Pinney retirement planning presentation

PINNEY
I N S U R A N C E
2266 Lava Ridge Court
Roseville, CA 95661
www.pinneyinsurance.com

Disclaimer:
This material was not intended or written to be used, and cannot
be used, to avoid penalties imposed under the Internal Revenue
Code. This material was written to support the promotion or
marketing of the products, services, and/or concepts addressed in
this material. Anyone to whom this material is promoted, marketed,
or recommended should consult with and rely solely on their own
independent advisors regarding their particular situation and the
concepts presented here.

PINNEY 2266 Lava Ridge Court
Roseville, CA 95661
For financial professional use only. Not for client presentation.
I N S U R A N C E www.pinneyinsurance.com

Planning for Retirement
• What’s Your Number?
• Typical Funding Alternatives
• Hierarchy of Money
• Where Are Tax Rates Going?
• Are you in debt to the Government?
• Self Owned Life and Retirement
• IRA Rescue

Roseville, CA 95661

What’s Your Number?
• How many years can you make contributions?
• How much will you need to live on?
• How long will you need income (When will you die?)
• What Interest Rate will you earn before and during?
• What Inflation Rate would you like to factor?
• How much will the IRS tax your income?
• Do you believe Social Security will be there for you?
• Do you believe your Company’s Pension Plan will
be there for you?

Roseville, CA 95661

Typical Funding Alternatives
• Individual Retirement Accounts
• Traditional
• Contributions deductible (maybe)
• Growth is Tax Deferred
• Distributions, less Basis, are Taxed (at what rate?)
• Roth
• Contributions are not deductible
• Growth is Tax Deferred
• Distributions are not Taxed
• Most of your clients are facing deductibility and contribution phase
outs due to income limitations

Roseville, CA 95661

Typical Funding Alternatives
• Employer Pension Plans
• Will the Employer still exist during your Retirement?
• Many Employers, particularly, Municipalities will have to restructure or
go Bankrupt.
• Other Government Sponsored Employee Benefits
• Non-Qualified Deferred Compensation
• Death Benefit paid to the Employer, not Employee’s family
• Administration and Compliance subject to 409a and 101j
• No flexibility on distributions
• No Portability
• Funding Limitations

Roseville, CA 95661

Hierarchy of Money
• Free Money
• 401k Employer Match
• Tax Free Money
• Roth IRA
• Life Insurance
• Tax-Deferred Money
• Roth and Traditional IRA’s
• Life Insurance
• Annuities
• Taxable Money

Roseville, CA 95661

Where are Tax Rates Going?
• Record Spending Deficits
• Postal Service losing Billions
• Social Security going Bankrupt by 2020
• We are spending $500 Billion more than we earn
• www.usdebtclock.org
• Are Tax Rates going up or down?
• Would you rather be taxed now or later?

Roseville, CA 95661

Are Yo u in D e bt to th e F e d e ra l Go v e rn m e n t?
If You a r e Defer r in g Ta xes in a Ret ir em en t P la n , t h e An swer is Yes

Accu m u la t ion P h a se Dist r ibu t ion P h a se
Bor r owin g Ta xes F r om t h e IRS P a yin g Ta xes To t h e IRS
Plan Deferred Tax @ Balance @ Plan Tax Payment @ Balance @
Year Age Contributions 28% 6% Year Age Distributions 28% 6%
1 40 10,000 2,800 10,600 26 65 (47,833) (13,393) 565,754
2 41 10,000 2,800 21,836 27 66 (47,833) (13,393) 548,996
3 42 10,000 2,800 33,746 28 67 (47,833) (13,393) 531,233
4 43 10,000 2,800 46,371 29 68 (47,833) (13,393) 512,403
5 44 10,000 2,800 59,753 30 69 (47,833) (13,393) 492,444
6 45 10,000 2,800 73,938 31 70 (47,833) (13,393) 471,287
7 46 10,000 2,800 88,975 32 71 (47,833) (13,393) 448,861
8 47 10,000 2,800 104,913 33 72 (47,833) (13,393) 425,090
9 48 10,000 2,800 121,808 34 73 (47,833) (13,393) 399,892
10 49 10,000 2,800 139,716 35 74 (47,833) (13,393) 373,182
11 50 10,000 2,800 158,699 36 75 (47,833) (13,393) 344,869
12 51 10,000 2,800 178,821 37 76 (47,833) (13,393) 314,858
13 52 10,000 2,800 200,151 38 77 (47,833) (13,393) 283,046
14 53 10,000 2,800 222,760 39 78 (47,833) (13,393) 249,326
15 54 10,000 2,800 246,725 40 79 (47,833) (13,393) 213,582
16 55 10,000 2,800 272,129 41 80 (47,833) (13,393) 175,693
17 56 10,000 2,800 299,057 42 81 (47,833) (13,393) 135,532
18 57 10,000 2,800 327,600 43 82 (47,833) (13,393) 92,960
19 58 10,000 2,800 357,856 44 83 (47,833) (13,393) 47,834
20 59 10,000 2,800 389,927 45 84 (47,833) (13,393) 1
21 60 10,000 2,800 423,923 (956,667) (267,867)
22 61 10,000 2,800 459,958
23 62 10,000 2,800 498,156
24 63 10,000 2,800 538,645
25 64 10,000 2,800 581,564
250,000 70,000

