Show Clients the Benefits of Tax Deferral

February 4, 2020
Show Clients the Benefits of Tax Deferral

The Power of Tax Deferral

One 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, which means clients:

  • Earn interest on principal.
  • Earn interest on interest.
  • Earn interest on tax savings. Because interest in an annuity is not subject to income tax until it’s withdrawn, 100% of the interest can continue to compound.

Here’s an example of how tax-deferral benefits could increase a client’s earning power. Consider a client whose federal tax bracket is 25% and has a tax-deferred annuity that earns 2.50%. To match those earnings with a taxable investment, the client would have to earn a rate of 3.33% instead!

See how a tax-deferred annuity from The Standard can help your client’s money work harder for them.

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

 

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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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