Investment Company and Variable Contracts Products Representative (Series 6)Practice Exam

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The acronym TSA in finance refers to what?

Tactical Savings Account
Tax-Sheltered Annuity
Total Savings Annuity
Treasury Savings Account

The correct answer is: Tax-Sheltered Annuity

The acronym TSA in finance stands for Tax-Sheltered Annuity. This type of annuity is designed primarily for certain types of retirement savings, where the contributions can be made on a pre-tax basis, allowing the funds to grow tax-deferred until withdrawal. This means that individuals can potentially save on taxes in the present while also securing their financial future through a structured annuity plan. Tax-Sheltered Annuities are often linked to retirement plans, particularly for employees of non-profit organizations and certain governmental entities. Participants can benefit from not only tax deferral but often also from the investment growth that occurs within the annuity itself without immediate tax implications. This makes TSAs an attractive option for long-term retirement savings, promoting the accumulation of funds over time while offering tax advantages.