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Your investment … …Your Future. Investing Fundamentals. Deciding to start Defining investment goals (what is your investment objective?) Choosing the right investment to meet your budget, lifestyle/life stage and goals. Defining investment goals.
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Investing Fundamentals • Deciding to start • Defining investment goals (what is your investment objective?) • Choosing the right investment to meet your budget, lifestyle/life stage and goals
Defining investment goals • Key to successful investing is identifying your investment goals and the time frame over which you will invest • Decide what time frame is attached to your goal – short, medium of long term
Investment Goals and Options • Short term – 0-3 years (Overseas Holiday, Automobile Purchase etc.) • Medium Term – 3-5 years (Deposit on a House, Your education etc.) • Long term – 5 + years (Childrens’ Education, Retirement/Early Retirement, Holiday Villa/Home etc.)
Choosing the right investment • RISK - high returns mean higher risks, lower returns mean lower risk • RETURN – capital preservation, income, growth • TIME – How long do you expect to invest for?
Why should we invest for our retirement? • To secure financial independence at and after retirement • To be able to live the life we want at retirement • To be able to meet any unforeseen medical and other expenses during retirement.
Important Questions to Ask • How far are you from retirement? • Is there any special dream that you would like to realize in your retirement? • What level of income are you likely to have then? • What lifestyle will you be able to support during retirement?
Retirement Facts • On an average we change our jobs every 4 to 7 years • Some of us are fortunate to be members of a pension fund others are not • Some employees who leave their employment prior to retirement leave with only their contribution. - The company’s portion remains behind - The reality is made more serious since the money received is seldom reinvested in another retirement plan
Retirement Facts (cont’d) • Due to the advanced medical knowledge and resources available today, 25% of one’s adulthood can be spent on retirement • The average life expectancy in 2002 is 76 years, persons retiring at age 60, on average, can expect to spend 18-20 years in retirement Source: Ohio State University Extension • There are persons who retired 15 years ago who receive less that $18,000 per month for pension or have to survive on less than $1,900 every fortnight in NIS Pension.
Retirement Facts (cont’d) • Employers are shying away from the traditional employer funded schemes to Defined benefit plans which are frequently not adequate. • You will need 70% to 80% of your current income (adjusted for inflation) just to maintain your current standard of living during retirement. • Older persons have more chronic diseases and therefore spends more on medical expenses.
Retirement Concerns If you retired today, would you have enough money to fund your desired retirement lifestyle?
Retirement Concerns(Cont’d) • Will I have adequate funds to provide the kind of retirement lifestyle I envision? • Will I outlive my resources? • Will my pension arrangements be able to cover my expenses? • Are my company retirement benefits alone enough? Note: It does not cost less to live during retirement.
Why plan for retirement? • The earlier you start planning, the more you’ll be able to grow your retirement nest egg. • Your retirement years should not be plagued with financial worries Some people don’t start thinking about financial plans for retirement until they are just about ready to retire.
Your retirement will be more enjoyable if your income is structured to fit your lifestyle choices and if you have developed a retirement plan to protect the assets you have worked hard to acquire.
What needs to be done? • Prepare yourself to ensure that you have a reliable source of income at retirement. • You need more than just a Pension Plan, you need an investment savings regime to supplement your pension cheque (if you will get one) • You should invest into plans that pay returns in excess of the inflation rate or at least plans that postpone your tax or pay none at all.
What needs to be done? • Remember the purpose of the funds you will soon have available to you. These funds were saved with the expressed desire of securing retirement. • Invest wisely … invest tax efficiently.
Steps to Retirement Planning • Get started now! • Pay yourself first ( 20% of your current income is a good rule of thumb) • Establish a structured investment plan that facilitates monthly investments, such as standing order or PAP.
Steps to Retirement Planning (cont) • Review regularly at least once per year, or earlier if your circumstances change • Invest tax-efficiently • Watch your investment grow
The Solution • is a Universal Life Insurance Product • Medium to Long-term Investment • Interest-sensitive Instrument • Tax-advantaged Vehicle • Guaranteed Interest Rates
Who is Eligible for ? • Owner (18 years & older) • Life insured (0 – 70 years) • Owner should have a specified need. • Owner must have insurable interest in the insured - A parent or guardian of a child under 18 years of age - A husband or wife - A grandparent
Benefits • Tax-free Returns - Annual Regular Premium Income - $60,000 - Annual Lump Sum Premium - $1 M • Deferred Taxation Returns - Power of compound interest at 100% • Convenient Premium Deductions - Method of Payment- Standing Order, and P.A.P - Recommended Minimum Regular Premium ($2,500) - Minimum Additional Premium ($10,000) • Attractive, guaranteed Interest Rate - Regular Premium (Current Rate – tiered rates up to11.25%) - Lump Sum – Guaranteed for 1 year (Current Rate - tiered rates up to 11.25%)
Benefits (cont’d) • Monthly Compound Interest - Interest is credited monthly to the Plan • Life Insurance Coverage - Up to $125,000 in insurance coverage - Accidental Death Benefit
Benefits (cont’d) Facilitates Estate Planning • No transfer tax - Death of the insured - assets pass directly to the beneficiaries - Death of the owner – if a contingent owner is named assets pass to the contingent owner • Free from creditors’ liens - Creditors by law cannot claim any part of the investment unless the owner had hypothecated his policy.
Lets see how your money works! If a 25 year old invests $5,000 monthly at 12% p.a., after 20 years the Projected Accumulated Value is $4,349,877.07. At the age of 60 the Projected Accumulated Value is $26,033,908
Why Choose NCBIC/Omni? • NCBIC is owned by a stable & solid Company – NCB • With a strong parent owner – AIC • Funds are safe and secure. • Most experienced Bancassurance Company in Ja. • Proven Track-Record of performance
Omni has excellent features which aims at meeting the needs of its clients • Omni’s benefits are unmatched by most Financial Institutions in its field.
Retirement planning tips • Determine your retirement objectives. • Consider your financial situation both present and in the future. • Develop a retirement plan based upon the information you gather. • Get started now!
Don’t leave it to chance! With careful planning, your retirement could include some of the best years of you life.
How to get started? • Call or visit an NCB Insurance Sales Representative at any NCB Branch islandwide or complete a contact card being distributed. • Our team of professionals will design a plan that is tailored to meet your needs.
