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Transitioning from accumulating retirement assets to taking income
distributions
Presenter NameRegistered RepresentativeDate
Cracking Cracking the Nest the Nest
EggEgg
3017601.X.P-1 C10-0827-009
Retirement - Insurance - Investments 2
Important Information
Insurance products, annuities and retirement plan funding issued by (third party administrative services may also be provided by) ING Life Insurance and Annuity Company ( Windsor, CT). Securities are distributed by ING Financial Advisers, LLC (member SIPC), Windsor, CT or through other broker/dealers with which it has selling agreements. Annuities may also be issued by ReliaStar Life Insurance Company (Minneapolis, MN) and ReliaStar Life Insurance Company of New York (Woodbury, NY). Variable annuities issued by ReliaStar Life Insurance Company are distributed by ING Financial Advisers, LLC. Variable annuities issued by ING USA Annuity and Life Insurance Company and ReliaStar Life Insurance Company of New York are distributed by Directed Service, LLC. Only ING Life Insurance Annuity Company and ReliaStar Life Insurance Company of New York are admitted and issue products in the state of New York. All companies are members of the ING Family of companies.
© 2011 ING North America Insurance Corporation.
Retirement - Insurance - Investments 3
Important Information
Insurance products, annuities and retirement plan funding issued by (third party administrative services may also be provided by) ING Life Insurance and Annuity Company ( Windsor, CT). Securities are distributed by ING Financial Advisers, LLC (member SIPC), Windsor, CT or through other broker/dealers with which it has selling agreements. Annuities may also be issued by ING USA Annuity and Life Insurance Company (Des Moines, IA) and are distributed by Directed Services, LLC. All companies are members of the ING Family of companies.
© 2011 ING North America Insurance Corporation.
Retirement - Insurance - Investments 4
Important Information
Securities and [financial planning] offered through ING Financial Partners, (member SIPC), 909 Locust Street, Des Moines, IA 50309 or through other broker-dealers with which it has selling agreements.
© 2011 ING North America Insurance Corporation.
Retirement - Insurance - Investments 5
Important Information
Recordkeeping and Plan administrative services provided by ING Institutional Plan Services, LLC.
© 2011 ING North America Insurance Corporation.
Important Information
Registered representative and retirement educational seminars are provided by ING Investment Advisors, LLC. These educational seminars are provided to you as a supplemental service to your plan sponsor as part of the Plan Administrative services provided by ING Institutional Plan Services, LLC. The information contained herein should not be constituted as (i) an offer to sell or solicitation of an offer to buy an security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. You should contact your investment representative (or advisor), attorney, accountant or tax advisor, with regard to your individual situation prior to implementing a retirement plan strategy.
Retirement - Insurance - Investments 6
Retirement - Insurance - Investments 7
Important Information
Framewor(k) and (k)Choice Recordkeeping and Plan administrative services provided by ING Institutional Plan Services, LLC. Mutual funds offered through ING Financial Advisers, LLC (member SIPC).
© 2011 ING North America Insurance Corporation.
Retirement - Insurance - Investments 8
Important Information (continued)
Variable annuities, group annuities or funding agreements are long-term investments designed for retirement purposes. If withdrawals are taken prior to age 50 1/2, an IRA 10% premature distribution penalty tax may apply. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you.
Variable investments, of any kind, are not guaranteed and are subject to investment risk including the possible loss of principal. The investment return and principal value of the security will fluctuate so that when redeemed, it may be worth more of less than the original investment. In addition, there is no guarantee that any variable investment option will meet its stated objective.
For 403(b)(1) annuities, the Internal Revenue Code (IRC) generally prohibits withdrawals of 403(b) salary reduction contributions and earnings on such contributions prior to death, disability and age 50 ½, severance of employment, or financial hardship. Amounts held in a 403(b)(1) annuity as of 12/31/1988 are “grandfathered” and are not subject to these restrictions. For 403(b)(7) custodial accounts, the IRC generally prohibits withdrawals of any contributions and attributable earnings prior to death, disability, age 59 ½, severance of employment, or financial hardship. For both 403(b)(1) annuities and 403(b)(7) custodial accounts, the amount available for hardship is limited to the lesser of the amount necessary to relieve the hardship, or the account value as of 12/31/1988, plus the amount of any salary reduction contributions made after 12/31/1988 (exclusive of any earnings).
