7 Reasons Why You Should Invest Your Tax Return Into An Annuity


Spring is almost here.  It’s the time of year when people are done recovering from the holidays, looking for ways to spend time outside and more importantly getting their taxes done.  What happens to that tax return money – do you spend it on a vacation?  Buy a new dishwasher?  How about investing it for your future?

That last option is where we can help.  When taking the time to decide where best to place your tax return dollars, consider an annuity.  Many people plunk that money into a CD where it’s bound to sit on a shelf earning a little interest and a lot of dust.

Here are seven reasons why you should reconsider that CD – and fund an annuity instead.

  1. Safety – in an annuity your funds are fully guaranteed and free from risk.  This protection from loss is important in terms of diversifying your portfolio.  Consider an annuity in this circumstance.
  2. Probate – annuities give you the benefit of assining a beneficiary.  This is helpful because the funds would pass directly to the beneficiary and stay out of probate in the event of the owners death.  This is a huge advantage for many people.
  3. Liquidity – unlike CD’s in which your money is on lock down for the duration of the term, annuities give you much needed flexibility.  More specifically, you can withdraw a certain percentage of your funds without penalty.  Additionally, there is no cap to the amount of money put into an annuity in any given year (unlike many other retirement and savings vehicles.)
  4. Interest – Typical annuities are earning significantly higher interest rates than their CD counterparts.  All companies vary so check with your insurance or financial advisor to see what is available to you.
  5. No Fees – annuities have no fee structure attached to them.
  6. Tax Deferral – there are certain tax advantages to an annuity.  The interest earned is tax deferred.  So you only pay taxes on the interest when the money is withdrawn.  This means more money gaining more interest.
  7. Save on other insurance products – much like a home or auto multi-policy discount, many insurance companies will give a discount for having an annuity product in place!  Again, your insurance advisor will be able to direct you to the appropriate and reputable companies that offer this.

This year, when deciding where to place your tax return dollars, consider the benefits of an annuity.  If you would like more information as to what we can offer, contact Heather Mosher | 906.315.7235 | heatherm@vastsolution.com.

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