A tax-deferred annuity is a contract with an insurance company that promises to pay you, the owner, a regular income or lump sum, at some future date. You don’t pay taxes on the earnings until you make a withdrawal or begin receiving payments.
Tax deferral means that you are postponing paying taxes on interest earned until a future date, as we mentioned above. During that “deferral” time period, you are earning interest on dollars that would otherwise be paid as taxes.
The value in your annuity can be passed to a named beneficiary. This can help avoid any delays and costs associated with probating, and simplify the transfer of assets and easing worries at a difficult time.
A guaranteed income stream can be provided with the purchase of an annuity. The annuity can be converted into payments, based on your needs, for a specified period of time or for your remaining lifetime.
As always, we encourage you to consult with your tax and legal professionals to be aware and understand the tax effects annuities can have for you and your estate.
At Dixon Financial we put your needs first. We advocate for our clients and are there to be a trusted advisor and guide through the planning process. We evaluate possible pitfalls in your current plan and walk you through opportunities and options available to you.
It’s not about products, it’s about people. Together we can combine the steps above to prioritize your goals
and implement your plan with sound practices and strategies to create your unique Legacy.