With the U.S. debt at $17 trillion, tax rates will likely rise. A Roth annuity lets clients pay taxes now on contributions while all future earnings grow tax-free, locking in today's lower rates before they climb.
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Here's the problem. We now have a tax-saving opportunity we may never have again. According to the Government Accounting Office, the United States government is more than $17 trillion in debt, but our current tax rates produce barely enough tax revenue to cover the interest payments on this $17 trillion debt. So can there be any doubt that tax rates will go much higher? And if we currently have money, in a tax-deferred sense, to pay the lower tax now, only on the money we initially deposit, and avoid the higher tax later on all of the compound interest we earn on the growth of our money? Of course it does. But how? With Internal Revenue Code Section 408(a). Also known as a Roth Retirement Savings Account. A Roth retirement account does not defer our taxes.