|
|
|
The following chart illustrates the benefits of TAX-DEFERRAL. It assumes that both the annuity and CD are earning the same rate of interest (3% in this example). In many cases, annuities pay higher rates of return than certificates of deposit, so the total advantage of an annuity may turn out to be greater than illustrated on this chart. Again, the purpose of this chart is solely to illustrate and isolate the benefits of tax-deferral.
|
$100,000 invested for 30 years at 3% interest
(in a 39% tax bracket)
|
| Year |
Certificate of Deposit
3% Interest Rate
(IncomeTaxes paid annually) |
Tax-Deferred Annuity
3% Interest Rate
(IncomeTaxes deferred and
paid upon surrender
)
|
Net Advantage
of Annuity over
Certificate of Deposit
(After Income taxes)
|
|
Net value after taxes |
Net value after taxes |
|
| 10 |
$119,882 |
$120,978 |
$1,096 |
| 20 |
$143,719 |
$149,173 |
$5,454 |
| 30 |
$172,294 |
$187,063 |
$14,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
