Tax deferred annuity rates are now just about 4% a year, guaranteed for 5 or more years...  This is an exciting opportunity for those seeking to accumulate money safely, at a conservative guaranteed rate of interest.

A tax deferred annuity is like a certificate of deposit, issued by a major, financially solvent insurance carrier.  It has a huge tax benefit in that no taxes are due on gains in the value of the contract until you take money out.  For long term, safe accumulations, there are no better options.

In a taxable savings account, a 4% interest rate is really worth about 2.4% in the highest personal tax bracket.  However, savings rates are now at 1.5% or about 0.9% after tax.  In contrast, the annuity crediting 4% is really delivering an interest rate equivalent to 6% since no tax is due on the earnings.  Unlike other retirement saving vehicles, tax deferred annuities have no required distribution schedules.  You can literally maintain the status of deferred taxation for your lifetime – and beyond, if you use spousal continuation.

We do not advocate that anyone put all of their long term funds into tax deferred annuities.  Like any other investment or savings vehicle, these should represent a part of an overall diversified asset allocation strategy.

If you believe that our revenue starved government is likely to increase taxes in the coming years, these options are certainly attractive.  Funds are going to be needed to prop up social security and Medicare, as well as support our many international involvements.

Diligence is critical.  Just like any financial product, annuities should be evaluated as to the terms of the interest rate, the stability of the company issuing the contract, and the liquidity features, should you need to withdraw funds.

We are happy to provide recommended products and companies.  Contact us by email anadolna@associatesgroupinc.com