FOR IMMEDIATE RELEASE

Jefferson National Contact:
Deborah Newman
Director Corporate Communications
212-220-5862
dnewman@jeffnat.com

Tax-Deferral Key to Generating Retirement Savings, Providing Additional Retirement Income

Jefferson National White Paper Concludes Flat-Insurance Fee VA Can Outperform Both Taxable Accounts and Traditional VAs to Generate More Retirement Income

New York, NY and Louisville, KY - February 04, 2008 - Tax-deferral is vital for accumulating more savings and generating more retirement income, according to a new white paper released by Jefferson National that examines the performance of tax-deferred vs. taxable accounts over varying periods of time. The key is using a low-cost, no-load tax-deferred investment platform such as a flat-insurance fee variable annuity, after maxing-out contributions to other vehicles such as IRAs and 401(k)s.

"Increasing Retirement Income through the Power of Tax-Deferral" co-authored by Matthew Grove of Jefferson National and Professor Ira Weiss, Ph. D. of the University of Chicago, concludes that a no-load, flat-insurance fee VA can outperform a taxable account, even when capital gains taxes are at an all time low. The study further concludes that the asset-based fees associated with traditional VAs often negate the benefit of tax-deferral.

"Many financial advisors are currently questioning the benefit of tax-deferral, especially when derived through traditional variable annuities, which carry relatively high costs and asset-based fees," said Laurence Greenberg, President and CEO of Jefferson National Life Insurance Company. "But tax-deferral can indeed boost the returns on retirement savings when a no-load, flat-insurance fee variable annuity is used. And, the power of low cost tax-deferral can be significant, helping consumers accumulate more, generate more retirement income for longer, and improve their chances of leaving a lasting legacy for their heirs."

"Many investors assume it takes several decades of tax-deferred growth to produce after-tax returns that are higher than those produced by a taxable account. However, depending on the mix of asset classes and trading strategy used, it can take anywhere from thirteen years to as little as one year for a tax-deferred portfolio to outperform a taxable portfolio," said Professor Ira Weiss of the University of Chicago. "Our research concludes that advisors should consider moving taxable accounts earmarked for long-term accumulation into a low-cost, no-load tax-deferred investment platform to enhance their clients' after-tax outcome."

Key findings of the white paper include:

• Typical mutual fund investors with a moderate risk profile are better off in a flat-fee VA, rather than a taxable account, if they accumulate savings for more than ten years before taking withdrawals to generate a retirement income.
• Conservative investors are better off in a flat-fee VA after four years of accumulation, and aggressive investors will do better after thirteen years.
• Those using an active management strategy will almost always do better in a flat-fee VA, because active strategies typically involve high tax costs.
• The high costs of traditional VAs' increase these "break even" periods to 23, 31 and 37 years for conservative, moderate and aggressive investors, making it difficult to recommend traditional VAs for the purpose of tax-deferral.
• Although some advisors may prefer to locate clients' entire retirement portfolios in a flat-fee VA, higher after-tax returns can be earned if advisors practice asset location – locating tax-inefficient asset classes in a flat-fee VA and tax-efficient asset classes in a taxable account.

Accumulation is still a big issue for more than half of the 77 million boomers nearing retirement. The median boomer is only 51 years old—fourteen years or more until the traditional retirement age. The more assets these boomers can accumulate, the more retirement income they will ultimately generate. While investment horizon and investment type are key to determining the accumulation power of tax-deferral, other factors are evaluated in the white paper, including investment strategy, tax bracket, withdrawal strategy and account size.

To perform this analysis, authors Grove and Weiss conducted primary research on the tax characteristics of traditional mutual funds, using data from the University of Chicago's Center for Research in Security Prices¹ as well as Ibbotson Associates. The research, which examined large cap, small-to-mid cap, and long-term bond funds over a 35-year period, breaks each asset class' total return into different buckets based on tax treatment, enabling an analysis of the relative performance of taxable accounts and tax-deferred flat insurance fee VAs.

Financial Professionals can receive a copy of the white paper at: www.jeffnat.com/whitepaper

About Jefferson National Life Insurance Company

Jefferson National Life Insurance Company offers retirement products for fee-based advisors and the clients they serve. Jefferson National believes that simple, low-cost variable annuities should be considered for a part of every American's retirement portfolio, and we've made it our mission to help all Americans save more for retirement by launching Monument Advisor, the first variable annuity with a flat-insurance fee. Jefferson National serves more than 60,000 customers nationwide, and is domiciled in Dallas, Texas with authority in 49 states and the District of Columbia. To reach our advisor support desk, please call 1-866-WHY-FLAT (1-866-949-3528). To learn more, please visit www.jeffnat.com.

¹Calculated (or Derived) based on data from CUSIP database © 2007 Center for Research in Security Prices (CRSP ©), Graduate School of Business, The University of Chicago.

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JNL2008CL003 02/08

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