Annuities
Annuities are an excellent vehicle for accumulating assets. Interest
earned within an annuity is 100% tax deferred – no taxes are
paid on earnings until the money is withdrawn. This can make a dramatic
difference over time in total accumulations. Some annuities can even
provide a stream of guaranteed lifetime income – income that
can never be outlived – to provide ongoing retirement income.
An array of annuities is available, some with guaranteed rates for
a specified period, others with rates that adjust to reflect current
market conditions. One type of annuity, called an Equity Indexed Annuity
(EIA), ties its interest earnings to a stock market index, such as
the S&P 500. This allows the owner to participate in stock market
growth – yet these products provide a guaranteed return of principal – the
owner can never lose premiums paid into the EIA.
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