Not a deposit Not insured by any federal agency IMPORTANT DISCLOSURES For an audience with a basic understanding of the financial industry Not intended for use with the general public Before investing investors should carefully consider the investment objectives risks charges and ex ID: 375048
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Slide1
Not FDIC/NCUA insured • May lose value • Not bank/CU guaranteed
Not a deposit • Not insured by any federal agencySlide2
IMPORTANT DISCLOSURES
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
Before investing, investors should carefully consider the investment objectives, risks, charges, and expenses of the variable annuity and its underlying investment options. The current contract prospectus and underlying fund prospectuses, which are contained in the same document, provide this and other important information. Please contact your representative or the Company to obtain the prospectuses. Please read the prospectuses carefully before investing or sending money.
This material was prepared to support the promotion and marketing of Jackson
®
variable annuities. Jackson, its distributors and their respective representatives do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S. federal, state, or local tax penalties. Please consult your own independent advisor as to any tax, accounting, or legal statements made herein.
Annuities are long-term, tax-deferred vehicles designed for retirement. Variable annuities involve investment risks and may lose value. Earnings are taxable as ordinary income when distributed and may be subject to a 10% additional tax if withdrawn before age 59½.
Optional benefits are available for an extra charge in addition to the ongoing fees and expenses of the variable annuity.
Guarantees are backed by the claims-paying ability of the issuing insurance company.
Tax deferral offers no additional value if an annuity is used to fund a qualified plan, such as a 401(k) or IRA. It also may not be available if the annuity is owned by a “non-natural person” such as a corporation or certain types of trusts.
Although asset allocation among different asset categories generally limits risk and exposure to any one category, the risk remains that management may favor an asset category that performs poorly relative to the other asset categories. Other risks include general economic risk, geopolitical risk, commodity-price volatility, counterparty and settlement risk, currency risk, derivatives risk, emerging markets risk, foreign securities risk, high-yield bond exposure, noninvestment-grade bond exposure, index investing risk, industry concentration risk, leveraging risk, market risk, prepayment risk, liquidity risk, real estate investment risk, sector risk, short sales risk, temporary defensive positions, and large cash positions.
Jackson is the marketing name for Jackson National Life Insurance Company
®
(Home Office: Lansing, Michigan) and Jackson National Life Insurance Company of New York
®
(Home Office: Purchase, New York). Jackson National Life Distributors LLC.
OSJ: 7601 Technology Way, Denver, CO 80237 Phone: 800/565-8797Slide3
IMPORTANT DISCLOSURES
A message from the Florida Department of Financial Services
An entity that is required to be licensed or registered with the Florida Office of Insurance Regulation but is operating without the proper authorization is identified as an
unauthorized insurer
. All persons have the responsibility of conducting reasonable research to ensure they are not writing policies or placing business with an unauthorized insurer. Any person who, directly or indirectly, aid or represent an unauthorized insurer can lose their licenses or face other disciplinary sanctions. Please see section 626.901, Florida Statutes, to read the laws. Lack of careful screening can result in significant financial loss to Florida consumers due to unpaid claims and/or theft of premiums. Under Florida law, a person can be charged with a third-degree felony and also held liable for any unpaid claims and refund of premiums when representing an unauthorized insurer. It is the person's responsibility to give fair and accurate information regarding the companies they represent.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide4
Gross Public Debt: Total Pct. GDP & Avg. Tax Rate
INTRODUCTION: Historical Tax Rates
Sources: Tax Foundation, Tax Data, U.S. Federal Individual Income Tax Rates History, 1913-2011; Treasury Direct, Historical Debt Outstanding – Annual (1929-2010); U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts Table, Table 1.1.5. Gross Domestic Product (1929-2010); The White House Office of Management and Budget, Historical Tables for 2011-2016. Data includes actual historical data from 1929-2011 and projected data from 2012-2016.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide5
INTRODUCTION: TAXES PAID
Some taxpayers are already paying a larger percentage of the total federal tax bill
Adjusted Growth Income > $112,000 puts one in the top 10%
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide6
Why Taxes Will Rise in the End
Source: David Leonhardt, The New York Times, July 12, 2011.
