Retirement planning for today ’s changing world external pressuresautopilot spending

not a political presentation

many experts …believe it’s time to wake up

significant pressures

impacting

potentially

insulate yourself

Qualified plans…

Social Security

Current Liabilities and Unfunded Promises ofthe United States Government$61.9 Trillion and

growing!

$38.2 TrillionPromised Medicare benefits NOT covered by taxes and other

contributions $7.7 TrillionPromised Social Security benefits NOT

covered by taxes and other contributions

$16 TrillionOther Federal Liabilities

Source: Peter G. Peterson Foundation, 2010 Financial Report of the United States Government

67,866 miles

4,200,905 miles

$3,519,538,502,343

$1,000,000,000,000

238,857 miles

$61,900,000,000,000

7 miles

Source: Understanding Large Numbers, EHD.ORG

on the hook for the $61,900,000,000,000

to clear off that debt… each household

owes

$545,000

Source: Peter G. Peterson Foundation, 2010 Financial Report of the United States Government

77,000,000 boomers retire

mandatory spending for

Social Security

will add toour national

debtin 2015

pressure comes from

past decisions

embedded until polices are changed

Action is needed soon to make sure the system is sound when today’s younger workers are ready

for retirement.

Your estimated benefits are based on current law.Congress has made changes to the lawin the past and can do so at any time.

The law governing benefit amounts may change because by 2037, the payroll taxes collected will be

enoughto pay only about 78 percent of scheduled

benefits.

We’re facing serious financial problems.

Action is needed soon

2.5 x 28%=70%

2.5 x 35%=87.5%

“As far as taxes go, the United

States would have to raise income

tax rates across the board by

about 2.5 times today’s levels to

close the financing gap, and

some politicians complain when

there is any talk of tax increases.”- David WalkerFormer Comptroller General

US Government Accountability Office

Where are Tax Rates Going?Top U.S. Marginal Tax Rates 1913 - 2009

Past tax rates are not shown to predict future tax rates. Congress holds the right to modify tax rates at any time.

Should qualified plans be the foundationof your retirement plan?

Federal taxes are comparably low now.

With the current budget deficits and required spending

it seems highly likely taxes will climb.

The The old belief old belief that youthat you’’ll be in all be in a

lower tax lower tax bracket bracket in retirementin retirement

seemsseems highly unlikely.highly unlikely.

Tax Savings?A Hypothetical Example over a 20-year Period

Not To Be Considered Tax Advice. Please Rely On and Speak With A Tax Advisor For More Information.

After-tax Contribution withTax-Deferred Growth

Pre-tax Contribution withTax-Deferred Growth

Are pre-tax contributionsactually tax savings?

Not To Be Considered Tax Advice. Please Rely On and Speak With A Tax Advisor For More Information.

Is Tax Deferred Growth Really a Tax-Savings Event?

Retirement Account:Tax Savings: $25,000

Current Tax Bracket: 25%

$116,524$466,096

8% compounding for 20 years

30% Future Tax Bracket:

35% Future Tax Bracket:

$139,829

$163,134

($23,305)

($46,610)

$100,000

Source: DALBAR, Inc., Quantitative Analysis of Investor Behavior —2006

In quantitative analysis of investor behaviorDalbar concluded a typical investor

only captured 37% of a market’s total return.

While highly profitable to avoid down turns…

... getting out to avoid a loss doesn’t work

10% x 37% =3.7%

very few do this successfully.

Options to consider:

1When properly managed and structured.

Roth IRAs

The Safe Money Retirement Plan

May be contrary to conventional wisdom…

Increase contributions to tax-free1 retirement products

reduce your qualified contributions

The Roth IRA

Contributions:

Go in after taxGrow tax-deferred

Withdrawals atretirement are tax-free

Roth Limitations

Contributions arelimited each year

May still be tied tothe volatile stock market

If you make too much moneyyou can’t contribute to one

Qualified distributions can’t startuntil after age 59½

The Safe Money Retirement Plan

Distributions are Taxed like a Roth

Grows tax-deferred1

Income at retirementcan be tax-free1

Income at any age1

No limits on contributions1

Self completing…in the event of death an income-tax free benefit is paid to your beneficiaries

1When properly managed and structured.

0% floor in declining market conditions

May be deductible to your business

Creditor protected

Do you want ...

… to have tax-free income1 at any age?

… to eliminate stock market risk, and still share in the market’s upside potential?

1 When properly managed and structured.

The Safe Money Retirement Plan(Funded with Indexed Universal Life Insurance)

• Selective: Can be established and funded just for the business owner or for key employees• Affordable and Simple: Eliminates costly, confusing IRS & DOL administrative burdens• Flexible: Allows virtually unlimited contributions• Tax Advantaged: Provides tax deferred growth of & tax free access to your money• Conservative: Eliminates market risk while allowing participation in the selected indexes

upside potential (ie. S&P 500, Dow Jones Industrials, Nasdaq, Russell)• Liquid: Access without tax penalties at any age through loans and/or withdrawals• Protected: Assets can be protected from creditors, predators and malpractice

Provides TAX-FREE income when YOU choose… Not when the IRS says it’s OK!!!

Principal ProtectionIndexed UL products also provide downside protection with minimum guarantees, regardless of the index performance.

Starting with $100k in an Indexed Universal Life contract versus $100k in a fund directly invested in the index. In year one there was a 10% gain and both accounts grew to $110k. In year two there was a 10% loss. The index fund lost $11k to end the year at $99k. The Index Universal Life policy protects against market down turns by

locking in last year's gains and ends the year at $110k - suffering no loss. In year 3 the gain was 5%. The index fund ends the third year at $103,950. The Equity Indexed Universal Life policy ends the third year at $115,655. In

just 3 short years the Equity Indexed Life policy in this hypothetical example is up 11% more than the fund directly invested in the market. That is the power of locking in annual gains and protection against market risk.

The PowerfulAdvantage of

Locking inAnnual Gains

Eliminating the Down YearsIn the last example we saw the power of locking in our gains and protection from stock market risk over a 3 year period. How much

better off would we be in our Equity Indexed Universal Life plan versus a fund invested directly in the market after 10 years? Let's see… Here is how an Indexed Universal Life policy would have performed from 1999 to 2009 versus a fund that is directly invested in the

S & P 500. The Equity Indexed Life policy illustrated below has a 0% floor and a 15% cap.

As you can see the in the hypothetical example above, by protecting our principal and previous gains from market downturns we have the potential to build more cash in our Indexed Universal Life plan than a typical IRA that is directly invested in the market. The fact the future income will be tax-free is like icing on the cake!

Where do I go from here?

Keep your head in the sand and continue to fund a qualified retirement plan, paying taxes when IRS requires?

Or…..

Establish a Safe Money Retirement Plan, exit the stock market roller coaster today

and enjoy Tax Free Incomewhen you choose!

Thank you for your time and attention

- Brought to you by -

Michael J. Sloan, CRPCRetirement | Insurance | Benefits

770 Old Roswell Place | Suite A-500Roswell, GA 30076Tel: 678.895.6356

Website: www.yourfinancialpartner.com