Deposits into an annuity are not tax-deductible; however, you may not have to pay taxes on the interest earned until you begin making withdrawals. This tax-deferral period can have a dramatic effect on the growth of an investment. Use this calculator to compare the potential tax advantages of saving in an annuity versus an account where the interest is taxed each year.
This is a hypothetical example used for illustrative purposes only. It is not representative of any specific investment or combination of investments. Annuities have contract limitations, fees, and charges, including account and administrative fees, underlying investment management fees, mortality and expense fees, and charges for optional benefits. Most annuities have surrender fees that are usually highest if you take out the money in the initial years of the annuity contact. Withdrawals and income payments are taxed as ordinary income. If a withdrawals is made prior to age 59½, a 10% federal income tax penalty may apply (unless an exception applies). The guarantees of an annuity contract depend on the issuing company's claims-paying ability. Annuities are not guaranteed by the FDIC or any other government agency. Actual results will vary.