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Increase bank and market yields using Tax Deferral by 17% to 53%
How much can you save and earn by using tax-deferred accounts?

The answer varies based on your tax bracket and interest rate that you are earning. But there is little debate regarding the power of compounding interest using tax deferral.
If you have an IRA, 401k, 403b or an annuity, then you already are taking advantage of tax deferral. Instead of paying taxes on annual gains, you are deferring paying taxes until you make withdrawals from the account.

This principle is known as triple-compounding. You earn interest on:
  1. Your principle
  2. Your past interest earned
  3. The taxes which you are deferring payment 
By not paying taxes annually, you increase your yield greatly and reduce taxable income!
How Would I Know? 
To see if you could benefit from tax-deferral, review your recent 1040 tax return.

Read line 8a and line 9. 

These two lines show your taxable income which could be deferred.
Find your potential yield increase based on your tax bracket:


Your Tax Bracket

15%
25%
28%
33%
35%
Tax Due
per $1,000
$150
$250
$280
$330
$350
Yield
Increase

17%
33%
39%
49%
53%
If you earn $1,000 in annual interest income from a bank or market account, you will need to report that income at year's end on a 1099. Those in a 28% bracket will owe $280.

The $280 is equal to 39% of the $720 you keep!

Choosing a tax-deferred savings vehicle allows you to earn interest on the $280!

The Index Annuities mentioned previously are a common and excellent tax-deferred savings vehicle to grow retirement funds. If you feel an annuity might suit your needs, let Four Peaks Planning, Inc. help you learn more about how they may fit into your retirement plan.

If you have questions or would like to learn more, please call (480) 229-6220 or send a message by clicking the email address above.
Important: Please consult with Four Peaks Planning, Inc. before undertaking any actions. The information in this web site is provided with the understanding that the publisher is not engaged in rendering legal, tax or investment advice. While every attempt has been made to provide current and accurate information, neither the author nor the publisher can be held accountable for any errors or omissions. You agree not to hold any employee of Four Peaks Planning, Inc. liable for action you take from the information on www.fourpeaksplanning.com.