Why Are Annuities Tax Deferred? 
The Internal Revenue Code reflects the will of Congress . The underlying laws consider saving for retirement to be a worthwhile endeavor . The deferral granted to an annuity means that the taxes will be paid when the money is withdrawn . However , the effect of the deferral accelerates the growth of the annuity . There are ways to not only defer taxes but also not have to pay them when you withdraw them . 