CDs Compared to Annuities
Increase the Yield On Your Bank Deposits by 45%
Those in a 31% tax bracket can increase the growth on their bank deposits by 45% with tax-deferred annuities. Here is how it works:
If your bank account earns $1000 in annual interest income, shortly after year's end, you'll receive a 1099 for $1000 to report on your tax return. This means you'll owe Uncle Sam $310. That $310 equals 31% of what you earned, but it equals 45% of the amount you get to keep.
By transferring your savings to an annuity, you eliminate the 1099 and get to keep that $310 in interest to compound tax-deferred. It's like borrowing from Uncle Sam at 0%.
| Comparison of Fixed Annuities with Bank Certificates of Deposit |
| Features | Annuity | CD |
| Free from Market risk and price fluctuations? | Yes | No |
| Interest earnings free from current taxation? | Yes | No |
| Interest earnings reinvested automatically with no current income taxation? | Yes | No |
| Tax liability on Social Security income eliminated on deferred accumulation? | Yes | No |
| Penalty free withdrawals? | Yes | No |
| Deposit not reduced by commissions? | Yes | No |
| Automatically avoids the expense and delay of probate? | Yes | No |
| Gauranteed lifetime income with tax advantages? | Yes | No |
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