You should consider the investment objectives, risk, and charges and expenses of the investment options carefully before investing. Fund prospectuses contain this and other information and can be obtained by contacting your local ING representative. Please read carefully before investing.
Retirement - Insurance - Investments 9
Important Information (continued)
Variable annuities, group annuities or funding agreements are long-term investments designed for retirement purposes. If withdrawals are taken prior to age 50 1/2, an IRA 10% premature distribution penalty tax may apply. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you.
Variable investments, of any kind, are not guaranteed and are subject to investment risk including the possible loss of principal. The investment return and principal value of the security will fluctuate so that when redeemed, it may be worth more of less than the original investment. In addition, there is no guarantee that any variable investment option will meet its stated objective.
For 403(b)(1) annuities, the Internal Revenue Code (IRC) generally prohibits withdrawals of 403(b) salary reduction contributions and earnings on such contributions prior to death, disability and age 50 ½, severance of employment, or financial hardship. Amounts held in a 403(b)(1) annuity as of 12/31/1988 are “grandfathered” and are not subject to these restrictions. For 403(b)(7) custodial accounts, the IRC generally prohibits withdrawals of any contributions and attributable earnings prior to death, disability, age 59 ½, severance of employment, or financial hardship. For both 403(b)(1) annuities and 403(b)(7) custodial accounts, the amount available for hardship is limited to the lesser of the amount necessary to relieve the hardship, or the account value as of 12/31/1988, plus the amount of any salary reduction contributions made after 12/31/1988 (exclusive of any earnings).
All Guarantees are based on the financial strength and claims-paying ability of the issuing insurance company, who is solely responsible for all obligations under its policies.
You should consider the investment objectives, risk, and charges and expenses of the investment options carefully before investing. Fund prospectuses contain this and other information and can be obtained by contacting your local ING representative. Please read carefully before investing.
Retirement - Insurance - Investments 10
Important Information (continued)
You should consider the investment objectives, risk, and charges and expenses of the investment options carefully before investing. Fund prospectuses contain this and other information and can be obtained by contacting your local ING representative. Please read carefully before investing.
Retirement - Insurance - Investments 11
Important Information (continued)
This presentation/seminar contains information regarding insurance products for sale.
Retirement - Insurance - Investments 12
RetireRetire1: To go away, retreat, recede 2: to give up one’s work, business, career due to advanced age 3: to go to bed 4: to withdraw as in battle 5: to remove from circulation 6: to move to a place of privacy or seclusion 7: to withdraw from contact with others
RetireRetire1: To go away, retreat, recede 2: to give up one’s work, business, career due to advanced age 3: to go to bed 4: to withdraw as in battle 5: to remove from circulation 6: to move to a place of privacy or seclusion 7: to withdraw from contact with others
What does ‘Retire’ mean?
Retirement - Insurance - Investments 13
What does ‘Retire’ mean?
Travel?Family?Hobbies?
What does retirement mean to you?
Retirement - Insurance - Investments 14
Longer lifeBetter health
Early/late retirement
Second careerLeisure activities
Fewer pensions
Less Social SecurityMore personal savings
Higher healthcare costs
What Retirement Looks Like
Retirement - Insurance - Investments 15
8465-year old female: 1 in 2 chance of living past age
8165-year old male: 1 in 2 chance of living past age
Your Time in Retirement
How long do you expect to live in retirement…the next 1/3 of your life?
The truth is, you may need to live without a paycheck, as long as you have lived with one. How much will you need?
Funding for your future goals
25 35 45 55 65 75 85 95
SOURCE: Based on current Annuity 2000 Mortality Table assuming relatively good health. Society of Actuaries, Longevity: The Underlying Driver of Retirement Risk – 2005 Risks and Process of Retirement Survey Report (2006).
You
r A
ge
Employer’s Checks
Retirement - Insurance - Investments 16
What Retirement Looks Like
Stage One
Go Go
Stage Three
No Go
Stage Two
Slow Go
Retirement isn’t just a new stage of life.It can have three stages, each with its own characteristics and costs.
Retirement - Insurance - Investments 17
For illustrative purposes only. This example may not reflect your actual situation.
Essential vs. Discretionary Expenses
Determining Retirement Income Needs
Retirement - Insurance - Investments 18
Funding Your Retirement
OtherPersonal Savings,
Part-Time Work60%
Pensions* orOther Savings
21%
SocialSecurity*
19%
SOURCE: Social Security Brief #25, National Academy of Social Insurance, May 2007. Persons 65+, income $44k+
No matter what goes into yours, chances are, your
own personal savings will be the biggest
piece of the pie.
