Annuities can look tax-friendly because your money grows without an annual tax bill, but the real surprise often comes when you start taking money out. Depending on how the annuity was funded, withdrawals can trigger ordinary income taxes, early-withdrawal penalties and surrender charges. Combined, these costs can significantly reduce what you keep. It’s important to understand how annuities are taxed before investing to avoid an unexpected tax bill later.
Before moving forward with an annuity, consider talking to a financial advisor. They can create a financial plan to help you achieve your long-term goals.
Qualified vs. Non-Qualified…
Read the full article at SMARTASSET.COM
