In this study, we show how to measure the size of tax benefit arising from the purchase of fixed annuities - both deferred and immediate. We demonstrate how the size of tax benefit available from tax deferral depends on five factors: (1) the length of time the annuity is held during the accumulation and decumulation phases of ownership; (2) whether a deferred annuity is annuitized (either by conversion or by a 1035 exchange) at the end of the surrender period, or taken as a lump sum distribution; (3) the level of yields; (4) tax rates on ordinary income; and (5) the differential between tax rates on ordinary income and tax-preferred treatment of dividends and capital gains. We provide a set of formulae that can be used to estimate the size of tax benefit arising from tax deferral under varied scenarios.