Advantages of Tax Deferred Annuities

1. Tax Deferred Growth. The interest earned is not taxed until it is touched. Your funds grow tax deferred.

2. Safety. Annuities are among the most guaranteed and safe investments available.

3. Avoid Probate. Annuities transfer to a beneficiary without the need for probate.

4. Income. At any time, annuities can change from a savings or accumulation vehicle to an income vehicle. Annuities can provide an income that cannot be outlived.

5. Estate Planning. Annuities are used in estate planning to help protect assets in the event of a long-term care
situation.

6. Interest Income. Interest is available for income any time after the first 30 days of the deposit. The interest can be withdrawn monthly, annually, or quarterly.

7. Death Benefit. Your beneficiary always receives the full account value from the annuity immediately.

8. Fees. No contract fee or sales commissions.

9. Comparison. Interest rate on annuities is usually higher than bank CD’s or other fully guaranteed products.

10. Access. Unlike bank CD’s, you have access to your funds during the interest earning time period.


Disadvantages of Tax Deferred Annuities

1. Penalty for early withdrawal. During the guaranteed
period, if you withdraw more that the contract allows, a penalty is imposed. This penalty can be voided by using the contract as an income (annuitization) or death.

2. Early Access. Any access to funds is a tax deferred
annuity before age 59 1/2 can be subject to a tax penalty of 10%.