Split annuities are insurance products that guarantee your principal and offer fixed interest rates up to 10 years, positioning them as safer alternatives to bank CDs and bonds. They're backed by legal-reserve insurance companies and can reduce taxable interest compared to traditional safe investments.
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At least some of your retirement income is derived from money you have in government bonds or bank CDs because you don't want to worry about losing any of your money. But your interest earnings are all taxable and so low they don't even keep pace with inflation, which means that your safe money retirement funds are actually losing value every year. So how can you keep your money safe? And earn higher interest rates without paying taxes on all of your income with a split annuity. A split annuity is a safe money alternative to bank CDs and government bonds because they are contractually guaranteed by a legal reserve insurance company. With a split annuity, you earn an interest rate that is guaranteed for up to 10 years and guaranteed to return 100% of your money at the end of the term. So you needn't worry about losing any of your money, about low interest rates that don't keep pace with inflation, or about paying taxes on all of your income.