Annuity's Many Benefits #1: Tax Deferral

August 21, 2006 10:41 AM

Why should you consider annuity as an integral part of your investment plan? Here is our point-by-point breakdown of annuity's many benefits:

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Tax deferral on investment earnings

Many investments are taxed year by year, but in annuities, the investment earnings -- capital gains and investment income -- aren’t taxable until you withdraw money. This tax deferral is also true of 401(k)s and IRAs; however, unlike these products, there are no limits on the amount you can put into an annuity. Moreover, the minimum withdrawal requirements for annuities are much more liberal than they are for 401(k)s and IRAs.

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