This is a supplemental retirement plan which provides employees with theopportunity to invest money on a before tax basis, using payroll deduction. Because your taxable income is reduced, you can invest money and defertaxes. The before tax aspect is what makes tax deferred annuities veryattractive.
Participants defer federal and state income tax on their contributions.
In addition, interest or earnings on your account accumulates tax-deferred. No taxes are paid on the account until you begin withdrawing funds. This is a supplemental retirement plan which provides employees with theopportunity to invest money on a before tax basis, using payroll deduction. Because your taxable income is reduced, you can invest money and defertaxes. The before tax aspect is what makes tax deferred annuities veryattractive.