1 / 76

Retirement Planning and Annuities Guide

Learn about the retirement dilemma and different investment options for a comfortable retirement. Understand qualified and non-qualified plans, social security, annuities, taxes, and personal liability.

fkyles
Download Presentation

Retirement Planning and Annuities Guide

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Retirement Planning and Annuities  Jerry Rhinehart, CIC, CLU, ChFC, RHU Panama City, FL

  2. 1 Areas to be Covered 1 The “Retirement Dilemma” and normal products / concept that can assist in their retirement 2 Qualified vs. Non-Qualified Plans 3 Social Security; How it works; What about taxes; What about earned income? 4 Annuity overview; What about “risk”? 5 “Waivers” and Surrender Charges as typically found in an Annuity

  3. 2 Please note the DISCLAIMER

  4. 3 The Retirement Dilemma How much money will you need in which to retire comfortably?

  5. 4 How Much Money do You Need? Check out the “Retirement Assistant” at CNN Money. Just how much money will you need to retire “comfortably”? - 80% - inflation - a longer life expectancy

  6. 3 The Retirement Dilemma How much money will you need in which to retire comfortably? What are the normal retirement funding vehicles?

  7. 3 The Retirement Dilemma How much money will you need in which to retire comfortably? What are the normal retirement funding vehicles?  Qualified Plans (Pensions/ 401-k/ IRAs, SIMPLE, SEP, 403b, TSA, etc.)  Social Security

  8. 4

  9. 3 The Retirement Dilemma How much money will you need in which to retire comfortably? What are the normal retirement funding vehicles?  Qualified Plans (Pensions/ 401-k/ IRAs, SIMPLE, SEP, 403b, TSA, etc.)  Social Security  Non-Qualified Plans

  10. 3 What are Non-Qualified Plans? Personal Savings (CDs, Money Market, Savings Account) Investing (Stocks, bonds, mutual funds, real estate, collectibles, etc.)  Annuities, Life Insurance

  11. 5 The Retirement Dilemma Pros – Cons of various investment vehicles Tax issues  Qualified Plans (Pensions/ 401-k/ IRAs, SEP, etc.) 1. Tax deductible *

  12. 5 The Retirement Dilemma Pros – Cons of various investment vehicles Tax issues  Qualified Plans (Pensions/ 401-k/ IRAs, SEP, etc.) 1. Tax deductible * ROTH

  13. 5 The Retirement Dilemma Pros – Cons of various investment vehicles Tax issues  Qualified Plans (Pensions/ 401-k/ IRAs, SEP, etc.) 1. Tax deductible * 2. Grows tax-deferred 3. Withdrawals subject to tax * 4. May be subject to estate tax ROTH

  14. 6 The Retirement Dilemma Pros – Cons of various investment vehicles Diversification

  15. 6

  16. 6 The Retirement Dilemma Pros – Cons of various investment vehicles Diversification Check out YOUR “Investment Risk Tolerance” Why do stock prices go up and down so much?

  17. 8

  18. 7 The Retirement Dilemma Pros – Cons of various investment vehicles Tax issues  Qualified Plans (Pensions/ 401-k/ IRAs, 403B, SEP, etc.)  Social Security - Is SS $ subject to income tax (federal and state) tax? It depends. The specific answers can be found on the Social Security web-site.

  19. 7 The Retirement Dilemma Pros – Cons of various investment vehicles Tax issues  Qualified Plans (Pensions/ 401-k/ IRAs, 403B, SEP, etc.)  Social Security  Personal savings and investing

  20. 7 Taxes on Non-Qualified Money Ordinary Income Tax (Federal and State*)  Capital Gains (one year holding period – 15% tax {generally})

  21. 7 Taxes on Non-Qualified Money Ordinary Income Tax (Federal and State)  Capital Gains (one year holding period – 15% tax {generally})  Federal Estate Tax

  22. 9 The Retirement Dilemma Personal liability and diversifi-cation issues  Qualified Plans (Pensions/ 401-k/ IRAs, 403B, SEP, etc.)

  23. 9 The Retirement Dilemma Personal liability and diversifi-cation issues  Qualified Plans (Pensions/ 401-k/ IRAs, 403B, SEP, etc.) - Generally Q-Plan assets are exempt from creditors in a bankruptcy / legal verdict - New laws in effect to prevent another “Enron-Employee” investment debacle

  24. 9 The Retirement Dilemma Personal liability and diversifi-cation issues  Qualified Plans (Pensions/ 401-k/ IRAs, 403B, SEP, etc.)  Social Security

  25. 9 Can your Social Security check ever be taken away?

