• Income from taxable pensions and IRA payments, interest earned on CDs and savings accounts can be dramatically reduced by federal and state income taxes.
• Since the enactment of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), insurance companies have been required to withhold federal and applicable state income taxes from certain taxable distributions. Generally, however, retirees are permitted to elect not to have income taxes withheld from designated distributions.

Annuities have long been tax-favored investments for retirees seeking to secure a reliable supplemental guaranteed lifetime income. As we've seen, annuities also can offer competitive interest rates, investment flexibility, and death benefits, while some annuities can lock-in a guaranteed interest rate for a specified period.

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