The Importance of Tax Planning
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide7
The Importance of Tax Planning
Why Taxes Will Rise in the End
Taxes, Rising Rates Will Hit Rich in the Wallet, Experts Say
Source: Investment News, June 5, 2011.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide8
The Importance of Tax Planning
Why Taxes Will Rise in the End
Taxes, Rising Rates Will Hit Rich in the Wallet, Experts Say
InvestmentNews.com, June 2011
Top Marginal Tax Rates May Skyrocket
Source: Robert N. Gordon, Investment News, October 23, 2011.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide9
The Importance of Tax Planning
Why Taxes Will Rise in the End
New York Times, July 2011
Taxes, Rising Rates Will Hit Rich in the Wallet, Experts Say
InvestmentNews.com, June 2011
Top Marginal Tax Rates May Skyrocket
Higher Taxes are on the Horizon
Source: Jeff Benjamin, Investment News, November 6, 2011.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide10
The Importance of Tax Planning
Why Taxes Will Rise in the End
New York Times, July 2011
Taxes, Rising Rates Will Hit Rich in the Wallet, Experts Say
InvestmentNews.com, June 2011
Top Marginal Tax Rates May Skyrocket
Higher Taxes are on the Horizon
Advisors, Beware of Sharp Tax Increase in 2013, Expert Says
Source: Gil Weinreich, Advisor One, November 28, 2011.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide11
The Importance of Tax Planning
Why Taxes Will Rise in the End
New York Times, July 2011
Taxes, Rising Rates Will Hit Rich in the Wallet, Experts Say
InvestmentNews.com, June 2011
Top Marginal Tax Rates May Skyrocket
Higher Taxes are on the Horizon
Advisors, Beware of Sharp Tax Increase in 2013, Expert Says
AdvisorOne.com, November 2011
State Taxes Rise Across the U.S.
Source: Catherine Rampell, The New York Times, December 8, 2011.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide12
Why Taxes Will Rise in the End
New York Times, July 2011
Taxes, Rising Rates Will Hit Rich in the Wallet, Experts Say
InvestmentNews.com, June 2011
Top Marginal Tax Rates May Skyrocket
Higher Taxes are on the Horizon
Advisors, Beware of Sharp Tax Increase in 2013, Expert Says
AdvisorOne.com, November 2011
State Taxes Rise Across the U.S.
The Importance of Tax Planning
Taxes will be the single greatest factor that separates people from their retirement dreams.
Ed Slott
“Over and over again Courts have said that there
is nothing sinister in so arranging one’s affairs as to keep
taxes as low as possible. Everyone does so, rich or poor;
and all do right, for nobody owes any public duty
to pay more than the law demands..."
Judge
Learned Hand, 2
nd
Circuit Court of Appeals - 1934
Source: Legal Information Institute, Judge Learned Hand's comment in his dissenting opinion in Commissioner of Internal Revenue v. Newman, 159 F.2d 848, 850—851 (CA2 1947), data pulled June 21, 2012.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide13
Tax planning is an important consideration in:
Wealth Accumulation Retirement Income Distributions Estate
Planning Wealth TransferMistakes can be very costlyYou must understand the rules and plan accordingly
THE IMPORTANCE OF TAX PLANNING
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide14
OVERVIEW
The Changing Tax Environment
Treatment of Common InvestmentsTaxes and Investment Returns
The Importance of Tax Deferral*
Tax-Deferral Strategies
Things to Remember About Asset Location
* Tax deferral offers no additional value if an annuity is used to fund a qualified plan, such as 401(k)or IRA and may not be available if the annuity is owned by a “non-natural person” such as a corporation or certain types of trusts.For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide15
the Changing Tax Environment
Expiration of the Bush Tax Cuts
Higher Ordinary Income Tax Rates
Highest rate in 2012: 35%
Highest rate in 2013: 39.6% (43.4% including healthcare tax)
Higher Capital Gains Tax Rates
Long-term rate changing from 15% to 20% for individuals with taxable income above $400K for Single and $450K for MFJ2012 Marginal Tax Rates
$0 - $8,700
10%
$8,701 - $35,350
15%
$35,351
-
$85,650
25%
$85,651 - $178,650
28%
$178,651
- $
388,350
33%
$388,351+
