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Welcome to Financial Planning for Primary Care Physicians Presented by Michael Merrill, CLU, ChFC , Senior Partner,

Welcome to Financial Planning for Primary Care Physicians Presented by Michael Merrill, CLU, ChFC , Senior Partner, Finity Group, LLC. The presentation will begin shortly This webinar is being recorded for future use.

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Welcome to Financial Planning for Primary Care Physicians Presented by Michael Merrill, CLU, ChFC , Senior Partner,

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  1. Welcome to Financial Planning for Primary Care PhysiciansPresented by Michael Merrill, CLU, ChFC, Senior Partner, Finity Group, LLC The presentation will begin shortly This webinar is being recorded for future use. Funds for this webinar were provided by the U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) with the American Recovery and Reinvestment Act (ARRA) funding for the Retention and Evaluation Activities (REA) Initiative. This webinar is being offered by the San Francisco Community Clinic Consortium and the California Statewide AHEC program in partnership with the Office of Statewide Health Planning and Development (OSHPD), designated as the California Primary Care Office (PCO).

  2. WELCOME EVERYONE!Thank you for joining us today

  3. Raising your hand to ask a question

  4. Sending Notes

  5. Muting your phone

  6. Financial Strategiesfor Physicians Presented by Michael F. Merrill, CLU, ChFC Financial Advisor | Senior Partner Finity Group, LLC Michael.Merrill@thefinitygroup.com Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Finity Group, LLC and Cambridge are not affiliated. Financial Advisors do not provide specific tax/legal advice and this information should not be considered as such. You should always consult your tax/legal advisor regarding your own specific tax/legal situation. 0368-2002-2445DOFU: 062002

  7. Your Strategy Can Not Be “NORMAL” • > $113,799 = 10% • > $159,619 = 5% • > $380,354 = 1% *According to the IRS 2010 Database

  8. The Three T’s • Time • Getting a late start! • Taxes • Due to your income, you will pay significantly more in taxes than most people! • Trial Attorneys • You are an attorney’s dream come true!

  9. Keys to Reaching Financial Independence • Calculate Net Worth • Match Investments to Time Horizons • Save 20% of your Income • Eliminate “Bad Debt” • Manage Risks Properly • Use Tax Code to your advantage • Review your Financial Situation Yearly

  10. WEALTH SUCCESS Retirement Plans Home TAX ADVANTAGED INVESTMENTS Mutual Fund Portfolio Savings CAPITAL ACCUMULATION Debt Management SECURITY & CONFIDENCE Risk Management Emergency Reserves

  11. SECURITY & CONFIDENCE Debt Management

  12. Debt Management • 7% rule • “Good Debt vs. Bad Debt” • Mortgage Interest • Student Loans • Business Loans • Focus on high interest, short-term debt

  13. SECURITY & CONFIDENCE Debt Management Emergency Reserves

  14. Emergency Reserves • Safe, Liquid, Low Costs • “I’m not so concerned about the rate of return on my money, just the return of it!” • “High-Interest” Savings Accounts • www.bankrate.com

  15. Risk Management Debt Management SECURITY & CONFIDENCE Emergency Reserves

  16. Risk Management • Medical Insurance • Home Insurance • Car Insurance • Life Insurance • Disability Insurance • Professional Liability • Umbrella Liability

  17. Umbrella Liability Insurance • Excess liability insurance that covers above and beyond the limits on your Auto & Home Owners insurance • Only sold in million dollar increments • Usually costs $12 - $15 per month per million of coverage

  18. Keys to Risk Management • Self Insure High Probability, Low Cost Risks • Deductibles and waiting periods • Share Low Probability, High Cost Risks • Insure those risks with the least probability of occurrence and the greatest potential loss. • Protect Your Most Valuable Assets • Health • Income • Family

  19. Life InsuranceTemporary vs. Permanent • Term insurance • Least expensive form of life insurance • Lasts for a specified period of time (i.e., 10, 20 or 30 years) • Permanent (whole life, variable life, etc.) • Can last your whole life • Costs more than term insurance • Builds cash value Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender charges.

