Free-Financial-Plan.com presentation annuity webinar
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Free-Financial-Plan.com by Clifford E Wright
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Free-Financial-Plan.com presentation annuity webinar
- 1. WELCOME Our presentation will begin shortly. Client
- 2. WHAT’S MOST IMPORTANT IN RETIREMENT PLANNING “Income is the outcome that matters most in Retirement” “Monthly bills need monthly income” “In Retirement, it’s less about how much you earn and more about how much you KEEP”
- 3. WHAT WE’VE BEEN TAUGHT… GENERATE INCOME IN RETIREMENT FROM INVESTMENTS LIKE THE “STOCK-MARKET” A look at the “Buy & Hold” strategy… 7/1999 - S&P 500 1,418 12/2012 - S&P 500 1,418 13.5 years (4,913 days) with NO reward! 3/1999 - Dow Jones 10,006 10/2009 - Dow Jones 10,015 2020 - Dow Jones ?
- 4. Retirement Income Planning Asset Protection Estate Planning IRA & 401K Rollovers Income and Estate Planning Wright Retirement is an independent financial advisory firm serving clients throughout the East Coast. We have over 22 years of investment management experience throughout our market areas to bring you the highest quality services available today. www.wright-retirement.com Services we offer... Wright Retirement
- 5. The Three “Investment” Worlds “Linked” rate“Fixed” rate “Market” rate Bank-CD’s Stocks, Bonds Mutual Funds “Variable” Annuities Ins. Co. “Fixed” Annuities Bank-“Linked” CD’s Principal Protected No Growth REIT’s Not Principal Protected Potential Growth Ins. Co. “Indexed” Annuities Principal Protected Potential Growth 1% - 2% 2% - ?% -25% -?% Govt.-Bonds/Treasuries Govt.-TIPS I-Bonds 0 Fees 1% Fees 2-3 %Fees ETF’s,
- 6. “Linked” Investments 100K +50% 150K +50% 225K -50% 112,500K +25% 125K +25% 156,250K -0% 156,250K Stock Portfolio acct. “Linked” acct. (50% Participation) You receive a “portion” of the “upside” (participation rate)
- 7. TWO PRIMARY TYPES OF ANNUITIES Fixed and Variable
- 8. FIXED ANNUITIES Sold by Insurance Companies Principal/Deposit is GUARANTEED They offer a Minimum Guarantee Tax-deferred interest Specific term-3,5,7,9 Full account value at death 0 Fees
- 9. TYPES OF FIXED ANNUITIES • Immediate (SPIA) single premium annuity – Pension Guaranteed income for life, no growth and limitations on what happens to your money when you die. You can NEVER get this money back • Fixed (MYGA) multi year guaranteed annuity – CD Guaranteed fixed rate for a specific term. Full death benefit and the return of your principal at the end of the term • Fixed Index (Linked) account Growth based on a “stock-market’ index. Rider option for lifetime income. You keep control of your money and pass on a “death” benefit when you die. Average return 6-8%
- 10. THE “HYBRID” FIXED INDEX ANNUITY • Minimum fixed GUARANTEE • Market participation…Upside w/o Downside • Lifetime income GUARANTEE option • Flexible Liquidity Options Combines the benefits of the Immediate, Fixed and Variable
- 11. THE “HYBRID” FIXED INDEX ANNUITY GROWTH (ANNUAL-RESET) - Stock Market Value - Index Annuity Value ?
- 12. HOW IS INTEREST EARNED & CREDITED Positive Performance Negative Performance Starting Index Value 1,000 (S&P 500) Starting Index Value 1,000 (S&P 500) 1,000 1,200 1,000 800 + 200pts = 20% Gain - 200pts = 20% Loss You Receive approx. 80% of the gain! You Receive 0% of the loss! VS Jan. 1st 2020 Jan. 1st 2021 Jan. 1st 2020 Jan. 1st 2021 You “participate” in the performance of a “stock-market” index like the S&P 500
- 14. What about income? How can I guarantee my income even if I don’t know when I’ll need it?
