Transcript Slide 1

Who Will Benefit From This Seminar?
√
People who are tired of losing money in the
stock market.
√
People who are looking to do better on their
CD’s and Money Market funds.
√
People who are concerned that they might
outlive their income.
√
People who would like to preserve their
assets for future generations.
√
People who would like to have more income
to spend.
EXPLANATORY DISCLAIMER
This is an Educational Workshop Only
This presentation contains basic general information and is provided with the understanding that it is for educational purposes only and simply
reflects our understanding of retirement issues in effect at the time of publication. Individual situations vary and the personal impact of various
estate and retirement strategies should be carefully considered. Therefore, it is always recommended that you seek the advice of a certified
professional regarding your specific needs.
This guidebook is made available with the understanding that the publisher, its employees, representatives, partners, officers, agents or
associates do not give legal or tax advice. Tarkenton Financial LLC does not practice law, and nothing in this guidebook is ever to be viewed
as legal counsel. Please be aware that laws, regulations and procedures are constantly changing and are subject to local variations and
diverse interpretations. Therefore, if legal advice is required, it is always recommended that you seek the advice of a qualified attorney who is
familiar with the laws of your state of residence.
No specific investment advice is ever intended. Annuities and other financial products can vary significantly. Therefore, some of the
information provided in the guidebook may not apply to every insurance or financial product that is listed or available. Always examine the
details of any financial product under consideration for its exact structure and provisions. The U.S. Securities and Exchange Commission
(SEC) require that only a registered representative licensed with a registered broker/dealer may sell securities. The Department of Insurance in
each state require that only qualified licensed individuals may sell insurance products. Any mention of interest rates or rates of return are
purely hypothetical and not intended to represent any assurances or guarantees.
Tarkenton Financial seminars are intended to give basic general information on retirement issues and all efforts have been made to provide
useful and accurate information concerning the subject matter covered herein.
COPYRIGHT © 2004-2007 TARKENTON FINANCIAL LLC. Use or reproduction without prior written consent is prohibited by law. This material is provided for
educational purposes only and no legal, tax or investment advice is intended. Please consult a certified professional advisor regarding your specific needs. See
Disclaimer page.
29
Some Housekeeping Rules
• Please turn off your pagers
and cell phones for the
courtesy of others
• Restrooms are ……
• Seminar Will Last
About 90 Minutes
The Five Key Money Questions
•
•
•
•
•
How do I keep it?
How do I grow it?
How do I spend it?
How do I pass it on?
How do I get it back?
Seniors Tell Us…
“That Makes a Lot of Sense”
Who Can You Trust?
Attorneys
Tarkenton Financial and
Insurance
Mutual Fund
Accountants
Professionals
We’d Like for Professionals
You to Believe in Us
• Lots of Choices
• Industry Trusted Name
•
Lots
of
Information
Hard
Earned
• Highly Trained Representatives
Real Estate
Estate and
Dealers
• Lots
Opinions
Levels ofof
Integrity
Financial• Highest
Planners
• Multiple
Product of
Information
and Offerings
• Lots
Uncertainty
• State of the Art Planning Ideas and Technology
Annuity
•
Lots
of
Promises
Brokers
and
Salespeople
• 100%Stock
Focus
on Seniors
and Retirement
Money Managers
A Message from Fran Tarkenton
You Didn’t
Built aGrow
Financial
Your Money
on a House
Tree … Did It?
One Day of Work at a Time
Accumulation
Stage of Life
Basic
Needs
Money
Tax
Money
Taxes
Quality
of Life
Money
Inflation
Assets
Work
Harder
Work
And Managing Your Then
MoneyYou
TookRetired!
