Deferred Variable Annuity: What Is It and What Are the Benefits?

Shawn Plummer

CEO, The Annuity Expert

A deferred variable annuity is an investment that allows you to save money for retirement. This type of annuity offers many benefits, including tax breaks and the potential to earn higher returns than other investments. This guide will discuss deferred variable annuities and how they can help you save for retirement. We will also discuss the different features and benefits that these annuities offer.

What is a deferred variable annuity?

A deferred variable annuity is an investment product that allows you to invest in various assets, including stocks, bonds, and mutual funds. The money you invest grows tax-deferred, so you don’t have to pay taxes on the growth until you withdraw the money. Withdrawals are typically taxed as ordinary income.

Are variable annuities deferred annuities?

Yes, all variable annuities are deferred annuities. A deferred annuity is an insurance product that allows you to invest your money and grow it tax-deferred. With a deferred annuity, you don’t have to pay taxes on the growth of your investment until you withdraw the money.

What are the benefits of investing in a deferred variable annuity?

There are several benefits of investing in a deferred variable annuity, including:

  • The ability to grow your money tax-deferred
  • The ability to choose from a variety of investment options
  • The potential to receive income payments for life
  • The death benefit protection that is provided by most annuities

Helpful Tool: deferred variable annuity calculator

What are the risks of investing in a deferred variable annuity?

There are several risks associated with investing in a deferred variable annuity, including:

  • The risk that your investment will lose value
  • The risk that you will outlive your income payments
  • The risk that the insurance company will not be able to make good on its promise to pay you income payments for life

How do I know if a deferred variable annuity is right for me?

The best way to determine if a deferred variable annuity is right for you is to contact us. We can help you understand the risks and benefits of investing in a deferred variable annuity. We can help you decide if this investment is right for your unique situation.

Deferred Variable Annuity

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Frequently Asked Questions

Can you lose money in a deferred variable annuity?

Yes, you can lose money in a deferred variable annuity. This is because the value of your investment will fluctuate based on the performance of the underlying investments. Therefore, if the underlying investments lose value, so will your investment. Additionally, if you withdraw money from your annuity before age 59 1/2, you may be subject to a 10% early withdrawal penalty.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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