"What is an annuity?

To put it simply, an annuity is a contract between an individual (called the annuity owner) and an insurance company for a guaranteed interest-bearing policy with guaranteed annuity income options. (Please visit the Learning Center for more information.)

What is a tax-deferred annuity?

It is a tax-advantaged product issued by an insurance company where long term financial needs can be solved better than with most other financial alternatives.

What is the major advantage of annuities?" (e. g. https://www.naaleads.com/annuity_faq.php )

All annuity dollars are able to accumulate interest completely tax deferred. This means an individual can post-pone taxation of growth until the money is needed and therefore earn triple interest - interest on the principal, interest on the interest and interest on the dollars that normally would be paid in taxes. (Please visit the Learning Center for more information.)

"Who wants to own an annuity?

People who want a safe way to reduce taxes; people who want to decide when to pay taxes.

Is an annuity safe?

Yes - with annuities, your principal is 100% safe and you are guaranteed to earn at least a minimum interest rate. This guaranteed safety is possible because each insurance company issuing annuities is supervised and regulated by each state’s insurance department; plus, they are backed by a Legal Reserve System and a Guaranty Fund. (Please visit the Learning Center for more information.)" (e. g. https://www.naaleads.com/annuity_faq.php )

Is the annuity for ?

No. Dollars earmarked for short-term needs should not go into the annuity. , at least six months of income should be saved for emergencies outside of the annuity. Also, those who need current income should consider an immediate annuity, not a deferred annuity. On the other hand, those looking for one of the more efficient ways “to accumulate” dollars on a tax-advantaged basis will find the deferred annuity enormously beneficial.

"Who should consider purchasing an annuity?

Anyone who wants a safe way to accumulate funds through triple compounding without paying current taxes in earnings should definitely consider purchasing an annuity

Since a withdrawal of principal is tax-free and IRS penalty free, can principal be withdrawn first and then interest?