For example, if you’re paying 25% in combined federal and state income taxes, you’d be earning only 2.25% net. With a deferred annuity ... tax penalties. Annuities are meant for long-term savings.

Or you can use a portion of the tax savings to provide beneficiary protection on your annuity payments. Tax benefits from adding lifetime protection to your plan Let’s go back to our sample ...

If the annuity also offers a death benefit, any value remaining in the account at the owner’s death can be passed income-tax free to the next generation, too. A credit shelter trust, also known ...