The power of tax deferral
By Steve Savant
Ash Brokerage Corporation
One of the most important attributes of the annuities and life insurance is tax deferral.
Both life insurance and annuities give us substantial tax relief. And don’t discard modified endowment contracts as a planning tool. They give us more tax benefits than annuities and less than non-MEC life insurance. And since the money gets in quicker we may not have to put in as much premium.
Redeploy CDs and money market funds into our insurance products and watch the annual tax bill on earnings go down and the returns go up safely. Reducing gross income in this manner reduces adjusted gross income on Form 1040 (the last line on page one). This is important because it may cause substantial reduction in taxes.