What Are Tax Deferred Annuity And Fixed Annuity

By Author: Mike Anderson
Total Articles: 32
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We all know that money and finance have a very important place in our lives and we can enjoy life only when we have enough money. Today, you may be in a good position but who knows you may have to face severe financial crisis in future. Therefore, it is necessary to have a steady source of income during times of financial crisis and this is possible only when you invest in safe financial products. Today, one of the safest financial products in the market is annuity; there are many types of annuities and among them the most popular is Tax Deferred Annuity.

A Tax Deferred Annuity delays the tax payments on investments until the money is withdrawn. In Tax Deferred Annuity you are required to invest a certain amount of money over a specified period of time. The time period and the amount to be invested are determined while buying the annuity. You can withdraw the money after the lock in period is over. However, in Tax Deferred Annuity you cannot withdraw the entire amount at once; you can only withdraw a certain percentage of the amount at one time. The main advantage of Tax Deferred Annuity is that the ...
... money you are investing is not subjected to any tax deductions. Tax deductions are made at the time of withdrawal.

Fixed Annuity is another type of annuity in which you can invest. Fixed Annuity allows you to receive a fixed rate of return on the money invested by you. If you want security for the investment made by you then it is better to buy Fixed Annuity because it provides guaranteed and regular payments at normal intervals. It is also known as the safest financial product. You can easily calculate the amount of money you can receive after a year; here you can get what you expect over a certain period of time.

When you buy fixed annuity you are not only the one who is benefited, your loved ones can also enjoy the advantages if you invest in this type of annuity. Moreover, Fixed Annuity allows you to invest in as many annuities you want. However, if you still have any problems it is always advisable to seek help from a financial advisor because they will be able to clear all your doubts.

Thus, you can either invest in Tax Deferred Annuity or Fixed Annuity whichever you feel is suitable for you.