Lower your high tax bracket

How Indexed Annuities Can Help Lower a Wealthy Individual’s Tax Bracket
Tax-Deferred Growth

Indexed annuities allow earnings to grow tax-deferred, meaning you don’t pay taxes on interest or gains until you make withdrawals. This lets your investments compound faster than in taxable accounts, as money that would have gone to taxes remains invested.

Controlling Taxable Income Timing

By deferring withdrawals until retirement, when income is typically lower, high earners can strategically take distributions when they may be in a lower tax bracket, thus reducing their overall tax liability. This flexibility is especially valuable for wealthy individuals who want to manage their taxable income year by year.

Avoiding Higher Brackets During Peak Earning Years

Since annuity earnings aren’t reported as income until withdrawn, using indexed annuities can help keep current taxable income lower, potentially preventing a move into a higher tax bracket during high-earning years.

Supplement to Other Tax-Advantaged Accounts

Unlike 401(k)s and IRAs, indexed annuities have no contribution limits, making them attractive for high-income earners who have maxed out other retirement accounts and still want to defer taxes on additional savings.

Key Points
Indexed annuities can help wealthy individuals control when they recognize income, potentially lowering their taxable income during high-earning years and smoothing income in retirement.

Withdrawals are taxed as ordinary income, so the main advantage is the ability to choose when to take income and possibly do so in a lower bracket.

This strategy works best when annuities are held for the long term and withdrawals are planned to coincide with lower-income years.

Summary:
Indexed annuities offer tax deferral and income timing flexibility, which can help wealthy individuals manage their tax brackets by postponing taxable events until retirement, when they may be in a lower bracket.

Connie Dello Buono
index Annuities broker
investment Fiduciary
4088541883