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Legislative Birthdays

Discover the opportunities presented by legislative milestones in individuals' lives, where financial decisions are made. Learn how to build relationships, identify needs, and recommend solutions by taking advantage of these key birthdays.

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Legislative Birthdays

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  1. Legislative Birthdays A Doorway to Annuity Client Relationship Building

  2. Imagine your client as a house. Most of the times, all the doors and windows are locked. It is very difficult to get inside to build a relationship, identify needs and recommend solutions. But, every once in a while, something comes about that will cause a door to open. Something happens where a client needs to make a financial decision. If you know when that door is going to open, you can walk in and help them identify their need and present your solutions.

  3. Legislative Birthdays • Legislative Birthdays are milestones in an individual’s life where legislation has opened a door to a financial decision. • This presentation will describe those milestones and the financial decision and opportunities presented to these individuals.

  4. Legislative Milestone Birthdays • Age 50 • Age 55 • Age 59 ½ • Age 62 • Age 65 • Age 70 , 70 1/2

  5. Age 50 : Legislative Event • Can make Catch-Up contributions to IRAs and Qualified plans • 2017 Limits: • $6,000 for 401(k), 403(b), and 457 plans • $3,000 for SIMPLE IRA or 401(k) • $1,000 for Traditional or Roth IRA Catch-Up Contributions

  6. Age 50 : Life Stage • Reaching Peak Earning Years • Children in or finished with college • Well into home ownership • Sharper focus on retirement • Need to maximize savings • Age 50 – 60 is ideal for Long Term Care • May be sandwiched between children and aging parents

  7. Age 50: Opportunities • Retirement Income Planning • Asset Consolidation • May have old 401(k) plans • Maximize qualified plan savings • Non-Qualified Savings • Long Term Care • Estate Planning – Asset transfers from parents • Referral to parents

  8. Age 55: Legislative Event • If separated from service and age 55, may distribute retirement plan assets without incurring the 72(t) 10% premature distribution tax penalty. • Federal taxes (and maybe state) still apply Age 55 and Separated from Service

  9. Age 55: Life Stage • Peak Earning Years • Children in or finished with college • Well into home ownership • Sharper focus on retirement • Need to maximize savings • Age 50 – 60 is ideal for Long Term Care • May be sandwiched between children and aging parents

  10. Age 55: Opportunities • Retirement Income Planning • Asset Consolidation • May have old 401(k) plans • Maximize qualified plan savings • Non-Qualified Savings • Long Term Care • Insurance conversions at retirement • Estate Planning – Asset transfers from parents • Referral to parents

  11. Age 59 ½: Legislative Event • The 72(t) 10% penalty from annuities and qualified retirement plans no longer exists No 10% Pre-59 ½ penalty

  12. Age 59 ½: Life Stage • Retirement Approaching • Income needs to be estimated and adjusted • Subject to sequence of returns risk • Long Term Care pricing increases • Now or never for retirement savings • Estate Planning begins to become a priority • Parents may begin to need assisted living

  13. Age 59 ½ : Opportunities • Maximize qualified plan savings and supplement with non-qualified • Asset Consolidation • Retirement Income Planning • Begin structuring retirement income stream • Begin the Social Security Discussion – When to begin • May have old 401(k) plans • Long Term Care • Group Life conversion if retiring • Estate Planning • May begin RMD Spend down

  14. Age 62: Legislative Event Can begin taking Social Security • At age 62 Individuals that qualify for Social Security can begin taking a reduced income payment.

  15. Age 62: Life Stage • The Social Security decision leads to a bigger focus on retirement income planning • Income modeling and sequence of returns risk looms • Long term care pricing is increasing • If working – now or never for retirement saving • Estate planning becoming more important • Parents may be needing assisted living

  16. Age 62: Opportunities • Asset Consolidation • Pension Max if working with a Defined Benefit plan • Social Security Bridge to delay payment • Estate Planning • Group life conversion from employer • Long term care • RMD spend down

  17. Age 65: Legislative Event Eligible to begin Medicare • At age 65, individuals are eligible begin Medicare • In addition between age 66 and 68 most individuals will hit their full retirement age for Social Security

  18. Age 65: Life Stage • Generally retired • Concern to maximize income • Subject to sequence of returns and inflation risk • Estate Planning is critical • Last chance to purchase Long term Care before cost is prohibitive

  19. Age 65: Opportunities • Asset Consolidation • FIAs to address sequence of returns risk and potentially inflation risk • Pension Max if a defined benefit plan exists • Estate Planning • Long Term Care • RMD Spend down

  20. Age 70, 70 1/2 RMDs and Social Security • Age 70 is the latest you can delay Social Security • Each year Social Security is postponed, it represents an 8% increase in growth of assets • At age 70 ½, in general you must begin receiving Required Minimum Distributions from qualified plans and IRAs • Failure to take sufficient assets can result in a 50% tax penalty on any withdrawal shortfall • Some plans – 401(k), 403(b) or other defined contribution plans may allow the RMD to be postponed until April 1 of the year following the year the participant retires

  21. Age 70, 70 ½: Life Stage • Focus will be on not outliving assets and estate planning and asset transfer. • May begin to need some type of assisted living

  22. Age 70, 70 ½: Opportunities • Focus on lifetime income guarantees of income annuities • Estate Planning • Charitable giving • Asset Consolidation, prepare for asset transfer • Meet with next generation to begin relationship building

  23. More Door Openers Legislative Birthdays are the only milestones that may open the door to an individual needing to make a financial decision. Here are some more events that you can X-Date: • CDs • Auto Insurance • Homeowner’s Insurance • Mortgage Paid off • Student Loans paid off • Annual or quarterly bonus • Children out of college • Annuity “Step-Up” Dates • Bonds Maturing • End of Surrender Charges • Annuities • Mutual funds • Retirement • Birth of child or grandchild • End of day care • Term Conversion dates • Life Insurance additional purchase options

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