35%
2013
Marginal Tax Rates
$0-$8,925
10%
$8,926-$36,250
15%
$36,251-$87,850
25%
$87,851-$183,250
28%
$183,251-$398,350
33%
$398,351-$400,000
35%
$400,001+
39.6%
The slide is our summarization of information from CCH Tax Briefing, American Taxpayer Relief Act of 2012, "President Signs Eleventh-Hour Agreement to Avert Fiscal Cliff," January 2, 2013.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide16
TREATMENT OF COMMON INVESTMENTS: Retirement Accounts
Income taxable every year at ordinary income or capital gains tax rates
Brokerage accounts, mutual funds, CDs, SMAs (may offer a tax control feature –
“tax harvesting”)
Income taxable only when distributed, subject to ordinary income tax rates
Qualified retirement plans, traditional IRAs, SEP IRAs, SIMPLE IRAs, 403(b)s, 457s, nonqualified annuities
Taxable Accounts
Tax-deferred Accounts
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide17
TREATMENT OF COMMON INVESTMENTS:
4 Types of Tax Treatment
Exempt from tax at federal and/or state
and local level
Municipal bonds (exempt from federal tax
and state/local tax if the owner resides in
the state of issue)U.S. Treasuries (exempt at state and local level)Distributions not subject to taxation
Roth IRAs qualified distributions
Life insurance death benefits
Tax-exempt Accounts
Tax-free Accounts
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide18
TREATMENT OF COMMON INVESTMENTS: MUTUAL FUNDS
Mutual Fund Taxation
Shareholder tax liability arises in two ways
Income realized by the mutual fund
Capital gains distributions
Long-term capital gains (taxed at preferential rate)
Short-term capital gains (taxed at ordinary rates) Dividend distributions
Qualified dividends (taxed up to 20%)
Nonqualified dividends (taxed at ordinary rates)
Capital gains realized by shareholders liquidating fund shares
$200K for Singles and $250K for MFJ will also be subject to 3.8% Obamacare tax on net investment income
This slide is our summarization of information from CCH Tax Briefing, American Taxpayer Relief Act of 2012, "President Signs Eleventh-Hour Agreement to Avert Fiscal Cliff," January 2, 2013.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide19
TREATMENT OF COMMON INVESTMENTS: MUTUAL FUNDS
Portfolio Turnover
A measure of how frequently assets within a fund are bought and sold
High turnover implies short holding periods which may result in STCG taxed at ordinary income rates
High turnover increases transaction costs
Average alternative mutual fund turnover is 185.8%
1 Equity funds = 87.8%Tax-exempt income funds = 27.5%Taxable fixed income funds = 163.4% High turnover creates tax inefficiency
Source:
1
Tom Roseen, Lipper Research Study, "Asset Location Strategies for the Taxable Investor," December 2011.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide20
TREATMENT OF COMMON INVESTMENTS: MUTUAL FUNDS
Phantom Income
Income paid to a taxpayer during the tax year that is not constructively received at the taxpayer's year end but still results in income tax liability to the taxpayer
Example
1
Investor owns 10 shares of XYZ fund - $10/share. XYZ passes through a $2 short term capital gain. Assuming automatic reinvesting and fund distributions
to pay taxes: Initial value: $10 x 10 shares = $100 STCG = $2 share x 10 shares = $20 reinvested
NAV drops by distribution: $10 - $2 = $8
Reinvestment at $8/share: $20/$8 = 2.5 shares purchased
New account value: 12.5 shares @ $8 = $100
$20 STCG taxed at 35% = $7
Investor has to pay $7 in income tax despite no actual gain on their investment
Source:
1
Tom Roseen, Lipper Research Study, "Asset Location Strategies for the Taxable Investor," December 2011.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide21
TREATMENT OF COMMON INVESTMENTS: MUTUAL FUNDS
Embedded Gains / Losses
When fund shares are purchased, investors purchase the current embedded gains in the fund portfolio, even though they did not
own the fund at the time the gains were earned.
Shareholder purchases fund one day before ex-dividend and can have both long-term and short-term taxable distributions the next day.
Embedded losses from 2008 have reduced tax liability for mutual fund investors over the last few years.
