What is a Tax Shelter Annuity?

Are you familiar with the term “annuity”? An annuity is a distribution of money you earn on an investment put forward on a fixed timeframe usually annually. Annuities are typically used in the world of retirement funds. A tax shelter annuity is a new program offered in accordance with section 403(b) of the Internal Revenue Code is a popular option. You can deposit pre-tax portions of your salary into the annuity towards retirement or insurance. So how is it different from a 401k plan? To begin with, your employer is not an active party in this annuity, and therefore you are the only one pumping money into the annuity. Also, limitations are not imposed on the annuity by your employer.