Planning For A Secure Financial Future
Upcoming SlideShare
Loading in...5
×

Like this? Share it with your network

Share
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
1,335
On Slideshare
1,333
From Embeds
2
Number of Embeds
1

Actions

Shares
Downloads
91
Comments
0
Likes
2

Embeds 2

http://www.linkedin.com 2

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Planning for a Secure Financial Future Protection Wealth Accumulation Retirement Planning Estate Planning Business Planning
  • 2. PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS
  • 3. PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING Our objective is to help business owners, professionals, high-net-worth individuals and their families begin preparing for a secure financial future. Together, we will go through a financial discovery process – a step-by-step approach to personal and business planning designed to help you identify and focus on your unique goals and objectives. This process is designed to help you: Q Identify your current financial situation; Q Determine your financial objectives; Q Understand the options available to you; and Q Develop and implement a plan that addresses your unique needs. Working together, and, when appropriate, with your other financial advisors (for example, your CPA or attorney), we will help you select products and programs that are best suited to your individual situation. The five areas of planning in which we specialize include: Q Protection Using various types of insurance contracts to protect the people who depend on you – your family and business associates – should you die prematurely, become disabled, or suffer a long-term illness. Q Wealth Accumulation Developing financial programs with your long-term savings goals as a guide. Q Retirement Planning Using current tax law plus a variety of products and programs to help ensure a comfortable lifestyle during retirement. Q Estate Planning Preserving what you've worked hard to build over the years with programs that help you plan for the eventual distribution of your assets in a tax-efficient manner. Q Business Planning Designing programs that help you pass your business, intact, to the next generation or to your associates should you retire, become disabled or die prematurely; as well as incentive and benefit plans for key employees. With proper planning today, you can help achieve tomorrow’s dreams. 1
  • 4. PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING You’ve worked hard to get where you are. Now it’s time to protect what you’ve built – for yourself and for the people who depend on you. Will your current assets be sufficient to cover any unforeseen contingencies? Even substantial assets can be wiped out quickly. Q A medical emergency results in premature death, leaving your family without adequate income. Q A long-term illness quickly drains a lifetime of savings. What would your family have to Q An injury or accident makes returning to work give up to cover unpaid expenses? impossible. Q Mortgage payments No one likes to think about dying too soon, suffering a Q College savings long-term illness or becoming disabled. Q Child care However, if you haven’t planned for these possibilities, Q Taxes you, and the people who depend on you, could find Q Monthly bills yourselves in a devastating financial situation. For Q Food and clothing example: Q Car payment Q If your income suddenly stopped, how long Q Retirement savings could your family go on meeting its monthly obligations? What would happen after that? Q If you died leaving expensive, unpaid medical bills, where would the money come from to pay them? Would your family have to liquidate assets? 2
  • 5. Life’s Responsibilities Three of the most effective and affordable ways to address these concerns are life, disability, and long-term care insurance. Q Life insurance can provide an income tax-free, lump sum payment that can be used to settle debts, or provide a monthly income stream for your family. Q Disability insurance provides a monthly income to make up for lost wages should an accident, sickness or injury prevent you from working at your regular occupation. Benefits are generally received income tax-free. Q Long-term care insurance provides a monthly benefit to help offset the cost of nursing home or in-home care should you become unable to perform certain “activities of daily living” such as eating, dressing, bathing, toileting and transferring. What are your chances of becoming disabled? Do you own personal life insurance? Q How much? Q Over 51 million Americans are Q How did you arrive at this amount? classified as disabled, representing 18 percent of the population. Q Are your premiums level or do they increase? U.S. Census Bureau, Public Information Office, Q Does your policy build cash value that can be November 2008 used to meet lifetime needs? Q The average long-term disability absence lasts 2.5 years. Do you own disability or long-term Commissioner's Individual Disability Table A care insurance? Q Over 6.8 million workers are Q How much is the monthly benefit payment? receiving Social Security Disability Q When do benefits become payable? benefits, almost half are under age Q How long does the benefit payment last? 50. Social Security Administration, Fact Sheet Q Do you know how your policy defines “disability” January 31, 2007 and/or which “activities of daily living” are covered? Proper planning today will help you protect yourself, your family and the things that are important to you. 3