The information on this slide is our summarization of information from Tom Roseen, Lipper Research Study, "Asset Location Strategies for the Taxable Investor," December 2011.For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide22
The Impact of Tax Loss Carry Forwards
TREATMENT OF COMMON INVESTMENTS: MUTUAL FUNDS
With the steep losses witnessed in 2008 and the rapid market rise
in 2009 and 2010, we cannot be sure of the longevity or magnitude
of tax
loss carry forwards in the near future.
“
”
...taxable investors and their advocates would do well to become more cognizant of the impact taxes have on fund returns.
“
”
Source: Lipper Research Study, "Taxes in the Mutual Fund Industry," April 2010.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide23
TAXES AND INVESTMENT RETURNS: TAX DRAG
Tax Drag
Reduced investment return resulting from taxationAlternative investments have notoriously high tax drag
Alternative Funds
Tax Drag
Precious Metal Funds
2.93%Real Estate Funds1.96%Global Real Estate Funds
1.71%
Absolute
Return Funds
1.57%
Global Flexible
Portfolio Funds
1.57%
International
Real Estate Funds
1.55%
Flexible Portfolio Funds
1.12%
Long/Short
Equity Funds
1.02%
Equity Market Neutral
Funds
0.72%
Source: Tom Roseen, Lipper Research Study, “Asset Location Strategies for the Taxable Investor,” December 2011.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide24
Taxable investors gave up 1.03-1.96% in annual returns due to taxes in alternative mutual funds.
In years when tax loss carry forwards were not so prevalent,
tax drag on equity funds was as high as 2.5-3% annually.
Funds that have high portfolio turnover or other tax-inefficient characteristics are best located in tax-advantaged accounts.
TAXES AND INVESTMENT RETURNS: TAX DRAG
The information on this slide is our summarization of information from Tom Roseen, Lipper Research Study, "Asset Location Strategies for the Taxable Investor," December 2011.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide25
TAXES AND INVESTMENT RETURNS: TAX DRAG
How Long Will it Take Your Investment to Double?
The Rule of "72"
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide26
TAXES AND INVESTMENT RETURNS: ASSET LOCATION
Asset
allocation is widely utilized in retirement planning
Asset
location
is equally important
Goal: divide assets among taxable and taxed-advantaged accounts to defer taxes and gain the best after-tax wealth for the portfolio. Tax efficient assets often held in taxable account Tax inefficient assets often held in tax-deferred accountsCrucial to wealth accumulation over an investor’s lifetime
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide27
TAXES AND INVESTMENT RETURNS: ASSET LOCATION
Tax-deferred investing can be valuable because:
It allows investors to earn the pre-tax return on assets.
Pre-tax returns can compound over time.
The value of tax-deferred investing depends
on which assets are held in tax-deferred accounts.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide28
For representative use only. Not for public distribution.
THE IMPORTANCE OF TAX DEFERRAL
Tax Deferral
Allows growth to compound
faster than currently taxable
investments
Gives client control over when to recognize taxable
income
Provides a tax shelter for tax-inefficient assets
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide29
Tax deferral is especially important for tax-inefficient assets.
Bond funds, REITs, alternative investments, and actively managed investments tend to be tax inefficient.By placing tax-inefficient assets in tax-deferred accounts, returns potentially can increase by as much as 100 basis points without increasing risk.
THE IMPORTANCE OF TAX DEFERRAL
Source: Laurence P. Greenberg, LifeHealthPro, "Estate Planning With Annuities," October 1, 2011.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide30
The IMPORTANCE OF TAX DEFERRAL: ANNUITY DISTRIBUTION
Taxation of Withdrawals
Distributions consist of gain first
Gains are taxed at ordinary income tax rates
If gains have been depleted, then cost basis is returned tax free
Gain is determined at the time of withdrawal
$100,000: Cost Basis
$30,000
Distribution
Gain:
$20,000
Cost Basis:
$100,000
Gain: $20,000
Tax
Free: $10,000
Remaining
Cost Basis:
$90,000
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide31
The IMPORTANCE OF TAX DEFERRAL: ANNUITY DISTRIBUTION
Blended Tax Rates
Ordinary income tax treatment is often cited as a disadvantage
No one actually pays taxes at the marginal tax rate
Progressive tax system blends rates
$100k AGI is in the 25% marginal bracket (filing jointly) but effective tax rate
is less than 17%$100,000 - $72,500 = $27,500 * 25% = $6,875 + $9,983 = $16,658
$16,658/$100,000 = 16.7%
25% Marginal Rate
Effective Tax Rates
39.6% Cap
13.8%-19.4%
Blended Tax Rate
This slide is our summarization of information from IRS document Rev. Proc 2013-15.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide32
Tax-Deferral Strategies: Healthcare
Tax Deferral and Healthcare Reform
Healthcare
Reform - Penalty Taxes for
High-Income
Earners.
