Retirement Presentation


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Retirement Presentation

  1. 1. The Right Retirement Plan L I F E I N S U R A N C E & S U P P L E M E N T A L R E T I R E M E N T P L A N N I N G
  2. 2. A financially secure retirement requires more than understanding the importance of planning.
  3. 3. … made up of the right ingredients … in the right amounts … and given the right amount of time to grow. It requires the Right Retirement Plan … The Right Plan
  4. 4. <ul><li>Government-Sponsored Programs </li></ul><ul><li>Employer-Sponsored Programs </li></ul><ul><li>Individual Programs, including... </li></ul><ul><ul><li>IRAs and </li></ul></ul><ul><ul><li>Life Insurance </li></ul></ul>The Right Plan Government Programs Employer Programs Individual Programs 42% 40% 18% There are three basic ingredients in every successful retirement strategy:
  5. 5. Government-Sponsored Programs Don’t Gamble on the Government 6558 Rev. 12/00
  6. 6. <ul><li>On average, social security benefits amount to only 40 percent of the pre-retirement income of a person with average lifetime earnings. As your earnings increase, the amount Social Security will replace goes down. </li></ul>Don’t Gamble on the Government G O V E R N M E N T - S P O N S O R E D P R O G R A M S -- Social Security Administration, 2000 40% The primary government-sponsored program is Social Security. Social Security, however, was never intended to replace 100 percent of a person’s income prior to retirement.
  7. 7. Employer-Sponsored Programs Don’t Bet on the Benevolent Boss
  8. 8. Don’t Bet on the Benevolent Boss <ul><li>Employer-sponsored programs aren’t what they once were. Many businesses are shifting all or a portion of benefit responsibility to the employees themselves. </li></ul>E M P L O Y E R - S P O N S O R E D P R O G R A M S D E F I N E D B E N E F I T P E N S I O N P L A N S What they were What they are now Defined benefit pension plans are typically employer-pay-all plans, which provide long-term employees a portion of their pre-retirement salary as retirement income. Many of these plans have been replaced by 401(k) plans, which are funded by contributions by employees and employers and invested in accounts often selected by the employees.
  9. 9. Don’t Bet on the Benevolent Boss <ul><li>Contributions may be contingent on current and future profitability. </li></ul><ul><li>Account balances may not be available for borrowing. </li></ul><ul><li>Non-vested retirement account values may be forfeited if employment terminates. </li></ul><ul><li>Choices concerning survivor benefits may be limited; may not provide inflation protection; and will be taxable as ordinary income. </li></ul>E M P L O Y E R - S P O N S O R E D P R O G R A M S Here are some other facts about qualified employer-sponsored programs:
  10. 10. Individual Programs Make a Choice for Your Security
  11. 11. A Choice for Your Security <ul><li>This source is comprised of individual plans, including IRAs and life insurance: </li></ul><ul><li>IRAs offer valuable tax benefits </li></ul><ul><li>Life insurance provides valuable tax benefits AND financial security . </li></ul>I N D I V I D U A L P R O G R A M S With the uncertainty regarding Social Security and the reduction of employer-sponsored programs, a third source of funds may be the most crucial to experiencing a financially secure retirement.
  12. 12. Individual Retirement Accounts <ul><li>With traditional IRAs , individuals avoid paying tax on current contributions but settle up with Uncle Sam at retirement time. </li></ul><ul><li>With Roth IRAs , individuals pay Uncle Sam now by making after-tax contributions, but they receive their retirement income with no tax bill due. </li></ul><ul><li>The answer to which IRA is best depends on your tax situation and ultimately comes down to a choice between paying taxes now and paying taxes later. </li></ul>I N D I V I D U A L P R O G R A M S There are two types of IRAs: traditional and Roth.