- 15. THE “HYBRID” FIXED INDEX ANNUITY INCOME RIDER BENEFIT BASE - Stock Market Value - Index Annuity Income Value (7% Income Rider “Roll-Up”) 100k 200k 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% ?
- 16. +10% - 110,000 108,000 +5% - 115,500 112,000 +15% - 132,800 125,400 -10% - 119,500 125,400 -5% - 113,500 125,400 +7% - 121,400 132,400 +15% - 139,600 147,800 +6% - 147,900 154,900 -8% - 136,060 154,900 +10% - 149,700 167,300 Years 1 2 3 4 5 6 7 8 9 10 +7% - 107,000 +7% - 114,500 +7% - 122,500 +7% - 131,090 +7% - 140,300 +7% - 150,080 +7% - 160,600 +7% - 171,830 +7% - 183,860 +7% - 196,700 Growth Stock Market Annuity (80% Participation) 100K Deposit Income (7% Income Benefit) GROWTH VS INCOME
- 17. - Index Annuity Value ? - Stock Market Value - Stock Market Value - Index Annuity Income Value (7% Income Rider “Roll-Up”) 100k 200k 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% ? Growth Income
- 18. VARIABLE ANNUITIES Sold by Banks & Brokerage Firms Principal/Deposit is NOT guaranteed, classified as a “security” No Minimum Guarantee 100% Stock market driven (mutual funds) Advisor paid 1-1.5% annual management fee Additional Acct. fees of 4-6% annually Acct. value and death benefit based on “performance” Fees: • Rider-Income & Death Benefit 1.25%-3.0% • ME-Mortality Expense .5% • Turnover ratio.5-.75% • Management .75-1.25% • Mutual fund .5-1.5%
- 19. Variable Annuity Acct. value Value $100K Term (10 yrs.) ? $150K ? $50K- Stock Market Value - Variable Annuity Value
- 20. WHAT ARE YOUR OPTIONS?
Editor's Notes
- Please draw on a piece of paper three columns like this. Introduce and have a general discussion relating to: There are basically three categories of investments, we can chose to earn a fixed rate of interest, a linked rate of interest or a market rate of return. Have a discussion of the most common investments/policies that generally fall into one of the three columns. FDIC insured bank CD's and Insurance Fixed Annuities in left column, ELCD's and FiA's in column two to use as example of earning a linked interest rate although TIPS and I-Bonds can fall in this category as well. Market Rate are things like Stocks, MF's, Bonds, BF's, Real-estate and variable annuities. All of these earn based on some form of market investment and markets have cycles. Discuss the pro's and con's of both columns as well as limitations such as penalties for early withdrawals in column 1 and 2, possibility to lose principle in column three and that annuities are backed by the claims paying ability of the issuing insurance company and not insured in the same way as FDIC insured bank CD's.
- Please draw on a piece of paper three columns like this. Introduce and have a general discussion relating to: There are basically three categories of investments, we can chose to earn a fixed rate of interest, a linked rate of interest or a market rate of return. Have a discussion of the most common investments/policies that generally fall into one of the three columns. FDIC insured bank CD's and Insurance Fixed Annuities in left column, ELCD's and FiA's in column two to use as example of earning a linked interest rate although TIPS and I-Bonds can fall in this category as well. Market Rate are things like Stocks, MF's, Bonds, BF's, Real-estate and variable annuities. All of these earn based on some form of market investment and markets have cycles. Discuss the pro's and con's of both columns as well as limitations such as penalties for early withdrawals in column 1 and 2, possibility to lose principle in column three and that annuities are backed by the claims paying ability of the issuing insurance company and not insured in the same way as FDIC insured bank CD's.
- There are primarily two types of annuities, fixed and variable annuities. A third type is a fixed index annuity but it is a fixed annuity that pays out its interest in a different manner than a fixed rate annuity. Have a discussion on all three types, discuss how interest is earned, costs or accounts and limitations such as penalty for early withdrawals. This is a short discussion and specific products are not mentioned or addressed.