Share the Benefits of Tax Deferral

March 5, 2024

It’s an ideal time of year to talk about the tax advantages of fixed annuities. Your clients with CDs should be receiving 1099 forms soon from their banks showing their taxable gains for 2023. While this possible pain point is on their minds, use our sales concept flyer to show them the benefits that a tax-deferred annuity can offer.

Increase Your Earning Power

One benefit of an annuity is tax deferral. You won’t pay taxes on your earnings until you withdraw funds. Tax-deferred annuities make your money work harder with triple-compounding, which means:

  • 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 Because interest in an annuity is not subject to income tax until it’s withdrawn, 100% of the interest can continue to compound.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 your earning power. Consider someone whose federal tax bracket is 32% and has a tax-deferred annuity that earns 5.00%. To match those earnings with a taxable investment, they would have to earn a rate of 7.35% instead! 

See how a tax-deferred annuity from The Standard can help your clients' money work harder for them.

Rates you'd need to earn from taxable investments to match the rates of tax-deferred annuities:

Tax-deferred AnnuityInvestment Taxed at 22%Investment Taxed at 24%Investment Taxed at 32%Investment Taxed at 35%
4.00%5.13%5.26%5.88%6.15%
4.50%5.77%5.92%6.62%6.92%
5.00%6.41%6.58%7.35%7.69%
5.50%7.05%7.24%8.09%8.46%

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

Sales Idea Flyer

Download this flyer to help show clients the benefits of tax deferral.

Thumbnail view of The Power of Tax Deferral flyer

The Power of Tax Deferral

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Doing business with The Standard is good for you and your clients. Our annuities offer innovative product design, desirable rates, competitive compensation, high industry ratings and excellent service.