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  • Because American investors are not capable of buying and holding investments for the long term. We all like to “beat the indexes.” You have to try to “sell high” and “buy low” to do so.However, we unfortunately are pros at “Buying high” and “selling low!”Also, have you ever heard a money manager tell a client they can’t beat the indexes?Why?Because if they can’t, the client would be better off in spider fund where they sit and wait for years Presentation Transcript

  • 1
    Retirement Life™Learn How to “Retire Without Risk”
    By:Roccy DeFrancesco, JD, CWPP, CAPP, MMB
    Founder: The Wealth Preservation Institute
    Co-Founder: The Asset Protection Society
    Author of: Retiring Without Risk
    Copyright 2010
  • 2
    Where is the “best” place to build retirement wealth?
    Having said that, this presentation will focus on the proper use of Retirement Life™ (a cash value life insurance policy) to build a tax-favorable retirement nest egg.
  • 3
    Why Retirement Life™?
    Why not stocks and mutual funds?
    The answer is simple:
    1) Stocks and mutual funds have NO downside protection.
    2) They are also tax-hostile and very expensive.
    In 2008 equity funds posted a one-year return of
  • 4
    Mutual Fund Performance
    “The sad truth of the matter is, that over time the vast majority– approximately 80% - of mutual funds underperform the overall stock market.”
    The Motley Fool
  • 5
    What about Stock Indexes?
    They too provide No Downside Protection!
    S&P 500 in 2008
    Retirement Life™ in 2008
    S&P 500 in 1998-2008
    Retirement Life™ in 1998-2008
  • The Money Slide
    What did the average investor return over
    the last 20-years?
  • Recovering from loss
    Most people do not understand the following numbers.
    Today, most people would rather not go backwards.
  • 8
    Funding Retirement Life™ to build your retirement nest egg
    Policy design is critical.
    Funding the policy over 5-7 years (or more) is ideal to minimize costs and maximize cash value and growth.
    Cash in a LI policy grows tax-free* and can be removed tax-free** in retirement.
    *(No capital gains or dividend taxes on gains)
    **(No income taxes when removed in retirement with a proper design)
  • 9
    Yr. 4
    Mortality &
    Yr. 3
    Yr. 2
    Yr. 1
    Funding Retirement Life™
    A Tax Free Non-Qualified Retirement Plan
    Maximum Premiums
    Cash Contributions
    Compound Interest
    Year 5
    Minimum Death Benefit
  • 10
    What is Retirement Life™?
    Retirement Life™ is the best cash value life insurance policy in the marketplace to help clients build wealth for retirement in a safe, secure, and tax-free manner.
  • 11
    Retirement Life™ Continued
    -Minimum return guarantee every year while still allowing the cash value in the policy to grow at market rates every year.
    Growth pegged to the S&P 500 index.
    Principal protection (no downside due to negative market returns).
    From 1988-2008, the S&P 500 still averaged in excess of 8%* (even though the stock market had a “crash” of -46% from 2000-2002 and -59% from high to the low of 2007-2008).
  • 12
    Protective Wealth Building
    Retirement Life™ locks in the gains in up years and does not participate in the down years.
    S&P 500
    Gains Are
    Locked In
  • 13
    Nothing is for free
    Because of the contractual guarantees, Retirement Life™ policies take away some of the upside potential of the policies with caps on the growth.
    Caps vary per company and crediting method
    10 to16% annually
    If you are reaching for returns in excess of16% a year, then you would not want to use Retirement Life™ to reach for those gains.
  • 14
    Retirement Life™ (continued)
    The premiums allocated to cash growth in a Retirement Life™ are used to purchase income producing bonds.
    Income from the bonds (which varies) is used to purchase options in a stock index (typically the S&P 500 index).
    In up years, the options pay off and provide positive returns in the Retirement Life™ policy.
  • 15
    Retirement Life™ is a “supplemental retirement plan” plan for those who:
    do not like their stock portfolios tanking with the market.
    do like:
    Annual locking of returns;
    Upside growth pegged to indexes which outperform most mutual funds;
    No annual taxes on growth; and
    No taxes when removing money from the policy in retirement.
  • 16
    Would you have been happy to earn a tax free rate of return over the last 20 years of between 7.5%to9.1%?
    With no risk of loss due to downturns in the stock market?
    With a tool that self completesto protect your family in case you die prior to accumulating a retirement nest egg?
    Remember the average mutual fund investor earned returns of only 1.87%.
  • 17
    Wealth Building Example: Brokerage Account vs. Retirement Life™
    Assume you are a 45 year old male in good health and fund 15,000 after-tax into a mutual fund every year from ages 45-65.
    Annual expenses in an actively traded mutual fund:
    20% blended capital gains and dividend taxes
    1.2% mutual fund expense*
    No money management fee
    Let’s compare that using the same funding terms using Retirement Life™.
    The assumed gross rate of return will be 8% annually.
    Assume you are in the 25% income tax bracket.
    *(Average mutual fund expense is in approximately 1.5% annually)
  • 18
    Retirement Income
    Annually from your mutual funds you could remove:
    $44,717(from ages 66-85)
    Annually you could withdrawal from Retirement Life™:
    $77,739(from ages 66-85)
    How much more after tax retirement cash flow did the Retirement Life™ return?
    $33,022 every year for 20 years.
    $660,440total over the 20 year period.
  • 19
    This is the power of building wealth through Retirement Life™
  • 20
    Plus Retirement Life™ Protects your Family
    Comparing what passes to your heirs at death.
  • 21
    Again, a diversified wealth building strategy is always the best way to approach Retirement.
    However, if you want to “Retire Without Risk,” you should allocate money to Retirement Life™ which has the following characteristics
    No Downside Risk due to market forces
    Good upside growth potential pegged to the S&P 500 index
    Annual locking features
    Tax-free growth and tax-free retirement cash flow
    Do not forget about the death benefit.