Today the buzz is about retirement income solutions. And in the myriad of statistics that get bandied about, here is one you should remember: The median boomer is 51-years-old. That may seem innocuous, but it means that the typical boomer is 14 years away from retirement. And that, in turn, means accumulation is still a big issue for more than half of the 77 million boomers, not to mention the younger generations that follow.

Faced with longer lifespans and a failing retirement safety net, it is widely agreed that Americans need to save more. And in that vein, here's a simple fact that you should remember: The more you accumulate, the more retirement income you generate. And to maximize savings, few things can beat the power of tax-deferral.

Stockpile investments—without stripping away 15% to 35% in taxes each year—and growth compounds faster, giving you the potential to save substantially more.

But you may be surprised to learn that tax-deferral can quickly outperform a taxable account—even when capital gains taxes are at an all time low. The key is using a low-cost, no-load tax-deferred investment platform, such as a variable annuity, with a flat-insurance fee of $20 per month, no matter how much a client decides to invest.

That's the conclusion of a new study co-authored by University of Chicago Professor Ira Weiss, Ph.D. and Matthew Grove, a senior vice president of business development here at Jefferson National Life Insurance Co. Tax deferral supercharges accumulation to drive more retirement income.

Our experts posed several key questions in their research, including:

• When does a tax-deferred account "break even" with a taxable account?
• How do portfolio type, asset class, asset location, active trading and account size affect the accumulation power of tax-deferral?
• How do traditional VAs with asset-based fees erode performance?
• ow do flat-insurance fee VAs improve performance—and increase accumulation?

To help answer these questions, just remember three numbers: 4, 10 and 14. Those are the number of years it can take for a "tax-deferred flat-fee VA" to break even with a taxable account in various scenarios. More specifically, it will take just four years for the typical conservative investor to reach that point; 10 years for moderate investors; and 14 years for aggressive investors. For the typical active investor, however, it can take less than a year.

Also, keep in mind that flat-fee VAs can also generate higher after-tax returns for "tax-inefficient" assets.

But how does a traditional variable annuity, with asset-based insurance fees averaging 1.35% annually, stack up against a flat-fee VA? The break-even periods skyrocket to 23, 31, and 37 years for conservative, moderate and aggressive investors, respectively. Clearly, tax-deferral doesn't stand a chance with a traditional VA.

The innovative flat-fee VA is designed to work harder than the traditional VA by eliminating commissions, surrender fees and complex insurance riders. And it's built on a tax-deferred investment platform of more than 200 funds—four times more than the typical VA—to help you navigate the turbulence and generate returns in a broad range of market conditions.

But what about tax implications at withdrawal? With any VA, initial withdrawals are treated as gains and are taxed as ordinary income. Only after all gains are withdrawn will subsequent withdrawals be untaxed; whereas withdrawals from taxable accounts immediately benefit from lower tax rates, generally a mix of dividend income rates, long-term capital gains rates and ordinary income rates.

As the chart demonstrates, with tax-free compounding you can accumulate substantially more, to outweigh the cost of higher taxation upon withdrawal.

Asset Location: A Smarter Way to Invest

Based on tax implications, certain assets will benefit more from tax-deferral. "Tax-inefficient" investments such as real estate investment trusts and bond funds which generate ordinary income—currently taxed as high as 35%—consistently perform better in a low-cost tax-deferred variable annuity than in a taxable account.

Likewise, trading activity in a taxable account—even regular rebalancing—can create a taxable event and a drag on returns. But trading inside a flat-fee VA allows unlimited activity while deferring all taxes on gains to a future date.

This makes the flat-fee VA especially compelling for active managers. It provides the potential to capture alpha through short-term market moves, without the inefficiencies of paying taxes on short-term gains.

The Sweet Spot: High-Net-Worth Clients

Flat-fee VAs can be a magnet for high-net-worth clients, who can easily max out the low contribution limits of their 401(k)s and IRAs. A flat-fee VA allows these clients to contribute $10 million or more. At larger balances, clients can save thousands—even tens of thousands—annually with a flat-insurance fee of just $240 per year, versus asset-based fees of traditional VAs. And as illustrated in the chart (left), break-even periods versus taxable accounts decline even further as the account value increases.