Tax-Deferred Accumulation/ Simple Explanation
Another way you can illustrate the power of tax deferral is to show the senior this comparison. We refer to it as the simple explanation because it is simple. Once again we are comparing an annuity to a currently taxable alternative. Notice the simplicity of this idea.

We have compared where their money is now to where they could have money. Interest rates are 4% for each. They earn $4,000 in interest with each. Where does the interest go? Under the taxable plan, $2,880 remains with the consumer. The balance, $1,120 goes to government in taxes (28% tax bracket). On the annuity side, the entire $4,000 can stay with them. How can their money grow? In ten short years, they can have $132,834 if they stay where they are and $148,024 if they simply reposition their money to an annuity. Do your clients want a simple and secure way to accumulate more money? If so, the annuity can be the answer for some of their money.