Annuity distributions in Texas are taxed only at the federal level. Combined with tax-deferred accumulation, that's a retirement income strategy worth modeling.
The gap nobody talks about
Texas is one of the most tax-advantaged states for retirement. Pre-retirees who structure their income correctly can preserve substantially more of their savings than peers in other states.
In New York, annuity distributions face federal plus state income tax. In Texas, only federal tax applies. For a $6,000 monthly annuity payment, that difference can be $500 to $800 per month in after-tax income.
A 20% market loss in your first year of retirement can permanently reduce your sustainable withdrawal rate by 3 to 4 percentage points. A fixed indexed annuity eliminates downside market exposure entirely.
A healthy 62-year-old Texan has a 50% chance of living to age 87. A portfolio-only retirement strategy may not cover that span. A lifetime income annuity turns your assets into income you can't outlive.
Former Oracle Principal Consultant. PhD researcher. Queens-based. I work with carriers across the full market — not captive to one company — so you get the right coverage at the right price.
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