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ADVANCED TAX PLANNING STRATEGIES
Harnessing the Power of Asset Location
RETIREMENT AND WEALTH STRATEGIES
Not FDIC/NCUA insured • May lose value • Not bank/CU guaranteed
Not a deposit • Not insured by any federal agency
This presentation is meant to provide education on the content being presented and is intended for an audience
with a basic understanding of the financial industry. It is not intended for use with the general public.
CMC9299CEPPT 04/13
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ordinary income when distributed and may be subject to a 10% additional tax if withdrawn before age 59½.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
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
INTRODUCTION: HISTORICAL TAX RATES
Gross Public Debt: Total Pct. GDP & Avg. Tax Rate
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.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
INTRODUCTION: TAXES PAID
Total Taxes Paid - 1989
Top 10%
Total Taxes Paid - 2009
Top 10%
29%
44%
56%
Everyone
Else
Some taxpayers are already
paying a larger percentage of
the total federal tax bill
CMC9299CEPPT 04/13
71%
Everyone
Else
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.
THE IMPORTANCE OF TAX PLANNING
Source: David Leonhardt, The New York Times, July 12, 2011.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
THE IMPORTANCE OF TAX PLANNING
Source: Investment News, June 5, 2011.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
THE IMPORTANCE OF TAX PLANNING
InvestmentNews.com, June 2011
Source: Robert N. Gordon, Investment News, October 23, 2011.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
THE IMPORTANCE OF TAX PLANNING
New York Times, July 2011
InvestmentNews.com, June 2011
Source: Jeff Benjamin, Investment News, November 6, 2011.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
THE IMPORTANCE OF TAX PLANNING
New York Times, July 2011
Source: Gil Weinreich, Advisor One, November 28, 2011.
InvestmentNews.com, June 2011
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
THE IMPORTANCE OF TAX PLANNING
New York Times, July 2011
AdvisorOne.com, November 2011
InvestmentNews.com, June 2011
Source: Catherine Rampell, The New York Times, December 8, 2011.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
THE IMPORTANCE OF TAX PLANNING
“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..."
AdvisorOne.com, November 2011
New York Times, July 2011
Ed SlottJudge Learned Hand, 2nd Circuit Court of Appeals - 1934
InvestmentNews.com, June 2011
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.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
THE IMPORTANCE OF TAX PLANNING
• Tax planning is an important consideration in:
– Wealth Accumulation
– Retirement Income Distributions
– Estate Planning
– Wealth Transfer
• Mistakes can be very costly
• You must understand the rules and plan accordingly
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
OVERVIEW
• The Changing Tax Environment
• Treatment of Common Investments
• Taxes 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.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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 MFJ
2012 Marginal Tax Rates
$0 - $8,700
$8,701 - $35,350
$35,351 - $85,650
$85,651 - $178,650
$178,651 - $388,350
$388,351+
10%
15%
25%
28%
33%
35%
2013 Marginal Tax Rates
$0-$8,925
$8,926-$36,250
$36,251-$87,850
$87,851-$183,250
$183,251-$398,350
$398,351-$400,000
$400,001+
10%
15%
25%
28%
33%
35%
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.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
TREATMENT OF COMMON INVESTMENTS: RETIREMENT ACCOUNTS
• Income taxable every year at ordinary
income or capital gains tax rates
Taxable
Accounts
– 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
Taxdeferred
Accounts
CMC9299CEPPT 04/13
– Qualified retirement plans, traditional IRAs,
SEP IRAs, SIMPLE IRAs, 403(b)s, 457s,
nonqualified annuities
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
TREATMENT OF COMMON INVESTMENTS: 4 TYPES OF TAX TREATMENT
• Exempt from tax at federal and/or state
and local level
Taxexempt
Accounts
– 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-free
Accounts
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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
1
Source: Tom Roseen, Lipper Research Study, "Asset Location Strategies for the Taxable Investor," December 2011.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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
Example1
• 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.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
TREATMENT OF COMMON INVESTMENTS: MUTUAL FUNDS
The Impact of Tax Loss Carry Forwards
the steep losses witnessed in 2008 and the rapid market rise
“inWith
2009 and 2010, we cannot be sure of the longevity or magnitude
of tax loss carry forwards in the near future.
”
investors and their advocates would do well to become
“...taxable
more cognizant of the impact taxes have on fund returns.
”
Source: Lipper Research Study, "Taxes in the Mutual Fund Industry," April 2010.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
TAXES AND INVESTMENT RETURNS: TAX DRAG
Tax Drag
• Reduced investment return resulting from taxation
• Alternative investments have notoriously high tax drag
Alternative Funds
Tax Drag
Precious Metal Funds
2.93%
Real Estate Funds
1.96%
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.
CMC9299CEPPT 04/13
TAXES AND INVESTMENT RETURNS: TAX DRAG
• 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.