  26. 9 Can your Social Security check ever be taken away? Yes -Should you qualify for a Medicaid Nursing Home stay, your SS check will be kept by the Federal /State government - The Internet can provide additional information regarding your specific state and its rules (elderlawanswers.com)

  27. 9 The Retirement Dilemma Personal liability and diversifi-cation issues  Qualified Plans (Pensions/ 401-k/ IRAs, 403B, SEP, etc.)  Social Security  Personal savings and investing

  28. 9 Personal Liability concerning your Personal Saving and Investments?  Assets are subject to the claims of creditors - Certain exceptions (house, cash value in life insurance, annuities, etc.) - A Living Trust does NOT protect these assets from the claims of creditors - Certain advantages for a business

  29. 9 A Suggestion ... - Run complicated and potentially risky ventures past your accountant. - A good Financial Planner really makes a lot of sense! (Actually … Dollars and Cents!)

  30. Various Qualified Plan 11 • Individual Retirement Arrangement

  31. 11 Individual Retirement Arrangement Contributions  Earned Income  Maximum age for contribution and distributions (70½)  Distributions subject to ordinary tax and possible penalty

  32. 12 IRA Contribution Rules and Limits Contributions as the smaller of: - Taxable compensation for the tax year, or, - A limit stated by law (see table below) Contributions limits have been increased in stages by the Economic Growth & Tax Relief Reconciliation Act of 2001 ♦ 2013 - $5,500 plus $1,000 if 50 years of age or older ♦ 2014 - $5,500 plus $1,000 if 50 years of age or older ♦ 2015 - $5,500 plus $1,000 if 50 years of age or older Note: PPA (08-17-06) makes contribution limits permanent

  33. Various Qualified Plan 11 • Individual Retirement Arrangement • ROTH (same contribution limits as IRA)

  34. Roth IRA 11 •  Roth IRA rules •  Not tax-deductible when the Contribution is made • Compensation limits

  35. Roth IRA Compensation Rules - 2015  Filing “Single and Head of Household” - Income / $116,000 - $131,000  Married Filing “Joint” - Income / $183,000 - $193,000 Note: PPA will index income limits after 2006 (nearest $1,000). Check IRS website for specific numbers

  36. Roth IRA 11 •  Rules • Not tax-deductible when the Contribution is made • Compensation rules • OK to be “active” in another “qualified plan” • What about $$ coming out?

  37. 11 Roth IRA Distribution Rules  A “qualified distribution” (TAX FREE) from a Roth IRA is one that:  meets the 5 year rule, and;  is after age 59½,  or disability,  or death,  or meets the 1st time home-buyer rule

  38. A Few More Roth Rules  A Roth can be set on or before April 15, 2015 for 2014 tax filing.  Should a contributor be age 50 or older they can also contribute the “catch-up” amount ($1000 for 2015). “Converting” to a Roth IRA must be accomplished by the end of the tax-year. There is no age maximum nor minimum and contributions can be made past age 70½. (Must have Compensation)

  39. Various Qualified Plan 11 • Individual Retirement Arrangement • ROTH (same contribution limits as IRA) • 401-k (Limits = $18,000 / $6,000)

  40. 11 401-k Contributions  Earned Income  Maximum age for contribution and distributions (no limit if still employed; otherwise 70½)  Distributions subject to ordinary tax and possible penalty  Vesting

  41. Various Qualified Plan 11 • Individual Retirement Arrangement • ROTH (same contribution limits as IRA) • 401-k (Limits = $18,000 / $6,000) • SIMPLE (Limits = $12,500 / $3,000)

  42. 11 SIMPLE Similar to 401-k, but with lower contribution limits. Less initial cost to set- up and minimal annual “maintenance cost”.

  43. Various Qualified Plan 11 • Individual Retirement Arrangement • ROTH (same contribution limits as IRA) • 401-k (Limits = $18,000 / $6,000) • SIMPLE (Limits = $12,500 / $3,000) • Simplified Employment Pension (53,000 / 25% of Income)

  44. 11 Simplified Employment Pension (SEP) More suited for self-employed  High limits of contribution

  45. 14 Just What is an Annuity? Tax Deferral growth Creditor protection Investment options Tax-free transfers Lifetime income Benefits to your heirs

  46. 13 The Parties of an Annuity Owner Annuitant Beneficiary Insurance Company

  47. 13 Classifications of an Annuity Number of Lives Covered  Single  Joint Life, or Joint Live and Survivorship

More Related