The Power of Tax Deferral

The Power Of Tax Deferral

Normally, investment earnings such as interest, dividends and capital gains create taxable events that can slow down your investment growth. But the ASL PREMIER SERIES II Annuity receives favorable tax treatment:

  • Taxes on your ASL PREMIER SERIES II Annuity interest earnings are deferred until you actually receive them in the form of withdrawals or annuity payments.
  • This deferral of taxes keeps more money at work and can potentially enhance the wealth-building process.

Another factor to consider: When you receive your earnings at a later time (via withdrawals or annuity payments), you may be in a lower tax bracket than you were during your younger prime accumulation years.

Any withdrawals or distributions of tax-deferred accumulations are subject to ordinary income taxes. A 10% federal tax penalty may apply to withdrawals made before age 59 ½.

Comparison of Taxable vs. Tax-Deferred Investment Performance

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This illustration assumes a $50,000 lump sum investment and a 28% federal tax bracket during the life of the investment and a 6% rate of return. The 6% hypothetical interest rate is used for illustrative purposes only and is not intended to project actual future incomes.

This example is used for illustrative purposes only. The return is not indicative of any specific investment product or class of investments and is not intended to be a projection of future values. Actual results will vary.

Actual returns will vary depending on your specific tax rate (which may be more or less than the figures shown). A lower tax rate on capital gains and dividends would reduce the favorable impact from the tax-deferred account. You should consider your investment time horizon and tax brackets, both current and anticipated.

The following are additional considerations you should take into account. By liquidating current taxable holdings, you may be subject to capital gains or losses, which could impact your tax liability. Tax-deferred performance would be reduced by income taxes on gains upon withdrawal.

In addition, withdrawals from an annuity prior to age 591/2, may be subject to a l0% penalty tax, and a surrender charge will generally apply if the withdrawal is made during the early years of the policy.

For specific tax advice, please speak to your tax advisor.

Above-Market Returns Without Market Risk

For our retirement funds, most of us don’t want the risk of losing any of our hard-earned retirement funds, which as we all know can happen with the stock or bond market at the most inopportune time.

On the other hand, we really want to earn a better interest rate than CD’s and bank savings accounts pay.

Enter the American Savings Life PREMIER SERIES II Fixed Deferred Annuity!

The PREMIER SERIES Annuity guarantees an above-market interest rate for the first year with both a high “bailout” interest rate and a 2.0% guaranteed minimum interest rate.

How does the ASL PREMIER SERIES Annuity not have any “market risk?”

American Savings Life Insurance Company guarantees a fixed interest rate each year, regardless of what the stock market or bond market does. This interest rate is guaranteed to never be less than 2.00%.

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30-DAY RISK FREE SATISFACTION GUARANTEE You have up to 30 days after your purchase of the PREMIER SERIES II Fixed Deferred Annuity to cancel the policy, for any reason, with no penalties. Your initial purchase payment will be returned.

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