  • 6. WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION Accumulating wealth, no matter when you start, requires: Q A long-term investment strategy; Q A commitment to seeing that strategy through; and Q An understanding of your tolerance for risk. As you go through various stages in your life, your ability to set money aside will fluctuate. This fluctuation must be factored in to any long-term accumulation strategy you develop. People today are retiring earlier and living longer. Where the concern was once accumulating sufficient assets, it is now making sure those assets last a lifetime. But you likely have other asset accumulation concerns too, including: Q Helping children afford college costs; Q Taking advantage of the equity markets without undue risk of loss; and Q Wondering whether Social Security will still be there when it’s time for you to begin collecting. The bottom line… You need an effective plan for setting money aside for the future. A plan that is consistent with your investment objectives, time horizon and comfort level, and will not jeopardize your current lifestyle. The cost of waiting $50,000 goal in 10 years $1921 Monthly Contributions $887 $545 $376 $276 T T T T T Today Wait 2 Years Wait 4 Years Wait 6 Years Wait 8 Years Assuming 8.00% return. This chart is illustrative of the time value of money and does not represent any specific investment. Actual results may be more or less than those shown. 4
  • 7. Life’s Priorities The solution: Save early and often, and practice solid investment management with asset allocation. Asset allocation simply means you “allocate” your assets among a variety of investment classes to help protect against market ups and downs. Investment funds can be allocated among a number of accumulation vehicles, including: Q Fixed annuities, which pay a guaranteed rate of return and accumulate income tax-deferred. Q Variable annuities, which allow you to choose how your money is invested according to your risk tolerance. Variable annuities also accumulate income tax-deferred. For an additional cost, living benefit riders can also be added to provide guaranteed accumulation and/or withdrawal Asset Allocation Alternatives benefits. A variable annuity is a long-term financial retirement vehicle, subject to market fluctuations and may lose value. CDs Money Q Mutual funds, which allow you to accumulate Market money according to your investment risk Life Insurance Stocks tolerance. Most mutual fund families offer a Cash Value range of conservative, moderate and aggressive investment choices. Mutual Bonds Q Life insurance cash values, which accumulate Funds income tax-deferred and can be used to help pay for such things as college costs or to supplement Annuities retirement income. Please note: Certain limitations may apply to withdrawals. Policy loans and withdrawals will Of course, within annuities and mutual reduce the death benefit and cash values, and funds you can further allocate among may be taxable under certain circumstances. types of investments, including fixed- Q Stocks, bonds, money market funds, etc. income investments or equities. Where are you saving money? Are you paying income taxes on your earnings? Would you like to earn more? The right plan can help protect against market fluctuations and may result in greater wealth over the long term. 5
  • 8. RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION One of the biggest concerns facing Americans today is retirement. Unfortunately… Q Many company-sponsored, company-paid pension plans, long the staple of many Americans’ retirement incomes, are quickly being replaced by qualified retirement plans funded by employee contributions. Q According to current assumptions made by the Social Security Board of Trustees, annual benefits paid to retirees will exceed payroll tax revenues beginning in 2017. By 2041, they predict the Social Security Trust Fund will have been fully spent, resulting in ongoing reductions in benefits for future retirees. (Source: 2005 OASDI Trustees Report) How much would you have to start saving For many people, the answer will be today on a monthly basis in order to have self-funded retirement plans such as: saved $1 million at age 65? Q IRAs Age Assuming 6% Assuming 8% Q Employer-sponsored 401(k) and 403(b) Plans annual growth annual growth Q Fixed and variable annuities 30 $699 $437 Q Life insurance cash values 40 $1,436 $1,060 Most of us list financial security at retirement among our 50 $3,421 $2,900 highest priorities, yet only a few of us take adequate steps This hypothetical chart is illustrative and is not representa- to prepare for it. tive of past or future results. Actual results may be more or less than those shown. The typical 45-year-old married couple in the United States today will only have a portion of what they’ll need at retirement to maintain their existing lifestyle. Choose the right tools now to prepare for the comfortable 6 retirement you expect and deserve.
