The document discusses how interest income from certain assets like CDs, bonds, and money market accounts can increase provisional income and cause Social Security benefits to become partially or fully taxable. It provides examples of how moving such assets to a deferred annuity, where interest accrues tax-deferred, can reduce provisional income and eliminate taxes on Social Security benefits. This can significantly increase total retirement income and net returns.

1. Securing Your Clients Financial Future

7. The Real Rate of Return * *This is a hypothetical example $590 Net Loss $99,410 Amount Left -3,605 3.50% Inflation $103,015 Amount after Tax -1,485 33% Taxes +4,500 (4.50% Interest Rate) $100,000 Premium Amount

9. What is their Risk Tolerance?

10. What is your Risk Tolerance? CD

11. What is your Risk Tolerance? CD Safety

12. What is your Risk Tolerance? CD Safety 2/3/4+ %?

13. What is your Risk Tolerance? CD Safety 2/3/4+ %? STOCK

14. What is your Risk Tolerance? CD Safety 2/3/4+ %? STOCK Upside Market Potential

15. What is your Risk Tolerance? CD Safety 2/3/4+ %? STOCK Upside Market Potential 100% Loss

16. What is your Risk Tolerance? CD Safety 2/3/4+ %? STOCK Upside Market Potential 100% Loss √

17. What is your Risk Tolerance? CD Safety 2/3/4+ %? STOCK Upside Market Potential 100% Loss √

18. What is your Risk Tolerance? CD Safety 2/3/4+ %? STOCK Upside Market Potential 100% Loss √ √

19. What is your Risk Tolerance? CD Safety 2/3/4+ %? STOCK Upside Market Potential 100% Loss √ √ Annuity Deferred or Immediate

20. The Taxing of Social Security

21. Social Security History

25. What Causes Social Security to be Taxed?

28. If you are married, Social Security is taxed when your threshold income exceeds $32,000 Income (Threshold) No Tax on Social Security $32,000 and Under Up to 50% of Social Security is taxed $44,000 to $32,000 Up to 85% of Social Security is taxed Over $44,000

30. If you are single, Social Security is taxed when your threshold income exceeds $25,000 Income (Threshold) No tax on Social Security $25,000 and Under Up to 50% of Social Security is taxed $34,000 to $25,000 Up to 85% of Social Security is taxed Over $34,000

31. What is Provisional Income 1099 Income from Savings & Investments Provisional Income Contributes to Taxing Social Security

32. What is Provisional Income? Income from these accounts may be the reason you pay more taxes including the tax on your Social Security ½ Social Security Corporate Bonds Tax Free Bonds Dividends Capital Gains Mortgage Certificates US Treasury Money Market Certificate Of Deposits IRA Distributions Threshold Income

38. Sam Q. Prospect * Estimated Income Tax *$6,828 Total Federal Income Taxes $47,400 Total Income Received $4,400 Money Market $12,400 CD’s, Mortgage Certificates $11,400 Social Security $19,200 Pension

39. Sam’s Social Security Threshold … Triggered a tax on Sam’s Social Security!! <$16,800> Over Threshold $25,000 Threshold limit $41,700 Threshold Income $4,400 Money Market $12,400 CD’s, Mortgage Certificates $5,700 ½ Social Security $19,200 Pension

40. Sam’s Tax on Social Security *Estimated based on tax table $2,665* Tax on Social Security $9,690 Social Security (subject to tax) $11,400 Social Security

41. An Annuity would have stopped the tax on Sam’s Social Security Income *Assumes the interest paid by the Annuity is the same as paid by the Certificates of Deposit and Money Market Accounts. *With Annuity *Without Annuity $6,828 $1,598 Federal tax due $2,665 $0 Tax on Social Security $9,690 $0 Social Security taxed Over Below Over or Below Threshold $25,000 $25,000 Threshold limit (single) $41,700 $24,900 Threshold income $0 <$16,800> *Annuity (Deferred interest) $41,700 $41,700 Total Threshold Income

42. An Annuity is the only interest producing asset that will not create a tax on Social Security Yes No √ Gains-Mutual Fund √ Dividends – Mutual Fund √ Bonds including Tax Free √ Money Market Account √ Certificates of Deposits √ Annuity – Deferred

44. Summary of Tax Savings $1,598 $3,480 $6,828 0% 50% 100% $2,665 $623 0 Reduced tax amounts based on a percentage of taxable income ($16,800) illustrated as deferred income $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 Total Federal Tax Tax on Social Security

46. Gary and Lisa $15,000 Social Security $20,000 1099 Income $24,450 Pension/ IRA Distribution $59,450 Total Income

47. Gary and Lisa Tax on Social Security *Estimated based on tax table @ 15% $1,913* Tax on Social Security $12,750 Social Security (85% subject to tax) $15,000 Social Security

48. Gary and Lisa Tax on Remaining Income *Estimated based on tax table @ 15% $3,073* Tax on Remaining Income $20,000 1099 Income $24,450 Pension/IRA Income

49. Gary and Lisa Potential Tax Liability *Estimated based on tax table @ 15% $1,913* Tax on Social Security $12,750 85% subject to tax $15,000 Social Security $3,073* Tax on Remaining Income $20,000 1099 Income $24,450 Pension/IRA Income $4,986 Total Tax Potential

50. There May be a Better Way *With Annuity *Without Annuity *Assumes earnings from an annuity are not withdrawn and left to accumulate. Assumes standard deductions $3,073* $555.00* Federal tax due $1,913* $0 Tax on Social Security $12,750 $0 Social Security taxed (assuming qualified deductions) Over Below Over or Below Threshold $44,000 $44,000 Threshold limit (married) $59,450 $39,450 Threshold income $0 <$20,000> *Annuity (Deferred interest) $59,450 $59,450 Total Threshold Income $4,986 $555.00* Total Tax Potential

51. There May be a Better Way By repositioning Gary and Lisa’s 1099 assets (that created taxable income) into a Deferred Annuity, the tax of $1,913 on their Social Security was eliminated! Potential total tax savings …$4,431 *Without Annuity *With Annuity 1099 Asset Created Income $1,913 *Assumes earnings from an annuity are not withdrawn and left to accumulate. Assumes standard deductions $3,073* $555.00* Federal tax due $0 Tax on Social Security $12,750 $0 Social Security taxed Over Below Over or Below Threshold $44,000 $44,000 Threshold limit (married) $59,450 $39,450 Threshold income $0 <$20,000> *Annuity (Deferred interest) $59,450 $59,450 Total Threshold Income $4,986 $555.00 Total Tax Potential

55. To reduce the income taxes you pay on your Social Security while increasing the return you get “on” your money let’s compare your current rate of return?