3.8% on Net Investment Income starting in 2013.$200k+ for Singles.$250k+ for Married.
Net Investment Income Includes:
Capital gains, annuity income, interest, rents, royalties...
Does
not include distributions from qualified plans, IRAs, Simples, SEPs, and Roth IRAs.
Top rate projected to be 43.4
%
Source: Congressional Healthcare Caucus, Healthcare Reconciliation Act of 2010, "New 3.8% Medicare Tax on 'Unearned' Net Investment Income."
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide33
TAX-DEFERRAL STRATEGIES: TRUST FUNDING
Deferred Annuities and Non-natural Owners
Trust taxation may expose low amounts of income to high tax rates
2013 Single
0 - $8,925
10%
$8,926 - $36,250
15%
$36,251 - $87,850
25%
$87,851 - $183,250
28%
$183,251 - $398,350
33%
$398,351
- $400,000
35%
$400,001+
39.6%
2013
Trust
Tax Rates
$0 - $2,450
15%
$2,451 - $5,700
25%
$5,701 - $8,750
28%
$8,751 - $11,950
33%
$11,951+
39.6%
This slide is our summarization of information from IRS document Rev. Proc 2013-15.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide34
Tax-deferral Strategies: Trust Funding
Deferred Annuities and Non-natural Owners
Non-natural owners generally do not receive
tax deferral
under
IRC 72(u).
Owners that lose
tax deferral include
businesses,
corporations
, partnerships, charities, CRTs, foundations,
endowments
, and municipalities.
EXCEPTION
:
Trusts that are acting as an agent
for a
natural
person
will receive tax deferral
.
This slide is our summarization of information from Cornell University Law School, Internal Revenue Code 72 (u), data pulled June 20, 2012.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide35
TAX-DEFERRAL STRATEGIES: TRUST FUNDING
“Pass-In-Kind” Titling
Annuity 1
Owner: Trust
Annuitant: Andy
Beneficiary: Trust
Annuity 2Owner: Trust
Annuitant: Ben
Beneficiary: Trust
Annuity 3
Owner: Trust
Annuitant: Cathy
Beneficiary: Trust
Annuity 1
Owner: Andy
Annuitant: Andy
Annuity 2
Owner: Ben
Annuitant: Ben
Annuity 3
Owner: Cathy
Annuitant: Cathy
At the trustee’s request, these annuities
are passed “in kind” to the beneficiaries.
Ownership is changed to the beneficial owner without triggering a taxable event. Any annuity benefits that have accrued during trust ownership continue after the ownership change.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide36
Buy and hold…for a while
The average holding period for mutual funds is 3.29 years1
Liquidation of mutual funds creates a taxable eventDeferred annuities can be 1035 exchanged for another annuity contract allowing growth to remain tax deferredAnnuity subaccounts can be rebalanced without taxes or transaction costs
TAX-DEFERRAL STRATEGIES: Tax-free Exchanges
Source:
1
Dalbar, Inc., Quantitative Analysis of Investor Behavior, April 2012.For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide37
TAX-DEFERRAL STRATEGIES: Taxation of Death Benefits
How
A
re
Death Benefits Taxed?
No step-up
in cost basisFull death benefit value includable in taxable estate
Death benefit paid out in excess of basis is taxable
as ordinary income
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide38
TAX-DEFERRAL STRATEGIES: IRD
Step 1
This slide is our summarization of information from the Internal Revenue Service Publication 950, “Introduction to Estate and Gift Taxes,” November 21, 2011; The Internal Revenue Code Section 691 “Recipients of Income in Respect of Decedents,” 2012; P.L. 111-312 (The 2010 Tax Act); P.L. 107-16, EGTRRA
; IRS document Rev. Proc 2013-15.
