The Swiss Army Knife of Retirement
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Learn about the Roth IRA on steroids, has all the benefits but none of the rules of a Roth IRA. Your money goes up with the market but NEVER loses!
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The Swiss Army Knife of Retirement
- 1. The Swiss Army Knife OF RETIREMENT SAVINGS
- 2. Tax Advantages THE SWISS ARMY KNIFE OF RETIREMENT SAVINGS
- 3. SEED? HARVEST?OR THE WOULD YOU RATHER PAY TAX ON THE SEED? You spend $1,000 on the seed (pre-tax), but later pay 8% tax on your $50,000 harvest. ($4,000) You spend $1,000 on the seed PLUS 8% sales tax ($80), but later reap the entire $50,000 harvest tax-free.
- 4. THE SWISS ARMY KNIFE OF RETIREMENT SAVINGS • Funded with after-tax $$$ (pay on the seed, not the harvest!) • Grows tax-deferred • Can be designed to provide a tax-free income stream in retirement! Much like a ROTH IRA – without all the contribution limits! TAX ADVANTAGES
- 5. Upside Potential, Downside Protection THE SWISS ARMY KNIFE OF RETIREMENT SAVINGS
- 6. Upside Potential, Downside Protection What if there were a better way? That’s the problem with losing money in the market – you have to make up for it!-50% +50% ? $1,000 $500 $750
- 7. Floor / Ceiling Concept (aka the Indexed Strategy) When the market goes up… • You participate in the gains up to the “ceiling” • The ceiling is generally set at or around 12% When the market goes down… • Your account sits safely on the sidelines – 0% “floor” is the worst you can do • “Zero is your Hero”!
- 8. 100k in Y2K - Actual vs. Indexed (S&P 500) YEAR ACTUAL RETURN ACTUAL BALANCE INDEXED RETURN INDEXED BALANCE 2000 -9.10 $90,900 0.00 $100,000 2001 -11.89 $80,092 0.00 $100,000 2002 -22.10 $62,392 0.00 $100,000 2003 28.68 $80,286 12.50 $112,500 2004 10.88 $89,021 10.88 $124,740 2005 4.91 $93,391 4.91 $130,864 2006 15.79 $108,137 12.50 $147,222 2007 5.49 $114,073 5.49 $155,304 YEAR ACTUAL RETURN ACTUAL BALANCE INDEXED RETURN INDEXED BALANCE 2008 -37.00 $71,866 0.00 $155,304 2009 26.46 $90,881 12.50 $174,717 2010 15.06 $104,568 12.50 $196,556 2011 2.11 $106,774 2.11 $200,703 2012 16.00 $123,858 12.50 $225,790 2013 32.39 $163,976 12.50 $254,013 2014 13.69 $186,424 12.50 $285,764 2015 1.38 $188,997 1.38 $289,707 S&P drops 37% Actual Balance drops from $114,073 to $71,866 (a loss of $42,207) Capped Balance loses NOTHING S&P recovers 26.46% Actual Balance gains $19,015 Capped Balance rises “only” 12.5% but gains $19,413
- 9. Bonus Benefits! THE SWISS ARMY KNIFE OF RETIREMENT SAVINGS
- 10. THE SWISS ARMY KNIFE OF RETIREMENT SAVINGS Self Completing if you pass away (Death Benefit) Access to crucial money if you get sick or hurt (Living Benefits) 1 2 Bonus Benefits!
- 11. THE SWISS ARMY KNIFE OF RETIREMENT SAVINGS 1. Tax Advantages 2. Upside Potential, Downside Protection 3. Bonus Benefits! Let’s see what it can do for you!