Why Annuities are Better than CDs: Tax
Advantages
- Annuities are tax-deferred--no tax is due until you
annuitize. CD's are taxable every year.
Whether you rollover or not, your bank will send you a
form 1099 showing what you earned in order to pay your
taxes.
- Tax-deferred income (in annuities) doesn't count toward
the IRS' provisional (retirement) income levels.
Having tax-deferred income after age 65 can save money on
taxes.
- Pension income, interest income, and 50% of Social
Security benefits count toward provisional income.
Tax-deferred income (in annuities) does not.
- If your provisional income (married, joint filing
status) is:
- $0-$32,000 you
pay no Social Security tax.
- $32,000-$44,000 you
may bay up to 50% tax.
- Above $44,000
you may pay up to 85% tax.
- In other words, if you receive $24,000 a year from
Social Security and have $15,000 of CD interest income,
you're going to give up a healthy portion of that to the
IRS.
Liquidity
Tax Advantages
Returns
Safety
Probate
Create Income Stream
Creditor Protection
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