• Retirement and Annuity Advisor Jennifer Lang

How Your Gains Could Be Swallowed Up by Taxes & Inflation. + Guaranteed Wealth Protection Strategies

Today's Objective: Principal Protection

Will your gains be overwhelmed by inflation or taxes?


In an uncertain economic environment, many consumers are seeking fixed rate products like certificates of deposit (CDs) for security. While benefits such as short term durations and a guaranteed interest rate can be appealing, two factors are often overlooked that can negatively impact a conservative fixed rate: taxes and inflation.

Inflation and taxes are top of mind for lots of people. With markets at big highs, safety is also a concern.


But do you know how your gains w/ bank products, like CDs, might be overwhelmed by taxes and inflation?

Here's a look at how real returns matter. This one-page overview shows bank product rates (and inflation and taxes) from the past 20 years.

We can see how inflation and taxes can swallow up nominal growth -- and why alternatives like fixed index annuities and fixed-rate annuities can offer more bang for the buck.

The hypothetical chart shows what a “real rate” of return can be when adjusted for any applicable taxes and potential inflation rates. The CD return rates below are calculated using the six-month annualized average monthly CD rate as reported by the Federal Reserve. The tax rate used in the example is the highest marginal federal income-tax rate based on $100,000 of taxable income for a married couple filing jointly. The tax rate assumed will not apply to every consumer, and a lower tax rate may have a more favorable impact on the real return. The use of alternate assumptions will produce different results.


This piece shows annualized returns of 6-month CDs and how a couple earning $100k per year will have big tax and inflation hits to their interest earnings.


A Fixed Index Annuity offers the opportunity for accumulation without the risk of losing money in the market.


With everything else that may fit into your future plans, know that Fixed Index Annuities provide:

  • Tax-deferral

  • Guarantess against the loss of principal due to market downturs

  • Potential for credited interest

  • Reassurance of a death benefit for beneficiaries

Watch the following video to learn more.

Contact us today and find out if a Fixed Index Annuity is appropriate for your needs.