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What are the tax advantages of an immediate annuity?

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What are the tax advantages of an immediate annuity?

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A portion of each income payment from an immediate annuity is a return of the original principal and is, therefore, tax-free. Additionally, if you purchase an immediate annuity with a taxable lump sum distribution from a qualified retirement plan [i.e., 401(k)], you can spread the tax liability over a longer period of time.

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