entaire
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The ENTAIRE retirement systemTRANSCRIPT
Entaire Programs Overview
John A WeisenbergEntaire Global Companies, Inc.
• Who are Entaire Programs for: • Business Owners
• What the Programs are: • Financed Planning™
• How the Programs work:• Overview of the Programs
• Case Study:• Paul Smith
Financed Planning™ is a trademark of Entaire Global Intellectual Property, Inc.
Today’s Agenda
Who are Entaire Programs for:Business Owners
• 47% of Business Owners surveyed indicated that they do not believe that they are financially prepared for their retirement1
• 68% of Business Owners believe that they will live below their current lifestyle when they retire2
1 Harris Interactive on behalf of Sharebuilder 401(k)2 LIMRA, 2006
So, what’s the challenge?
The Business Owners’ Challenge
Startup
Growth
ExpansionMaturity
LimitedExcessMoney
ExcessMoney
Reinvested
ExcessFunds
Available
Cashing Out
Phase
Phases of the Entrepreneurial Business
Most Business Owners believe that they will sell their business to fund their retirement –
if they retire, that is
Unfortunately…………
Selling the Business: The Perception
Approximately 1.2 million viable businesses go on the market for sale each year
Nearly 3/4 of these fail in their efforts to sell
Most of the businesses sold end up selling for much less than their expected Market Value, and in many cases, below their Asset Value Source:
2005 Business Reference Guide, 13th Edition (West)
Selling the Business: The Reality
Government Mandated Restrictions
Retirement Health
The Entrepreneur’s Dilemma: Restrictions
Programs:• designed solely for you, the Business Owner,• that use your business checkbook,• that allow for large sums of money to grow
tax deferred,• that are tax efficient and cost effective, and• that will create less risk and more stability in
your portfolio
The Answer
What the Programs are:Financed Planning™
Note: Hypothetical results for illustrative purposes only and not a representation of past or future results.
$500K0 Years
$500K10 Years
$500K20 Years
$500K30 Years
$500K$1M
$2M
$4M
The Rule of 72
How long does money take to double?Divide 72 by the assumed rate, the result is the number of years until a sum doubles.
Assumptions: Net Book Value of Business - $500K
Rule of 72
Interest Rate – 7.2%
Note: A hypothetical crediting rate of 7%. Represents approximations and should not be relied upon as tax or investment advice. The performance of financial products fluctuate over time. The actual time to achieve any result cannot be predicted with certainty.
Choice 3 - $500,000 only once X Today = $500,000
Choice 2 - $ 50,000 per year X 10 years = $500,000
Choice 1 - $ 16,667 per year X 30 years = $500,000
Accelerated Funding
$2,860,393$50,000
$3,808,127$500,000
$1,684,584$16,667
Today 30 Years
Compressed Time Frame Concept
Compounding with Real Estate
Asset Value = $500,000
$500k Mortgage 7% Interest-Only
$35,000 annual cost
7% average annual growth
over 20 years
$500k Mortgage
Asset Value = $1,934,842
$1,434,842 gross gain - $700,000 interest cost = $734,842 Net Gain
Point A Point B
Note: This is a hypothetical example, not indicative of actual results. Actual results will vary.
• Allows client to participate in market upside • No downside risk to principal and prior period
earnings
$1,000,000
Annual Crediting
8%
$1,080,000
Market Down Turn- 8%
$993,660
Annual Crediting
5%Annual Crediting0%
$1,134,000
Needed to Catch Up14.12%
The Stability of Equity Indexed Products
Keep in mind…If you received the 5% as shown in this example on the $993,660, you would have a total of $1,043,343. That is a $90,657 difference because of the guaranteed floor.
How the Programs Work:An Overview
Program Overview
Client Business
Global One Financial
Commercial Loan
Step 1
Asset Funding
Universal Life and/or
Annuity Products
Step 3
Transfer Method
Client Business
Step 2
Application
Recent Cases
• Furniture $200,000• Dentist $600,000• Doctor
$2,400,000• Nuts & Bolts $1,000,000
Industry Case Size
Case Study: ABC Company
Case Study – ABC Company
• Paul Smith, Small Business owner• 25 Years in Business• Current Age – 50• Desired Retirement Age – 63• Annual Budget to Fund Personal
Retirement Plan – $41,000
Summary – Paul Smith
• Age: 50• Years Until Retirement: 13• Desired Annual Income: $115,000• Number of Payout Years: 25• Personal Tax Bracket: 35%• Company Budget: $41,000
Paul needs a lump sum of at least $1,340,162 at retirement to support an income of $115,000 per year for 25 years.
Solution – Paul Smith
ABC Company implements a Financed Planning™ program in the
amount of $600,000.
The $600,000 is placed into an Equity Indexed Annuity, owned by
Paul Smith (assumed annual tax deferred earnings of 7%).
ABC Company makes interest payments of approximately
$40,500 annually (assumed interest rate of 6.75%).
After 13 years, Paul’s annuity value will have grown to $1,445,907,
which gives Paul an income in the amount of $115,957 per year for
25 years.
(This example assumes that the loan is repaid at retirement using assets that are not part of the program’s
financed product - preferably assets with the then-current lowest yielding performance.)
Equivalent Yield – Paul Smith
ABC Company makes interest payments for the Entaire Program of approximately $40,500 annually.
If the company were to distribute this amount to Paul directly, he would have to pay income tax at 35%, leaving him with $26,325
per year to invest.
Paul’s investment of $26,325 per year for 13 years would have to earn an annual rate of return of 19.26% in order to provide the same annual income of $115,957 for 25 years.
• Provides alternative to traditional retirement plans
• Allows catching up on retirement planning• Provides asset protection opportunities
Entaire Programs Provide Value
Program Structure - Asset Protection
Individual Level
The product is owned by the individual, not the corporation. If the corporation is sued, this is not its asset.
Corporate Level
In order to make a loan with no personal guarantee, we lend directly to the corporation and place a lien on certain corporate assets. This may limit the attractiveness for a potential law suit.
Product Level
This level depends on the state you sell in. State law defines the level of protection regarding cash value and policy attachment by creditors.
Q & A
