Reported 8 months ago
Nonqualified annuities are a common type of financial product issued by life insurance companies, where individuals contribute after-tax funds. The money invested in the annuity grows tax-deferred, with earnings not taxed until withdrawal or receiving payments. Unlike qualified annuities, nonqualified annuities do not have required minimum distributions and offer flexibility in contributions, making them suitable for high-income earners. Withdrawals are subject to penalties if done before age 59.5, and while the original contributions are tax-free upon withdrawal, earnings are taxed as ordinary income. Nonqualified annuities differ from qualified annuities in terms of tax treatment, contributions, withdrawals, and required minimum distributions, so individuals should carefully consider their financial goals and consult professionals before investing in them.
Source: YAHOO