Tag: Tax Deferral

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How Are Annuities Taxed? A Simple Guide for Retirement (Ep. 118 | Pt. 3)

How Are Annuities Taxed? A Simple Guide for Retirement (Ep. 118 | Pt. 3)

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Retirement tax planning can feel confusing, especially when annuities enter the conversation. 

I’ve found that many people aren’t really asking about the annuity itself. They’re trying to understand what happens to their money, how it’s taxed, and whether an annuity is the right fit for their retirement.

In this episode, I continue our annuity series by walking through the tax rules that often create the most confusion. I explain why the source of your money matters, how qualified and non-qualified annuities are taxed differently, and why buying an annuity inside an IRA doesn’t change the tax treatment of that retirement account. 

We also discuss how withdrawals work, how tax deferral fits into retirement planning, and why every annuity decision should begin with one simple question: What do I want this money to do for me?

Key takeaways:

  • Understanding how the source of your money determines the way an annuity is generally taxed
  • Why placing an annuity inside an IRA usually doesn’t change the retirement account’s tax rules
  • The difference between qualified and non-qualified annuities when withdrawals begin
  • How tax deferral allows earnings to continue growing until money is withdrawn
  • Asking what role an annuity should play before deciding whether it belongs in your retirement plan
  • And more!

Resources:

Connect with Eric Blake: 

Annuities are insurance products issued by insurance companies and involve costs, fees, limitations, and contractual terms that vary by product. Guarantees are backed solely by the claims-paying ability of the issuing insurance company. Before purchasing an annuity, investors should carefully consider their financial objectives, risks, charges, expenses, and contract features, and consult with their financial, tax, and legal professionals.

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Understanding Annuities Before You Decide if They Belong in Your Retirement Plan (Ep. 115 | Pt. 1)

Understanding Annuities Before You Decide if They Belong in Your Retirement Plan (Ep. 115 | Pt. 1)

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Annuities often become part of the retirement conversation during major life changes, yet many people still aren’t sure what they actually are or when they make sense.

In this episode, I begin a four-part series designed to help you understand annuities before you ever evaluate a specific product. We discuss what an annuity actually is, why insurance companies created them, how they can provide retirement income, and why every decision should begin with your retirement goals rather than product features. 

We also explore accumulation versus income phases, tax deferral, and the questions you should ask before deciding whether an annuity belongs in your retirement plan.

Key takeaways:

  • How annuities work as insurance contracts that may provide retirement income now or later
  • Why retirement planning should begin with your goals before discussing financial products
  • How accumulation and income phases affect the way annuities function over time
  • Why tax deferral should be viewed as one feature rather than the primary reason to buy
  • Questions that help determine whether an annuity belongs in your retirement strategy
  • And more!

Resources:

Connect with Eric Blake: 

Annuities are insurance products issued by insurance companies and involve costs, fees, limitations, and contractual terms that vary by product. Guarantees are backed solely by the claims-paying ability of the issuing insurance company. Before purchasing an annuity, investors should carefully consider their financial objectives, risks, charges, expenses, and contract features, and consult with their financial, tax, and legal professionals.

Podcast: Play in new window | Download | Embed

Subscribe: RSS | More