Show Clients the Benefits of a Tax-Deferred Annuity
April is an ideal time to talk about the tax advantages of fixed annuities. Your clients with CDs should be receiving 1099 forms from their banks showing their taxable gains for 2022. 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.
The Power of Tax Deferral
Clients with annuities 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 Because interest in an annuity is not subject to income tax until it’s withdrawn, 100% of the interest can continue to compound.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-deferred benefits could increase a client’s earning power. Consider a client whose federal tax bracket is 32% and has a tax-deferred annuity that earns 4.50%. To match those earnings with a taxable investment, the client would have to earn a rate of 6.62% 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 Annuity | Investment 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.
Client-Friendly Flyer
Download this flyer to help show clients the benefits of tax deferral.
Sales Concept Flyer
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