Investment Center
Products: Basics of Investing: Take Shelter In an Annuity
One of the main features of an annuity is the tax shelter it provides. Many people think tax shelters are just for the rich, but annuities can benefit middle-income people as well. What is the main benefit? Earnings on contributions are income tax-deferred until pay-out. However, the contributions themselves — your non-qualified annuity premiums — are not deductible at the time of contribution. In other words, you don't have to pay income taxes on any earnings until you start receiving your annuity payments or make a withdrawal. At pay-out time, the reverse is true. Your annuity earnings will be taxed as income, but the premiums you paid will not. So annuities can be a good way to defer taxes on earnings.
Qualified or Non-Qualified, That is the Question
Some annuities allow you to defer taxes on both contributions and earnings until pay-out. They're called qualified annuities, as opposed to the more common non-qualified annuity. A qualified annuity is funded with pre-tax dollars, as is an IRA, 401(k) or similar retirement plan. You'll pay income taxes on both the contributions and earnings when you begin taking pay-outs, which you must begin taking by April 1 of the year following age 70½ (IRAs and other qualified plans have this same rule). These are called Required Minimum Distribution rules.
Also, qualified annuities have annual contribution limits. Qualifying for a qualified annuity is determined by your income and whether you and/or your spouse participate in a qualified employer-sponsored plan. If you're eligible and trying to decide whether to include an annuity in a tax-qualified plan, don't factor in the tax-deferred featured because it's really not an additional benefit in such a plan. You need to consider the other benefits of an annuity — such as lifetime payments and death benefit protection — plus the fees associated with them before buying. Talk to one of our investment professionals or your tax advisor for more specific information.
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The Fair Housing Act prohibits discrimination in housing because of:
- Race or color
- National origin
- Religion
- Sex
- Familial status (including children under the age of 18 living with parents or legal custodians; pregnant women and people securing custody of children under 18)
- Handicap (Disability)
Enforce the Fair Housing Act and other civil rights laws to ensure the right of equal housing opportunity and free and fair housing choice without discrimination based on race, color, religion, sex, national origin, disability or family composition.
Major Goals
1. Reduce discrimination in housing by doubling the Title VIII case load by the end of 2000 through aggressive enforcement of civil rights and fair housing laws;
2. Promote geographic mobility for low-income and minority households;
3. Integrate fair housing plans into HUD's Consolidated Plans;
4. Further fair housing in other relevant programs of the Federal government; and
5. Promote substantial equivalency among state, local and community organizations involved in providing housing.