The Power of Tax Deferral: Unlocking Growth with a Multi-Year Guarantee Annuity

For savvy, do-it-yourself (DIY) planners, diversification isn't just a buzzword—it's a strategy. You've built your portfolio carefully, balancing risk and reward while optimizing tax efficiency. However, if you’re not maximizing tax-deferred growth, you could leave money on the table.

That's where a fixed-deferred Multi-Year Guarantee Annuity (MYG Annuity) from American National Insurance Company (American National) comes in. You can now purchase this MYG Annuity directly, on your own, perfect for those who prefer to take control of their financial journey. 

Why Tax Deferral Matters

As a disciplined DIY Planner, you understand the impact of taxes on returns. With some financial strategies, such as investing in the stock market, things like interest, dividends, and capital gains can trigger a yearly tax bill (i.e., taxable asset), chipping away at any positive returns. With an MYG Annuity, your money grows tax-deferred over time, without taxation on any growth until withdrawal.

Benefits of Tax Deferral:

• Steady Growth: Since earnings aren't taxed until withdrawal, your money can compound more quickly over time compared to a taxable asset with the same return.
• Control Over Taxes: You decide when to take income, giving you flexibility in managing your taxes — potentially benefiting from a lower tax rate during retirement.
• Predictable Returns: Unlike stocks or mutual funds, an MYG Annuity guarantees a fixed interest rate for a set period, so you know exactly what you're earning. 

Tax-Deferred Growth: Triple Compound Benefit

An MYG Annuity can provide a unique triple compound interest advantage to help your savings grow faster than a taxable asset with the same interest rate. Here’s how it works:

1. Your Principal Earns Interest: The initial amount you contribute grows at a guaranteed fixed rate.
2. Your Interest Earns Interest: The returns also compound over time.
3. The Money You Would Have Paid in Taxes Earns Interest: Instead of paying taxes annually on your earnings, those funds remain in your annuity, also generating returns.

The longer you keep your money in a tax-deferred annuity, the greater the growth potential. This can make annuities especially useful for long-term planning, when considering your own retirement strategy.

For example, let’s consider a $100,000 initial premium earning 3% annually for seven years for someone in a 24% tax bracket. With simple interest, the total grows to $115,750 after accounting for taxes paid on earnings. Now consider compound interest, where your interest also earns interest. In that case, the total grows to $117,035 after accounting for the same 24% tax rate. Because annuities defer taxes until withdrawal, even more of your money keeps working – pushing the final value to $122,987.

How Does This Compare to Taxabale Accounts?

To achieve the same growth in a taxable account, you’d need to earn a higher interest rate. For instance, a fixed annuity earning a guaranteed rate of 2.50% tax-deferred would require a taxable vehicle to earn a 3.29% to 24.00% tax bracket to achieve the same outcome.*

*Annualized comparison to demonstrate how the two vehicles compare per year when interest is withdrawn or taxed annually. Assumes interest is credited annually.

By keeping your growth sheltered from taxes until withdrawal, an MYG Annuity can maximize your compounding potential – giving you competitive growth with greater tax efficiency. 

American National Insurance Company's MYG Annuity: An Option for Tax Efficient Planning

For people who are looking to optimize their tax efficiency for retirement, an MYG Annuity from American National can be an option. Here's why:

• Use your MYG Annuity for retirement: Since your fixed returns are guaranteed, you know exactly what your annuity value will be when you decide to withdraw funds from your MYG Annuity. This makes it easier to forecast your post-retirement income.
• Control your withdrawal timing for smart tax planning: MYG Annuities let you choose when to begin taking distributions, so you can align withdrawals with your financial needs and goals.
• Take advantage of a lower tax bracket: Waiting to take your withdrawals until you retire or have less earned income, can place you in a lower tax bracket—allowing you to keep more of your money on taxable withdrawals from your MYG Annuity. 

Is an MYG Annuity from American National Insurance Company Right for You?

If you:

• Prefer tax-efficient growth strategies.
• Want guaranteed returns without market exposure
• Like to direct your own financial decisions and prefer a do-it-yourself approach.
• Need portfolio diversification with stable, fixed-income growth.
• Have maxed out other tax-advantaged accounts such as a 401(k)

... then an MYG Annuity from American National Insurance Company could be an effective addition to your money management strategy. Get started today.

Information herein is not intended to be legal or tax advice. You should consult with your own attorney and tax advisor for your specific circumstance. Current U.S. tax law provides that earnings from an annuity are taxable only upon withdrawal as ordinary income. Any withdrawals in excess of the surrender free amount are subject to surrender charges or market value adjustments.

Examples are for demonstrative purposes only. Assumes contract is individually owned.

Penalty-free withdrawals allow up to 10% of the annuity value at the beginning of the year to be withdrawn annually, free of surrender charges. Any withdrawals, including interest-only withdrawals, will reduce the amount of interest credited to your contract. Withdrawals of earnings are subject to income tax. A 10% IRS penalty may be imposed for withdrawals before age 59 1/2.

Interest rates and interest rate guarantee periods are subject to change. At the end of the selected interest rate guarantee period, you can either withdraw all your money without penalty during a special 30-day window or continue the annuity and earn an annual effective interest rate declared annually on the policy anniversary. This special surrender option applies to a full surrender only.

American National is a group of companies writing a broad array of insurance products and services and operating in all 50 states.  American National was founded in 1905 and is headquartered in Galveston, Texas. Not all products and services are available in all states. Form Series: MYG24; AI20 (Forms may vary by state). CA Form: MYG16(04). Not available in New York.

Not a deposit. Not FDIC insured. May lose value.