Question

One of the greatest benefits of annuities that cannot be found with other vehicles is the tax-deferred nature of the earnings.

True or False?

Answer 1

true

The biggest advantages annuities offer is that they allow you to sock away a larger amount of cash and defer paying taxes. Unlike other tax-deferred retirement accounts such as 401(k)s and IRAs, there is no annual contribution limit for an annuity.

The benefit of annuities is the great amount of cash can be taken and defer paying tax, compared to the other tax deferred retirement accounts there is no limit of contribution, so many cons are there in tax deferred nature of earning.

Tax deferred annuities will favour people; however, every investor should be aware of their drawbacks too.