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What is a tax-sheltered annuity?

April 26, 2017Annuity tax-sheltered

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What is a tax-sheltered annuity?

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A tax-sheltered annuity is a fund that allows you to accumulate tax-deferred cash for your retirement. Your TSA usually reduces your current taxable income. You may pay even less after you’ve retired because you may be in a lower tax bracket.

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Annuity allows premium payments to grow tax deferred until any distributions are taken. You can either have your employer deduct premiums from a paycheck and apply them to an annuity, or you can make premium payments on your own.