How Annuities Are Taxed

Briefly introduce primary aspects of how annuities are taxed.

Annuities may be taxed differently depending on their attributes.

•Social Security is taxed based on income limits.

•Pensions are taxed as ordinary income when received.

•Asset backed annuities held within a qualified plan are taxed as ordinary income at distribution. Asset backed annuities held outside a qualified plan are only taxed on growth at distribution.

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