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Last Chance Retirement

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Last Chance Retirement and why conventional retirement plans have been a failure.

Last Chance Retirement and why conventional retirement plans have been a failure.

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  • You have a choice! Between the “Real” Stock Market for your retirement savings. Or you can have “the stock market they sell you” – but ONLY with Indexed Life.
  • Transcript

    • 1. Presented by PETER LANGELIER Tax Advantaged and “Safe” Retirement Savings Advisor
    • 2. "New Knowledge is the most valuable commodity on earth.
    • 3. "New Knowledge is the most valuable commodity on earth. The more truth we have to work with, the richer we become." Kurt Vonnegut
    • 4. Just Say “NO!” to a 401(k), 403(b), 457, IRA, SEP or ROTH!
    • 5. Truth #1 IRS Qualified Retirement Savings Plans 403b / 457 / IRA / SEP / 401k Are a Failure!
    • 6. 5 Reasons You Shouldn‟t Contribute to a 401(k) March 16, 2011 1) If there is no employer match. 2) High Fees. 3) Higher Tax Rate (at withdrawal) in Qualified Plan. 4) Larger Tax Bill at Withdrawal (larger balance). 5) (Likely) Future Tax Rate Increases.
    • 7. October 19,2009
    • 8. “Why It‟s Time to Retire the 401(k)” “The ugly truth is that the 401(k) is a lousy idea, a rotten repository for our retirement reserves …”
    • 9. “…The biggest factor in whether the 401(k) works as designed has to do with when you retire. If the market rises that year, you're fine. If you retired last year, you're toast.
    • 10. “…The biggest factor in whether the 401(k) works as designed has to do with when you retire. If the market rises that year, you're fine. If you retired last year, you're toast. And the chances of your becoming a victim of this huge flaw in the 401(k) plan are pretty high.
    • 11. “…The biggest factor in whether the 401(k) works as designed has to do with when you retire. If the market rises that year, you're fine. If you retired last year, you're toast. And the chances of your becoming a victim of this huge flaw in the 401(k) plan are pretty high. The market fell in four of the nine years since the beginning of the decade. That means anyone retiring this decade had a nearly 50% chance of leaving work in a down market.
    • 12. “…The biggest factor in whether the 401(k) works as designed has to do with when you retire. If the market rises that year, you're fine. If you retired last year, you're toast. And the chances of your becoming a victim of this huge flaw in the 401(k) plan are pretty high. The market fell in four of the nine years since the beginning of the decade. That means anyone retiring this decade had a nearly 50% chance of leaving work in a down market. In fact, your chances of retiring into a down market are even greater than that: forced retirements spike in recessions just as the stock market is tanking.”
    • 13. “Guaranteed accounts don't have to be run by the government. The ERISA Industry Committee that represents the nation's largest employers, has proposed a system that would allow individuals the ability to buy a guaranteed retirement account on their own. Some government regulation would be needed, but it would be a „Private Plan‟ .”
    • 14. “But the policy would be portable. Contribute for 30 years and you would be guaranteed income in retirement, no matter how many employers you worked for.
    • 15. “But the policy would be portable. Contribute for 30 years and you would be guaranteed income in retirement, no matter how many employers you worked for. Combine your retirement-insurance check with the money you get from Social Security, which can equal as much as 50% of final pay, and presto: you have something approaching retirement security.”
    • 16. “But the policy would be portable. Contribute for 30 years and you would be guaranteed income in retirement, no matter how many employers you worked for. Combine your retirement-insurance check with the money you get from Social Security, which can equal as much as 50% of final pay, and presto: you have something approaching retirement security.” We need a NEW, Safer way to save for retirement because …
    • 17. * 52% of workers (not including home equity) have savings less than $25,000.
    • 18. * 52% of workers (not including home equity) have savings less than $25,000. * 75% have savings less than $10,000.
    • 19. * 52% of workers (not including home equity) have savings less than $25,000. * 75% have savings less than $10,000. * 36% of those over 55 have saved less than … $10,000!
    • 20. Most Americans will be too poor to retire at 65! Nov. 1, 2009 / Center for Retirement Research at Boston College 51% are at high risk of falling short of having enough money in retirement.
    • 21. Most Americans will be too poor to retire at 65! Nov. 1, 2009 / Center for Retirement Research at Boston College 51% are at high risk of falling short of having enough money in retirement. “The disappearance of pension plans, as well as troubles with the Social Security system, place younger Americans at a higher risk of being unable to hold on to their standards of living during retirement. The cradle-to-the- grave relationship with the employer is severed…
    • 22. Most Americans will be too poor to retire at 65! Nov. 1, 2009 / Center for Retirement Research at Boston College 51% are at high risk of falling short of having enough money in retirement. “The disappearance of pension plans, as well as troubles with the Social Security system, place younger Americans at a higher risk of being unable to hold on to their standards of living during retirement. The cradle-to-the- grave relationship with the employer is severed… Younger people have to be responsible for their own retirement.”
    • 23. Most Americans will be too poor to retire at 65! Nov. 1, 2009 / Center for Retirement Research at Boston College 51% are at high risk of falling short of having enough money in retirement. “The disappearance of pension plans, as well as troubles with the Social Security system, place younger Americans at a higher risk of being unable to hold on to their standards of living during retirement. The cradle-to-the- grave relationship with the employer is severed… Younger people have to be responsible for their own retirement.” “Retiring won‟t become impossible, but it will require some thoughtful planning. Many workers will need to save and invest more, reduce debt and work longer to maintain their standard of living in retirement.”
    • 24. Truth #2 Stock Investment Gains – for Investors – are LOUSY!
    • 25. "There are two times when a man shouldn't speculate:
    • 26. "There are two times when a man shouldn't speculate: when he can't afford it, and when he can." Mark Twain
    • 27. Morningstar & Harvard Business School BCT Study 4000 Mutual Funds 1996-2002 Investor ROI Net Fees = 2.924%
    • 28. Bear Market Losses November 29, 1968 to May 26, 1970 - 36.06% January 11,1973 to October 3, 1974 - 48.20% November 28, 1980 to August 12, 1982 - 27.11% August 25, 1987 to December 4, 1987 - 33.54% March 27, 2000 to July 18, 2002 - 42.29% October 9, 2007 to March 9, 2009 - 56.77%
    • 29. Bear Market Losses November 29, 1968 to May 26, 1970 - 36.06% January 11,1973 to October 3, 1974 - 48.20% November 28, 1980 to August 12, 1982 - 27.11% August 25, 1987 to December 4, 1987 - 33.54% March 27, 2000 to July 18, 2002 - 42.29% October 9, 2007 to March 9, 2009 - 56.77% The Market (since 1946) has an average loss of -33.21% EVERY 6 YEARS!
