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Tax-Deferral
One big advantage when you're investing is finding a product with a tax-deferral feature. All taxes on your investment earnings will be deferred until you begin to take withdrawals. This enables your money to grow faster than if it were placed in an investment where taxes were due each year, because 100% of your earnings are also earning interest. The power of tax-deferral
The chart below compares how three different $10,000 investments might fare over 10, 20 and 30 years. The example illustrates an investment in a non-tax-deferred account and assumes that taxes are paid annually out of that account; how the same investment would grow in a tax-deferred investment, and the net value of the tax-deferred investment after paying taxes on the full account value.
Growth of a $10,000 investment over 30 years
This hypothetical illustration shows the benefits of tax deferral only and does not represent the projected performance of any investment. Taxes are due upon withdrawal. The chart assumes an 8% annual return and a 30% federal income tax rate. A 10% tax penalty may apply for withdrawals made before age 59 1/2.
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Tax-deferred financial vehicles carry fees and charges, which may include mortality and expense risk charges and other contract charges including optional benefit fees. Had these costs been deducted, the ending value for the tax-deferred investment would be lower. Note that the tax rates and the tax treatment of investment earnings are changed periodically, and these changes may impact the comparative results between tax-deferred and taxable investments.
In addition to the above factors, you should consider your personal investment horizon and income tax brackets (both current and anticipated) when making your investment decision, as these aspects may further impact the results of this comparison.
Investments in variable sub-accounts will fluctuate, and when redeemed, may be worth more or less than their original value.
If you are considering this product for a qualified investment, please note that the tax-deferral feature is unnecessary. However, annuities provide other features that may be valuable to you. Withdrawals made prior to age 59½ are subject to a 10% federal tax penalty. |
Sun Life Assurance Company of Canada (U.S.) issues the contract and it is distributed by MFS/Sun Life Financial Distributors, Inc. Both companies are members of the Sun Life Financial group of companies.
SLPC14206(05/05)
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