Both fixed and equity indexed annuities can be a deferred annuity. A deferred annuity allows you to postpone paying income taxes on any earnings until you withdraw money, typically during retirement, when you may be in a lower tax bracket. All earnings grow tax-deferred. You can put in as much money as you want. Unlike Individual Retirement Accounts (IRAs), there is no IRS restriction on the amount that can be contributed annually to deferred annuities with your after-tax money. You can, however, use a deferred annuity to fund your traditional or Roth IRA, in which case you would operate within IRA limitations. Deferred and immediate annuities can provide a life long, guaranteed income to you or your heirs. What income options are there?

Advantages of deferred annuities:

Deferred annuities can be a great way to accumulate money for retirement, if you want retirement income in addition to what you will receive from social security or your pension plan. They are particularly effective if you have many years before retirement or if you want to reduce taxes during retirement. Your money grows tax deferred, which means you pay no taxes on earnings until you begin to withdraw your money.

Withdrawing Money from a Deferred Annuity:

When you're ready to start withdrawing money from your deferred annuity, you can choose how you want to receive your money. You can take it all out in a lump sum, take it as needed, or receive it in a steady stream of periodic payments which you cannot outlive. What are my income options?