  • 9. Life’s Goals Will Social Security be enough? Assuming Social Security is still solvent when you retire, it may only pay a small percentage no more than about one-third of your pre-retirement income. For example: Individual Age 50 Pre-retirement Estimated Yearly Social % of current Income Security benefit at income age 66 $100,000 $27,024 27% $50,000 $18,960 38% Source: Social Security Benefits Calculator, 2009 figures. Assumes no increases in prices or earnings. Q Are you counting on Social Security to help you afford retirement? Q Could you maintain your current lifestyle at this level of income? Q From where will the balance of what you need to live on come? Q If the funds aren’t there, what will you have to give up? With proper planning now, you can begin accumulating assets to supplement your retirement income and potentially stretch those funds out over your expected lifetime. Plan for your retirement: Q You may want to consider opening an IRA. Then, defer as much as you can into it. Are you self-employed? Look into a Simplified Employee Pension (SEP) plan, SIMPLE IRA or installing a 401(k) plan. Q Exercise restraint. Once you’ve put money away, leave it alone. The Government imposes strict penalties on money you take out of tax-favored retirement plans, in addition to making you pay income taxes on it. Q Learn all you can. With 401(k) and other self-funded plans, you determine how your money is invested. By applying some basic investment strategies, you’ll have a better shot at achieving your retirement goals and objectives. 7
  • 10. ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING Most of us are pretty good about taking care of our present needs and protecting the things swe value. But surprisingly, many of us never take time to address what could be our biggest financial questions. How would you answer these questions? Q Who will receive your estate? Q Will you owe federal or state death taxes and, if so, how much will you owe? Q Where will the money come from to pay these taxes and other settlement costs? Q If cash and other liquid assets available to your heirs are insufficient to pay the taxes and costs, will they have to liquidate your estate? Without proper planning, estate taxes could consume a substantial portion of everything you own. Proper estate planning now can help you reduce the amount of taxes your estate will owe, as well as allow you to plan for how the assets you’ve accumulated over your lifetime will be distributed. 8
  • 11. Life’s Achievements The most common estate planning tools include: Q Wills, which are a legal declaration of how you want your assets to be distributed when you die. Q Trusts, which transfer property to your beneficiaries with several tax and non-tax advantages. Q Charitable giving, which enables you to distribute a portion of your assets to selected organizations, thus reducing the amount of taxes you owe. Q Life insurance, which provides the cash your family needs to maintain its lifestyle and the liquidity needed to pay estate taxes and settlement costs. Do you know what your estate is worth? Have you planned for the orderly disposition of your estate? Find out more about strategies to help reduce taxes, transfer assets to heirs quickly and privately, and preserve what you have spent a lifetime building. How large is your current estate? What is the: Value of your home? ________________________________________ Value of any savings accounts, including stocks, bonds, retirement accounts, CDs, annuities or mutual funds? ________________________________________ Total face amount of any life insurance policies? ________________________________________ Value of your possessions, including jewelry, artwork, home furnishings, etc? ________________________________________ Value of your share of a business or professional practice? ________________________________________ Value of anticipated inheritance? ________________________________________ Now ask yourself: Which of the above would you want your family to liquidate in order to pay your federal and state taxes and estate settlement costs? 9
