A tax–deferred annuity is a contract between you and an insurance company for a guaranteed interest bearing contract. The Company credits interest, and you don‘t pay taxes on the earnings until you make a withdrawal or begin receiving an annuity income.
Tax deferral means that you are postponing paying taxes on interest earned until a future date. During that “deferral” time you are earning interest on dollars that would otherwise be paid as taxes. Leaving you the potential to accumulate more money over a shorter period of time, which ultimately can provide you with a greater return.
Passing along the value in your annuity to a named beneficiary can avoid the delays and costs of probate making for a simplified way to transfer assets during a difficult time.
Annuities can provide you with a guaranteed income stream with the purchase of a tax–deferred annuity. You can convert an annuity into payments based on your needs–whether that be payments for life or over a specified period. We encourage you to consult with and rely on your legal or tax advisor to fully understand the tax effects annuities can have for you and your estate.
At Dixon Financial, we can help you evaluate pitfalls in your current plan, make you aware of opportunities you may be missing, and walk you through the many options available to you.
Together we can combine the steps above to prioritize your goals and implement your plan in connection with an experienced estate planning attorney to create your Legacy.
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