*If applicable
Retirement - Insurance - Investments 19
Methods for Generating Retirement Income
Method 1:Method 1: Lump Sums as Needed
Method 2:Method 2: Full or Partial Annuitization
Method 3:Method 3: Systematic Withdrawals
Method 4:Method 4: Guaranteed Lifetime Withdrawal Option
Retirement - Insurance - Investments 20
Methods for Generating Retirement Income
Method 1:Method 1: Lump Sums as Needed
ExpenseExpense SourceSource Essential Living ExpensesEssential Living Expenses Pension and/or Social Security Pension and/or Social Security
Additional Expenses Lump sum withdrawals from Additional Expenses Lump sum withdrawals from personal retirement assets as personal retirement assets as
needed needed
Retirement - Insurance - Investments 21
Methods for Generating Retirement Income
Method 1:Method 1: Lump Sums as Needed
PROSPROS CONSCONS
Potential to outperform inflation
Potential to miscalculate when income needs will occur
Complete flexibility in withdrawals
Potential to outlive your assets
Full control on how assets are invested
Tax Implications
Retirement - Insurance - Investments 22
Methods for Generating Retirement Income
Method 2:Method 2: Full or Partial Annuitization
AnnuitizationAn annuity is an insurancecontract that generallyguarantees periodic income payments. Annuities may beannuitized immediately ordeferred, over a long or shorttime period, or in some cases,in one single payment. Paymentguarantees are based on theclaims paying ability of theIssuing insurance company.
AnnuitizationAn annuity is an insurancecontract that generallyguarantees periodic income payments. Annuities may beannuitized immediately ordeferred, over a long or shorttime period, or in some cases,in one single payment. Paymentguarantees are based on theclaims paying ability of theIssuing insurance company.
Source: Investopedia.com
Retirement - Insurance - Investments 23
Methods for Generating Retirement Income
Method 2:Method 2: Full or Partial Annuitization
PROSPROS CONSCONS
Investment risk is transferred to the insurance company
(N/A for variable payouts)
Loose flexibility to take lump sum withdrawals
Steady and predictable stream of income
Income stream may not keep up with inflation
Can be for an individual or can include a spouse
Cannot make adjustments to payment amount
Ability to select an option so that you cannot outlive your assets
Death benefits may be limited or eliminated
Retirement - Insurance - Investments 24
Methods for Generating Retirement Income
Method 3:Method 3: Systematic Withdrawals
Source: Investopedia.com
A service that provides A service that provides a specific payout a specific payout
amount to the amount to the shareholder at shareholder at
predetermined intervals, predetermined intervals, generally monthly, generally monthly,
quarterly, semiannually quarterly, semiannually or annually without or annually without
requiring annuitization.requiring annuitization.
Retirement - Insurance - Investments 25
Methods for Generating Retirement Income
Method 3:Method 3: Systematic Withdrawals
PROSPROS CONSCONS
Steady income stream Can outlive your assets
Potential to outperform inflation
Can be significantly impacted by poor market performance
Ability to take lump sum withdrawals
Can adjust amount of the payments
Retirement - Insurance - Investments 26
Methods for Generating Retirement Income
Method 4:Method 4: Guaranteed Lifetime Withdrawal Options
Retirement - Insurance - Investments 27
Methods for Generating Retirement Income
Method 4:Method 4: Guaranteed Lifetime Withdrawal Options
PROSPROS CONSCONS
Steady stream of income for life The benefit can be costly
Ability to take on market risk with downside protection
Flexibility is limited- bound to the terms of the contract
Lump sum withdrawal options available
When market performance is poor lump sum withdrawals become
unfavorable and may impact future income potential
Riders can be complex based on complicated formulas
Retirement - Insurance - Investments 28
Next Steps
Retirement is like a long vacation. The goal is to enjoy it the fullest, but not so fully that you run out of money.
Retirement is like a long vacation. The goal is to enjoy it the fullest, but not so fully that you run out of money.
Retirement - Insurance - Investments 29
Determine how to reach your
retirement goals
Speak to a Financial
Professional
Synch Up with Your Spouse
Next Steps
Transitioning from accumulating retirement assets to taking income
distributions
Any Questions?Any Questions?
Cracking Cracking the Nest the Nest
EggEgg
Compliance information to go here if needed.