Why A Deferred Annuity May Be The Best Retirement Investment For You

Shawn Plummer

CEO, The Annuity Expert

When most people think about retirement investments, they think about 401ks and IRAs. These are excellent options, but they may not be the best for everyone. Another option that you should consider is a deferred annuity. Here’s why a deferred annuity may be your best retirement investment.

Confused About Annuities?

Are you new to annuities and unsure where to begin? Visit our Annuity Learning Lab for expert guidance and insights.

Why Would A Deferred Annuity Be Preferred As A Retirement Investment?

The primary reasons a deferred annuity is preferred are as follows:

  • First, you will not have to pay taxes on your annuity until you begin taking distributions. This means that your money can grow tax-deferred.
  • An annuity provides a guaranteed income stream for life. With a 401k or IRA, you are not guaranteed an income after retirement.
  • An annuity can be used to supplement your social security income.
  • An annuity can provide a death benefit for your beneficiaries.
  • Annuities offer the potential for higher returns than other retirement investments.
  • You can access your money without penalty if you need to in some cases.
  • No contribution limits
  • Reduce tax burden in retirement
  • Pay for long-term care services

Helpful Tool: deferred annuities calculator

Deferred Annuity Definition

No Contribution Limits

One of the great things about a deferred annuity is that there are no contribution limits. This means you can save as much money as you want on your annuity. This can be a massive advantage if you invest a lot of money.

Defer Taxes

One of the main reasons why a deferred annuity would be preferred as a retirement investment is because of the tax benefits that it offers. With a deferred annuity, you can defer taxes on your earnings until you start withdrawing them. This can give you a significant tax break and help you keep more of your money in the long run.

Why Would A Deferred Annuity Or Annuities Due Be Preferred As A Retirement Investment

Reduces Taxes In Retirement

Another benefit of a deferred annuity is that it can help reduce your taxes in retirement. Funding an annuity with after-taxed money can help you reduce your overall tax burden in retirement because only the interest earned is taxable as opposed to the entire account balance on a 401k or IRA.

Avoids Probate

Another reason to consider a deferred annuity is because of the death benefit that it offers. With most other retirement investments, such as 401ks and IRAs, your beneficiaries will only receive what you have contributed. With a deferred annuity, your beneficiaries can receive the entire account balance, no matter how much it has grown. This can provide them with a much-needed financial cushion in the event of your death. And In most cases, the death benefit avoids probate, saving your beneficiaries time and money.

Guaranteed Income

The following reason to consider a deferred annuity is that it can offer you a guaranteed income for life. With most other retirement investments, you are entirely responsible for managing your money and ensuring it lasts throughout your retirement. With a deferred annuity, you can choose to receive guaranteed income payments for as long as you live, no matter how long that may be. This can give you the peace that you will never outlive your retirement savings.

Deferred Annuity

Pays For Most, If Not All, Long-Term Care Services

A final reason to consider a deferred annuity is that it can help pay for long-term care services. For example, if you need to go into a nursing home or assisted living facility, your annuity can help cover the costs. This can be a substantial financial burden on your family and give you the peace of mind of knowing that your care will be taken care of.

Next Steps

In conclusion, deferred annuities can be a great investment choice for those looking for tax breaks, death benefits, and guaranteed income. If you are interested in learning more about this investment, please get in touch with us today. Our team of knowledgeable professionals would be happy to answer any questions you may have and help you get started on your path to retirement security.

Why A Deferred Annuity May Be The Best Retirement Investment For You

Request A Quote

Get help from a licensed financial professional. This service is free of charge.

Contact Us
First
Last

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. 

Scroll to Top