What is the tax advantage to the ARP?
You pay no current federal income tax on your contributions or any earnings on those contributions. You will pay tax when you eventually withdraw money from the plan, but it is possible that you may be in a lower tax bracket when you receive the benefits. Tax deferral is provided by your employer’s plan and the annuity does not provide any additional tax deferral benefit. Annuities may be subject to additional fees and expenses to which other tax-qualified plan funding vehicles may not be subject. However, annuities provide features and benefits such as lifetime income payments and death benefits which may be valuable to you.
