Whether you are trying to grow assets in preparation of retirement or to provide a legacy, tax deferral through an annuity can help harness this growth by allowing you to keep more of what you earn. The potential growth of an annuity doesn't have to be interrupted by taxable events such as capital gains taxes.
Use our tax deferral calculator to learn how nonqualified annuities could help reduce tax drag on investments and help achieve your financial goals.
Get a digital walkthrough on ordinary income tax rates in retirement.
Check out these five important tax strategies that can help you keep more of what you earned during the tax season.
Know the tax facts of your tax situation as it relates to the creation, preservation, and distribution of your wealth.
You've worked hard to build and grow your assets, don't let taxes drain and deplete all that you've achieved. Ordinary income taxes, federal taxes, state taxes, investment gains taxes, and taxes on trusts are all holes that can drain assets from your retirement bucket.
Stay in the know about the recent Secure 2.0 Act changes enacted on December 29, 2022. If the recent changes impact you or your clients, please reference the FAQs below.
Tax deferral through a variable annuity can provide a powerful tool in your investment process.
Compare your 1040 form to our digital example to find potential tax inefficiencies and help identify opportunities for growth.
This analysis will help you compare the accumulation values and after-tax withdrawals of investments subject to income tax each year versus deferring the tax until withdrawals occur.
Use this calculator to compare the tax advantages of purchasing an annuity versus an investment account where the interest is taxed each year.
What is an Annuity?
Annuities are long-term, tax-deferred vehicles designed for retirement and are insurance contracts. Variable annuities and registered index-linked annuities involve investment risks and may lose value. Earnings are taxable as ordinary income when distributed. Individuals may be subject to a 10% additional tax for withdrawals before age 59½ unless an exception to the tax is met.
*Tax deferral offers no additional value if an IRA or a qualified plan, such as 401(k), is used to fund an annuity and may be found at lower cost in other investment products. It also may not be available if the annuity is owned by a legal entity such as a corporation or certain types of trusts.
†Add-on benefits that provide income for the length of a designated life and/or lives may be available for additional charge. The amount of income that these benefits may provide can vary depending on age when income is taken, and how many lives are covered when the benefit is elected. The cost of these benefits may negatively impact the contract's cash value.
‡Lifetime income of the add-on lifetime benefits available with variable annuities becomes effective at issue if the designated life is age 59½ at issue, or upon the contract anniversary following designated life's 59½ birthday, provided the contract value is greater than zero and has not been annuitized.
§The principal value of the variable annuity will fluctuate based on the performance of the underlying investment options and may lose value.
Before investing, investors should carefully consider the investment objectives, risks, charges, and expenses of the variable annuity and its underlying investment options. The current contract prospectus and underlying fund prospectuses provide this and other important information. Please contact your financial professional or the Company to obtain the prospectuses. Please read the prospectuses carefully before investing or sending money.
Jackson, its distributors and their respective representatives do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used and cannot be used for the purpose of avoiding U.S. federal, state, or local tax penalties. Tax laws are complicated and subject to change. Tax results may depend on each taxpayer’s individual set of facts and circumstances. Clients should rely on their own independent advisors as to any tax, accounting, or legal statements made herein.
Guarantees are backed by the claims-paying ability of Jackson National Life Insurance Company® or Jackson National Life Insurance Company of New York® and do not apply to the principal amount or investment performance of a variable annuity’s separate account or its underlying investments. They are not backed by the broker/dealer from which this annuity contract is purchased, by the insurance agency from which this annuity contract is purchased or any affiliates of those entities, and none makes any representations or guarantees regarding the claims-paying ability of Jackson National Life Insurance Company® or Jackson National Life Insurance Company of New York®.
The latest maturity date or income date allowed under an annuity contract is age 95, which is the required age to annuitize or take a lump sum. Please see the prospectus for important information regarding the annuitization of a variable annuity contract.
Annuities are issued by Jackson National Life Insurance Company® (Home Office: Lansing, Michigan) and in New York, by Jackson National Life Insurance Company of New York® (Home Office: Purchase, New York). Annuities are distributed by Jackson National Life Distributors LLC, member FINRA. These contracts have limitations and restrictions. Jackson issues other annuities with similar features, benefits, limitations, and charges. Contact Jackson for more information.
Jackson® is the marketing name for Jackson Financial Inc., Jackson National Life Insurance Company®, and Jackson National Life Insurance Company of New York®.