Current tax law allows for the deferral of all taxes on an annuity's earnings until they are withdrawn. Tax deferral helps annuities grow at a faster rate than taxable interest-bearing accounts like money market funds and certificates of deposit because the funds grow three ways:
Compared to other investment alternatives, annuities offer distinct advantages to individuals with longer-term wealth accumulation or retirement planning needs – in addition to tax-deferred growth. With people living longer than ever before, and the future of Social Security program uncertain, the need to guarantee a retirement income that cannot be outlived continues to gain importance. An annuity is the only financial vehicle that can make that guarantee!
Finally, with the turmoil surrounding other investment alternatives, annuities issued by a high-quality insurance companies offer a safe, flexible haven of competitive returns and guarantees to today's investor. Unlike CDs or money market accounts, annuities are not FDIC-insured and annuity guarantees are based on the claims-paying ability of the issuer.
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