welcome to the professional’s approach to rollover concepts presented by: lfm fixed strategies...
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Welcome to the Professional’s Approach to Rollover Concepts
Presented by:LFM Fixed Strategies Insurance Services
Florian SpinelloLauren Carrasco & Sarah Niss
This material is intended to provide general education and is not intended to provide legal or tax advice. It is recommended that decisions be made only after consultation with qualified financial, tax and legal professionals about your specific financial situation.
Who Is LFM Fixed Strategies?
• LFM is a National Marketing Organization for Fixed & Indexed Annuities and Life Insurance Products
• Created by Experienced Producing Registered Representatives / Agents
• Committed to Helping Financial Professionals Address the Growing Demand for Retirement Planning and Income Strategies
FOR PRODUCER USE ONLY. NOT FOR USE WITH THE PUBLIC.
Why LFM Fixed Strategies?
• Experience – We have a team of experienced consultants and seasoned producers to give you the guidance and expertise in your business
• Innovation – We offer innovative sales strategies and unique business opportunities to take you to the next level with your practice
• Dedication – Our support staff is ready to help you submit, track and get you paid on your business, in addition to providing a sales team who is familiar with your company philosophy
FOR PRODUCER USE ONLY. NOT FOR USE WITH THE PUBLIC.
What Carriers does LFM Represent?
FOR PRODUCER USE ONLY. NOT FOR USE WITH THE PUBLIC.
RE0000.271.1101 April 2004
When You Retire or Change JobsWhen You Retire or Change Jobs
How to Shape Your Financial FutureHow to Shape Your Financial Future
OppenheimerFundsOppenheimerFunds
RolloverIRA RolloverIRA
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The Decision Takes a Minute, the Results Last a LifetimeThe Decision Takes a Minute, the Results Last a Lifetime
• Retirement: what to expect• Knowing your plan options• Special considerations• Take action to control your future
• Retirement: what to expect• Knowing your plan options• Special considerations• Take action to control your future
RE0000.271.1101 April 2004
Retirement: What to ExpectRetirement: What to Expect• Retirement lasts a long time• How much you’ll need• Inflation• Where will the money come from?
• Retirement lasts a long time• How much you’ll need• Inflation• Where will the money come from?
RE0000.271.1101 April 2004
Retirement Lasts a Long TimeRetirement Lasts a Long Time
Source of chart data: National Center for Health Statistics, National Vital Statistics Report, 1999.
Life ExpectancyLife Expectancy
19991999W 85 YrsW 85 YrsM 80 YrsM 80 Yrs
People spend more yearsin retirement today
People spend more yearsin retirement today
66.3 Yrs66.3 Yrs1950s1950s
RE0000.271.1101 April 2004
How Much You’ll NeedHow Much You’ll Need
Retirement FormulaRetirement Formula
80% of Preretirement Salary
Years in Retirement
Amount Needed To Maintain Same LifestyleAmount Needed To Maintain Same Lifestyle
XX
ExampleExample
$800,000$800,000
80% of $50,000 = $40,000
20 Years
80% of $50,000 = $40,000
20 YearsXX
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InflationInflation
$72,244$72,244
20 Years20 Years
$40,000$40,000
TodayToday
A $40,000 per year standard of living at an annual inflation rate of 3%
A $40,000 per year standard of living at an annual inflation rate of 3%
RE0000.271.1101 April 2004
Where Will You Get the Money?Where Will You Get the Money?• Pension?• Social Security?• Part-time Work?• Retirement Savings?
• Pension?• Social Security?• Part-time Work?• Retirement Savings?
Defined Contribution Plans
• There are many types of defined contribution plans. Examples include 401(k), 403(b), SEP-IRA, SIMPLE and others. These plans share the following characteristics:– Employer-sponsored, qualified retirement plans– Tax-deferred retirement savings vehicles– Provide an individual account for each participant– The employee or the employer (or both) may contribute to the
employee’s account– Participants are often responsible for investment selections– Benefits based upon contributions plus or minus income,
expenses, gains or losses– Participants have choices when taking money out of plans
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Defined Contribution Plans
• CHANGING JOBS? DO THE RIGHT THING.• Nearly half of the people changing jobs take their retirement account
in cash, pay tax penalties and lose potential tax-deferred growth.
Source: Hewitt Associates, “Hewitt Data Shows U.S. Employees Cash Out of 401k Plans When Changing Jobs,” July 25, 2005. Data from 2004.
Taken in cash
Kept savings in currentemployer’s 401(k) plan
Rolled over into qualified IRA or other retirement plan
Retirement distributions to job changers
32%
45%
23%
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RE0000.271.1101 April 2004
1. Take the Cash1. Take the Cash
Advantages• You get the money right away
Disadvantages• You’ll pay a very high price
Advantages• You get the money right away
Disadvantages• You’ll pay a very high price
RE0000.271.1101 April 2004
1. Take the Cash1. Take the Cash
• You’ll pay a very high price• You’ll pay a very high price
1. Hypothetical example assumes a 28% federal tax rate, a 5% state tax rate and a 10% early withdrawal penalty if under age 59 ½. Your tax rates may be higher or lower.
$10,000 initial distribution
–2,800 federal income tax
–500 state income tax
–1,000 penalty tax
$10,000 initial distribution
–2,800 federal income tax
–500 state income tax
–1,000 penalty tax
$5,700 could be all you see of your original $10,000.1
$5,700 could be all you see of your original $10,000.1
RE0000.271.1101 April 2004
1. Take the Cash1. Take the Cash
• You’ll pay a very high price• You’ll pay a very high price
1. Hypothetical example assumes a 28% federal tax rate, a 5% state tax rate, a 10% early withdrawal penalty if under age 59 ½ and a 9% fixed rate of return. Example is not intended to reflect the performance of any Oppenheimer fund. Your tax rates and rate of return may be higher or lower.
Growth of $10,000 Over 25 Years1Growth of $10,000 Over 25 Years1
No Rollover, After Rollover, Taxes & Penalties Tax-deferredNo Rollover, After Rollover, Taxes & Penalties Tax-deferred
$24,637
$10,000
$24,637
$10,000
$57,774
$10,000
$57,774
$10,000
Additional Tools to Assist in Closing Business
• Detailed financial profile
• Prospective client illustrations
• Agent product packet
FOR PRODUCER USE ONLY. NOT FOR USE WITH THE PUBLIC.
LICENSING!
• 52 Hour Class & Paperwork– Sal Magturo [email protected]
• Regional Sales Manager– Lauren Carrasco [email protected]
FOR PRODUCER USE ONLY. NOT FOR USE WITH THE PUBLIC.