The Tax-Deferred Benefit of Investing

Did you know that a dollar doubled every day for 20 days in a row, will turn into over one million dollars? 

But also did you know that a dollar doubled every day for 20 days and you pay the taxes say 30 percent every time it doubles. You’ll have a little over $40,000 and that’s a fact. You can check it out too. 

This is Ron Adams of One Family Financial. I’d like to share with you why tax-deferred money is so important to you in your retirement plans. 

A lot of people start out and say with one hundred thousand dollars, this happened back in the year 2000, of course, they lost half their money. But if you’d had your money in the index annuity your principal and any previous gains wouldn’t have gone down. You would then next year if the market came up and did 7 percent it would double in that time, but it would double without paying any taxes on it.

So if you doubled it let’s say 10 years in a row you have two hundred thousand dollars. That’s tax-deferred. It grew at that rate because you didn’t pay the taxes every year. 

If you had it in let’s say in an account like a CD and you had to pay taxes on it every year, the one hundred thousand would not get that kind of gain and you’d have maybe a hundred and forty thousand instead of two hundred thousand. 

So this is a very important thing to remember. Tax-deferred and how it can grow. 

A client came in and he had money in a CD he was getting 2%. It was non-qualified or not an IRA. So he had over a five-year period of time he had to pay taxes every year and he didn’t understand why that was so detrimental to his gains. 

We showed him an annuity that would guarantee about 4% a year and no taxes paid over a five-year plan. If he paid the taxes every year after five years in the CD he had one hundred seven thousand dollars and 2% after taxes.

If he had it in the annuity he would have $121,500. And then if you want to take it all out and pay taxes he could do that or he could just take part of it out at a time. 

Anyway, the gain was from $107,000 up to $121,500. I think you can see a lot of difference. Which one would you rather have? 

If any of this resonates with you and you would like to know more about it and how to have a plan that will protect you. 

Click on the link below and we’ll share the information with you. It’s absolutely free.

So give us a call. We can help you more with protecting, growing, and managing any savings you’ve accumulated. We can also help you create a wealth plan, and there’s no charge or obligation.

It’s amazing how reducing things to writing and seeing it written down can be an eye-opener. And that’s what we provide for you. We provide it free of charge. So give us a call at 423-710-2009. We’ll be glad to help you.