Let’s Compare Qualified and Non-Qualified Annuities
April 20, 2022
Qualified | Non-Qualified |
---|---|
Funded with pre-tax money. | Funded with post-tax money. |
Taxes are paid after retirement when distributions are made. | No income taxes paid on principal upon withdrawal. Taxes are only due on interest earned. |
Less expensive to fund now. Tax savings occurs immediately. | More expensive to fund now. Tax savings occurs in the future. |
Traditional retirement accounts such as 401k and IRAs are qualified retirement savings vehicles. | Withdrawals are taken from accrued interest first and are taxed until all interest is paid, then principal is paid out tax free. |

Graduating from college is an exciting milestone, but it’s also the perfect time to focus on your financial future. Building on the foundation you’ve already laid the groundwork for with smart money choices will set you up for long-term success. Here are a few key financial products to consider as you take the next step.