Per Section 72 of the Internal Revenue Code, if you are not currently spending it anyway, the deferred earnings grow without current taxation. This may reduce or eliminate taxes on your Social Security income when you receive it. (As different from 'tax-free bonds' & other investments whose 1099s trigger possible taxation on Social Security income!)
When in a tax-deferred status (no income is coming out), your annuity earnings are protected from the ravages of inflation. (Which means every dollar you earn grows that much more in value!)
In most states, creditors and lawyers cannot garnish, levy, attach or otherwise sue for money inside an annuity. (Therefore, leaving you more money in the event of a crisis caused by Alzheimer's, or a car wreck that didn't seem like it was your fault!)
There is no dollar limit on contributions and no set time when you have to start taking money out of a non-qualified annuity. (As different from Qualified plans that restrict amounts contributed & require minimum distributions at age 70 1/2!)
After the first year, most deferred annuities have liquidity, allowing you to take some money out, without insurance company penalties, when you need it for emergencies or whatever. (Does your bank CD allow this?)
Have your stock market investments been doing poorly over the past few years? Equity Index Annuities (EIAs) are fixed annuities that offer participation in market gains with none of the downside risk. (You can keep - not lose - more of your stock market money this way!)
Do you need extra money to offset the costs to transfer from your currently-unattractive investment to an annuity? Bonus deferred annuities offer up to 10% immediate, day-one bonus. (This means you have more money going to work for you right away in your new annuity!)
Deferred, fixed annuities usually earn higher interest rates (and of course, tax-deferral) than CDs, money markets or savings accounts. And they usually have no management fees. (Which means you build up more money inside your annuity than inside bank instruments!)
Deferred fixed Annuities can be used to fund new or ongoing, Qualified retirement plans such as Roth IRAs, traditional IRAs, SEP IRAs, Keoghs, 403bs, etc. (Your qualified retirement plan then has all the best benefits such as income you cannot outlive!)
Qualified IRA & 401k rollovers and 403b transfers can be made into an IRA or 403b funded by a fixed annuity. (Your retirement plan becomes an annuity retirement plan with all of the great benefits of annuities!)
Should an angry family member contest the division of your assets at your death, a deferred annuity avoids the time, hassles, costs and publicity of probate. To do this, you must name a human beneficiary (not your estate). (This is the way to avoid probate of that money without hiring an attorney!)
Some deferred annuities allow a death benefit rider to be added. This can pay income taxes which may be due at death if no spouse is named beneficiary. (Then, this non-spousal beneficiary will not have to dip into his/her pockets for the taxes!)
Fixed Annuities in Action:
When you are ready to get income, fixed annuities can guarantee income for as long as you live, no matter how long that is. That way, you won't run out of income and have to go back to work at a fast food place or at the supermarket. (No other place you put your money can guarantee a fixed income you cannot outlive!)
Some annuities have a special benefit that allows more income in the event of a disability when receiving income. (This can help pay for expenses like prescriptions or yard work not covered by Medicare!)
Annuity payments can pay Long Term Care insurance premiums. This prevents having to sell most of your assets just for you to be eligible for Medicaid's nursing home services. (Medicaid was designed for the poor and does not offer choices when you need long term care; an LTCi policy gives you the freedom to choose!)
Did I mention safety? All annuities are backed dollar-for-dollar by the insurance company issuing them, and in most states also insured up to $100,000 by a state guarantee fund. (This may help you sleep better at night!)
Deferred Fixed Annuities:
