Power of tax-deferred growth


Annuities come with a number of benefits, such as protection from loss, guaranteed retirement income and legacy solutions for your loved ones. But one benefit that can play a fundamental role in the growth of your retirement savings is tax deferral. 

During the accumulation period, the interest credited is untouched by current federal income tax, meaning your account value grows at a faster rate. The table below shows the yield that would never be required from a taxable investment to equal that of a tax-deferred investment over a 10-year period.

Example assumes a non-qualified annuity over a 10-year period, and that the investment is made on the first day of a 10-year timeframe with no withdrawals. Example also assumes taxes on earnings paid annually on the taxable investment, taxes paid at the end of the 10-year period on the tax-deferred investment, taxes on the taxable investment are the same as taxes on the non-qualified annuity, and that tax rates are constant. 

Talk to your financial professional about the benefits of tax deferral and how an annuity could fit into your overall portfolio.

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