  20. Long Term Disability Insurance

  21. Example Benefits Received from Group LTD *Based on an individual making $20,000/month, 33% effective tax rate and a Group LTD policy with a taxable 60% benefit and a monthly maximum of $15,000.

  22. What to look for in a Financial Advisor • Specialized in working with Physicians • Truly Independent – no conflict of interests • No Regulatory Violations, Disciplinary Actions, or Client Complaints filed. • www.FINRA.org • Broker Check

  23. WEALTH SUCCESS TAX ADVANTAGED INVESTMENTS Mutual Funds, College Savings Plans, Real Estate CAPITAL ACCUMULATION Debt Management SECURITY & CONFIDENCE Risk Management Emergency Reserves

  24. Start Saving Early • $2,000/year from Age 35 to age 45 • Stop Investing • Total: $20,000 • Result at Age 65: • $147,157 • Wait to start saving • $2,000/year from age 45 to 65 • Total: $40,000 • Result at age 65: • $114,550 This example assumes an 8% rate of return – compound interest. This is a hypothetical example for illustrative purposes only, and is not representative of any specific investment. It does not factor investment costs, and if costs were factored, results would be less.

  25. 3 Methods of Diversifying Your Financial Strategy • Asset Class • Time Horizon • Tax Treatment *Asset allocation and diversification strategies cannot assure profit or guarantee against loss. Past performance does not indicate future results.

  26. Investor Behavior • 20 year average equities investment return = 9.14% • 20 year average equities investor return = 3.83% • 20 year average bond investment return = 6.89% • 20 year average bond investor return = 1.01% • 20 year average inflation = 3% • Average equities investor retention rate = 3.27 years • Source: 2011 DALBAR Study of Investor Returns Offers Ways to Improve Investor’s Alpha

  27. 3 Methods of Diversifying Your Financial Strategy • Asset Class • Time Horizon • Tax Treatment *Asset allocation and diversification strategies cannot assure profit or guarantee against loss. Past performance does not indicate future results.

  28. Time Horizons • Short Term • Medium Term • Long Term

  29. 3 Methods of Diversifying Your Financial Strategy • Asset Class • Time Horizon • Tax Treatment *Asset allocation and diversification strategies cannot assure profit or guarantee against loss. Past performance does not indicate future results.

  30. What do you get when you combine the words:The IRS THEIRS

  31. *Source: www.taxpolicycenter.org

  32. Three “Buckets” Used • Pre-Tax • 401(k), 403(b), SEP, Traditional IRA • Post-Tax • Roth IRA, Cash Value Life Insurance • Capital Gains Tax • Non-Retirement Investment account

  33. Roth IRA Vs. 401k / 403b • Roth IRA • After tax contribution • Tax deferred growth • TAX FREE distributions* • 401k / 403b • Pre-tax contribution • Tax deferred growth • TAXABLE distributions *For a Roth IRA, earnings withdrawn prior to reaching age 59½ and/or not meeting the five-year holding period may be subject to a 10 percent penalty in addition to income tax. After-tax contribution amounts are generally returned income tax free. Investors’ anticipated tax bracket in retirement will determine whether or not a Roth IRA versus a traditional IRA or qualified plan will provide more money in retirement. Generally, investors who are in a higher tax bracket at retirement relative to their current tax bracket while making contributions to a Roth IRA benefit more than an investor who is in a lower tax bracket at retirement. For 401k or 403b plans, withdrawals prior to age 59½ are subject to a 10% early distribution penalty unless an exception applies.

  34. Possible Opportunity • Do you have an old IRA, 401k, 403b, or other retirement plan? • Roth Conversion • IRA Rollover

  35. Filing Status Income Single or Head of Household $112,000 - $127,000 Married & filing jointly $178,000 - $188,000 Contribution Limitation 2013: $5,500 2012: $5,000 (Eligible participants may contribute up until April 15th, 2013 for tax year 2012) Distributions Tax-Free If over age 59 ½, and Established for at least five years Roth IRAEffective January 1, 2013

  36. “People don’t plan to fail, they fail to plan.” Please Take a few Minutes to Fill Out the Seminar Comment Form & CME Evaluation

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