Self Owned Life & Retirement
• The combination of all of the unique attributes of a Life Insurance
Policy used to supplement a Retirement Plan
• Can be Privately or Employer funded
• Utilizing the “Select” Loan feature of ING’s Global Plus eliminates
out of pocket expenses to pay Taxes
• This is NOT 162 Bonus where the Employer Bonuses the
Employee, the Employee pays Taxes and puts the balance in a
Life Insurance Policy.
• The Employer pays the Bonus directly to ING, the Employee
takes a loan against the policy to pay taxes.

Roseville, CA 95661

Self Owned Life & Retirement
• Employers get a current Tax Deduction
• Employees get the Cash Values and the Death Benefit
• The plan is completely portable
• There is no additional cost for Administration
• Retirement Income is taken when the Employee wants it
• Retirement Income is taken Tax Free
• There are no Compliance issues with 409a or 101j

Roseville, CA 95661

IRA Rescue
• There are $5 Trillion in IRA Assets
• Everyone wishes it was 100% in a Roth
• The Government waived the 10% Penalty if you wanted to
convert to a Roth in 2010
• Most, if not all, of you recommended to your clients that they
should convert
• Nobody did it
• Why?
• No one wanted to write the check

Roseville, CA 95661

IRA Rescue
• Why does an IRA need rescuing in the first place?
• Participant doesn’t have control over the timing and amount of
distributions
• All distributions are taxable
• If the client is worth more than $10mm, then IRA assets are subject to
Income AND Estate Taxes
• Plan Assets are all that family gets if there is an early death
• Three Scenarios
• The 72t IRA Rescue
• The 5 Year Liquidation IRA Rescue
• The RMD IRA Rescue

Roseville, CA 95661

IRA Rescue using 72t
• Case Study – Male Age 50, Preferred Non-Tobacco in a 35% Tax
Bracket
• His Current IRA Balance is $500,000
• He will take 72t distributions for 10 years, then liquidate the
balance over the next 5 years
• He will take retirement distributions from 70 to 95
• http://www.ingpresents.com/Sec72tCalc/Sec72tCalcInput.aspx -
ING’s Tool to Calculate the three 72t Options

Roseville, CA 95661

SOLAR IRA RESCUE 72(t)

Roseville, CA 95661

IRA Rescue for RMD’s
• The Worst Birthday Card Ever
• Clients in their 60’s and 70’s all have IRA’s
• Required Minimum Distribution
• IRS telling your clients what to do and how much
• Many clients don’t need this income which can
trigger additional taxes on Social Security
• They want to leave a legacy for kids/grandkids
• Life Insurance can provide significant leverage

Roseville, CA 95661

IRA Rescue Using RMD’s
• Case Study – Male 70 Years Old, Preferred Non-Tobacco in a 35%
Tax Bracket
• Current IRA Balance of $1,000,000, earning 4%
• He doesn’t need his IRA for Income and wants to pass it on to his
heirs
• If he takes RMD’s to Age 101 and uses the after-tax income @ 28%
to buy GUL to 101, he can buy $1,215,578
• Instead, he liquidates his IRA over 5 years by withdrawing $216,000
for Five Years and taking Loans from ING’s Global Plus policy,
generating $2.7mm of DB at Age 101

Roseville, CA 95661

RMD IRA RESCUE Using Solar

Roseville, CA 95661

Start Selling SOLAR IRA Rescue

Roseville, CA 95661

The Power of Hindsight

Roseville, CA 95661

Sample IUL
Global Statement

Roseville, CA 95661

Paul Sanfilippo
Brokerage Director
Contact Paul:
• Phone: (800) 823-4852 x8760
• E-mail:
psanfilippo@pinneyplatforms.com
• Web: www.PinneyPlatforms.com
www.EZLifeSales.com
• Connect with Pinney:

PINNEY
I N S U R A N C E
Roseville, CA 95661

Pinney retirement planning presentation

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