Individual Annuities
The vast majority of American workers who retire today receive Social Security retirement benefits. Many workers also receive benefits from their employers’ retirement plans. Individual annuities can also be purchased to provide additional retirement income. An annuity is a tax-deferred product. Although the premiums are paid with after-tax dollars, the investment income accumulates income-tax free and is not taxed until benefits are paid to the annuitant. The investment returns of tax-deferred compounding over long periods can be impressive.
Annuity Principle
An annuity is a periodic payment that continues for a fixed period or for the duration of a designated life or lives. The person who receives the periodic payments ...
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