On a Whole New Meaning
The Big Cloud
Basic
Needs
Money
Preservation and
Distribution Stage
Tax
Money
Quality
of Life
Money
Inflation
Taxes
Assets
Age Became a Big Factor
Pre-Retirement Years are
Weighted Towards Accumulation
Accumulation
Stage
Accumulation
Stage
Retirement Years are
Weighted Towards
Preservation and Distribution
Preservation
and
Distribution
Preservation
and
Stage
Distribution
Stage
The Impact of Taxes
CAPITAL GAINS TAX
STATE/LOCAL TAX
Federal Income Tax
INTEREST TAX
SALES TAX
SOCIAL SECURITY TAX
37.6%
49.2%
Today
1976
PROPERTY TAX
DIVIDENDS TAX
Estate Tax
Luxury Tax
Capital Gains and
Federal Estate Taxes
Capital Gains Tax
• Capital Gains Tax Rate is 15%
(exception of 0% for taxpayers at
15% regular rate)
Federal Estate Tax
• 18% to 45% Tax on Taxable Estate
• Paid at Death of Surviving Spouse
• Paid Nine (9) months after passing
• Everything over $2,000,000
• “Laughter is the right response …..2010 is
going to be a great year to die.”
- Jane Bryant Quinn
Avoiding Tax on Social Security
Gives You More Money to Spend
• 1935 - Social Security Established
• 1984 - Started to Tax, Congress Exempt
• 1994 - OBRA – Raised Tax to 85%
• Single - $25,000
*Married - $32,000
50%
• Single - $34,000
*Married - $44,000
85%
*IRS Publication 915 Pgs. 3,5
IRS Code Section 86 ( c ) ( 1 ) Code
Section 86 ( a ) ( 2 ) * Married Filing Jointly
Get Maximum Growth With
Tax Deferred Compounding
Put Your Money To Work
Don’t Give It to Uncle Sam in Taxes
Triple Exemption
Compounding
Federal Tax
• Earn Interest on Principal
State Tax• Earn Interest on Interest
Tax on Social
• EarnSecurity
Interest onBenefits
Dollars
Not Paid in Taxes
Money Accumulates Totally Tax Deferred
In 1492...the Year Columbus
Sailed the Ocean Blue…
$858 Million
With Interest Taxed
Each Year at 33%
$242,219
5%
“Compound interest is the
greatest discovery in the
universe.”
Albert Einstein
Sailing Along
With Triple
Compounding
You Can Make Your Money Do More Than
You Ever Imagined
Multi-Generational IRA’s – The Newest Tax Option
$200,000 to Heirs
With Multi-Generational
IRA
$1,782,009
Without Multi-Generational IRA
$157,424
Lump Sum (Without Stretch)
Multi-Generational IRA
Benefits of Tax Deferral Lost
Benefits of Tax Deferral Continue
Estate Taxes Due
Income Taxes On Distributions Only
Income Taxes Due
Lifetime Income Provided to Children
Hypothetical Illustration assuming stretch for two generations @ 5.5% interest. Assumes
assets are passed at age 70 and the children disclaim the IRA to the grandchildren.
Grandchildren are 8 years old at the time of the grandparents death.
Joe - 71
Sally - 65
“My accountant tells me he’s
taking advantage of every
deduction. “
Tax Savings
$2719
$5235
$2516
Before
After
Probate Takes Money From Your
Children and Grandchildren
Grantors
Heirs
Probate
Costs
Public Notice
Creditors
Money Pit
*This information is for educational purposes only and should not be construed as
legal advice. Always consult an attorney about your individual circumstances.
Lawyers
Fees
Estate Taxes
Trusts Put That Money Back
in Their Pockets
Grantors
Heirs
Public Notice
Creditors
Probate
Lawyers
Costs Estate Taxes
Money Pit
*This information is for educational purposes only and should not be construed as
legal advice. Always consult an attorney about your individual circumstances.
