How to elevate annuity discussions during tax season

Tax season changes the tone of every financial conversation.

In working alongside financial professionals, I've found it's the one time of year when consumers are fully engaged with their numbers. They're looking at income, deductions, realized gains and what they owe.

Some are frustrated. Some are surprised. Almost all are paying attention. And that attention is powerful.

If you've spent any meaningful time in this industry, you know that mindset matters. When consumers are focused on taxes, they're already thinking about efficiency and control. That's the ideal moment to elevate the annuity conversation.

Demand for protected growth and guaranteed income continues to rise. We see it in our own practices and in the numbers. Last year, U.S. retail annuity sales reached $461.3 billion, marking the fourth straight year of record sales. Indexed products accounted for 45% of total sales.

The opportunity is not to sell an annuity but to connect tax awareness with a long-term income strategy.

Move the discussion beyond this year's return

In working with financial professionals across the country, I've seen too many tax meeting discussions get stuck in the present. How do we reduce next year's liability? What adjustments should we make before Dec. 31?

Those questions are important. But they rarely move the conversation toward a long-term income strategy.

Annuities allow us to shift the focus from annual tax reduction to lifetime tax management. Nonqualified annuities provide tax-deferred growth without annual contribution caps. Contrast that with individual retirement account limits, which the IRS set at $7,500 for 2026, or $8,600 for those age 50 or older. Many higher-income households reach those limits quickly.

When qualified space runs out, we must be ready with a thoughtful alternative.

I often encourage financial professionals to ask:

• How much of your portfolio generates taxable interest each year?
• How are you managing capital gains exposure?
• What would deferring that growth mean over 15 or 20 years?

Tax deferral doesn't eliminate taxes. It gives consumers control over timing, and timing influences retirement income.

Tie tax frustration to income security

One data point stands out to me. Just one in five pre-retirees owns an annuity, yet nearly half say they may not have enough guaranteed income to cover basic living expenses.

That gap should change how we frame income planning altogether.

During tax season, consumers see how much income flows out the door. That awareness creates an opening for financial professionals to discuss how income will flow in during retirement.

This is where we can differentiate ourselves. We can explain how annuities can:

• Create predictable lifetime income
• Offer protected growth in volatile markets
• Complement qualified assets
• Help manage distribution sequencing in retirement

Required minimum distributions begin at age 73 for traditional IRAs and many employer plans. Those withdrawals increase taxable income whether the consumer needs the funds or not. Strategic annuity placement can help smooth distributions and reduce pressure on other assets. That's how we move from product discussions to real retirement income strategy.

Clarify structure with confidence

Tax time is also when confusion around qualified versus nonqualified money surfaces. Qualified annuities inherit the tax rules and RMD requirements of the underlying plan. Nonqualified annuities offer tax-deferred growth on after-tax dollars and greater flexibility in contribution amounts.

Many consumers assume all retirement accounts operate the same way. They don't.

When we break down those distinctions clearly, we build credibility. We show depth. We demonstrate that placement and structure matter as much as product selection.

Use the sales story wisely

Record sales are encouraging, but they're not a strategy.

The fact that annuity sales topped $461 billion last year reflects demographic pressure and a growing demand for security. More than four million Americans are turning 65 each year during Peak 65. Consumers are seeking protection and income stability.

But record sales don't replace thoughtful guidance.

The business owner navigating a liquidity event is solving for flexibility and tax exposure. The near-retiree concerned about RMDs is thinking about income sequencing. The high-income professional, frustrated by the annual tax drag, wants efficiency. Meanwhile, the conservative saver is focused on stability.

If we treat those conversations the same, we miss the opportunity. Our responsibility is to match structure to objective.

Make tax meetings more strategic

You don't need a separate annuity appointment during tax season. Integrate the discussion naturally.

In working with financial professionals across the country, I've seen simple shifts make a difference:

• Review last year's return to identify recurring taxable income.
• Model long-term outcomes with and without tax deferral.
• Compare taxable brokerage growth to tax-deferred alternatives.
• Illustrate how income streams interact with Social Security and RMDs.

Keep it clear. Keep it educational. Let the numbers speak.

Tax season concentrates attention. That's a gift. Instead of limiting conversations to refunds and deductions, use that focus to build a more complete retirement income plan.

If you want to elevate your annuity production this year, start by elevating your tax-time conversations. Bring strategy into the room. Show how annuities fit within a tax-aware framework. Demonstrate that you see the full picture.

In a crowded field, insight and structure separate the top professionals from their competitors. This tax season, do more than file returns. Turn every meeting into an opportunity to strengthen income planning and reinforce your value as a financial professional.

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Brian Kunkel, JD, CMFC, CRPS, RICP, is Senior Vice President of Marketing Strategy and Field Services at Connect Wealth Solutions, an AmeriLife company. Contact him at [email protected].