Five Year Period Ending 12/31/2010
1.84%
1.37%
2.00%
0.93%
1.50%
1.00%
0.50%
0.00%
Fixed Income
Alts
Equities
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.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
TAXES AND INVESTMENT RETURNS: TAX DRAG
How Long Will it Take Your Investment
to Double?
xxx
The Rule of "72"
The Rule of "72"
17.91
20
15
Rule of 72
Rule of 72-33-50
12
11.94
8
10
5
0
6% Return
CMC9299CEPPT 04/13
9% Return
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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 accounts
– Crucial to wealth accumulation over an investor’s lifetime
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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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
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.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
THE IMPORTANCE OF TAX DEFERRAL
Tax deferral is especially important for taxinefficient 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.
Source: Laurence P. Greenberg, LifeHealthPro, "Estate Planning With Annuities," October 1, 2011.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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
Gain: $20,000
Gain: $20,000
Cost Basis:
$100,000
$100,000:
Cost Basis
CMC9299CEPPT 04/13
$30,000
Distribution
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.
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%
13.8%-19.4%
Effective Tax Rates
Blended Tax Rate
25% Marginal
Rate
39.6% Cap
This slide is our summarization of information from IRS document Rev. Proc 2013-15.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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."
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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
$8,926 - $36,250
$36,251 - $87,850
$87,851 - $183,250
$183,251 - $398,350
$398,351 - $400,000
$400,001+
2013 Trust Tax Rates
10%
15%
25%
28%
33%
35%
39.6%
$0 - $2,450
$2,451 - $5,700
$5,701 - $8,750
$8,751 - $11,950
$11,951+
15%
25%
28%
33%
39.6%
This slide is our summarization of information from IRS document Rev. Proc 2013-15.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
TAX-DEFERRAL STRATEGIES: TRUST FUNDING
“Pass-In-Kind” Titling
Annuity 1
Owner: Trust
Annuitant: Andy
Beneficiary: Trust
Annuity 2
Owner: Trust
Annuitant: Ben
Beneficiary: Trust
Annuity 3
Owner: Trust
Annuitant: Cathy
Beneficiary: Trust
At the trustee’s request, these annuities
are passed “in kind” to the beneficiaries.
Annuity 1
Owner: Andy
Annuitant: Andy
Annuity 2
Owner: Ben
Annuitant: Ben
Annuity 3
Owner: Cathy
Annuitant: Cathy
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.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
TAX-DEFERRAL STRATEGIES: TAX-FREE EXCHANGES
Buy and hold…for a while
• The average holding period for mutual funds is 3.29 years1
• Liquidation of mutual funds creates a taxable event
• Deferred annuities can be 1035 exchanged for another
annuity contract allowing growth to remain tax deferred
• Annuity subaccounts can be rebalanced without taxes or
transaction costs
Source: 1 Dalbar, Inc., Quantitative Analysis of Investor Behavior, April 2012.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
TAX-DEFERRAL STRATEGIES: TAXATION OF DEATH BENEFITS
How Are Death Benefits Taxed?
• No step-up in cost basis
• Full death benefit value includable in taxable estate
• Death benefit paid out in excess of basis is taxable
as ordinary income
Death
Benefit Paid
CMC9299CEPPT 04/13
Remaining
Cost Basis
Taxable
Amount
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
TAX-DEFERRAL STRATEGIES: IRD
Step 1
Step 2
Calculate
estate tax
Step 3
Take out IRD items and
recalculate estate tax
Gross estate
$6,000,000
Gross estate
$6,000,000
Adj. tax estate
$6,000,000
Adj. tax estate
$6,000,000
Less: IRD assets
Adj. taxable estate
without IRD
Tax @ 40%
$2,345,800
Tax @ 40%
- $500,000
$5,500,000
Fed estate tax
Fed estate tax
without IRD items
$300,000
- $100,000
Tax attributable
to IRD
$200,000
deduction
$2,145,800
Less unified credit - $2,045,800
Less unified credit - $2,045,800
Fed estate tax
Fed estate tax
$300,000
Calculate IRD
tax deduction
$100,000
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.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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 book
• Provides a platform to control spendthrift beneficiaries
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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
points1
Source: 1 Laurence P. Greenberg, LifeHealthPro, “Estate Planning With Annuities,” October 1, 2011.
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
Thank You
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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
CMC9299CEPPT 04/13
For an audience with a basic understanding of the financial industry. Not intended for use with the general public.
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ADVANCED TAX PLANNING STRATEGIES
Harnessing the Power of Asset Location
RETIREMENT AND WEALTH STRATEGIES
This presentation is meant to provide education on the content being presented and is intended for an audience
with a basic understanding of the financial industry. It is not intended for use with the general public.
CMC9299CEPPT 04/13