Different Kinds of Trusts
Living Trust A – B
I.L.I.T. – Irrevocable Life Insurance Trust
C.R.T. – Charitable Remainder Trust
Other Common Planning Vehicles
F.L.P. – Family Limited Partnership
Additional “Must Have” Documents
Financial Power of Attorney
Healthcare Power of Attorney
Living Will Document
*This information is for educational purposes only and should not be construed as
legal advice. Always consult an attorney about your individual circumstances.
Registration and Information Request Card
Name ___________________________________________ How Did You Like Our Workshop?
Address _________________________________________
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City ____________________________ Zip_____________
□ Wonderful □ Magnificent
Phone __________________________________________
I Would Like More Information About:
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Tax Savings and Shelters
Estate Planning Using Trusts
Protecting Assets from Catastrophic Loss
Rule of 100 Asset Allocation Analysis
Lifetime of Income Compass Program
Market Growth – No Loss FIA’s
Give us one hour and we’ll give you years of experience!
Best Day and Time to Meet – Please Select Two Choices
Circle Day
Put Time in Box
Monday
Tuesday
Wednesday
Thursday
Friday
You Know That Everything
Can Be Lost to Illness
OK Deary,
Hand That Egg
Over, Or Else!
Catastrophic Illness
Options to Consider
• Out of Pocket
• Medicaid Planning
• Children Care
• Long Term Care Insurance
Long Term
Long TermCare
Care Insurance May Be
Insurance?
a Solution
That’ll Be About $1000
Per Year*
Penny Wise Age 60
50% Chance of Entering a
Nursing Home or Needing Home
Health Care Over 10 Year Period
If You Are Going to Buy
Long Term Care
Insurance…. Do It Now!
Wisdom at 60
20 Years
Pound Foolish Age 70
$40,000 Age 80
*Actual rates for Male- Age 60. Allianz ‘Term Long Term Care’.
Covers 150 per day for 5 years with simple interest rider attached.
$20,000 Age 80
Real Life Issue
John, 63 and Cathy, 61
$50,000 per person
Death Benefit
*$175,912
“I don’t want to throw money out the
window on Long Term Care
Insurance! I probably won’t need it.”
Specially
Designed
Life Insurance
Policy
Living Benefit
@ 4.0%
*$100,000 Minimum
Return of Premium
*Combined Benefits
Lincoln National Life MoneyGuard
Reserve Policy
Long Term Care
*$87,948 for 4 Years
Review Current Life Insurance Policies
Good News: Life Insurance has
become less expensive!
Old Policy
Death Benefits
$250,000
Cash Value
$81,994
New Policy
Cash Value to
New Policy
$81,994
Death Benefit
$394, 021
Registration and Information Request Card
Name ___________________________________________ How Did You Like Our Workshop?
Address _________________________________________
□ Excellent
□ Fantastic
City ____________________________ Zip_____________
□ Wonderful □ Magnificent
Phone __________________________________________
I Would Like More Information About:
□
□
□
□
□
□
Tax Savings and Shelters
Estate Planning Using Trusts
Protecting Assets from Catastrophic Loss
Rule of 100 Asset Allocation Analysis
Lifetime of Income Compass Program
Market Growth – No Loss FIA’s
Give us one hour and we’ll give you years of experience!
Best Day and Time to Meet – Please Select Two Choices
Circle Day
Put Time in Box
Monday
Tuesday
Wednesday
Thursday
Friday
The Lure of the Stock Market
+5,700%
7,000%
6,500%
+10,000%
+4,400%
6,000%
5,500%
5,000%
4,500%
The Dow at 30,000
Dow Jones Industrial Index
Is It Possible?
S&P 500 Index
4,000%
Yes!
+8,000%
3,500%
3,000%
2,500%
2,000%
1,500%
1,000%
500%
0%
-500%
1954
1960
1965
1970
1975
1980
1985
1990
1995
2000
2006
9
But, What If the Market Goes Down?
Have You Discovered Money Lost is
Hard to Recoup?
