How Does Retirement Annuities Work? 
There are two annuity retirement plans : qualified and non-qualified . Annuities are designed and should be purchased ultimately as an income strategy for your golden years . Qualified annuity payments are completely taxable at ordinary income tax rates . Non-qualified annuities are taxed as ordinary income on the policys gain , but not the basis . There are two distribution formats : withdrawals and annuitization . Lifetime annuitization credits the prevailing interest rate and adds the appropriate mortality credits for lifetime income you cant outlive . 