Calculate
estate tax
Gross estate
$6,000,000
Adj. tax estate
$6,000,000
Tax @ 40%
$2,345,800
Less unified credit
- $2,045,800
Fed estate tax
$300,000
Take out IRD items and recalculate estate tax
Gross estate
$6,000,000
Adj. tax estate
$6,000,000
Less: IRD assets
- $500,000
Adj. taxable estate
without IRD
$5,500,000
Tax @ 40%
$2,145,800
Less unified credit
- $2,045,800
Fed estate tax
$100,000
Step 2
Calculate IRD
tax deduction
Fed estate tax
$300,000
Fed estate tax
without IRD items
- $100,000
Tax attributable
to IRD
$200,000
deduction
Step 3
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide39
TAX-DEFERRAL STRATEGIES: STRETCH
Nonqualified Stretch
Provides clients with a simple legacy planning tool
Allows beneficiaries to pay taxes on only required distributions
Continues to grow tax deferred
IRD can be used to offset income taxes owed on distributions
Creates opportunity to educate beneficiaries and retain assets on your bookProvides a platform to control spendthrift beneficiaries
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide40
THINGS TO REMEMBER ABOUT ASSET LOCATION
GOAL:
Reduce the tax burden while maintaining an optimally diversified portfolio.
Portfolio turnover, tax drag, phantom income, and embedded gains can all have an impact on returns
Tax deferral and beyond: IRD, non-natural ownership taxation, pass-in-kind strategy, and stretch distributions
Research shows that simply by locating assets based on their tax treatment (taxable vs. tax-deferred), tax deferral can potentially increase returns by as much as 100 basis points1Source: 1
Laurence P. Greenberg, LifeHealthPro, “Estate Planning With Annuities,” October 1, 2011.
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide41
Thank You
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide42
As required by the IRS, you are advised that any discussion of tax issues in this material is not intended
or written to be used, and cannot be used, (a) to avoid penalties imposed under the Internal Revenue Code
or (b) to promote, market or recommend to another party any transaction or matter addressed herein.
IMPORTANT DISCLOSURES
Before investing, investors should carefully consider the investment objectives, risks, charges, and expenses of the variable annuity and its underlying investment options. The current contract prospectus and underlying fund prospectuses, which are contained in the same document, provide this and other important information. Please contact your representative or the Company to obtain the prospectuses. Please read the prospectuses carefully before investing or sending money.
This material was prepared to support the promotion and marketing of Jackson
®
variable annuities. Jackson, its distributors and their respective representatives do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S. federal, state, or local tax penalties. Please consult your own independent advisor as to any tax, accounting, or legal statements made herein.
Annuities are long-term, tax-deferred vehicles designed for retirement. Variable annuities involve investment risks and may lose value. Earnings are taxable as ordinary income when distributed and may be subject to a 10% additional tax if withdrawn before age 59½.
Optional benefits are available for an extra charge in addition to the ongoing fees and expenses of the variable annuity.
Guarantees are backed by the claims-paying ability of the issuing insurance company.
Tax deferral offers no additional value if an annuity is used to fund a qualified plan, such as a 401(k) or IRA. It also may not be available if the annuity is owned by a “non-natural person” such as a corporation or certain types of trusts.
Although asset allocation among different asset categories generally limits risk and exposure to any one category, the risk remains that management may favor an asset category that performs poorly relative to the other asset categories. Other risks include general economic risk, geopolitical risk, commodity-price volatility, counterparty and settlement risk, currency risk, derivatives risk, emerging markets risk, foreign securities risk, high-yield bond exposure, noninvestment-grade bond exposure, index investing risk, industry concentration risk, leveraging risk, market risk, prepayment risk, liquidity risk, real estate investment risk, sector risk, short sales risk, temporary defensive positions, and large cash positions.
Jackson is the marketing name for Jackson National Life Insurance Company
®
(Home Office: Lansing, Michigan) and Jackson National Life Insurance Company of New York
®
(Home Office: Purchase, New York). Jackson National Life Distributors LLC.
OSJ: 7601 Technology Way, Denver, CO 80237 Phone: 800/565-8797
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.Slide43