Break Even
$100,000
-20%
+25%
+66.6%
$80,000
-40%
+100%
$60,000
-50%
$50,000
Financial Snapshot – Risk Ratio Analysis
You Now Have a Money Management
Balancing Act
Risk
No Risk
Stocks
CD’s
Fixed
Annuities
No Loss
FIA
Variable
Annuities Annuities
Mutual
Funds
LOSS
___%
-4-
Financial Snapshot – Risk Ratio Analysis
Age Based Asset Allocation Provides the
Freedom to Take Advantage of the Market
The Rule
of 100
High Risk
Moderate Risk
No Risk
Mutual Funds
Common Stocks
Variable Annuities
100 – Your Age =
%
in–High
100
65 =and
35%
Moderate Risk
Preferred Stocks; Bonds;
Bond and Income Funds; Cash;
CD’s; Treasuries**
Certain Variable Annuities
Fixed Annuities; Fixed Indexed Annuities; Other Annuities
with Minimum Guarantees; Emergency Cash Reserves
___%
No Market Risk*
___%
* Based on claims paying ability of the issuer. Always review
financial strength of insurance company.
65%
** CD’s are FDIC insured. Treasuries are insured by the US
Government. Both CD’s and Treasuries are subject to inflation
risk.
___%
-4-
Financial Snapshot – Risk Ratio Analysis
Upside Down Asset Allocation
The Biggest Cause of Outliving Income
High Risk
Mutual Funds,
Common Stocks,
Variable Annuities
Moderate Risk
Preferred Stocks; Bonds,
Bond and Income Funds; Cash;
CD’s, Treasuries,
Certain Variable Annuities
Fixed Annuities; Fixed Indexed Annuities;
Other Annuities with Minimum Guarantees;
Emergency Cash Reserves
___%
No Risk
___%
-4-
Financial Snapshot – Risk Ratio Analysis
Real Life Issue
“I like having money in the
market, but the ups and downs
are driving me nuts.”
Tom, 68 and Cynthia, 68
Fixed
Annuity
CD’s
VA
Stocks/Bonds
High Risk
Mutual
Funds
62%
Total Money Assets $454,000
• Strong Financial
Foundation
• Take Advantage of
Market Growth
• Less Stress About
Potential Losses
High Risk
Moderate/Low Risk
17%
28%
Moderate/Low Risk
No Risk
15%
10%
No Risk
___%
68% = $308,720
___%
-4-
Registration and Information Request Card
Name ___________________________________________ How Did You Like Our Workshop?
Address _________________________________________
□ Excellent
□ Fantastic
City ____________________________ Zip_____________
□ Wonderful □ Magnificent
Phone __________________________________________
I Would Like More Information About:
□
□
□
□
□
□
Tax Savings and Shelters
Estate Planning Using Trusts
Protecting Assets from Catastrophic Loss
Rule of 100 Asset Allocation Analysis
Lifetime of Income Compass Program
Market Growth – No Loss FIA’s
Give us one hour and we’ll give you years of experience!
Best Day and Time to Meet – Please Select Two Choices
Circle Day
Put Time in Box
Monday
Tuesday
Wednesday
Thursday
Friday
Inflation and
Market Risk
CD’s and Money Market Funds
The Slow Leak You Can’t See
Year
‘93
‘94
‘95
‘96
‘97
‘98
‘99
‘00
‘01
‘02
‘03
‘04
‘05
‘06
’07
CD Rate
3.3
5.0
6.0
5.5
5.7
5.4
5.5
6.6
3.7
1.8
1.2
1.8
3.7
5.2
5.2
Inflation
3.2
2.8
3.0
3.2
2.5
1.7
2.4
3.7
3.1
1.7
2.5
2.9
3.7
3.2
2.8
.10
.50
1.0
.50
1.3
2.0
1.3
.76
.60
.50
1.7
1.7
1.2
.27
.65
Real Rate
of Return
Real Rate of Return is CD Rate Adjusted for Inflation Less 33% Tax
Over the Past 15 Years CD’s
• Creditors?
