(Welcome.) (Introductions.) (Time Frame for Presentation and Order of Events)
Fitting the pieces together for your retirement is important. This brief presentation will help you understand the risks to your retirement income and what you may be able to do to reduce these risks. Western & Southern Life is a proud member of Western & Southern Financial Group, a FORTUNE 500 company.
There are three main risks to your retirement income. Longevity . Individuals are living long through their retirement. Do they have enough income and assets? 2. Inflation erodes the value of each dollar of income. A dollar today will buy more today than it will next year or the next decade. Uncertainty . Market volatility can erode the value of your financial assets and can lower the amount of income you may expect from them. Now let’s review how each of these risks may impact you and your retirement income. Then, let’s see if we can reduce each risk.
Whether you are married or not, you can expect to live many years in retirement. Long life has its rewards, but it is also a risk to your retirement funds. Your retirement funds may provide an income for ten years, but what about 15, 20 or more years?
Inflation is the second risk to your retirement income. A dollar in 1943 does not buy as much as today. In fact, $100 in 1970 has the same buying power as $503 did in 2005. Many of us do not consider inflation to be a big risk. Sure, prices go up each year. But it’s only by three percent, on average. The problem is that a three percent increase in prices each year adds up over five, ten or twenty years.
Uncertainty means the volatility you may have in your retirement funds. The “Ups” and “Downs” of the financial markets can have a dramatic impact to your retirement nest egg. Too many “Down” markets can result in your retirement funds being depleted far too soon.
Retirement Income Needs does not focus on reducing any one of these risks. It looks at reducing all of them. The risk due to Longevity is managed by providing an additional source of guaranteed income, as long as you live. This approach may allow your assets to continue to grow to help offset the impact of Inflation . Uncertainty , or market risks, is addressed by using products that are not tied to the risks of the stock market. Note to Sale Rep: If the client is married, you may say, “The risk due to Longevity is managed by providing an additional source of guaranteed income, as long as you and your spouse live.”
The Western & Southern Life’s approach to Retirement Income Strategies offers you control and peace of mind. First, the Strategy offers increased guaranteed income that is income tax-advantaged. This income can be paid as long as you live. You cannot outlive this income. There are a number of guaranteed options for your survivors, in the event of your death. Plus, the Strategy may provide access to your funds, in the event of an emergency. Note to Sales Rep: If the client is married, you may substitute “you” for “you and your spouse.” Guaranteed income is provided by using a single premium immediate annuity (SPIA) with a life contingent settlement option. Income tax advantaged income is available from the SPIA if it is funded by non-qualified money. Income tax-deferred growth is derived by the purchase of a single premium deferred annuity (SPDA). Many Retirees do not allow their assets to grow. Rather, they take interest income. This increases their taxable income and may limit the tax efficiency of their retirement income. Guaranteed benefits to your survivors can be derived in three ways; 1. SPIA’s life contingent settlement option can offer the spouse and/or beneficiaries a continued income stream in the event of the annuitant’s death, 2. the SPDA’s account value will be paid to the beneficiary, and 3. the purchase of a whole life insurance policy can provide a guaranteed death benefit that is income tax free to the beneficiary. Access to funds may be achieved if the clients purchase a SPDA or if assets are retained in a current financial vehicle, such as a money market account, bank certificate of deposit, or other such asset that allows access.
Guarantees are important. Life policy guarantees are only as good as the underwriting company supporting them. Thankfully, that company is The Western and Southern Life Insurance Company. The Western and Southern Life Insurance Company is among the highest financially rated insurance companies in the United States.
We are now at step 3 of the process and I would like to continue our conversation if that is acceptable?
Now that we have explored Retirement Income Strategies we need to determine the Strategy that is right for you. Here is where we will look at your current assets and determine if there are any available to fund a Retirement Income Strategy. Let’s take a look at the information we gathered earlier on your current assets…. Sales Representative NOTE: At this stage, if permission is granted and the client understands the Retirement Income Strategy you should return to the Client Profiler in the Financial Focus software program. Here you should look at each individual asset and re-explore the purpose, rate of return and maturity date of each asset. Discuss with your prospect the comfort level and availability of these funds. Be sure to identify the assets as qualified or non-qualified as this could create a tax event for the client. For specific training on how to determine a Retirement Income need please review the “Retirement Income Needs, Needs Analysis Parts 1 and 2” in archived EDLive.
There has never been a better time to secure your Legacy lives on through your heirs with your own Retirement Income Strategy.
1. Cincinnati, Ohio Policy Series 0701-3030 WSA 0506-320, 0506-320-U 0506-100, 0506-100-U Rider Series 9401-540, 9401-581-U, 9401-670, 9401-671, 0010-620, 0010-602, 0010-675 RINC 0805 Legacy Master® and annuities are issued by Western-Southern Life Assurance Company. Superior Value Life is issued by The Western and Southern Life Insurance Company. Economy Life is issued by The Western and Southern Life Insurance Company. WESTERN-SOUTHERN LIFE® Copyright May 2008. Retirement Income Needs 1 of 12
2. FITTING THE PIECES TOGETHER 2 of 12
3. <ul><li>Longevity </li></ul><ul><li>Inflation </li></ul><ul><li>Uncertainty </li></ul>Understand and reduce them The Risks to Your Retirement Income
7. Retirement Income Needs <ul><li>Reduce all three risks </li></ul>Not a deposit. Not FDIC-insured. Not insured by any federal government agency. Not guaranteed by Fort Washington Savings Company. May go down in value. Reduce exposure to market risks Uncertainty Allow assets to grow Inflation Guaranteed income Longevity Approach Risk
8. <ul><li>Helps give you Control and offers Peace of Mind </li></ul><ul><li>Increases the amount of guaranteed income to you on an income tax-advantaged basis </li></ul><ul><li>Income is guaranteed for as long as you live </li></ul><ul><li>Income tax-deferred growth </li></ul><ul><li>Guaranteed benefits to your survivors upon your death </li></ul><ul><li>Access to funds in the event of an emergency </li></ul>Benefits to You
9. <ul><li>Holds the following ratings awarded by three highly respected, independent insurance-rating firms: </li></ul><ul><ul><li>Standard & Poor’s AA+ for Very Strong financial security characteristics (second highest of 21 ratings; rating held since August 2005) </li></ul></ul><ul><ul><li>A.M. Best A++ (Superior) for financial strength, operating performance, and market profile (highest of 16 ratings; rating held since May 1991) </li></ul></ul><ul><ul><li>Fitch AA+ for Very Strong insurer financial strength (second highest of 21 ratings; rating held since September 2002) </li></ul></ul>Ratings are subject to change from time to time. The ratings shown herein are correct as of 01/02/08. Western & Southern Life
10. <ul><li>Next Steps: </li></ul><ul><li>Step 1 I gather your information </li></ul><ul><li>Step 2 I help you determine your needs </li></ul><ul><li>Step 3 I explore alternatives with you based on the information we gathered </li></ul><ul><li>Step 4 I recommend solutions to fit your need </li></ul><ul><li>Step 5 I will review your plan annually </li></ul>Western & Southern Life
11. Western & Southern Life Let’s look at your assets Step 3 Exploring alternatives based on the information we gathered