    • 30. Bear Market Losses November 29, 1968 to May 26, 1970 - 36.06% January 11,1973 to October 3, 1974 - 48.20% November 28, 1980 to August 12, 1982 - 27.11% August 25, 1987 to December 4, 1987 - 33.54% March 27, 2000 to July 18, 2002 - 42.29% October 9, 2007 to March 9, 2009 - 56.77% The Market (since 1946) has an average loss of -33.21% EVERY 6 YEARS! It Takes 22.5 months for the Index to Return to Prior High Value.
    • 31. Is this Anxiety Roller Coaster how you want to live 20 - 30 years of Retirement?
    • 32. Wall Street Always Wins! Even when you lose Wall Street always wins with fees you ALWAYS pay – when the market goes up – AND when it goes down!
    • 33. Morningstar Management Fee [8-17-09]: Average domestic fee is 1.39%. International is 1.56%.
    • 34. Morningstar Management Fee [8-17-09]: Average domestic fee is 1.39%. International is 1.56%. Transaction Fee [6-19-09]: This annual fee is 1.64%. For Small Cap Fund it’s 2.80%.
    • 35. Morningstar Management Fee [8-17-09]: Average domestic fee is 1.39%. International is 1.56%. Transaction Fee [6-19-09]: This annual fee is 1.64%. For Small Cap Fund it’s 2.80%. “Vastly more important than expense ratios and no one‟s talking about it.” These are in ADDITION to Fund fees. You don’t control a fund’s transaction costs. That’s determined in part by how often the fund manager trades the securities in the fund’s portfolio, and how costly those trades are.
    • 36. Morningstar Management Fee [8-17-09]: Average domestic fee is 1.39%. International is 1.56%. Transaction Fee [6-19-09]: This annual fee is 1.64%. For Small Cap Fund it’s 2.80%. “Vastly more important than expense ratios and no one‟s talking about it.” These are in ADDITION to Fund fees. You don’t control a fund’s transaction costs. That’s determined in part by how often the fund manager trades the securities in the fund’s portfolio, and how costly those trades are. The Minimum Average TOTAL Actual Annual Fund Fees = 3.03%!
    • 37. Morningstar Management Fee [8-17-09]: Average domestic fee is 1.39%. International is 1.56%. Transaction Fee [6-19-09]: This annual fee is 1.64%. For Small Cap Fund it’s 2.80%. “Vastly more important than expense ratios and no one‟s talking about it.” These are in ADDITION to Fund fees. You don’t control a fund’s transaction costs. That’s determined in part by how often the fund manager trades the securities in the fund’s portfolio, and how costly those trades are. The Minimum Average TOTAL Actual Annual Fund Fees = 3.03%! Investment News ERISA Costs [10-15-09]: “It's fair to say that in many cases the total ERISA (401k) drag is close to about 1% of plan assets.”
    • 38. Morningstar Management Fee [8-17-09]: Average domestic fee is 1.39%. International is 1.56%. Transaction Fee [6-19-09]: This annual fee is 1.64%. For Small Cap Fund it’s 2.80%. “Vastly more important than expense ratios and no one‟s talking about it.” These are in ADDITION to Fund fees. You don’t control a fund’s transaction costs. That’s determined in part by how often the fund manager trades the securities in the fund’s portfolio, and how costly those trades are. The Minimum Average TOTAL Actual Annual Fund Fees = 3.03%! Investment News ERISA Costs [10-15-09]: “It's fair to say that in many cases the total ERISA (401k) drag is close to about 1% of plan assets.” Summary: Many plans are in the range of 4% to 5% in TOTAL yearly costs – the worst plans charge even more. After all the fees …
    • 39. Is Your 401(k) more like a 201(k)?!
    • 40. Putnam Investments President and Chief Executive Officer Robert L. Reynolds calls for a “ New Generation” of Workplace Savings Plans with Lower Volatility and Lifetime Income Solutions October 1, 2009 “After Market Meltdown, Better Plan Design Needed to Secure Reliable Lifetime Income” “Index funds and other passive investments that track benchmarks are guaranteed to lose value when the markets they track sink.
    • 41. Putnam Investments President and Chief Executive Officer Robert L. Reynolds calls for a “ New Generation” of Workplace Savings Plans with Lower Volatility and Lifetime Income Solutions October 1, 2009 “After Market Meltdown, Better Plan Design Needed to Secure Reliable Lifetime Income” “Index funds and other passive investments that track benchmarks are guaranteed to lose value when the markets they track sink. People in or near retirement are not well served by too-great a concentration of passive (index) investments, thinking they are a protection against a downturn …”
    • 42. “(Retirement) plans should be made much more resistant to market downturns … The next challenge in workplace savings plans will be to offer guidelines, even guardrails, to ensure that worker‟s savings are Protected as they reach retirement age.”
    • 43. BECAUSE …
    • 44. THE WALL STREET JOURNAL October 15, 2009 The Lost Decade of Stock Investing “Advisers sold us a bill of goods about the lasting value of real estate and stocks.”
    • 45. THE WALL STREET JOURNAL October 15, 2009 The Lost Decade of Stock Investing “Advisers sold us a bill of goods about the lasting value of real estate and stocks.” “If you invested $100 in the S&P 500 at the end of the last decade, you're happy with Dow 10,000 but still hoping for a 34.5% rally before year end -- just to break even.
    • 46. THE WALL STREET JOURNAL October 15, 2009 The Lost Decade of Stock Investing “Advisers sold us a bill of goods about the lasting value of real estate and stocks.” “If you invested $100 in the S&P 500 at the end of the last decade, you're happy with Dow 10,000 but still hoping for a 34.5% rally before year end -- just to break even. You'll need a staggering 72% rally when adjusting for inflation.”
