Definition of Tax Deferred Annuity

Tax deferred annuity is a non-Qualified retirement account that allows an investor’s money to grow tax deferred. A Tax-deferred annuity is a contract between an insurance company and an investor.

Applying "Tax Deferred Annuity" to Securities Exams:

Investors may contribute after tax dollars to a tax deferred annuity that will allow the money to grow free from taxes until the money is withdrawn by the investor. An investor may purchase an annuity by making periodic payments or by depositing a lump sum.

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