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| What's the advantage of tax-deferring my money through an annuity? |
| To illustrate the increased earnings
capacity of tax-deferred interest, compare it to fully
taxable earnings. $26,000 at 6.0% will earn $1,560 of
interest in a year. A 28% tax bracket means that
approximately $436.80 of those earnings will be lost in taxes,
leaving only $1,123.20 to compound the next year. If these
same earnings were tax deferred, the full $1,560 would be
available to earn even more interest. The longer you can
postpone taxes, the greater the gain. |
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