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2-14-10 Version I NTRODUCING T HE  M F INANCIAL  G ROUP “ The Power of M” Leading the Way in the Ultra-Affluent  and Corpo...
CONFIDENTIALITY This report contains proprietary material provided by Advisors Trust Planning and Investment Company, Inc....
2-14-10 Version The  M Financial Group  is one of the nation’s  premier financial services  design and distribution compan...
T ODAY’S  S AMPLE  D ISCUSSION : T HE  “ S UPER  R OTH ”  D EFERRED  C OMPENSATION  S TRATEGY 2-14-10 Version: This is a s...
THE DEFERRED COMPENSATION STRATEGY <ul><li>Designing a strategy to help create the most spendable retirement income with t...
TAX RISK <ul><li>To maximize future spendable income, taxes may be your biggest challenge.  </li></ul><ul><li>Smart tax pl...
HISTORY OF INCOME TAX RATES Source: Congressional Joint Committee on Taxation 1913  1918  1929  1941  1952  1963  1982  19...
INCOME DIVERSIFICATION <ul><li>While no one can predict future tax rates, any tax increase would leave less spendable inco...
RETIREMENT FUNDING STRATEGIES <ul><li>Personal  Investments. </li></ul><ul><li>Employer sponsored “ Qualified  Pension, Pr...
RETIREMENT ACCUMULATION STRATEGIES “ Qualified” Before Tax Contributions “ Personal” After-Tax Contributions Taxable Accum...
YOU DECIDE ALLOCATION AMONG STRATEGIES <ul><li>How much spendable income could each strategy produce? </li></ul><ul><li>Wh...
“ PENSION” ACCUMULATION STRATEGY <ul><li>Before-tax contribution is generally the most appealing characteristic. </li></ul...
“ PENSION AND PROFIT SHARING” PLAN DESIGN <ul><li>Review existing plan(s). </li></ul><ul><li>Clarify purpose and restate o...
WHAT IS THE “SUPER ROTH”? <ul><li>It is  not  a Roth IRA, but has some of the best characteristics  of a Roth -  Tax free ...
BENEFITS OF “SUPER ROTH” PLAN <ul><li>Collective underwriting  enhances flexibility. Provides most advantageous insurance ...
“ SUPER ROTH” SUMMARY <ul><li>Company sponsored plan provides lower policy costs.  </li></ul><ul><li>Entire Company Contri...
HYPOTHETICAL SUMMARY – FOR  ILLUSTRATION  ONLY ALLOCATED  COMPENSATION AVAILABLE TO GROW VALUE  IN 20 YEARS GROSS ANNUAL P...
OUR  ROLE <ul><li>Integrate the various strategies. </li></ul><ul><li>Help you diversify accumulations through employer sp...
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Deferred Compensation Strategy.

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Money withheld from current consumption to provide future retirement income,

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Deferred Compensation Strategy.

  1. 1. 2-14-10 Version I NTRODUCING T HE M F INANCIAL G ROUP “ The Power of M” Leading the Way in the Ultra-Affluent and Corporate Markets Since 1978
  2. 2. CONFIDENTIALITY This report contains proprietary material provided by Advisors Trust Planning and Investment Company, Inc. We ask you to respect our interests and to maintain its confidentiality. Please direct any questions regarding this report or its return to our office at 866.434.7500 (toll free). LEGAL, ACCOUNTING AND INFORMATION This report is intended to support discussions between clients and their professional advisors. The information is provided as a example only - using hypothetical investment and insurance company products and assumptions The facts, projections and assumptions do not apply to all circumstances. The estimated quantitative tax information should not be relied upon for making investment decisions. We do not engage in the practice of law or accounting. Accordingly, the information presented is not offered as legal or tax advice. Tax laws are complex and change frequently. Your personal advisors should be contacted if you have any questions regarding the application of such information for your particular circumstances. INVESTMENTS All references to current or projected investment results are hypothetical and are neither guarantees nor estimates of future results. Actual values may be higher or lower. If applicable, prospective clients must carefully review of our Form ADV Part II and product Prospectus’. INSURANCE References to insurance may include dividends, current interest crediting rates, or variable investment returns - each of which are illustrative and are neither guarantees nor estimates of future results. See footnotes on company provided illustrations for details and further explanation prior to the purchase of insurance. A new insurance policy is contestable for two years from the date of issue. This means the insurer may deny a claim because of a material misrepresentation by the insured or owner. A claim may also be denied due to the suicide of the insured during the first two policy years. ****************************************************************************************************************** Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a Registered Broker Dealer and Investment Advisor, Member FINRA/SIPC. Advisors Trust is independently owned and operated.  