Lost Money for Their Owners
• Taxes?
40% of the Time
*Source: Inflationdata.com; Federalreserve.gov
• Lawsuits?
Market Linked Products
Fixed Index Annuities (FIA’s)
Annual Lock In
Current Value
Annual Reset
Principal $
Index at
1000
Index at
1000
Index at
900
Index at
900
Year
1
Annuities are insurance products and are subject to limitations, including
withdrawal charges, caps, fees, and market value adjustments, that may
affect contract values. Withdrawals prior to age 59 1/2 may be subject to an
IRS penalty. Availability of products and features may vary by state.
Index at
1000
2
3
*Hypothetical Illustration.. Always consult with an
insurance professional about your individual
circumstances. Annuity guarantees only extend to the
claims paying ability of the insurer.
Index at
900
4
5
No Market Losses
6
FIA’s Are Historically 100% Risk Free
•
Insurance company invests 79% of your dollars in Treasuries, 6% in
Mortgage Loans, 5% Stocks, 3% Real Estate, 3% Cash and 2% in S&P
500 Institutional Options.
•
For each dollar you invest, approximately $1.00 of the insurance
company’s Capital & Surplus is put into Reserve (Banks Reserve
typically 3 to 10%)!
•
Because of this, they are able to insure 100% of your principal against
loss and guarantee a minimum rate of return (due to the yield on the
Treasuries).
•
And if the market is positive, you are credited with a interest at a rate
linked to the return on the S&P 500 or NASDAQ 100 (Fixed Index
Annuities)*
*For illustration and educational purposes only. Different insurance companies use different formulas to
manage their portfolios and structure reserves.
*Up to specified cap, if any.
** Lost Money is defined as any loss from a fixed annuity of Principal or Guaranteed Interest. Principal is the amount initially invested in the annuity; Guaranteed Interest is interest rate guaranteed
specified in the annuity contract as guaranteed to be paid either throughout the term of the contract, or for a specific elected year – whichever applies. Proof of loss required including: Specific
Annuity Contract for the Annuity in question and support documentation demonstrating that loss was the result of non-payment by the underwriting insurance company.
Real Life Issue
“I’d like to have more income,
but I’m so afraid of running out
of money.”
Chris, 71
Margaret, 70
$100,000
Monthly Income:
Start
5th Year
Compass Income Plan
$427
$462
1
2
3
4
$24,866
$20,438
$15,814
$38,883
$26,060
$20,668
$53,273
$0
$27,012
$72,988
$0
10th Year
15th Year
* Illustration Purposes Only. Leg 1 –
Immediate Annuity; Leg 2 – Deferred
Annuity 4.98%; Leg 3 – Deferred
Annuity 5.5%; Leg 4 – Deferred
Annuity 6.5%. Results will vary based
on market conditions. Principal is
guaranteed against loss.
$473
$0
Tax Free 97.01%
Tax Free 73.65%
Tax Free 55.67%
$100,000*
What is the Real Truth About Annuities?
“Index Annuities may be the Perfect Product.”
“Index Annuities are a Poor Choice for Seniors.”
•Over $25 billion of index annuities were purchased in 2006.
True
•Annuities are appropriate for all seniors.
False
•FIA in general have become more consumer friendly.
True
•There are good and bad types of annuities.
True
•Work with someone you trust and top rated companies.
True
•FIAs should be part of a long-term retirement strategy.
Maybe
Fixed Indexed Annuities Are Not For Everyone!
“I have to admit I like the concept
for the right investor. In fact, for
those who do not want to take any
downside risk, the index annuity
can be a good option … If you are
willing to give up some upside
potential, an index annuity can help
you protect yourself against
downside risk, both in the short
term and the long term … If you do
not want to take any risks but still
want to play the stock market, a
good index annuity may be right
for you.”
-- Excerpted from The Road to Wealth, Pages 506-507.
