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T HE F ACTS OF L IFE. Tracking 100 Americans from age 25 to 65 … 36 will be dead … 54 will be DEAD BROKE … 5 will still be working … 4 will be financially secure and 1 will be Financially Independent Where does your money go?.
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THE FACTS OF LIFE Tracking 100 Americans from age 25 to 65 … 36 will be dead…54will be DEAD BROKE… 5 will still be working…4will be financially secure and 1 will be Financially Independent Where does your money go? What did the 5 financially successful Americans do differently?
401(k) / 403(b)INTHENEWS it's painfully obvious that something is wrong with the way we save. The tax-deferred 401(k) plan, and others like it, such as the 403(b) and the IRA,has become our nation's go-to retirement piggy bank. Time Magazine - Oct 2009
401(k) / 403(b)INTHENEWS If you were doing the wrong thing to prepare for your retirement, when would you like to know about it? Now, or when you retire?
401(k) / 403(b)INTHENEWS Why Now? Time Magazine - Oct 2009 It isn’t working for the first retirees!
TAXABLE INCOME CalSTRS and CalPERS are TAXABLE INCOME Source: Internal Revenue Service
TAX PLANNING STRATEGIES Tax Deductible Contribution Tax Deferred Accumulation Tax Free Distribution You can only take two of the three! Which would you choose?
QUALIFIED PLANS TAX HISTORY Source: Internal Revenue Service
TAXABLE INCOME Bush tax cuts expire in 2011 ! Source: Internal Revenue Service/ CNN Money
Insurance Taxes Savings/ Investments Living Expenses Mortgage Consumer Debt THE FACTS OF LIFE Where does your money go?
HOW MONEY WORKS INFLATION In 1976 A First Class Stamp .13 cents1 In 1976 A Gallon of Gasoline .59 cents2 In 2009 A First Class Stamp .44 cents1 In 2009 A Gallon of Gasoline $2.95 4% Inflation will double prices every 18 years. 1 US Postal Service 2 Flashback 1970’s
HOW MONEY WORKS Upside Potential Upside Potential 3% to 5% 3% to 5% Fixed Products Fixed Products Variable Products Variable Products Indexed Products Safety of Principal Safety of Principal Risk of Principal Risk of Principal EARNINGSAND GROWTH Protection and Potential TIC-TAC-TOE
HOW MONEY WORKS $170,000 $166,359 $160,000 $155,476 $150,073 $152,488 $150,000 $149,937 $140,255 $140,000 $139,237 $134,631 $131,080 $133,977 $130,000 $126,925 $129,330 $120,000 $117,435 $122,504 $122,504 $114,490 $115,449 $110,000 $107,000 $103,775 $100,000 $95,529 $90,000 Large Company Stocks Indexed Account EARNINGSAND GROWTH Many people sacrifice return for safety, and other people sacrifice safety for return. Indexing brings together the best of both. $100,000 Invested in 1997 $166,359 $105,012 8/1997 8/1998 8/1999 8/2000 8/2001 8/2002 8/2003 8/2004 8/2005 8/2006 8/2007 8/2008 8/2009 Protection and Potential
IUL (AKALIFE SAVINGS PLAN) • The Solution: A new type of insurance. Retirement savings, it turns out, are exactly the type of asset we need insurance for. We need insurance to protect against risks we can't predict (when the market collapses) and can't afford to recover from on our own (Time Magazine Oct 2009)
DEFERRED STRATEGY $150,725 After Taxes
TAX-FREE STRATEGY $400
TAX-FREE STRATEGY $353,677
TAX-FREE STRATEGY 2% Chronic Illness Income = $7,074 per Month
TAX-FREE STRATEGY Cash Value at Year 15 = $96,334
TAX-FREE STRATEGY TAX-FREE Income For Life (or until age 120) $37,497
DEFERRED STRATEGY $233,119 After Taxes
TAX-FREE STRATEGY $300
TAX-FREE STRATEGY $393,679
TAX-FREE STRATEGY 2% Chronic Illness Income = $7,874 per Month
TAX-FREE STRATEGY Cash Value at Year 15 = $70,565
TAX-FREE STRATEGY TAX-FREE Income For Life (or until age 120) $95,470
TAX-FREE STRATEGY $300
TAX-FREE STRATEGY $224,348
TAX-FREE STRATEGY 2% Chronic Illness Income = $5,886 per Month
TAX-FREE STRATEGY Cash Value at Year 15 = $80,767
TAX-FREE STRATEGY $16,570 TAX-FREE Income For Life (or until age 120) $257,509
TAX-FREE STRATEGY $300
TAX-FREE STRATEGY $272,570
TAX-FREE STRATEGY 2% Chronic Illness Income = $5,451 per Month
TAX-FREE STRATEGY Cash Value at Year 15 = $81,464
TAX-FREE STRATEGY $16,214 TAX-FREE Income For Life (or until age 120) $374,335
TAX-FREE STRATEGY $300
TAX-FREE STRATEGY $342,826
TAX-FREE STRATEGY 2% Chronic Illness Income = $6,856 per Month
TAX-FREE STRATEGY Cash Value at Year 15 = $81,867
TAX-FREE STRATEGY $15,968 TAX-FREE Income For Life (or until age 120) $613,288