Chapter 47. For whom annuities are best
“An annuity is a very serious business.” | ||
| --Jane Austen | ||
One of the most significant benefits of an annuity is that income taxes on its earnings are deferred until you take money out of the annuity, thereby providing time for your money to grow without being immediately taxed. But is this reason enough to buy an annuity?
No. You can get tax deferrals at less cost to you in fees by paying into a tax-deferred retirement account at work, like a 401(k). In fact, your employer may even match your contribution to your 401(k), thereby giving you free money, which beats added fees any day and also provides a tremendous incentive to invest in your 401(k) at work before you ever consider buying an annuity. In addition, ...
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