    • 47. “Quantitative Analysis of Investor Behavior” March 9, 2009 DALBAR Study Reveals Carnage for Equity, Bond and Asset Allocation Shareholders The reality is that investors are not rational, and make buy and sell decisions at the worst possible moments.
    • 48. “Quantitative Analysis of Investor Behavior” March 9, 2009 DALBAR Study Reveals Carnage for Equity, Bond and Asset Allocation Shareholders The reality is that investors are not rational, and make buy and sell decisions at the worst possible moments. For the 20 years ended December 31, 2008, equity and asset allocation fund investors had average annual returns of 1.87% and 1.67%, respectively.
    • 49. “Quantitative Analysis of Investor Behavior” March 9, 2009 DALBAR Study Reveals Carnage for Equity, Bond and Asset Allocation Shareholders The reality is that investors are not rational, and make buy and sell decisions at the worst possible moments. For the 20 years ended December 31, 2008, equity and asset allocation fund investors had average annual returns of 1.87% and 1.67%, respectively. The inflation rate averaged 2.89% over that same time period.
    • 50. What About the Future?
    • 51. What About the Future? Market Watch – Wall Street Journal / 12-7-10 „10 reasons to shun stocks till banks crash‟ “Do not buy stocks. Not for retirement. Not in the coming decade. Don‟t. Huge risks.” “Wall Street is a loser. Stocks are Wall Street’s ultimate sucker bet. And it’ll sucker you again. You’ll lose, worse than in the last decade. Wake up before Wall Street banks trigger the next meltdown, igniting mass bankruptcy.”
    • 52. What About the Future? Market Watch – Wall Street Journal / 12-7-10 “Adjusted for inflation, Wall Street has lost 20% of your money in the past decade. Wall Street‟s a loser. And, worse, Wall Street will do it again by 2020.”
    • 53. What About the Future? Market Watch – Wall Street Journal / 12-7-10 “Adjusted for inflation, Wall Street has lost 20% of your money in the past decade. Wall Street‟s a loser. And, worse, Wall Street will do it again by 2020.” “That‟s right: It will lose another 20% of your retirement money.”
    • 54. With Retirement Savings, It‟s a Sprint to the Finish 21 January 2011 “What would you do if your financial planner prescribed the following advice? „Save and invest diligently for 30 years, then cross your fingers and pray your investments will double over the last decade before you retire‟.”
    • 55. With Retirement Savings, It‟s a Sprint to the Finish 21 January 2011 “What would you do if your financial planner prescribed the following advice? „Save and invest diligently for 30 years, then cross your fingers and pray your investments will double over the last decade before you retire‟.” “You might as well go to Las Vegas.”
    • 56. With Retirement Savings, It‟s a Sprint to the Finish 21 January 2011 “The problem is that even if you do everything right and save at a respectable rate, you‟re still relying on the market to push you to the finish line in the last decade before retirement. Why?
    • 57. With Retirement Savings, It‟s a Sprint to the Finish 21 January 2011 “The problem is that even if you do everything right and save at a respectable rate, you‟re still relying on the market to push you to the finish line in the last decade before retirement. Why? Reaching your goal is highly dependent on the power of compounding.”
    • 58. With Retirement Savings, It‟s a Sprint to the Finish 21 January 2011 “But if you‟re dealt a bad set of returns during an extended period of time just before you retire or shortly thereafter, your plan could be thrown wildly off track. Many baby boomers know the feeling all too well, given the stock market‟s weak showing during the last decade.”
    • 59. 21 January 2011 “The homestretch before retirement is often the most anxiety-inducing because workers have neither the time nor the financial capacity to recover before they begin taking withdrawals.” “When the bad returns come in the final 10 years, no reasonable amount of savings will make up the shortfall.”
    • 60. LOST DECADE The Stock Market Roller Coaster of 2000 – 2009 left these years known as the “Lost Decade”. . After average costs $1 after 10 years was worth 55 cents!
    • 61. LOST DECADE The Stock Market Roller Coaster of 2000 – 2009 left these years known as the “Lost Decade”. . After average costs $1 after 10 years was worth 55 cents! . The ROI was – 44.96%!
    • 62. Albert Einstein Insanity: "Doing the same thing over and over
    • 63. Albert Einstein Insanity: "Doing the same thing over and over and expecting different results."
    • 64. Truth #3 Taxes MUST go UP!
    • 65. August 19,2009 Don't put any more money in your tax-deferred retirement savings
    • 66. August 19,2009 Don't put any more money in your tax-deferred retirement savings “This is heresy in a world where people hate taxes … (but) things have changed in the past year … The old thinking was that you should defer tax bills until „you are in a lower bracket at retirement‟.
    • 67. August 19,2009 Don't put any more money in your tax-deferred retirement savings “This is heresy in a world where people hate taxes … (but) things have changed in the past year … The old thinking was that you should defer tax bills until „you are in a lower bracket at retirement‟. Higher bracket is more like it.
    • 68. August 19,2009 Don't put any more money in your tax-deferred retirement savings “This is heresy in a world where people hate taxes … (but) things have changed in the past year … The old thinking was that you should defer tax bills until „you are in a lower bracket at retirement‟. Higher bracket is more like it. If you are 45 and prosperous, plan on big federal deficits and higher income taxes when you retire in 2031.
    • 69. August 19,2009 Don't put any more money in your tax-deferred retirement savings “This is heresy in a world where people hate taxes … (but) things have changed in the past year … The old thinking was that you should defer tax bills until „you are in a lower bracket at retirement‟. Higher bracket is more like it. If you are 45 and prosperous, plan on big federal deficits and higher income taxes when you retire in 2031. You might be better off skipping the 401(k).
    • 70. August 19,2009 Don't put any more money in your tax-deferred retirement savings “This is heresy in a world where people hate taxes … (but) things have changed in the past year … The old thinking was that you should defer tax bills until „you are in a lower bracket at retirement‟. Higher bracket is more like it. If you are 45 and prosperous, plan on big federal deficits and higher income taxes when you retire in 2031. You might be better off skipping the 401(k). Maybe you should pay tax on your salary now!”
