Compounding is the process in which earnings from the interest are reinvested to generate additional earnings.
$574,349
$574,349
ADDITIONAL EARNINGS WITH TAX DEFERRAL
VALUE WITHOUT TAX DEFERRAL
$113,844
$460,505
$100,000
$
$
$
$
$
$
$
5 YEARS
10 YEARS
15 YEARS
20 YEARS
25 YEARS
30 YEARS
PURCHASE
This hypothetical example is not intended to be a projection of future values and does not represent the performance of any MassMutual product. This example assumes a 24% federal income tax rate and assumes a 6% return over 30 years, which is not guaranteed. The investment that is taxed annually assumes the earnings are taxed at 24% each year, and the taxes are paid from the same account. The tax-deferred investment assumes a full withdrawal of the account value at the end of the 30-year period with the withdrawal being taxed at 24%. Surrender charges are not included and had they been, results would have been lower. Be sure to consider your personal retirement time horizon and income tax bracket, both current and anticipated, when making your financial decision as they may have an additional impact on the results of any comparison.
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