Fixed Index Annuities are long term, safe money financial products that are not suitable for everyone. Read all product disclosures, consult your
advisors and the NAIC “Buyer’s Guide to Fixed Annuities with Appendix for Equity Index Annuities”. Guarantees are contingent upon you abiding
by the terms of the annuity contract.
When Financial Needs Change
You can generate immediate cash
Yesterday’s decisions may not be
from:
suitable for today:
• Income payments from an
• Eliminate debt.
annuity.
• Home improvement.
• Structured settlement payments.
• Helping children buy a house or
• Inherited annuities.
starting a business.
• Existing annuities.
• Assisting family in times of need.
Registration and Information Request Card
Name ___________________________________________ How Did You Like Our Workshop?
Address _________________________________________
□ Excellent
□ Fantastic
City ____________________________ Zip_____________
□ Wonderful □ Magnificent
Phone __________________________________________
I Would Like More Information About:
□
□
□
□
□
□
Tax Savings and Shelters
Estate Planning Using Trusts
Protecting Assets from Catastrophic Loss
Rule of 100 Asset Allocation Analysis
Lifetime of Income Compass Program
Market Growth – No Loss FIA’s
Give us one hour and we’ll give you years of experience!
Best Day and Time to Meet – Please Select Two Choices
Circle Day
Put Time in Box
Monday
Tuesday
Wednesday
Thursday
Friday
What’s Your Worry Level?
Low
Having less money to spend due to tax
High
1
2
3
4
5
Losing on investments
1
2
3
4
5
Getting extremely low interest rates on CD’s
and Money Market accounts
1
2
3
4
5
Outliving income or running out of money
1
2
3
4
5
1
2
3
4
5
increases and inflation
Losing home and assets to the nursing home
19
My Score Today ______
My Score Tomorrow ______
How’s
WouldYour
You Retirement
Like to Do Better?
Looking?
Peace of
Mind
Some
Concern
Under
5
6 - 10
Fear of the
Future
11 - 15
Sustained
Feeling Very
Disappointment Vulnerable
16 - 20
20 &
Over
19
4
My Score Today ___________
My Score Tomorrow ___________
When?
Procrastination Never Helped Anyone
• Feels Obligation to Another
• Does Not Want to be Pressured
• Overly Optimistic
• Overly Pessimistic
• Fear of the Unknown
• Too Emotional
• Embarrassed
• Cannot Admit Mistakes
Who Can You Trust?
Tarkenton FinancialAttorneys
Insurance
We’d Like
Professionals
and
for You
Believe
in Us
Mutualto
Fund
Accountants
Professionals
•
Lots
of
Choices
• Spend one hour with us for a ‘no obligation’ visit
• We will
give youHard
a candid
second opinion
• Lots
of
Information
Earned
Real Estate
Estate and
• We will give you a personally designed,
Dealers
•
Lots
of
Opinions
Financial
mathematically based plan
Planners
• Give•usLots
one hour
your time and we will give
ofof Uncertainty
you years of our experience
Annuity
•StockLots
of
Promises
Brokers and
Salespeople
Money Managers
Closing Thoughts From
Fran Tarkenton
Registration and Information Request Card
Name ___________________________________________ How Did You Like Our Workshop?
Address _________________________________________
□ Excellent
□ Fantastic
City ____________________________ Zip_____________
□ Wonderful □ Magnificent
Phone __________________________________________
I Would Like More Information About:
□
□
□
□
□
□
Tax Savings and Shelters
Estate Planning Using Trusts
Protecting Assets from Catastrophic Loss
Rule of 100 Asset Allocation Analysis
Lifetime of Income Compass Program
Market Growth – No Loss FIA’s
Give us one hour and we’ll give you years of experience!
Best Day and Time to Meet – Please Select Two Choices
Circle Day
Put Time in Box
Monday
Tuesday
Wednesday
Thursday
Friday
All About Money