  3. 3. 2-14-10 Version The M Financial Group is one of the nation’s premier financial services design and distribution companies, serving ultra-affluent individuals and Fortune 1000 companies through a network of more than 125 independent Firms. Advisors Trust - M Financial Group member firm -
  4. 4. T ODAY’S S AMPLE D ISCUSSION : T HE “ S UPER R OTH ” D EFERRED C OMPENSATION S TRATEGY 2-14-10 Version: This is a strategy we refer to as “The Super-Roth” Deferred Compensation Strategy. It is NOT a Roth IRA.
  5. 5. THE DEFERRED COMPENSATION STRATEGY <ul><li>Designing a strategy to help create the most spendable retirement income with the least risks. </li></ul><ul><li>Potential risks affecting asset accumulation: </li></ul><ul><ul><li>Taxes </li></ul></ul><ul><ul><li>Volatility </li></ul></ul><ul><ul><li>Litigation </li></ul></ul>
  6. 6. TAX RISK <ul><li>To maximize future spendable income, taxes may be your biggest challenge. </li></ul><ul><li>Smart tax planning may have a more likely impact on future spendable income than chasing higher investment returns. </li></ul><ul><li>Uncle Sam will always be our partner. Unless we plan properly, he may take an increasing share of future income. </li></ul>
  7. 7. HISTORY OF INCOME TAX RATES Source: Congressional Joint Committee on Taxation 1913 1918 1929 1941 1952 1963 1982 1988 1993 2006 2010 beyond 100 80 60 40 20 0 ? ?
  8. 8. INCOME DIVERSIFICATION <ul><li>While no one can predict future tax rates, any tax increase would leave less spendable income. </li></ul><ul><li>Creating future tax free income helps hedge against higher tax rates. </li></ul><ul><li>Diversification should include different asset classes and provide both taxable and non-taxable retirement income. </li></ul>
  9. 9. RETIREMENT FUNDING STRATEGIES <ul><li>Personal Investments. </li></ul><ul><li>Employer sponsored “ Qualified Pension, Profit Sharing and 401(k) Plans”. </li></ul><ul><li>Employer sponsored “ Non-Qualified ” Deferred Compensation. </li></ul>
  10. 10. RETIREMENT ACCUMULATION STRATEGIES “ Qualified” Before Tax Contributions “ Personal” After-Tax Contributions Taxable Accumulation Non-Taxable Accumulation Pay Ordinary Income Tax Yes! May help Provide Litigation Protection IRA 401(k) Plan Profit Sharing Defined Benefit Cash Balance “ Qualified” Non-Taxable Accumulation Pay Capital Gains & Ordinary Income Tax No Litigation Protection Stocks Bonds Commodities Annuities Home Runs Receive Tax-Free Income Yes! May Help Provide Litigation Protection Non-Qualified Deferred Compensation (think of it like a “ Super Roth”) “ Non-Qualified” After-Tax Contributions
  11. 11. YOU DECIDE ALLOCATION AMONG STRATEGIES <ul><li>How much spendable income could each strategy produce? </li></ul><ul><li>What is the proper mix to hedge against future tax increases and potential litigation? </li></ul><ul><li>What are the associated investment risks? </li></ul>“ Super Roth” “ Super Roth”
  12. 12. “ PENSION” ACCUMULATION STRATEGY <ul><li>Before-tax contribution is generally the most appealing characteristic. </li></ul><ul><li>Plans may be “Defined Contribution” or “Defined Benefit”. </li></ul><ul><li>All require plan documents and administration and some require actuarial services. </li></ul><ul><li>Most plans cannot discriminate. </li></ul><ul><li>Penalty for distributions before age 59 ½. </li></ul><ul><li>Distributions must begin by age 70 ½. </li></ul>
  13. 13. “ PENSION AND PROFIT SHARING” PLAN DESIGN <ul><li>Review existing plan(s). </li></ul><ul><li>Clarify purpose and restate objectives. </li></ul><ul><li>Identify cost-saving designs and administrative alternatives*. </li></ul><ul><li>Integrate with added employer sponsored plans. </li></ul>* Specific details available for further discussion. Q: What is the cost of Employees and Fees?
