Today there are many ways to watch your money grow. None of these is as attractive as a Farmers Annuity. This is important because the tax treatment that your interest earnings receive can have a profound effect on how fast your money grows. It also affects when you will have to pay taxes on those interest earnings. Every year that you earn interest in a pasbook savings or money market account or CD, you pay taxes on that interest.
Annuities accumulate interest-free from currrent taxes.
So, you pay no taxes on interest until you withdraw your money. This allows your fund to grow at a faster rate than the taxable alternatives. As an example, if your income puts you in a 36 percent tax bracket, you would need to receive a taxable interest rate of 8.59 percent to equal the accumulation value of an Annuity offering 5.5 percent. When you retire and begin withdrawing your money, you'll probably be in a lower tax bracket, so you'll have more money to spend. Funds deposited in Farmers Annuity plans earn a competitive interest rate, which varies by the plan you choose.