What Does It Mean To Have Money In A Tax Deferred Annuity? 
Putting money in a tax deferred annuity in very simple terms means the money paid into the annuity is growing without being taxed while in the annuity . The taxes are `` deferred '' until you start withdrawing the money to use usually for retirement . The hope is when you retire you will be in a lower tax bracket than when you were earning income . It can also be described as triple compounding meaning the dollar you put in earns interest , the dollar of interest earns interest and the dollar you owe Uncle Sam earns interest . 