  14. 14. WHAT IS THE “SUPER ROTH”? <ul><li>It is not a Roth IRA, but has some of the best characteristics of a Roth - Tax free growth and Tax free withdrawals . </li></ul><ul><li>It is a company sponsored plan with contributions made by the company on your behalf. </li></ul><ul><li>Funding vehicle is accumulation-designed life insurance*. </li></ul><ul><li>High contribution limits (e.g. $100K – 200K per year are a function of group demographics and insurance contract funding limits). </li></ul><ul><li>Contributions can be limited to physicians and highly-compensated employees </li></ul><ul><li>Generally less complex and burdensome annual administration. </li></ul>*We think of this type of Non-Qualified Deferred Compensation as a “Super Roth” type plan.
  15. 15. BENEFITS OF “SUPER ROTH” PLAN <ul><li>Collective underwriting enhances flexibility. Provides most advantageous insurance underwriting classifications for all participants. </li></ul><ul><li>Discounted policy charges and no surrender charges based on total plan participation ( economies of scale ): </li></ul><ul><ul><li>Less than $250,000 </li></ul></ul><ul><ul><li>$250,000 to $500,000 </li></ul></ul><ul><ul><li>$500,000 to $1,000,000 </li></ul></ul><ul><ul><li>Over $1,000,000 </li></ul></ul><ul><li>Tax Reimbursement Loan – participants borrow funds from the insurance company to cover tax - creating potential benefit of “float and arbitrage”. </li></ul>
  16. 16. “ SUPER ROTH” SUMMARY <ul><li>Company sponsored plan provides lower policy costs. </li></ul><ul><li>Entire Company Contribution available for growth. </li></ul><ul><li>Opportunity for valuable Litigation Protection. </li></ul><ul><li>Portability. </li></ul><ul><li>Flexible funding options (normally 7 year schedule). </li></ul><ul><li>Little or no administration fees. </li></ul><ul><li>Available liquidity (e.g. college education funding). </li></ul><ul><li>No minimum or maximum age requirements for withdrawals. </li></ul><ul><li>Self-completion option – Disability Completion Benefit. </li></ul><ul><li>Online Access to Account Information. </li></ul><ul><li>Account Values based on Equity Indexing Strategy. </li></ul><ul><li>More control over tax obligations – hedge against future rates. </li></ul>
  17. 17. HYPOTHETICAL SUMMARY – FOR ILLUSTRATION ONLY ALLOCATED COMPENSATION AVAILABLE TO GROW VALUE IN 20 YEARS GROSS ANNUAL PAYMENTS AFTER-TAX NET PAYMENTS FOR FAMILY AT DEATH TOTAL FOR YOU AND FAMILY “ PENSION” $700,000 “ SUPER-ROTH” $700,000 “ PERSONAL” $700,000 $420,000 $1,060,000 $112,000 $99,000 None $1.48 Million $1,485,000 TOTAL NET PAYMENTS $974,000 TOTAL TO TAXES AND EMPLOYEES $560,000 $2,080,000 $219,000 $132,000 None $1.98 Million $1,980,000 $1,455,000 $700,000 $1,233,000 $144,000 $144,000 $1,838,000 $4 Million $2,160,000 $280,000
  18. 18. OUR ROLE <ul><li>Integrate the various strategies. </li></ul><ul><li>Help you diversify accumulations through employer sponsored plans. </li></ul><ul><li>Provide efficient solutions to enhance net benefits. </li></ul><ul><li>Help you maximize spendable retirement distributions. </li></ul>

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