Monthly Archives: June 2011

Benefits for Annuity Owners

Sewickley & Pittsburgh AnnuitiesThere is no other investment vehicle that provides as many benefits in one wrapper as does the annuity, which is something that annuity owners must know and their critics don’t.



Tax Deferral

In one study done on annuity owners, it was found that 85% invest in annuities for their tax benefits.   Under the tax code, annuities are considered to be life insurance contracts and are afforded many of the same tax advantages.  Cash values are not currently taxed which allows accumulated earnings to grow faster.

Over a long period of time, this produces a significant advantage over taxable equivalents such as CDs.  For an individual who pays state and federal taxes at a combined rate of 50%, a CD would have to yield 6% in order to achieve the same after-tax return of an annuity that yields 3%.


Another primary reason annuities are purchased is the safety of principal the offer.  Annuities provide for a guarantee of principal that is backed by the annuity provider, which is a life insurance company.  […]

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