Examples of tax-advantaged plans include defined benefit plans, 403(b), and 401(k) retirement plans or IRAs.
We offer a number of annuities and products that are funded with after-tax contributions. This means that contributions made into these types of annuities are not deductible from your gross income for income tax purposes.
When it comes to taxation on your non-qualified annuity, withdrawals come first from any earnings, which are taxed at your ordinary income rate. Once all the earnings have been distributed, the amount that represents what you paid into your contract is then tax-free.
Keep in mind that if you elect an annuity payout option, one portion of each payment comes from your original investment (which isn’t taxed) while the other portion comes from earnings and is taxed at your ordinary income tax rate.