    • 71. 2011 Deficit $1.5 Trillion That's 10% GDP / largest since WWII
    • 72. 2011 Deficit $1.5 Trillion That's 10% GDP / largest since WWII Total National Debt = $14 Trillion
    • 73. 2011 Deficit $1.5 Trillion That's 10% GDP / largest since WWII Total National Debt = $14 Trillion Total with SS & Medicare = 70% GDP
    • 74. 2011 Deficit $1.5 Trillion That's 10% GDP / largest since WWII Total National Debt = $14 Trillion Total with SS & Medicare = 70% GDP With SS, Prescription and Medicare = $60 Trillion+ (to 2084)
    • 75. 2011 Deficit $1.5 Trillion That's 10% GDP / largest since WWII Total National Debt = $14 Trillion Total with SS & Medicare = 70% GDP With SS, Prescription and Medicare = $60 Trillion+ (to 2084) That = $500,000 Each!
    • 76. RECENT High TAX RATES 1944-45 94% 1958-64 91% 1965-81 70% 1982-86 50%
    • 77. RECENT High TAX RATES 1944-45 94% 1958-64 91% 1965-81 70% 1982-86 50% Current 35%
    • 78. RECENT High TAX RATES 1944-45 94% 1958-64 91% 1965-81 70% 1982-86 50% Current 35% The last time taxes were this low was 1931! (pre Increasing National Debt Era since 1980)
    • 79. RECENT High TAX RATES 1944-45 94% 1958-64 91% 1965-81 70% 1982-86 50% Current 35% The last time taxes were this low was 1931! (pre Increasing National Debt Era since 1980) The last time the “low” rate was today's 10% was 1941 – 70 years ago!
    • 80. Future Taxes Make 401(k) Less Advantageous November 6, 2009 Since 401(k)s were created in the early 1980s, the general assumption was that a saver would pay lower taxes in retirement, when their income was certain to be lower. So saving pretax dollars and delaying taxes made sense.
    • 81. Future Taxes Make 401(k) Less Advantageous November 6, 2009 Since 401(k)s were created in the early 1980s, the general assumption was that a saver would pay lower taxes in retirement, when their income was certain to be lower. So saving pretax dollars and delaying taxes made sense. Now, particularly for higher earners with the largest 401(k) balances, that assumption is fading as hikes in tax rates seem likely.
    • 82. Future Taxes Make 401(k) Less Advantageous November 6, 2009 Since 401(k)s were created in the early 1980s, the general assumption was that a saver would pay lower taxes in retirement, when their income was certain to be lower. So saving pretax dollars and delaying taxes made sense. Now, particularly for higher earners with the largest 401(k) balances, that assumption is fading as hikes in tax rates seem likely. (Another) problem high earners may face by saving only in a pretax 401(k) is that, years later, large withdrawals could trigger the tax on Social Security.
    • 83. Future Taxes Make 401(k) Less Advantageous November 6, 2009 Since 401(k)s were created in the early 1980s, the general assumption was that a saver would pay lower taxes in retirement, when their income was certain to be lower. So saving pretax dollars and delaying taxes made sense. Now, particularly for higher earners with the largest 401(k) balances, that assumption is fading as hikes in tax rates seem likely. (Another) problem high earners may face by saving only in a pretax 401(k) is that, years later, large withdrawals could trigger the tax on Social Security. (Not deferring taxes) is a good choice for higher earners whose income isn't likely to fall in retirement and for young investors, who will likely see their salaries and taxes increase.
    • 84. / 22 October 2008 "It's Time for Young Voters to Get Mad!" To Voters under 35: "You have a heavily mortgaged future. You'll pay for Social Security and Medicare for aging baby boomers ...
    • 85. / 22 October 2008 "It's Time for Young Voters to Get Mad!" To Voters under 35: "You have a heavily mortgaged future. You'll pay for Social Security and Medicare for aging baby boomers ... the needed federal tax increase might total 50% over the next 25 years."
    • 86. Truth #4 Social Security is NOT Secure!
    • 87. Social Security is going BROKE! 2008 - 65% Rely on SS for 50% of their income!
    • 88. Social Security is going BROKE! 2008 - 65% Rely on SS for 50% of their income! - 33% Rely on SS for 90% of their income!
    • 89. Social Security is going BROKE! 2008 - 65% Rely on SS for 50% of their income! - 33% Rely on SS for 90% of their income! - Accounts for 1/3 of discretionary income for couples earning over $500,000 year!
    • 90. Social Security is going BROKE! 2008 - 65% Rely on SS for 50% of their income! - 33% Rely on SS for 90% of their income! - Accounts for 1/3 of discretionary income for couples earning over $500,000 year! - 1 in 7 Americans receive a check from SS!
    • 91. Social Security is going BROKE! 2008 - 65% Rely on SS for 50% of their income! - 33% Rely on SS for 90% of their income! - Accounts for 1/3 of discretionary income for couples earning over $500,000 year! - 1 in 7 Americans receive a check from SS! - # Workers per Retiree: 1960 = 5 2009 = 3.3 2020 = 2!
    • 92. 2010: SS Outlays exceed Revenues! The likely solution say most experts is MORE Taxes!
    • 93. 2010: SS Outlays exceed Revenues! 2012: - SS Benefit check: - $1,229 mo. Average The likely solution say most experts is MORE Taxes!
    • 94. 2010: SS Outlays exceed Revenues! 2012: - SS Benefit check: - $1,229 mo. Average - $1,994 (Couple) The likely solution say most experts is MORE Taxes!
    • 95. 2010: SS Outlays exceed Revenues! 2012: - SS Benefit check: - $1,229 mo. Average - $1,994 (Couple) - Up to 85% of Benefits are Taxed! The likely solution say most experts is MORE Taxes!
    • 96. 2010: SS Outlays exceed Revenues! 2012: - SS Benefit check: - $1,229 mo. Average - $1,994 (Couple) - Up to 85% of Benefits are Taxed! 2030: Medicare Trust Fund is Broke! The likely solution say most experts is MORE Taxes!
    • 97. 2010: SS Outlays exceed Revenues! 2012: - SS Benefit check: - $1,229 mo. Average - $1,994 (Couple) - Up to 85% of Benefits are Taxed! 2030: Medicare Trust Fund is Broke! 2037: Social Security Trust Fund is Broke! The likely solution say most experts is MORE Taxes!
    • 98. But What Else is Left?
    • 99. But What Else is Left? What Possible Investment is There?!
