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    Taxes & Annuities

    Tax Deferral Strategies with Annuities

    Tax deferral can dramatically increase the long-term value of your savings. Used strategically, annuities can be a key piece of that puzzle.

    Compounding growth chart on a tablet
    Tax deferral lets your money compound faster — over decades, the impact is significant.

    Why Tax Deferral Matters

    When you don't pay taxes annually on investment growth, more dollars stay invested and compound. Over 20–30 years, this can produce a meaningfully larger nest egg.

    How Non-Qualified Annuities Help

    After-tax money inside a non-qualified annuity grows tax-deferred. This is especially valuable for retirees in higher tax brackets who have maxed out IRAs and 401(k)s.

    Tax Bracket Management

    Withdrawals can be timed to fill lower tax brackets in early retirement, or deferred until needed. Coordinated with Roth conversions, this can produce major lifetime tax savings.

    Watch Outs

    Earnings come out as ordinary income, not capital gains. Withdrawals before 59½ may face a 10% penalty. The benefit grows with longer holding periods.

    The Bottom Line

    Tax deferral is one of the most powerful — and underused — wealth tools available to retirees. Annuities are one of the few vehicles that provide it without contribution limits.

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