Annuity Tax Advantages: What are the tax advantages of an annuity?
Deposits into an annuity are not tax-deductible, however you don't have to pay taxes on the interest earned until you begin making withdrawals. Withdrawals prior to age 59 1/2 may be subject to a 10% IRS penalty tax. This tax-deferral period can have a dramatic affect on the growth of an investment. Use this calculator to compare the tax advantages of saving in fixed annuity versus an account where the interest is taxed each year such as a CD.**CD's are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250.000 per depositor. Fixed annuities are issued by insurance companies and are not insured by the U.S. Government. They are backed by the financial strength of the issuing insuring company.
The results and explanations generated by this calculator may vary due to user input and assumptions. New York Life Insurance Company does not guarantee the accuracy of the calculators, results, explanations, nor applicability to your specific situation. We recommend that you use this calculator as a guideline only and you ultimately seek the guidance of an experienced professional.
