There is a limit to the number of savings vehicles available that grow tax deferred. IRAs, 401Ks, Health Savings Accounts are what most people use to save money in a tax advantaged manner. The earnings in an annuity grow tax deferred as well. This means that instead of paying capital gains upon redemption or being taxed on the earnings yearly, the growth remains untouched until withdrawals begin. At this time the earnings are taxed as ordinary income and the principle is distributed tax free. People save money in annuities for a variety of reasons. Supplemental retirement and College savings funds are just a couple of reasons annuities are used to save money. At Cochrane Insurance & Annuity Services we can find the perfect annuity for you using our large portfolio of top rated insurance companies. We can serve you regardless of your location in California.