    • 100. "The Difficulty lies not in the new ideas,
    • 101. "The Difficulty lies not in the new ideas, but in escaping from the old ones." John Maynard Keynes 20th Century Economist "The General Theory of Employment, Interest and Money"
    • 102. “The solution: a new type of „insurance‟.
    • 103. “The solution: a new type of „insurance‟. Retirement savings, it turns out, are exactly the type of asset we need insurance for.
    • 104. “The solution: a new type of „insurance‟. Retirement savings, it turns out, are exactly the type of asset we need insurance for. We need insurance to protect against risks we can't predict (when the market collapses) and can't afford to recover from on our own.”
    • 105. Fortunately, there IS a “NEW” Solution!
    • 106. With all these benefits, today it is called … "The 'NEW' Asset Class Investment" March 26, 2008 "This is a safe bet, long term investment with high interest, almost no volatility and liquid.
    • 107. With all these benefits, today it is called … "The 'NEW' Asset Class Investment" March 26, 2008 "This is a safe bet, long term investment with high interest, almost no volatility and liquid. You do not have to die to enjoy these returns (and) it can work like a Roth ...
    • 108. “It‟s dramatic advantage is that you pay no tax on the gains ever, and you can spend them while you are alive tax free.”
    • 109. WHAT IS IT?!
    • 110. Permanent Life Insurance
    • 111. For Retirement Savings it’s often called a “Private Plan”
    • 112. For Retirement Savings it’s often called a “Private Plan” It IS Approved by Congress and Regulated by the IRS with IRC 7702(a)
    • 113. "It ain't what you don't know that gets you into trouble.
    • 114. "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so." Mark Twain
    • 115. April 2009 Myth. Life Insurance is not a good investment.
    • 116. April 2009 Myth. Life Insurance is not a good investment. “This canard spread as 401(k)s and IRA's supplanted Life Insurance as Americans' most popular ways to build Savings while deferring taxes. But two factors point to a revival of Life insurance as an investment:
    • 117. April 2009 Myth. Life Insurance is not a good investment. “This canard spread as 401(k)s and IRA's supplanted Life Insurance as Americans' most popular ways to build Savings while deferring taxes. But two factors point to a revival of Life insurance as an investment: One is guaranteed credits on cash values, which means if you pay the premiums, you cannot lose money unless the company fails. (The other is if you are over 65, you can often sell it for several times its cash value)!”
    • 118. April 2009 Myth. Life Insurance is not a good investment. “This canard spread as 401(k)s and IRA's supplanted Life Insurance as Americans' most popular ways to build Savings while deferring taxes. But two factors point to a revival of Life insurance as an investment: One is guaranteed credits on cash values, which means if you pay the premiums, you cannot lose money unless the company fails. (The other is if you are over 65, you can often sell it for several times its cash value)!” TRUTH: “A good investment is one in which you put money away now and have more later. Checked your 401(k) lately?”
    • 119. BUT this is NOT your Grandparents Life Insurance!
    • 120. Returns can be LINKED to the S&P 500 (or other index)
    • 121. Returns can be LINKED to the S&P 500 (or other index) You are NOT IN the stock market!
    • 122. Returns can be LINKED to the S&P 500 (or other index) You are NOT IN the stock market! This means you KEEP ALL Annual gains!
    • 123. Your Principal and Gains CANNOT go down in value because of the market -- they can only go UP!
    • 124. Juicing Your Life Insurance 5 June 2010 This year's hottest life-insurance product is well-suited to an era of sudden "flash crashes" and overall uncertainty: It appeals to people eager to capture stock-market gains while avoiding undue risk. The product (is) "indexed universal life”.
    • 125. Juicing Your Life Insurance 5 June 2010 The twist in these new policies is the use of a stock-market index to help determine the interest rate for the cash-value account. In many versions, insurers link to the Standard & Poor's 500-stock index, but cap the annual interest rate …
    • 126. Juicing Your Life Insurance 5 June 2010 The twist in these new policies is the use of a stock-market index to help determine the interest rate for the cash-value account. In many versions, insurers link to the Standard & Poor's 500-stock index, but cap the annual interest rate … For downside protection, some policies promise a minimum interest rate of as much as 2%, even in losing years for stocks, while others simply protect against losses.
    • 127. Juicing Your Life Insurance 5 June 2010 The product "resonates with people" says the chief actuary (for one co.). “It has a guarantee so people can sleep at night, and it has upside potential”.
    • 128. For Retirement Savings… ZERO IS HERO!
    • 129. How well can this 'solution' work? Hypothetical Past 20 years to 12/31/10 (Age 40 to 59) Based on ACTUAL S&P 500 Index gains using Current Crediting Formula & Expenses (including zero gain years) 7 – 8% NET per year!
    • 130. This is Indexed Life! THE Retirement Savings Investment for the Future!
    • 131. Thanks to IRS IRC: 7702(a) Indexed Universal Life (IUL) is the ONLY Investment approved by Congress and the IRS to provide you ALL of these Benefits and Features ...
    • 132. TAX FREE Income!
    • 133. TAX FREE to Heirs!
    • 134. Putnam Investment Retirement Survey 2005 “A majority of retirees said their BIGGEST MISTAKE in planning for Retirement was failing to invest in TAX FREE Accounts.”
    • 135. Putnam Investment Retirement Survey 2005 “A majority of retirees said their BIGGEST MISTAKE in planning for Retirement was failing to invest in TAX FREE Accounts.” With Indexed Life …
    • 136. ... it's OTHER dramatic advantage is that you pay NO tax on the gains ever – Your Retirement Income is Tax Free!
    • 137. 7 - 8% IUL NET 1991-2010 vs. DALBAR Report 20 Year Investor Behavior to 2010 4-1-11
    • 138. 7 - 8% IUL NET 1991-2010 vs. DALBAR Report 20 Year Investor Behavior to 2010 4-1-11 "Market" S&P 500 = 9.14% gross
    • 139. 7 - 8% IUL NET 1991-2010 vs. DALBAR Report 20 Year Investor Behavior to 2010 4-1-11 "Market" S&P 500 = 9.14% gross NET Investor ROI = 3.83% ACTUAL!
    • 140. 7 - 8% IUL NET 1991-2010 vs. DALBAR Report 20 Year Investor Behavior to 2010 4-1-11 "Market" S&P 500 = 9.14% gross NET Investor ROI = 3.83% ACTUAL! RESULT: 20 Year IUL Net > Market!
