Fixed Annuities Retirement Dreams: Something to Think About… When you think retirement, do you think fixed investment? If so, then your retirement savings might be gradually eaten away by taxes and inflation. Though they offer safety and liquidity, some investments do not offer tax deferral or penalty free access to money. The Power of Tax Deferral If you are in a 28% tax bracket and have a taxable investment earning of 5%, then 1.4% of your return goes to pay federal income taxes – leaving you only 3.6%. After subtracting for inflation, you are losing purchasing power. With annuities, you do not pay taxes until you take the money out. This way you earn interest on both your principal and the money you would have normally paid out in taxes. The power of tax deferral means your money can grow much faster. And, with no up-front sales charges, 100% of your money starts to earn interest immediately. Access to Money Annuities also offer you limited access to your money when needed. With most annuities you can access a portion of your money each year without paying surrender charges. (Withdrawals made prior to age 59½ may incur a 10% penalty.) Tax deferral…access to money…competitive earnings – they are all part of a tax deferred annuity. If you have any questions regarding any of the information mentioned above, contact The Hancock Group at (814) 944-8849.