferred annuity is a policy offered by life insurance companies to give people high interest and tax relief on their savings. A tax deferred annuity works by allowing the saver to compound yearly interest and keeping the tax deferred. This is a practical and convenient way of accumulating money for use at a later date, such as in retirement.

However, ‘deferred’ does not mean ‘exempt’. The deferral of tax lasts until the saver begins to draw money from the tax deferred annuity. At this point, you then have to pay taxes on what you have gained.

“The way in which you choose to take your income – perhaps as a tax deferred annuity – will determine how your taxable income is calculated. By setting up a regular income annuity payment, you can spread the tax out over the anticipated number of years that the annuity will be made. Although the tax that is paid remains the same, it is broken down into much smaller chunks.”

To get the best from your tax-deferred annuity, you will undoubtedly need the services of a finance and insurance specialist. They can review your current financial situation and explain your options to you, as well as helping you to find the best policy and advise you on how to use it to your best advantage.

QuoteRack.com puts you directly in touch with professional and committed finance and insurance specialists who know the market and the intricacies of the policies involved. Getting the right deferred tax annuity allows you peace of mind for now and the future.