The Truth About Retirement Plans

The Truth about Retirement Plans Robert E. Williams Jr www.robertwilliamsjr.com

Problems Facing Today’s Consumers Debt Trap U.S. consumer debt has doubled over the past ten years, with the average debt at $18,700 per U.S. household [excluding mortgages]; bankruptcy filings are estimated to have topped 1.8 million in 2005. 1 Lack of Security If you died tomorrow, your family could face financial devastation. The average death claim paid by the insurance industry in 1999 was $15,130. 3 Poor Savings Habits Today, savings rates are at their lowest levels since the Great Depression. For the first time since 1933, savings rates fell into negative territory at -0.5% in 2005. Americans either dipped into savings or increased their borrowing. 2 Retirement Woes Most Americans retire in poverty. According to the U.S. Census Bureau, 73.8% of Americans 65 and older retire on a combined income of private pension and Social Security of $10,000 or less a year. 4 1 Timothy Egan, “Debtors in Rush to Bankruptcy as Change Nears”, The New York Times Online, August 21, 2005. 2 Martin Crustinger, “Savings Rates at Lowest Levels Since 1933”, Associated Press, January 30, 2006. 3 Statistical Compilation of Annual Statement Information for Life/Health Insurance Companies in 1999* NAIC, 2000 4 Social Security Administration, 1996. Use for recruiting purposes only. Rising Cost of Living If you and your spouse earn $100,000 a year and want to retire in 18 years, with average inflation of 4%, you will need a little more than $200,000 a year to equal your current income of $100,000.

What Would Be the Perfect Account?

Triple Compounding Interest

Excellent Returns

Safety of Principle

Tax Free Income

Access/Liquidity

Types of Interest The hypothetical examples are for illustrative purposes only and do not represent any particular savings vehicle. The actual interest rate may fluctuate over time, and as a result, the actual time it will take an investment to double in value cannot be predicted with any certainty. FFS nor any of its associates offer tax advice. Please consult with your tax professional. Use for recruiting purposes only. 6% Compound Interest $1 $157 $24,566 $3,850,315 6% Triple Compound Interest $1 $21,247 $451,446,116 $9,591,993,611,211 6% Simple Interest 1492 $1 1663 $11 1834 $22 2005 $32

Excellent Returns and Safety Used with permission from American Equity Investments Life Insurance Company, Inc. This is not a solicitation or offer to purchase any product. FFS is not a franchise. FFS does not charge any fees for the right to engage in the business of offering, selling or distributing goods or services. Use for recruiting purposes only.

Tax Free Income & Access Tax Deferred Accumulation Tax Free Distribution Tax Deductible Contribution Which would you choose? You can only get two of the three! Let’s take a look at two brothers who chose differently. FFS nor any of its associates offer tax advice. Please consult with your tax professional. Use for recruiting purposes only.

Our story begins with two brothers, each married with two children. Both earn $70,000 a year, have $40,000 in savings and $600 monthly earmarked for retirement. Tax Free Income Who made the right decision? Brother “A” Brother “B” is a hypothetical example and is for illustrative purposes only. This is not a solicitation or offer to purchase any product. FFS nor any of its associates offer tax advice. Please consult with your tax professional. Example assumes tax rate of 25% on withdrawals, 33% tax rate for tax savings, 8% annual compounded rate of return using FFS Calculators, Retirement Needs. Use for recruiting purposes only. • $15,000 emergency fund. • $6,520 contributions to 401(k) plus employer match $1,050 . • $680 annual premium $600,000 30 year term. • $25,000 in an IRA. • $15,000 emergency fund. • $2,100 contributions to 401(k) plus employer match $1,050. • $5,100 annual premium $600,000 Equity Indexed Universal Life. • PLUS $5,000 contribution to EIUL for five years, totaling $25,000 . Brother “A” Believes in “The Old Way” — Save for retirement in qualified accounts, receive tax deduction and pay taxes later. Brother “B” Believes in “The New Way” — Save for retirement in non-qualified accounts and receive tax free income later.

Results After 30 Years Tax-Free Income/Access Brother “A” Brother “B” is a hypothetical example and is for illustrative purposes only. This is not a solicitation or offer to purchase any product. FFS nor any of its associates offer tax advice. Please consult with your tax professional. Example assumes tax rate of 25% on withdrawals, 33% tax rate for tax savings, 8% annual compounded rate of return using FFS Calculators, Retirement Needs. Use for recruiting purposes only. It’s not how much you make It’s how much you keep!