    • 141. Indexed Life also does NOT have the Restrictive Qualified Plan Contribution, Access and Loan Rules!
    • 142. 2012 403b/457/401k IUL Contribution Limit $17,000 NONE Pre 59.5 Penalty 10% Federal NONE Plus State
    • 143. 2012 403b/457/401k IUL Contribution Limit $17,000 NONE Pre 59.5 Penalty 10% Federal NONE Plus State Mandatory Distribution 70.5 NONE
    • 144. 2012 403b/457/401k IUL Contribution Limit $17,000 NONE Pre 59.5 Penalty 10% Federal NONE Plus State Mandatory Distribution 70.5 NONE Accelerated Terminal no to $1 million Illness Advance
    • 145. Plan LOAN 403b/457/401k IUL Amount 50% to $50k NO Limit
    • 146. Plan LOAN 403b/457/401k IUL Amount 50% to $50k NO Limit Loan Repayment mandatory Optional
    • 147. Plan LOAN 403b/457/401k IUL Amount 50% to $50k NO Limit Loan Repayment mandatory Optional Quit/Fired/Co. 'broke' 90 days N/A repay in full
    • 148. Plan LOAN 403b/457/401k IUL Amount 50% to $50k NO Limit Loan Repayment mandatory Optional Quit/Fired/Co. 'broke' 90 days N/A repay in full Late with payment 30 day grace N/A or ALL Taxable
    • 149. Indexed Life also includes: Lifetime Life Insurance (may guarantee Retirement Plan completion for Survivor Spouse)
    • 150. The Life Insurance can also be used for PENSION MAX to Increase Your Pension Income $hundreds or $thousands per month! Popular for Teacher & Government Pension Plans: STRS [State Teachers Retirement System] PERS [Public Employees Retirement System]
    • 151. Accelerated “Living” Benefit With 1 or 2 year terminal diagnosis up to $1 million Advance Benefit!
    • 152. Accelerated “Living” Benefit With 1 or 2 year terminal diagnosis up to $1 million Advance Benefit! Money can be used for ANY purpose - including treatment that could SAVE YOUR LIFE!
    • 153. With Indexed Life You can also … Be Your OWN Banker! (Great Financial Strategy for those in their 20's & 30's!) You can use your savings to finance your life while on your journey to retirement!
    • 154. AND Finance Your Retirement TOO While You D0! Age 40 Save $1,000 Month to Age 65
    • 155. AND Finance Your Retirement TOO While You D0! Age 65 Cash Value = $857,000
    • 156. AND Finance Your Retirement TOO While You D0! Age 65 Cash Value = $857,000 Tax Free Retirement Income = $50,000 Yr!
    • 157. AND Finance Your Retirement TOO While You D0! Age 65 Cash Value = $857,000 Tax Free Retirement Income = $50,000 Yr! Age 85 Cash Value = $2,229,000!
    • 158. AND Finance Your Retirement TOO While You D0! Age 65 Cash Value = $857,000 Tax Free Retirement Income = $50,000 Yr! Age 85 Cash Value = $2,229,000! (Or give Yourself a Raise!)
    • 159. The BEST COLLEGE SAVINGS Plan! * Can take out “Tuition” Tax/Penalty Free!
    • 160. The BEST COLLEGE SAVINGS Plan! * Can take out “Tuition” Tax/Penalty Free! * NOT included in college aid formulas!
    • 161. The BEST COLLEGE SAVINGS Plan! * Can take out “Tuition” Tax/Penalty Free! * NOT included in college aid formulas! * CV Remains the Parents Savings!
    • 162. The BEST COLLEGE SAVINGS Plan! * Can take out “Tuition” Tax/Penalty Free! * NOT included in college aid formulas! * CV Remains the Parents Savings! * Balance can continue to grow to provide Tax FREE Retirement Income!
    • 163. The BEST COLLEGE SAVINGS Plan! * Can take out “Tuition” Tax/Penalty Free! * NOT included in college aid formulas! * CV Remains the Parents Savings! * Balance can continue to grow to provide Tax FREE Retirement Income! * Life Insurance on Parent to guarantee College paid for if premature death.
    • 164. Or You Can Keep “Saving” in Mutual Funds!
    • 165. BONUS! The Tax Free Income from Indexed Life (unlike Municipal Bonds and Qualified Savings withdrawals)
    • 166. BONUS! The Tax Free Income from Indexed Life (unlike Municipal Bonds and Qualified Savings withdrawals) is NOT included in the formula to tax up to 85% of your Social Security!
    • 167. BONUS! The Tax Free Income from Indexed Life (unlike Municipal Bonds and Qualified Savings withdrawals) is NOT included in the formula to tax up to 85% of your Social Security! An IUL plan may be the easiest, 'cheapest' and BEST way to Save for Retirement AND Avoid this Tax!
    • 168. November 2007 BEST ALL-AROUND RETIREMENT ACCOUNT is the Roth IRA: “There's no up-front tax break [IUL], but decades of tax-free growth [IUL], plus tax-free income in retirement [IUL].”
    • 169. November 2007 BEST ALL-AROUND RETIREMENT ACCOUNT is the Roth IRA: “There's no up-front tax break [IUL], but decades of tax-free growth [IUL], plus tax-free income in retirement [IUL].” Why Stop There?! Even BETTER is ...
    • 170. An IUL "SUPER ROTH"! Unlike a Roth ... * NO Contribution Limits.
    • 171. An IUL "SUPER ROTH"! Unlike a Roth ... * NO Contribution Limits. * NO Income Restrictions.
    • 172. An IUL "SUPER ROTH"! Unlike a Roth ... * NO Contribution Limits. * NO Income Restrictions. * Includes Hundreds of Thousands $'s (or more) in Life Insurance from Day 1 [NOT Allowed in Roth! Use it to Pension Max!]
    • 173. An IUL "SUPER ROTH"! Unlike a Roth ... * NO Contribution Limits. * NO Income Restrictions. * Includes Hundreds of Thousands $'s (or more) in Life Insurance from Day 1 [NOT Allowed in Roth! Use it to Pension Max!] * NO IRS or State Penalties for pre 59.5 access to gains.
