While you are connecting with clients and prospects during first quarter, they may have a couple of other items on their mind instead of retirement planning, life insurance, annuities, and possibly future long-term care costs. They wonder how much Uncle Sam may take away from their income gained in 2024.

AIP Marketing Alliance understands how you are not tax professionals – neither are we – and that disclaimer is something we include in all marketing materials. However, there’s nothing wrong with sharing some useful resources with your clients to discuss with their tax advisor that could affect their retirement.

To put things in perspective, the IRS processed more than 163 million tax returns in 2024 with over 85 million received from tax professionals and more than 66 million self-prepared (151 million total e-files). Consumers received more than $301 billion in total tax refunds.

With those numbers in mind, let’s talk about a few things you can do to help out your clients and prospects before the Tuesday, April 15th filing deadline for 2024’s taxes occurs before it’s too late.

Let’s start with their retirement planning choices. Do they own CDs? If so, interest earned on a CD is considered taxable income by the IRS – regardless of whether the money is received in cash or reinvested. Interest earned on CDs longer than one year (i.e., a three-year CD) must reported and taxed on an annual basis.

On the flip side, an annuity provides tax-free growth throughout the term of the contract. According to Western & Southern, qualified annuities (pre-tax funds) are fully taxable upon withdrawal and non-qualified annuities (after-tax funds) involve taxing earnings before original contributions.

Enter the CD vs. Annuity conversation. Annuities currently have competitive rates vs. CDs, aren’t impacted by market conditions, and tax-deferred accumulation might work better for their situation right now. Feel free to share our Annuity vs. CD video as an educational resource.

Once the annuitant makes a withdrawal from the annuity contract, the person will need to pay taxes on that amount (whether monthly income payments or total amount). The details vary on how annuities are taxed, but you can recommend to your clients to discuss with their tax advisor as needed. You can learn more in the W&S article.

AIP Marketing Alliance also wants to share two consumer-approved resources from Securian Financial that could prove helpful to your clients and prospects. Our team receives a lot of requests for these documents from our downline wholesalers and agents.

• 2025 Tax Reference Guide: This PDF provides some guidance on employer plan/IRA contributions and distributions, life expectancy, long-term care, 2024 income tax rates, 2025 income tax rates, estate/gift/corporate taxes, and additional resources.
• 2025 Retirement Benefits – Social Security Quick Guide: This PDF provides an overview of Social Security numbers including full retirement age (FRA), delayed retirement credits (DRCs), primary insurance amount (PIA) computation, cost of living adjustments (COLAs), and additional information.

Like the other documents, these materials are for educational purposes only. Your client/prospect should talk to a tax advisor as needed. You are welcome to share these documents with consumers.

As a reminder, most people do not like paying taxes on current income or interest made on certain retirement products. However, some of your clients may find themselves receiving a refund instead. That’s when you could pivot into talking more about retirement planning, protecting those dollars with an annuity or life insurance, or even making changes to their current retirement products to better position them for the future.

There’s nothing wrong with educating your consumers to help them in making decisions in their best interest or to bounce off their tax advisor. Keeping them informed is your way of providing protection and a valuable resource to assist with their retirement planning.

Contact AIP Marketing Alliance’s Business Development team if you have any non-tax questions or need an illustration for your next appointment. We’re here to help! Contact AIPMA at (800) 783-5206 Press #2 or marketing@aipma.com.

For more than 40 years, AIP Marketing Alliance (AIPMA), an Integrity Company, serves as a premier life insurance and annuity distribution partner to provide full-service support to independent wholesalers, brokerages and agents from our Troy, Michigan office. NOT AFFILIATED WITH OR ENDORSED BY THE GOVERNMENT OR THE MEDICARE PROGRAM.

AIP Marketing Alliance is committed to STRIVE in ’25 as we support our independent insurance wholesalers and agents. Visit our blog on aipma.com to stay informed on these upcoming launches and learn why wholesalers nationwide choose AIPMA as their distributor for selling life insurance, annuities, long-term care insurance, final expense, and much more. Ask about our lead services, myAIP CRM platform with customizable recruiter portal, and online tools/resources designed to grow your business. The difference is personal.

AIP Marketing Alliance, an Integrity Company, has developed this electronic communication for informational and educational use only. Be advised, AIP Marketing Alliance, Inc. does not provide legal advice, tax advice, or guidance on issues involving securities laws, insurance laws nor securities or insurance regulations. This material should not be relied on as providing any such advice or guidance to either agents or retail consumers. Within this communication, AIPMA shares links for usage as information only. This content should not be interpreted as solicitation to purchase life insurance, annuities, or other products or as advice designed to meet your clients’ specific needs. Content involving fiduciary, tax, or legal advice should be directed to your legal, tax, and financial professionals for specific advice or product recommendations. AIPMA will not accept any legal liability resulting from any use of 3rd party material(s).