Financial Planning - Annuities - How a tax - Sheltered annuity plan works
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Hello this is financial adviser Patrick Munro. Today we are talking about how tax sheltered
annuities work. Tax shelter means just that. Your accumulation of your money is sheltered
from income tax as long as it's in the vessel of the annuity. So as long as you don't take
the money out. You are allowed to put money in to the vessel for future accumulation and
the benefit of the fact that it's tax sheltered means that it will grow upon growth and there
is no taxes to be paid. However that being said once you hit a minimum age which is seventy
and a half under IRS guidelines your qualified tax shelter annuity becomes under the guidelines
of RMD, required minimum distribution, and that means that the vessel now has to slowly
start to spend itself down. The insurance company will send you a check on your birthday
of seventy and a half and every birthday beyond that. Which is ok, because the tax shelter
annuity was designed for income in later life. This is financial adviser Patrick Munro talking
about the benefits of tax sheltered annuities.