    • 174. * NO 5 Year wait for Tax Free Access!
    • 175. * NO 5 Year wait for Tax Free Access! * Loans Allowed (payments not required!) Can USE the savings to ...
    • 176. * NO 5 Year wait for Tax Free Access! * Loans Allowed (payments not required!) Can USE the savings to ... * Be Your "Own Banker"!
    • 177. * NO 5 Year wait for Tax Free Access! * Loans Allowed (payments not required!) Can USE the savings to ... * Be Your "Own Banker"! * Children (or Grandchildren's) College Fund!
    • 178. * NO 5 Year wait for Tax Free Access! * Loans Allowed (payments not required!) Can USE the savings to ... * Be Your "Own Banker"! * Children (or Grandchildren's) College Fund! * Tax Benefits Grandfathered ... so NO Tax Change Risk!
    • 179. * NO 5 Year wait for Tax Free Access! * Loans Allowed (payments not required!) Can USE the savings to ... * Be Your "Own Banker"! * Children (or Grandchildren's) College Fund! * Tax Benefits Grandfathered ... so NO Tax Change Risk! * NO MARKET RISK – You KEEP the Gains!
    • 180. * NO 5 Year wait for Tax Free Access! * Loans Allowed (payments not required!) Can USE the savings to ... * Be Your "Own Banker"! * Children (or Grandchildren's) College Fund! * Tax Benefits Grandfathered ... so NO Tax Change Risk! * NO MARKET RISK – You KEEP the Gains! Roth OR IUL "Super Roth"? IUL!
    • 181. In case you were wondering, many of the companies who offer IUL are among the oldest (over 100 to 150 years old), most stable, best rated, AND largest financial services companies in the world!
    • 182. In case you were wondering, many of the companies who offer IUL are among the oldest (over 100 to 150 years old), most stable, best rated, AND largest financial services companies in the world! [Checks from Ins. Co.’s are a major reason why many survived the Great Depression!]
    • 183. FINAL TRUTH Indexed Life may be YOUR LAST Chance Retirement!
    • 184. NET CASH VALUE – Saving Stage [NET Fees, Pre 59.5 Penalties and Taxes] Age 45 PNT / Save $1,000 mo. for 20 years [Average Past 25, Thirty Year Periods (since 1953)] Year Qualified IUL 5 60,918 57,747 6 74,989 74,913 10 138,667 164,919 15 271,882 324,799 20 416,619 569,405
    • 185. NET Retirement - Income Stage Starting Age 66 / 35% MTR (pre/post retirement) Year Qualified IUL (66) 21 54,000 54,000 NET 25 54,000 54,000
    • 186. NET Retirement - Income Stage Starting Age 66 / 35% MTR (pre/post retirement) Year Qualified IUL (66) 21 54,000 54,000 NET 25 54,000 54,000 30 BROKE! 54,000 40 0 54,000 45 0 54,000 50 0 54,000 (100) 55 0 54,000
    • 187. NET Cash Value and IRR Year Qualified IRR IUL IRR 20 416,619 5.00% 569,405 7.66% 25 177,518 4.44% 547,239 8.13% 30 BROKE! 0% 551,109 8.48% 35 0 0% 609,981 8.79% 40 0 0% 759,719 9.03% 45 0 0% 1,053,434 9.21% 50 0 0% 1,645,896 9.37% 55 0 0% 2,909,552 9.54%
    • 188. 10 Year S&P 500 IUL Gains NO Cap 16% Cap (per year) Actual 100% PR* 1983 5.06% 7.45% 1982 1.40% 5.97% 1981 2.86% 6.59% 1980 3.87% 7.17% 1979 1.34% 6.10% Past 5 Yrs 2.91% 6.65% 1978 0.11% 5.40% 1977 0.87% 5.82% 1976 2.90% 6.84% 1975 0.48% 5.52% 1974 - 0.31% 5.17% Past 10 Yrs 1.86% 6.20% * Participation Rate What IF the Stock Market / S&P “Tanks” for Years in a Row?
    • 189. 10 Year S&P 500 IUL Gains NO Cap 16% Cap (per year) Actual 100% PR* 1983 5.06% 7.45% 1982 1.40% 5.97% 1981 2.86% 6.59% 1980 3.87% 7.17% 1979 1.34% 6.10% Past 5 Yrs 2.91% 6.65% 1978 0.11% 5.40% 1977 0.87% 5.82% 1976 2.90% 6.84% 1975 0.48% 5.52% 1974 - 0.31% 5.17% Past 10 Yrs 1.86% 6.20% * Participation Rate What IF the Stock Market / S&P “Tanks” for Years in a Row? The average 10 year gain of the S&P in an IUL the past 65 years is 9.05%. [18% historical average cap]
    • 190. 10 Year S&P 500 IUL Gains NO Cap 16% Cap (per year) Actual 100% PR* 1983 5.06% 7.45% 1982 1.40% 5.97% 1981 2.86% 6.59% 1980 3.87% 7.17% 1979 1.34% 6.10% Past 5 Yrs 2.91% 6.65% 1978 0.11% 5.40% 1977 0.87% 5.82% 1976 2.90% 6.84% 1975 0.48% 5.52% 1974 - 0.31% 5.17% Past 10 Yrs 1.86% 6.20% * Participation Rate What IF the Stock Market / S&P “Tanks” for Years in a Row? The average 10 year gain of the S&P in an IUL the past 65 years is 9.05%. [18% historical average cap] The worst stretch during that time was 1974 to 1983 when the S&P 10 year gains averaged 1.86% per yr.
    • 191. 10 Year S&P 500 IUL Gains NO Cap 16% Cap (per year) Actual 100% PR* 1983 5.06% 7.45% 1982 1.40% 5.97% 1981 2.86% 6.59% 1980 3.87% 7.17% 1979 1.34% 6.10% Past 5 Yrs 2.91% 6.65% 1978 0.11% 5.40% 1977 0.87% 5.82% 1976 2.90% 6.84% 1975 0.48% 5.52% 1974 - 0.31% 5.17% Past 10 Yrs 1.86% 6.20% * Participation Rate What IF the Stock Market / S&P “Tanks” for Years in a Row? The average 10 year gain of the S&P in an IUL the past 65 years is 9.05%. [18% historical average cap] The worst stretch during that time was 1974 to 1983 when the S&P 10 year gains averaged 1.86% per yr. But at an average (low) cap of 16% IUL would of averaged 6.20% per year – a gain that is 233% MORE!
