Creating Your Own Pension Plan
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This presentation explains how to create a tax free retirement for Civil employees.
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Creating Your Own Pension Plan
- 1. Creating Your Own Pension “How to Retire Without Going Broke” THETHE NEXTSTEP
- 2. The word “Pension” defined… 1. A fixed amount, other than wages, paid at regular intervals to a person or to the person’s surviving dependents in consideration of past services, age, merit poverty, injury or loss sustained, etc.: a retirement pension 2. An allowance, annuity, or subsidy. - Dictionary.com
- 3. California State Pension Funds Update Almost two years ago, a Stanford study stirred up discussion statewide with the prediction that the pension funds of California's state workers were headed for a train wreck. The retirement system would eventually not have enough money to pay all that it owes to its retirees. -Stanford Report, Dec. 14, 2011
- 4. California State Pension Funds Update The unfunded liabilities of the pension funds have increased by15 to 20 percent. -Stanford Report, Dec. 14, 2011
- 5. California State Pension Funds Update The big state pension funds at the center of the huge financial problem are the California Public Employees' Retirement System (CalPERS), the California State Teachers' Retirement System (CalSTRS), and the University of California Retirement Plan (UCRP). -Stanford Report, Dec. 14, 2011
- 6. California State Pension Funds Update The combined unfunded liability for the three funds is $290.6 billion, presuming that the funds earn a 6.2 percent return from investments. That figure represents an unfunded amount per California household of nearly $24,000. -Stanford Report, Dec. 14, 2011
- 7. California State Pension Funds Update The governing board of the California State Teachers Retirement System (CalSTRS) today adopted a new set of accrual assumptions, including the investment returns assumption from 7.75 percent to 7.5 percent. -February 2, 2012 CalSTRS www.calstrs.com/newsroom/2012/news020212.aspx
- 8. To Be… Ornot to Be… Healthcare (Medical & Dental)? Distributions? Increase in Retirement age? Decreased in benefits for spouse? Will these deficits affect My Retirement? Now is the time to Act!!!
- 9. 401(k),403(b), & TSA Plans Do they Work? The Good… Contributions can be pre-tax or post-tax Money grows tax deferred The Bad… Contribution limits for employees ($16,5000)* Early withdrawals subjected to Federal & State taxes* Tax on Retirement distributions The Ugly… Money at risk in the Stock Market!!!
- 10. 401(k),403(b), & TSA Plans Do they Work?
- 11. 3 Most Common Ways to Save for Retirement 0.5% to 3% (Low Interest Rates) FIXED PRODUCTS Safety of Principal
- 12. 3 Most Common Ways to Save for Retirement Upside Potential VARIABLE PRODUCTS Risk of Principal 0.5% to 3% (Low Interest Rates) FIXED PRODUCTS Safety of Principal
- 13. Safety ofSafety of PrincipalPrincipal EARNINGS AND GROWTH Upside PotentialUpside Potential IndexedIndexed ProductsProducts 3 Most Common Ways to Save for Retirement 0.5% to 3% (Low Interest Rates) FIXED PRODUCTS VARIABLE PRODUCTS Risk of Principal Indexing COMBINES Safety and Potential
- 14. Our Strategies for Creating a Pension Index Universal Life & Index Annuity Insurance Life Insurance Products that Offer: Index Universal Life insurance and Index Annuities are life products that offer a death benefit and cash value accumulation Each product uses an interest credit strategy that is based on the movement of specific market indexes such as the S&P 500, NASDAQ-100, and the Dow Jones Industrial Average
- 15. Our Strategies for Creating a Pension General Characteristics of an Index Universal Life Insurance • Death benefit • Cash Accumulation (Cap rates up to 14%*) • Protection from stock market crashes (0% floor with a 3% look back**) • Tax Deferred cash accumulation • Tax Free income during retirement • Tax Free income for life (or until policy holder reaches the age 120*) • No contribution limits (currently $16,500 for employees & $49,500 for certain business owners in qualified retirement plans)
- 16. Our Strategies for Creating a Pension General Characteristics of an Index Universal Life Insurance • No impact on existing qualified plans (policy holder may set aside more money for retirement without fear of IRS penalties) • 0% Floor (with 3% look back) • 12-14% Cape Rate • Terminal Illness Protection** • Critical Illness Protection** • Long Term Care Protection* *Represents riders that can be attached to specific IUL policies. **Represents FREE riders attached to specific IUL policies.
