2 great tax strategies many overlook.

Additional Tax Relief for Maxed-out Retirement Accounts

Many individuals surpass and max-out their retirement account contributions each year and still seek additional tax relief: For the self-employed the KEOGH plan (effective 2002), has a new maximum contribution level of 25% of income up to $40,000 per year and the SEP is 15% up to $30,000 per year. For corporate HCE(s) (Highly Compensated Employees), there is the annual discriminatory test to contend with. The HCE cannot exceed more than 125% of the average percentage of 401K contributions from the Non-HCE employees.

However, there is an option: Instead of a limited contribution with a penalty (if withdrawn before 59-1/2) and a mandatory distribution at age 70-1/2 with full (possibly spiked) taxation, consider the benefits of an NCF Tax Deductible Annuity[TM] Tax Deductible Annuities[TM] can be flexible and deferred to perfectly suit the individual that seeks additional tax relief now but desires the income later to supplement their retirement. The Tax Deductible Annuity[TM] gives your client two important features, access and control, to a Non-ERISA supplemental retirement plan. The client would have the ability to choose when to begin their retirement income, without penalty.

The TDA is funded with alter-tax dollars but provides an immediate income tax deduction, with a five year carry forward, if needed.

The income stream, when disbursed, is partially tax free (return of principal). Further, there is no maximum contribution amount, early withdrawal penalties, or forced minimal distribution. Take for example: a 50-year old professional has maxed out his retirement plan and decides to make a onetime contribution of $50,000 to an NCF Flexible Deferred Tax Deductible Annuity[TM]. This creates an:

Immediate Tax Deduction of $20,446

Annual Income For Life (if selected at age 65) $7,350

(or at age 70) $10,250

Note: 20% of Income is TAX FREE

Continuing with the same example, if the individual contributed $50,000 each year to a Tax Deductible Annuity[TM] for five years and received the income at age 70, this could be the result:

Cumulative Tax Deduction: $100,789

Income for Life starting at age 70: $46,050

Because there are no penalties and no restrictions, the Flexible Deferred Tax Deductible Annuity[TM] should definitely be a consideration to enhance the retirement programs of business owners, doctors, lawyers, HCEs, and other professional employees.

Customizable Two-Life Annuities?

Absolutely! Two-Life and Multi-generational Tax Deductible Annuities[TM] have been providing secured income streams with substantial tax savings for years. However, the income for the first and second annuitant has always been equal. The amount the first annuitant receives is exactly what the second annuitant would receive after the death of the first annuitant-until now!

National Community Foundation was first to introduce the Customizable Tax Deductible Annuity[TM]. What makes the feature so unique is that the first annuitant's income can now be adjusted to meet his or her needs today and still provide a lifetime income for a second annuitant. For example: A mother, age 72, with a $100,000 asset desires to exchange it for a Two-Life Tax Deductible Annuity[TM], designating herself as the primary annuitant, and her daughter, age 50, as the secondary annuitant. The standard results are:

Lifetime Annual Income for Two Lives $5,400 ($2,333 TAX FREE)

Tax Deduction $22,330

What if the mother needs more now and the daughter needs less later? This can be done with a Customizable Tax Deductible Annuity[TM]. The mother now receives:

Lifetime Annual Income $6,200 ($3,173 TAX FREE)

Tax Deduction $28,41.4

After she is gone:

Daughter's Lifetime Annual Income $3,240

Whether it's an immediate, deferred, flexible deferred or a customizable Tax Deductible Annuity[TM], NCF provides the solution to many of your clients needs. Along with versatility, your client can exchange a variety of assets like Cash, Securities, Real Estate, CDs or Commercial Annuities for a guaranteed lifetime income. The exchange creates a substantial income tax deduction, and if an appreciated asset is used, capital gains taxes are also partially eliminated. Call today to learn more about how the Tax Deductible Annuity[TM] can work for you and your clients.