    • 192. 10 Year S&P 500 IUL Gains NO Cap 16% Cap (per year) Actual 100% PR* 1983 5.06% 7.45% 1982 1.40% 5.97% 1981 2.86% 6.59% 1980 3.87% 7.17% 1979 1.34% 6.10% Past 5 Yrs 2.91% 6.65% 1978 0.11% 5.40% 1977 0.87% 5.82% 1976 2.90% 6.84% 1975 0.48% 5.52% 1974 - 0.31% 5.17% Past 10 Yrs 1.86% 6.20% * Participation Rate What IF the Stock Market / S&P “Tanks” for Years in a Row? The average 10 year gain of the S&P in an IUL the past 65 years is 9.05%. [18% historical average cap] The worst stretch during that time was 1974 to 1983 when the S&P 10 year gains averaged 1.86% per yr. But at an average (low) cap of 16% IUL would of averaged 6.20% per year – a gain that is 233% MORE! This is because IUL KEEPS its prior annual gains so when the market goes up again it BUILDS on those gains instead of having to recover 1st!
    • 193. 10 Year S&P 500 IUL Gains NO Cap 16% Cap (per year) Actual 100% PR* 1983 5.06% 7.45% 1982 1.40% 5.97% 1981 2.86% 6.59% 1980 3.87% 7.17% 1979 1.34% 6.10% Past 5 Yrs 2.91% 6.65% 1978 0.11% 5.40% 1977 0.87% 5.82% 1976 2.90% 6.84% 1975 0.48% 5.52% 1974 - 0.31% 5.17% Past 10 Yrs 1.86% 6.20% * Participation Rate What IF the Stock Market / S&P “Tanks” for Years in a Row? The average 10 year gain of the S&P in an IUL the past 65 years is 9.05%. [18% historical average cap] The worst stretch during that time was 1974 to 1983 when the S&P 10 year gains averaged 1.86% per yr. But at an average (low) cap of 16% IUL would of averaged 6.20% per year – a gain that is 233% MORE! This is because IUL KEEPS its prior annual gains so when the market goes up again it BUILDS on those gains instead of having to recover 1st! Indexed Life = Retirement Security!
    • 194. Indexed Life – KEEP the GAINS!
    • 195. Retirement: Secure Pension = Better Sleep November 2, 2009 Study of 14,714 participants over 16 years found a sharp decrease in sleep disturbances in financially secure retirees. “Where there is no proper pension level to guarantee financial security beyond working age, retirement may be followed by severe stress disturbing sleep even more than before retirement.”
    • 196. Qualified Plans (403b/401k/457/ IRA/SEP/Roth)
    • 197. Qualified Plans (403b/401k/457/ IRA/SEP/Roth) - Market Risk
    • 198. Qualified Plans (403b/401k/457/ IRA/SEP/Roth) - Market Risk - Future Tax Increases
    • 199. Qualified Plans (403b/401k/457/ IRA/SEP/Roth) - Market Risk - Future Tax Increases - Taxes on Social Security
    • 200. Qualified Plans (403b/401k/457/ IRA/SEP/Roth) - Market Risk - Future Tax Increases - Taxes on Social Security = Sinking / Broke Retirement!
    • 201. Indexed Life = Retirement Peace of Mind!
    • 202. Indexed Life = Retirement Peace of Mind! * Eliminate ALL Future ... - Increased Tax Rate Risk! - Stock Roller Coaster Anxiety!
    • 203. Indexed Life = Retirement Peace of Mind! * Eliminate ALL Future ... - Increased Tax Rate Risk! - Stock Roller Coaster Anxiety! * Feel confident about earning - and KEEPING – most Future Market Gains!
    • 204. Indexed Life = Retirement Peace of Mind! * Eliminate ALL Future ... - Increased Tax Rate Risk! - Stock Roller Coaster Anxiety! * Feel confident about earning - and KEEPING – most Future Market Gains! * Enjoy Steady, Tax Free Income!
    • 205. This is the "tip of the iceberg" about the MANY Indexed Life Benefits!
    • 206. "Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do." Mark Twain
    • 207. Indexed Life Private Plan Is it Right for You?
    • 208. Indexed Life Private Plan Is it Right for You? If you are saving in a 401k, 403b, 457, SEP, Roth or IRA the answer is likely YES!
    • 209. Indexed Life Private Plan Is it Right for You? If you are saving in a 401k, 403b, 457, SEP, Roth or IRA the answer is likely YES! Let us help you answer that question and show you the difference in Pre Retirement and Retirement Benefits and Income!
    • 210. Many Retirees Cannot Meet Basic Needs! Brandeis University Study / February 2009 "78% of retiring Americans may not be able to meet basic expenses for the remainder of their lives, ...
    • 211. Many Retirees Cannot Meet Basic Needs! Brandeis University Study / February 2009 "78% of retiring Americans may not be able to meet basic expenses for the remainder of their lives, ... ...today 1/3 have no money left over after meeting essential expenses,...
    • 212. Many Retirees Cannot Meet Basic Needs! Brandeis University Study / February 2009 "78% of retiring Americans may not be able to meet basic expenses for the remainder of their lives, ... and younger people may be facing an even bleaker financial future for their retirement years.” ...today 1/3 have no money left over after meeting essential expenses,...
    • 213. YOU HAVE A CHOICE! DON'T Become a Casualty of the Looming Boomer Retirement (& TAX) Catastrophe!
    • 214. YOU HAVE A CHOICE! DON'T Become a Casualty of the Looming Boomer Retirement (& TAX) Catastrophe! It IS time to Save a SMARTER, BETTER Way!
    • 215. YOU HAVE A CHOICE! DON'T Become a Casualty of the Looming Boomer Retirement (& TAX) Catastrophe! It IS time to Save a SMARTER, BETTER Way! TAX FREE Indexed Life!
    • 216. "Even if you're on the right track,
    • 217. "Even if you're on the right track, You'll get run over if you just sit there." Will Rogers
    • 218. The Time is NOW to Save a BETTER Way! Peter Langelier 207 740 0827 plangelier @langelierinsurance.com Norway ME