$22,300 emergency fund.

• $22,300 emergency fund. • $858,000 401(k). • $357,000 401(k). • $252,000 IRA. • $701,000 cash value EIUL. • ZERO term insurance. ($12,000 annual premium to replace) • $855,000 universal life insurance death benefit. • $65,000 cumulative tax savings. • $21,000 cumulative tax savings. • $1,109,000 total retirement savings. • $1,058,000 total retirement savings. Brother “A” Believes in “The Old Way” — Save for retirement in qualified accounts, receive tax deduction and pay taxes later. Brother “B” Believes in “The New Way” — Save for retirement in non-qualified accounts and receive tax free income later.

Results During Retirement Tax-Free Income/Access It’s not how much you make It’s how much you keep! Brother “A” Brother “B” is a hypothetical example and is for illustrative purposes only. This is not a solicitation or offer to purchase any product. FFS nor any of its associates offer tax advice. Please consult with your tax professional. Example assumes tax rate of 25% on withdrawals, 33% tax rate for tax savings, 8% annual compounded rate of return using FFS Calculators, Retirement Needs. Use for recruiting purposes only.

$84,000 annual income till age 120.

• $125,000 annual income till age 120.

$84,000 taxable withdrawals from qualified accounts.

• $25,000 taxable withdrawals from qualified accounts. • $21,000 tax.

$6,250 tax.

• $0 tax free. • $100,000 TAX FREE loans via EIUL. • $63,000 net after tax income. • $118,750 net after tax income. • $1,155,000 taxes during retirement. • $343,750 taxes during retirement. Brother “A” Believes in “The Old Way” — Save for retirement in qualified accounts, receive tax deduction and pay taxes later. Brother “B” Believes in “The New Way” — Save for retirement in non-qualified accounts and receive tax free income later.

Results During Retirement Tax-Free Income/Access Which plan makes you feel more financially secure? Brother “A” Brother “B” is a hypothetical example and is for illustrative purposes only. This is not a solicitation or offer to purchase any product. FFS nor any of its associates offer tax advice. Please consult with your tax professional. Example assumes tax rate of 25% on withdrawals, 33% tax rate for tax savings, 8% annual compounded rate of return using FFS Calculators, Retirement Needs. Use for recruiting purposes only. Brother “A” Believes in “The Old Way” — Save for retirement in qualified accounts, receive tax deduction and pay taxes later. Brother “B” Believes in “The New Way” — Save for retirement in non-qualified accounts and receive tax free income later.

$118,750 net after tax income.

• $118,750 net after tax income. • $158,000 taxable withdrawals from qualified accounts. • $25,000 taxable withdrawals from qualified accounts. • $39,250 tax. • $6,250 tax. • $0 tax free. • $100,000 TAX FREE loans via EIUL. In 9 years, at age 74, Brother “A” runs out of money! At age 100 Brother “B” has 20 more years of income and if he dies, his family would receive $3,795,000 income tax free!

The Access of Money Brother “B” NEVER interrupts his compounding. Brother “A” Must WITHDRAWAL to create income Brother “B” Takes LOANS Total retirement savings $1,109,000 Minus first year income ($158,000) Remaining balance $951,000 Plus annual interest $76,000 Account value $1,017,000 Minus second year income ($158,000) Remaining balance $859,000 Plus annual interest $69,000 Account value $928,000 Minus third year income ($158,000) Remaining balance $770,000 Plus annual interest $62,000 Account value $832,000 Minus second year income $0 Remaining balance $757,000 Plus annual interest $61,000 Account value $818,000 Minus third year income $0 Remaining balance $818,000 Plus annual interest $65,000 Account value $883,000 Total EIUL savings $701,000 Minus first year Income $0 Remaining balance $701,000 Plus annual interest $56,000 Account value $757,000

Summary

Triple Compounding Rule of 72

Excellent Returns

Safety of Principle

Tax Free Income

Access/Liquidity

For More Information

Contact Robert E. Williams Jr.

888-853-5293 phone

866-846-4901 fax

Web Site: www.robertwilliamsjr.com

FREE Reports and Information

FREE Comprehensive Financial Analysis if done next 10 days! $500 value! Can be done over our webinar system! Never leave the comfort of your home or office!