  13. 13. Tax me now or Tax me later <ul><li>If you anticipate that your federal income tax bracket will be lower in the future than it is now, or if retirement isn’t far away (within 8 to 15 years), it may make sense to defer taxes using a traditional IRA . </li></ul><ul><li>If your post-retirement tax bracket won’t be much different than today’s, or if retirement is still some distance in the future (15 to 20 years), the tax-free income provided by a Roth IRA might be the best choice. </li></ul><ul><li>Whenever you’re thinking about either IRA, it is important to remember that an IRA is not a product. It is a tax treatment. As such, a variety of products, including annuities, can be treated as either Roth or traditional Individual Retirement Accounts. </li></ul>I N D I V I D U A L P R O G R A M S
  14. 14. Life Insurance <ul><li>Like government-sponsored programs and IRAs, life insurance can be a valuable source for supplementing your retirement income, providing significant advantages for your financial security. </li></ul><ul><li>The primary purpose of life insurance is to provide income-tax- free death benefits to your loved ones. </li></ul><ul><li>Permanent life insurance, however, also contains a cash value element that grows tax-deferred inside the life insurance contract. </li></ul>I N D I V I D U A L P R O G R A M S
  15. 15. Life Insurance <ul><li>This combination makes life insurance the only financial product that can protect against the two greatest financial risks: </li></ul>I N D I V I D U A L P R O G R A M S Dying Too Soon or Living Too Long
  16. 16. Dying too Soon <ul><li>With other plans, your beneficiaries could receive significant benefits… </li></ul><ul><ul><ul><li>if you hold the retirement account for a significant length of time... </li></ul></ul></ul><ul><ul><ul><li>if you are able to make substantial contributions up to an annual limit… </li></ul></ul></ul><ul><ul><ul><li>if the investments in your retirement account “take off”… </li></ul></ul></ul>I N D I V I D U A L P R O G R A M S
  17. 17. Dying too Soon <ul><li>With most forms of permanent life insurance, you don’t have to worry about the ifs. </li></ul>I N D I V I D U A L P R O G R A M S Your beneficiaries receive a specified death benefit whether you hold the policy for two, 10 or 30 years.
  18. 18. Living too Long <ul><li>In addition to providing guaranteed death benefits, life insurance can be used to supplement your retirement income. </li></ul><ul><li>Permanent life insurance contains a cash value element that accumulates tax-deferred (with no immediate taxes) inside the contract. (Income and growth on accumulated cash values are generally taxable only upon withdrawal.) </li></ul><ul><li>These cash values can be used to supplement your retirement income through policy loans and withdrawals. (Policy loans or withdrawals will reduce the policy’s ultimate death benefit and cash value.) </li></ul>I N D I V I D U A L P R O G R A M S
  19. 19. Dying too soon or Living too long <ul><li>minus the restrictions and regulations that still govern IRAs </li></ul><ul><li>minus the requirements and limitations of government-sponsored programs </li></ul><ul><li>minus the uncertainty of employer-sponsored plans </li></ul><ul><li>Only permanent life insurance protects you against dying too soon or living too long. </li></ul>I N D I V I D U A L P R O G R A M S Dying too soon or living too long…only permanent life insurance offers you that certainty...
  20. 20. <ul><li>12 percent live below the poverty line. </li></ul><ul><li>19.7 percent live 125 percent below the poverty line. </li></ul><ul><li>23% live with other family members. </li></ul>The Plan According to the Department of Labor and the Social Security Administration*, out of all people age 65 or older… *1998 edition of the “Income of the Population 55 or Older,” published with information provided by various government entities, including the Department of Labor and the Social Security Administration.
  21. 21. Where do you want to be?
  22. 22. Contact Us <ul><li>MLZ Tax & Financial Services </li></ul><ul><li>Melody L. Ferguson </li></ul><ul><li>Financial Services Representative </li></ul><ul><li>1130 S Wabash, Suite 301 </li></ul><ul><li>Chicago IL 60605 </li></ul><ul><li>(312) 663-1336 office </li></ul><ul><li>(312) 781-1040 cell </li></ul><ul><li>[email_address] </li></ul>