Losing Money With Taxable Investments?

March 2, 2020
Are Your Clients Losing Money With Taxable Investments?

What Do Taxable Investments Really Earn?

If you have clients with money in taxable investments, they may be losing out with the taxes they pay year after year.

When allocating investment funds, think about the tax implications. For example, consider someone whose federal tax rate is 24% and has a taxable investment earning 2.50%. The after-tax earnings on that investment would be just 1.90%.

Use this chart to determine what taxable investments are really earning when you include taxes paid.

For example purposes only. If you have questions regarding your specific situation, please consult your tax advisor.

Benefits of Tax-Deferred Annuities

An annuity can help clients avoid losing money to taxes, because one major benefit of an annuity is tax deferral. Clients don't pay taxes on their earnings until they withdraw funds. Tax-deferred annuities make their money work harder with triple-compounding. This means they earn:

  • Interest on principal
  • Interest on interest
  • Interest on tax savings

Ask about tax-deferred compounded growth, a minimum guaranteed return and flexible access to money along the way with an annuity from The Standard.

 

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The Power of Tax Deferral

 

Annuities are not (a) insured by the FDIC or any federal government agency, (b) deposits of or guaranteed by any bank or credit union and (c) a provision or condition of any bank or credit union activity. Some annuities are subject to investment risk and may lose value. A surrender charge may apply during the surrender period, and a 10% penalty may apply to withdrawals prior to age 59½.

 

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