- 17. Our Strategies for Creating a Pension IUL vs. 401(K) Indexing COMBINES Safety and Potential $115,563 $124,230 $124,230 $143,563 $158,775 $170,683 $154,330 $133,547 $107,500 $170,683 $183,484 $150,000 $140,000 $130,000 $120,000 $100,000 $160,000 $170,000 $90,000 $110,000 $100,000 Invested in 1997 Indexed AccountLarge Company Stocks 8/1/97 8/3/98 8/2/99 8/1/00 8/1/01 8/1/02 8/1/03 8/2/04 8/1/05 8/1/06 8/1/07 8/1/08 8/3/09 $151,836 $128,379 $140,217 $93,403 $116,838$117,453 $130,430 $134,185 $103,485 $133,065 $109,673 $120,396 $154,762 8/2/10 $180,000 $190,000 $63,088 Difference!
- 18. Our Strategies for Creating a Pension Index Annuities Typically used to transfer or “rollover” from riskier or lower interest baring accounts Individuals must meet suitable age requirements for product Money must remain in account for several years (unless creating a Single Premium Index Annuity “SPIA”) aka “Surrender Period” Surrender Period can last for up to 12 years (typically 5/10)
- 19. Our Strategies for Creating a Pension Characteristics of Index Annuity Insurance • Death benefit • Beneficiaries can receive a lump sum upon death of owner or continue to receive distributions • Protection from stock market crashes • Tax Deferred cash accumulation (cap rates are much lower than IULs) • Tax Free income for life (if funded with AFTERTAX MONEY ONLY)
- 20. Our Strategies for Creating a Pension Characteristics of Index Annuity Insurance *Tax penalties are applicable for withdrawals from money received from qualified PRE-TAXED retirement plans
- 21. Our Strategies for Creating a Pension Recap of the definition of a Pension A fixed amount (income) other than wages Paid at regular intervals to a person or to the person's surviving dependents An allowance, annuity, or subsidy IUL Index Annuity
- 22. Our Strategies for Creating a Pension Recap of the definition of a Pension A fixed amount (income) other than wages Paid at regular intervals to a person or to the person's surviving dependents An allowance, annuity, or subsidy IUL Index Annuity
- 23. Our Strategies for Creating a Pension Recap of the definition of a Pension A fixed amount (income) other than wages Paid at regular intervals to a person or to the person's surviving dependents An allowance, annuity, or subsidy IUL Index Annuity
- 24. Our Strategies for Creating a Pension Recap of the definition of a Pension A fixed amount (income) other than wages Paid at regular intervals to a person or to the person's surviving dependents An allowance, annuity, or subsidy IUL Index Annuity
- 25. Our Strategies for Creating a Pension Recap of the definition of a Pension A fixed amount (income) other than wages Paid at regular intervals to a person or to the person's surviving dependents An allowance, annuity, or subsidy IUL Index Annuity
- 26. Our Strategies for Creating a Pension Recap of the definition of a Pension A fixed amount (income) other than wages Paid at regular intervals to a person or to the person's surviving dependents An allowance, annuity, or subsidy IUL Index Annuity
- 27. Our Strategies for Creating a Pension Recap of the definition of a Pension A fixed amount (income) other than wages Paid at regular intervals to a person or to the person's surviving dependents An allowance, annuity, or subsidy IUL Index Annuity
- 28. Creating Your Own Pension “How to Retire Without Going Broke” THETHE NEXTSTEP Act Now!!! Make an Appointment
Hinweis der Redaktion
- My name is Walter Hines and I’m with Bison Business & Technology Solutions. Our presentation today is called “Creating Your Own Pension Plan”.
- How many of you think that you deserve a pension for shaping the minds of America’s youth when you retire? Do you think that the County of Low Angeles will be able to provide that for you?
