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                               A 10 Year Comparison

$20,000 invested for 10 years in the following savings plan
(in a 39% tax bracket)
Year   Annuity
5.8% Interest Rate		   CD
5.6% Interest Rate
  Interest   Taxes   Balance   Interest   Taxes   Balance
1   $1,160.00 $0.00 $21,160.00     $1,120.00 $436.80 $20,683.20
2   $1,227.28 $0.00 $22,387.28     $1,159.63 $452.25 $21,390.57
3   $1,343.24 $0.00 $23,730.52     $1,200.65 $468.25 $22,122.97
4   $1,423.83 $0.00 $25,154.35     $1,243.13 $484.82 $22,881.28
5   $1,509.26 $0.00 $26,663.61     $1,287.11 $501.97 $23,666.42
6   $1,599.82 $0.00 $28,263.43     $1,332.65 $519.73 $24,479.34
7   $1,695.81 $0.00 $29,959.23     $1,379.80 $538.12 $25,321.02
8   $1,797.55 $0.00 $31,756.78     $1,428.62 $557.16 $26,192.47
9   $1,905.41 $0.00 $33,662.19     $1,479.16 $576.87 $27,671.64
10   $2,019.73 $0.00 $35,681.92     $1,531.50 $597.28 $29,203.13
    Total Interest Earned $15,681.92   Total Interest Earned $13,162.26
     
    Taxes Paid
(when withdrawn)		 $6,115.95   Taxes Paid
(during accumulation)		 $5,133.28
     
    Annuity Return $9,565.97   CD Return $8,028.98
 

By choosing an annuity, you would earn an extra $1,536.99 the first 10 years!

A 20 Year Comparison

$20,000 invested for 20 years in the following savings plan
(in a 39% tax bracket)
Year   Annuity
5.8% Interest Rate		   CD
5.6% Interest Rate
  Interest   Taxes   Balance   Interest   Taxes   Balance
1   $1,160.00 $0.00 $21,160.00     $1,120.00 $436.80 $20,683.20
2   $1,227.28 $0.00 $22,387.28     $1,159.63 $452.25 $21,390.57
3   $1,343.24 $0.00 $23,730.52     $1,200.65 $468.25 $22,122.97
4   $1,423.83 $0.00 $25,154.35     $1,243.13 $484.82 $22,881.28
5   $1,509.26 $0.00 $26,663.61     $1,287.11 $501.97 $23,666.42
6   $1,599.82 $0.00 $28,263.43     $1,332.65 $519.73 $24,479.34
7   $1,695.81 $0.00 $29,959.23     $1,379.80 $538.12 $25,321.02
8   $1,797.55 $0.00 $31,756.78     $1,428.62 $557.16 $26,192.47
9   $1,905.41 $0.00 $33,662.19     $1,479.16 $576.87 $27,671.64
10   $2,019.73 $0.00 $35,681.92     $1,531.50 $597.28 $29,203.13
11   $2,140.92 $0.00 $37,822.84     $1,585.68 $618.42 $30,788.82
12   $2,269.37 $0.00 $40,092.21     $1,641.78 $640.30 $32,430.60
13   $2,405.53 $0.00 $42,497.74     $1,699.87 $662.95 $34,130.47
14   $2,549.86 $0.00 $45,047.61     $1,760.01 $686.40 $35,890.48
15   $2,702.86 $0.00 $47,750.46     $1,822.28 $710.69 $37,712.75
16   $2,865.03 $0.00 $50,615.49     $1,886.75 $735.83 $39,599.51
17   $3,036.93 $0.00 $53,652.42     $1,953.50 $761.87 $41,553.01
18   $3,219.15 $0.00 $56,871.56     $2,022.62 $788.82 $43,575.63
19   $3,412.29 $0.00 $60,283.86     $2,094.18 $816.73 $45,669.81
20   $3,617.03 $0.00 $63,900.89     $2,168.27 $845.63 $47,838.08
    Total Interest Earned $43,900.89   Total Interest Earned $31,797.21
     
    Taxes Paid
(when withdrawn)		 $17,121.35   Taxes Paid
(during accumulation)		 $12,400.91
     
    Annuity Return $26,779.54   CD Return $19,396.30
 

By choosing an annuity, you would earn an extra $7,383.24 the first 20 years!

 

Before you purchase or renew that Certificate of Deposit please read this disclosure

Inflation
 I realize that the yields on CD’s have been less than the rate of inflation in one out of every five years.

I realize after subtracting taxes and the rate of inflation that the return on my CD has been negative 50% of the time

Returns
I realize that the average return on equity investments has been more than double that of CD’s.

I realize that a reliance on CD’s to fund my retirement could result in a 40% shortfall at retirement and require me to work after age 65.

Risk
I realize that the purchase of this CD subjects me to interest rate risk and inflation risk.

I realize that while my principal will not fluctuate, my income could drop as much as 57.3% in any given year without prior notice.

Taxes
I realize that the interest earned is subject to federal and state income taxes whether I use the income or let it accumulate.

Liquidity
I realize that the bank is not required to give me access to my CD principal during the term of the CD and may prevent me from making early withdrawals.

Although up to $100,000 is insured by FDIC, I realize that in the event of a bank failure FDIC may delay in returning my CD principal to me.

I fully understand the risks of buying this CD.

________________________
CD Buyer