  • 12. BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING You know the importance of delivering a good product or service and standing behind it. You also know the importance of keeping the books balanced, hiring qualified employees, beating the competition and meeting ever-increasing customer service expectations. But until you address the issues of retirement planning, business continuation and rewarding and retaining key employees, everything else could be in jeopardy. Did you know… Q Only about one third of small businesses offer some kind of retirement saving program to employees. Fewer than 10 percent offer nonqualified programs for the owners and executives. Q Life insurance is not a top priority for these businesses. Group life is the least common employee benefit, only one third have business life insurance for such things as key person coverage, and life insurance is next-to-last executive benefit the firms would bring in. Q Seven in 10 small business owners have thought about who would run the business in their absence, but only 25 percent have formal retirement succession plans and only 35 percent have formal continuation plans in the event of their deaths. Q Family-owned businesses are less prepared for future transition than nonfamily businesses. Q Just over half have personal IRAs, and fewer than 20 percent have annuities or pension plans. Source: Small Business Owners 2009. LIMRA Int’l, 2009 James O. Mitchel Ask yourself… Q What would happen to your business today if you suddenly weren’t here? Q What would happen if you were disabled or if you simply decided to retire? Q Would your business go on running smoothly without you, or would there be arguments over who should make executive decisions? Q Would your key people stay on, or would they begin looking for opportunities elsewhere? Q Would your best customers stay, or are you the reason they do business with you? 10
  • 13. Life’s Commitments What are your business concerns? Good business planning is more than just ensuring the stability of your business should you die or become disabled. It also includes using the business to reward yourself and your key people while you are living. By combining qualified retirement plans and selective benefit plans, you can: Q Set extra money aside for yourself; Q Help your employees prepare for their own retirement; and Q Reward and retain key employees Proper planning today can help ensure a comfortable retirement tomorrow. Do you know how these plans can reduce your current income taxes and increase the amount you’ll have to spend during retirement? Qualified Plans Non-Qualified Plans Q Comply with specific Internal Revenue Q Minimal Internal Revenue requirements requirement codes Q May favor owners and selected Q Allow for income tax benefits employees Q Must be provided to all eligible Q 401(k) Overlay employees Q Executive Bonus and Restricted Q 401(k) Bonus Plans Q SIMPLE (Savings Incentive Match Plan Q Split Dollar for Employees) Q Supplemental Executive Retirement Q SEPS (Simplified Employee Pension) (SERP) and Deferred Compensation 11 Plans
  • 14. PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING Are there other areas of planning that you would like to discuss? Of the areas reviewed, do any concern you more than the others? A secure financial future doesn’t just happen by accident. It requires examining your current circumstances; identifying your goals and objectives; developing a plan to achieve those goals and objectives; taking action to implement your plan; and periodically reviewing your plan. This guide has been prepared to help you begin preparing for a secure financial future and to introduce you to the wide range of products and services offered by our organization. At your convenience, we can work together to complete a financial analysis of your current situation. This information will remain strictly confidential, and will provide us with a good understanding of your present goals and your financial objectives moving into the future. Together, we’ll help develop the steps you can begin tak- ing immediately to help secure your financial future. 12
  • 15. PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS PROTECTION WEALTH ACCUMULATION RETIREMENT PLANNING ESTATE PLANNING BUSINESS PLANNING SELECTIVE BENEFITS
  • 16. The Penn Mutual Family of Companies: Q The Penn Mutual Life Insurance Company Q The Penn Insurance and Annuity Company Q Independence Capital Management, Inc. Q Hornor, Townsend & Kent, Inc. Q Penn Series Funds, Inc. Q The Pennsylvania Trust Company Q Janney Montgomery Scott LLC Investors should consider the investment objectives, risks, charges, and expenses of a variable insurance product carefully before investing. Please carefully read the prospectuses for the relevant variable insurance product and its underlying investment options, which contain this and other information about the product. You can obtain a prospectus from your Penn Mutual financial professional or go to www.pennmutual.com. Penn Mutual Variable products are principally offered through Hornor, Townsend & Kent, Inc., (HTK), Registered Investment Advisor, Member FINRA/SIPC. HTK is a wholly owned subsidiary of The Penn Mutual Life Insurance Company. Please note: Any reference to the taxation of life insurance products in this material is based on Penn Mutual’s understanding of current tax laws which are subject to change. You should consult a qualified tax advisor regarding your own personal situation. ©2009 The Penn Mutual Life Insurance Company, Philadelphia, PA 19172 www.pennmutual.com PM0374 6/09 A9JC-0608-14 FX2002-0115-0007