We’ve Moved! 6121 Excelsior Blvd. St. Louis Park, MN 55416

Tax Facts About Annuities

Often touted as a tax-advantaged retirement income resource, the annuity is a complex insurance product. While it offers distinct tax benefits, it’s important to understand how it works from a tax perspective. The following are six important facts you should know:

  1. Most contributions are not tax-free; the money you initially contribute is not deductible from your tax return.
  2. The exception to this is if you hold an annuity within a traditional tax-deferred account, such as an IRA or 401(k) plan. This is known as a qualified annuity.
  3. Whether you purchase an annuity alone or within a qualified retirement plan, your earnings will grow tax-deferred until distributed.
  4. Annuities are meant for retirement or other long-term needs so they come with a surrender charge period during which you may not be able to withdraw funds without incurring a surrender charge. In addition, withdrawals taken prior to age 59 ½ may be subject to an additional 10 percent federal tax.
  5. The IRS does not impose a limit on contributions to an annuity like it does for IRAs and 401(k)s.
  6. You generally have to start taking withdrawals from your IRAs or other retirement plan accounts, including qualified annuities, when you reach age 70 ½.


The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice. Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.

Share This Article

Get the latest retirement news today!

Subscribe Now

  • This field is for validation purposes and should be left unchanged.

Pick your topic or keywords

Similar Posts

Getting to the Truth: How Strong is Social Security Anyway?

The number one news headline grab this month isn't the Kardashians or Donald Trump. Nor is it Spieth's distressing loss at the Open Championship by…

Continue Reading
Secured Retirement Radio: Probability Investing vs. Safety First

Blog post written by Dale Decker We all have different tolerances for risk. Some people prefer to go big and climb Mount Everest. Others are perfectly…

Continue Reading
Cary Grant’s Retirement Income Checklist

“You never miss the water until the well runs dry.” His Girl Friday (1940) – Walter Burns (Cary Grant) In the 1940’s movie His Girl…

Continue Reading

Danielle Christensen


Danielle is dedicated to serving clients to achieve their retirement goals. As a Paraplanner, Danielle helps the advisors with the administrative side of preparing and documenting meetings. She is a graduate of the College of St. Benedict, with a degree in Business Administration and began working with Secured Retirement in May of 2023.

Danielle is a lifelong Minnesotan and currently resides in Farmington with her boyfriend and their senior rescue pittie/American Bulldog mix, Tukka.  In her free time, Danielle enjoys attending concerts and traveling. She is also an avid fan of the Minnesota Wild and loves to be at as many games as possible during the season!