You may also have money in tax-deferred annuities
that is going to be subject to income tax to someone at some point in time.
"Most fixed guaranteed tax-deferred annuities
permit withdrawals of money, but like a CD, there can be early withdrawal penalties," Mueller said.
Members can now invest in mutual funds, stocks, bonds, tax-deferred annuities
These 403(b) plans are often referred to as tax-deferred annuities
, or TDAs for short.
The Service issued an unpublished Letter Ruling (TAM)(52) involving a NIMCRUT(53) funded with tax-deferred annuities
. According to the TAM, an individual transferred closely held stock to a NIMCRUT with an 8% stated unitrust interest.
. Another broad-based layer of deferred compensation--available only to public schools and Section 501 (c) (3) organizations--may be provided through tax-deferred annuities
Eight chapters of Pension Planning are then devoted to a variety of specific pension plan vehicles: trust fund plans, annuities; profit sharing plans, thrift and savings plans, cash or deferred plans and employee stock ownership plans; individual retirement accounts; and tax-deferred annuities
. All of these chapters are very well presented and provide an exemplary source of information.
Given the higher tax rates recently enacted, the pitfalls of such arrangements abound, but many can be avoided through the use of tax-deferred annuities
. The authors discuss the growing use of annuities to not only reduce and defer taxation but also as estate planning vehicles.
* Consider saving in IRAs, tax-deferred annuities
and brokerage accounts
Unlike all other tax-deferred assets (including tax-deferred annuities
), the individual can transfer the policy to a family member, trust or other third party without triggering the recognition of gain in the policy's cash value.
The article, "Investment Tax Planning for Retirement" (JofA, Aug.03, page 63), suggests clients should avoid tax-deferred annuities
. In fact, it states, "CPAs should advise couples to invest in taxable accounts before buying nonqualified tax-deferred annuities
" and that MUNIs and other tax-exempt investments would be more advisable.
Individuals have several options for saving for retirement, ranging from tax-deferred annuities
and mutual funds to stocks, bonds, and cash-value life insurance policies.