The incoming Obama administration will likely increase taxes on individuals in higher tax brackets. Gail Liberman from the Palm Beach Daily News suggests that annuities are a very good option for these investors in the current economic climate. Tax-deferred fixed annuities and variable annuities are options that will keep your money safe and sound. Variable annuities often include principal guarantees and allow you to invest in stocks and bonds. However, their annual charges may be high.
You’ll have to pay regular income tax on withdrawn annuity income. Also, early withdrawal of your funds may result in you having to pay back-end surrender charges.
Liberman advises that when choosing any type of annuity, make sure that the insurer has at least an AAA rating by Standard & Poor’s, as well as an A+ by A.M. Best. This will help you select the best annuity for your needs.