- Two year ago, a Stanford study stirred debate when it predicted that the pensions funds covering most of California’s state workers was underfunded and would not have enough money to pay all of the money owed to its retirees.
- Two year ago, a Stanford study stirred debate when it predicted that the pensions funds covering most of California’s state workers was underfunded and would not have enough money to pay all of the money owed to its retirees.
- Two year ago, a Stanford study stirred debate when it predicted that the pensions funds covering most of California’s state workers was underfunded and would not have enough money to pay all of the money owed to its retirees.
- Two year ago, a Stanford study stirred debate when it predicted that the pensions funds covering most of California’s state workers was underfunded and would not have enough money to pay all of the money owed to its retirees.
- Two year ago, a Stanford study stirred debate when it predicted that the pensions funds covering most of California’s state workers was underfunded and would not have enough money to pay all of the money owed to its retirees.
- How will these deficits affect my retirement? No one really knows. But, you can bet that there will be deductions in health care benefits which will include medical and dental. Reductions in your monetary distributions at retirement. Perhaps an increase in the minimum retirement age, and decreased benefits for your spouse after death. Now is the time to act!
- How many of you have elected to save money for retirement in alterative investment plans such as 403(b) and 401(k) plans? Good. But, I want you to pay close attention to this short video.
- There are three reasons why the Crabbs went broke. The first was they didn’t put enough money away for retirement. Second, they didn’t know that their 401(k) money would be taxed, and by the way that goes for 403(b) money as well. Third, they didn’t understand that their money as at risk in the stock market. How many of you lost money in the crash of 2008? Have you been able to break even, yet?
- There are many was to save for retirement. The three most common are Fixed products that offer safety of principal, but low interest rates.
- Variable products, with upside potential for growth, but you could lose everything in the stock market.
- And there are index products, which offer the best of both worlds. You have safety of principal and great upside potential. A little 20 years ago, these products were introduced and they have become one of the fastest selling financial products available. Why? Because they combined safety of principal and upside potential for growth.
- Index Universal Life insurance and Index Annuities are life products that offer a death benefit and cash value accumulation. Each product uses an interest credit strategy that is based on the movement of specific market indexes such as the S&P 500, NASDAQ-100, and the Dow Jones Industrial Average. So, instead of investing in a specific stock, bond, treasure note, or portfolio, each product uses a strategy that allows the owner to participate in the growth of the entire market up to a cap rate. However, since these are not investment products, the policy holder’s money is protected from losses due to declines in the market.
- Read Text
- Read Text
- Here is an example of $100,000 invested in the stock market from 1997 – 2010. As you can see there were a lot of ups and downs in the market represented here in red, and after 13 years, there was a modest $20,000 gain. With the index product, marked in blue, the value increase along with the stock market, until it reached it’s cap rate. When the market crashed during in during what was called the “dot.com” bust of 2002, the value remained the same. It increased again during the boom years of the 2000’s and when the market crashed again in 2008, once again, the value remained the same and policy holders lost nothing. And, as you can see there was an additional $63,000 dollar gain. Once again, Indexing combines safety and potential!
- Typically, an annuity owner is between the ages of 45 and up. In some cases, carriers may not sell Annuities to individuals younger than 35 and older than 85 years of age. However, there are always exceptions to the rules.
- Read the Text
- Read the Text
- A recap of the definition of a pension. (Read Text) Did our IUL product meet the criteria for a fixed amount of income made payable to the owner or their beneficiaries?
- Did our IA product meet the criteria for a fixed amount of income made payable to the owner or their beneficiaries?
- Where the payments made payable to the owner or their beneficiaries at regular intervals?
- How about or IA?
- Was there an allowance or subsidy with IUL product?
- How about the IA?
- With our products, you receive a pension and an estate planning tool in which you can provide tax free income to your spouse our beneficiaries after death. So do our products meet the literal and figurative definition of a Pension?
- My business partner is now going to pass out appointment slips for those of you who are interested in setting appointments. Please remember that there is no obligation to begin your personal pension right now, but you’ll want to act now because time is of the essence.