1. Tax Diversifying
Your Retirement Income
This presentation includes a discussion of one or more tax-related topics. This tax-related discussion was prepared to assist in the
promotion or marketing of the transactions or matters addressed in this material. It is not intended (and cannot be used by any taxpayer)
for the purpose of avoiding any IRA penalties that may be imposed upon the taxpayer. Taxpayers should always seek and rely on the
advice of their own independent tax professionals. Please understand that New York Life Insurance Company, its affiliates and
subsidiaries, and agents and employees of any thereof, may not provide legal or tax advice to you.
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2. 14400(03/10)SMRU00386186CVExp.12/10
Retirement Isn’t What It Used to Be
Social
Security
Pension &
Qualified
Plans
Personal
Assets
Once:
 Retirement typically lasted
about 10 years
 Social Security, defined
benefit pensions and
some personal savings
covered basic expenses
Now:
 Retirement can last longer
 Many key sources of
income have been reduced
 Increased reliance on
personal assets
Social
Security
Pension &
Qualified
Plans
Persona
l Assets

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Social Security Is Shaky
 Social Security was
never intended to be
the only source of
income for retirement
 The maximum Social
Security Benefit in 2010
for a worker retiring at
full retirement age is
$2,346 per month1
 There are limits on how
much you can earn
before your Social
Security benefits are
reduced and/or taxed
1 http://www.elderlawanswers.com/Elder_Info/Elder_Article.asp?id=700
Without changes, by 2041 the Social Security
Trust Fund will be exhausted* and there will be
enough money to pay only about 75 cents for
each dollar of scheduled benefits.
* These estimates are based on the intermediate assumptions from the Social
Security Trustees’ Annual Report to the Congress.
“
”

4. 14400(03/10)SMRU00386186CVExp.12/10
Fewer Pensions, Limits on Qualified Plans
 Only 22% of today’s workforce has access to a defined
benefit pension plan1
 Fewer employer contributions to pension plans; limits on
company matching of 401(k) plans1
 More reliance on employee contributions
 Limitations on contributions
1
‘Trends in Retirement Plan Coverage Over the Last Decade,” Monthly Labor Review, Stephanie Costo, February 2006.
Pensions &
Qualified
Plans

5. 14400(03/10)SMRU00386186CVExp.12/10
Personal Assets Are Critical
 Most people have more questions than answers when it
comes to planning for retirement
– How much will I need?
– How much will I have?
– How much do I need to save to cover the shortfall?
 For personal savings, the questions are:
– Where should I put my money?
– How will I be affected by taxes?
Personal
Assets

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Tax-Perfect Retirement Planning
 The “tax-perfect” retirement plan would include:
– Contributions that are tax deductible
– Accumulation that is tax deferred
– Distributions that are tax free
 Such a plan does not exist, but you can have any two of
these tax benefits

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Where Do You Think Taxes Are Going?
 Tax rates are currently at historically low levels, suggesting
they may be higher when you retire
 Tax-diversifying your retirement savings might be sensible
The graph above illustrates the high and low marginal tax rates over history. Exemptions, deductions and state
and local taxes are not taken into account when illustrating these marginal tax rates. Your actual tax rates may
vary from those show on the graph. Remember that historical rates are not a guarantee of future rates.
Source: U.S. Department of Treasury, Internal Revenue Service, Statistics of Income, Historical income Tax Returns (2008)

8. 14400(03/10)SMRU00386186CVExp.12/10
Is Tax Deferral the Best Strategy?
 30 years ago, tax rates were so
high and there were so many
tax brackets, deferring income
generally reduced the tax
burden
 In the new tax reality, the tax
leverage benefits of deferring
may not exist
 Lower tax rates and fewer tax
brackets today call for a
smarter strategy
1979-1980 2009

9. 14400(03/10)SMRU00386186CVExp.12/10
Your Retirement Savings Tax Options
Roth IRA
Tax-free
municipal bonds
Cash value life
insurance
Traditional IRA
401(k)
Pension plans
Profit-sharing
plans
Keogh
Financial
Vehicles
After tax
Tax deferred
Tax free
Tax deductible
Tax deferred
Taxable
Tax Treatment
Contributions
Accumulation
Distributions

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A Non-Traditional Solution
1 The cash value in a life insurance policy is accessed through policy loans, which accrue interest at the current rate, and cash withdrawals. Loans
and withdrawals will decrease the total death benefit and total cash value.
Life
Insurance
 In addition to protecting your family, cash value life insurance
can provide an ideal way to tax-diversify your retirement
savings
– Premiums are paid with after-tax dollars
– Generates cash value that generally accumulates on a
tax-deferred basis
– Allows you access to policy values – before or during
retirement – generally on a tax-free basis1
 Upon your death, when many other investments
are taxed, your beneficiaries also receive the
death benefit income tax free

11. 14400(03/10)SMRU00386186CVExp.12/10
Social
Security
Pension &
Qualified
Plans
Personal
Assets
A “Self- Completing” Plan!
 If you live…
– You enjoy all the “living benefits” of life insurance,
including the potential for supplemental tax-free
retirement income
 If you become disabled…
– With the purchase of the Disability Waiver of
Premium Rider, your premiums are waived, and all
the benefits of your policy stay in force1
 If you die…
– Your family receives the full value
of the policy, less any unpaid loans
and loan interest, income tax free
1 Available on whole life policies

12. 14400(03/10)SMRU00386186CVExp.12/10
The Benefits of Tax Diversification
Retirement Income of $90,000
Without Tax
Diversification
$90,000
401(k)/Qualified Plans
100% taxable
$90,000 taxed at
25%1
= $22,500 tax
Tax Diversification Strategy
$90,000
$45,000
401(k)/Qualified Plans
100% taxable
$45,000 taxed at
15%1
= $6,750 tax
$45,000
Cash Value Life Ins.
tax free2
$45,000 taxed at
0%2
= $0 tax
1 Marginal federal income tax bracket under current rates. 2 If structured properly.
$67,500 to spend
after taxes
$83,250 to spend after taxes