How Tax-Deferred Annuities Work
Think of a tax-deferred annuity like a retirement savings plan. You put in money now, and, when you retire, you can take withdrawals to supplement your retirement or you can receive that money as regular monthly payments, guaranteed for life. And, because your annuity is tax-deferred, your earnings are reinvested and sheltered from current taxes.
There are two types of tax-deferred annuities:
- Variable
- Offering the opportunity for market growth through fund investing
- Fixed
- Providing capital preservation plus a guaranteed rate of return for a specific time period.
Tax-Deferred Variable Annuities
Benefit from Market Gains
A tax-deferred variable annuity, which invests in a wide range of investment options, including equity funds, can provide additional investing opportunities for your retirement savings. Each variable annuity offers a choice of professionally managed fund options. Your returns are dependent on the performance of the underlying funds.
An Important Part of Your Retirement Plan
A variable annuity is a long-term investment. The longer you allow your savings to accumulate, the more likely you are to gain from your annuity.
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