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Introduction. (Licensed agent) is a Licensed insurance agent in the state(s) of PA Licensed to sell insurance and annuities Affiliated with Midland National .

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Introduction

Introduction

  • (Licensed agent) is a Licensed insurance agent in the state(s) of PA

  • Licensed to sell insurance and annuities

  • Affiliated with Midland National

Securities offered by Registered Representatives with JW Cole Financial, Inc, (JWC) Member FINRA/SIPC, Investment Advisory Services provided by Investment Advisory Representatives through Jonathan Roberts Advisory Group (JRAG). Neither Sequinox nor Midland is affiliated with JWC or JRAG.


Disclosures

Disclosures

There will be an opportunity to schedule an appointment for an individual consultation at the end of this seminar which may result in a recommendation of specific Financial products that may help you achieve your financial goals.

There is no obligation to schedule an appointment or purchase a product. During the course of this presentation or in follow-up appointments, you may hear more about the following types of products. If so, please keep the following points in mind.

Variable Annuities: These are long-term investment vehicles designed for retirement purposes.

Qualified and non-qualified annuities: owners of non-qualified annuities are not required to take mandatory distributions due to age. Owners of qualified annuities are subject to the minimum Required distributions at age 70 1/2.

Indexed Annuities only guarantee principal against market downturns since a customer can loose principal due to the fees and charges of the product itself, particularly if they surrender in the early years.

Life Insurance: in exchange for the death-benefit coverage provided, all life insurance products include various costs, such as the cost of insurance, surrender charges, monthly expense charges, And premium loads (where applicable). Costs vary according to the product selected.


Why save for retirement

Why Save for Retirement?

  • 30% of Americans have less than $1,000 of savings.

  • More than half of workers (56%) report total value of household savings is less than $25,000.*

  • The average American spends 20 years in retirement.**

*Employee Benefit Research Organization-March 2011.

**Department of Labor “10 Ways to Prepare for Retirement” – June 2011. www.dol.gov


Women need a plan

Women Need a Plan

  • Women are more likely to work in part-time jobs that don't qualify for a retirement plan.

  • Working women are more likely than mento interrupt their careers to take care of family members.

  • Of the 62 million wage and salaried women (age 21 to 64) working in the United States,just 45% participated in a retirement plan.

  • On average, a female at age 65 can expect to live another 19 years, 3 years longer than aman the same age.

Source: US Department of Labor www.dol.gov/ebsa 6/1/2011.


Facts to consider

Facts to Consider

  • The “official” National Debt is in excess of $16,015,769,788,215 (www.treasurydirect.gov8/31/12)

  • 2012 budget proposal:

    • $2.47 T Revenue- $3.80T Expenses

    • Equals $1.33T deficit spending

  • Social Security & Medicare Expense


How big is a trillion

How Big is a Trillion?


Introduction

How Big is a Trillion?

$1,000,000,000,000 • Distance between Seattle and Minneapolis

Source: U.S. national debt is the elephant in the room, Vancouver Sun, www.canada.com, November 7, 2008.


What year was it one trillion seconds ago

What Year Was It One Trillion Seconds Ago?

  • 86,400 seconds = 1 day

  • 31,536,000 seconds = 1 year

  • 1,000,000,000,000 seconds = 31,688 years


Another way of thinking about this

Another Way of Thinking About This?

You could spend $31.5 million a year for

32,000 years just to spend $1 trillion


Why is this significant

Why Is This Significant?

  • There are at least three possible answers to address the debt:

    • Spend less

    • Artificially devalue the dollar

    • Tax more

What Do You Think the Answer Is?


One more way of thinking about this

One more way of thinking about this…

  • 2011 Budget Proposal:

    • $2,460,000,000,000 Revenue - $3,800,000,000,000 Expenses

    • Equals $1,340,000,000,000 Deficit

    • 14,000,000,000,000 Debt

    • 2011 revised budget lessened by 360,000,000,000

  • Family of 4:

    • 24,600 in income

    • Spent 38,000

    • Added 13,400 to Credit Cards

    • Budgeted to reduce expenses by 360

FOR AGENT/REGISTERED REPRESENTATIVE USE ONLY. NOT TO BE USED FOR CONSUMER SOLICITATION PURPOSES.

12

FOR AGENT/REGISTERED REPRESENTATIVE USE ONLY. NOT TO BE USED FOR CONSUMER SOLICITATION PURPOSES.


Introduction

Can they Tax us More?

Source: truthandpolitics.org, referencing IRS Statistics of Income Bulletin Pub 1136


Introduction

Taxable Money vs.

Tax-advantaged Money

Taxable Money(when received)

Tax-advantaged Money(when received)

Wages

Tax-qualified plans

Roth IRA

Life Insurance

Non-Qualified Investments

Income

Capital Gains

The information we are providing in the next few slides is for educational purposes only and is not to be construed as tax advice. You should always consult with and rely on your own tax advisor.

Please note that these “tax advantaged” products all have terms and conditions associated with receiving the funds tax advantaged or generally free from

current income taxes. In addition, each product is designed for a specific purpose and may not be suitable for all clients.

Policy loans will reduce available cash values and death benefits and may cause the policy to lapse,

or affect guarantees against lapse. Additional premium payments may be required to keep the policy in force.

In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject

to ordinary income tax. Tax laws are subject to change and your clients should consult

their tax professional.


Introduction

The Smart Money List

1. Free Money

Tax-advantaged Money

3. Tax-deferred Money

4. Taxable Money

Gift taxes or inheritance taxes may apply, to “free” money and matching 401k contributions are taxable when withdrawn

and a 10% penalty may apply if withdrawn prior to age 59 ½.


Introduction

Tax-deferred Strategy vs.

Tax-advantaged Strategy

Tax- deferred Strategy

Tax- advantaged Strategy

Gains

Gains

Tax-deferred Contributions

After-tax Contributions

(using before-tax dollars)

(using after-tax dollars)


Introduction

Tax-deferred Strategy vs.

Tax-advantaged Strategy

Tax- deferred Strategy

Tax- advantaged Strategy

No tax on distribution if done properly including 3.8% surtax and 0.9% Medicare tax

Gains

Gains

100% taxed as income at distribution

Tax-deferred Contributions

After-tax Contributions

Taxed prior to

contributions

Would you rather

pay taxes…

On this?

Or this?


Introduction

Roth IRA

  • Pros

  • Tax Deferred Growth

  • Tax Free Distribution

  • No RMD

  • No 3.8% Surtax

  • No 0.9% Medicare Tax

  • Income Tax free to spouse andChildren

  • Cons

  • Contribution limits

  • Contribution subject to 3.8% surtax and 0.9% Medicare tax

  • Income limits

  • Included in Estate Tax Calculation


Introduction

20

Life Insurance

  • Cons

  • Cost of Insurance

  • Medically underwritten

  • Premiums may be subject to 3.8% surtax and 0.9% Medicare tax

  • Potential premium load and surrender charges

  • Pros

  • Tax Deferred Growth

  • Tax Free Distribution

  • No RMD

  • No 3.8% Surtax on distribution

  • No 0.9% Medicare Tax on distribution

  • Income Tax free to spouse and Children

  • No Contribution limits

  • No Income limit

  • Leveraged Death Benefit

  • Leveraged Chronic Illness Rider

  • May avoid estate tax


Introduction

Characteristics of Term & Permanent Life Insurance

Please note: there are scenarios in which the premium can remain level. Also, premiums could increase if it is necessary to support the death benefit. For example, if the contract is overloaned a premium increase could be needed to keep the contract inforce. Information provided here is general and educational in nature, and is not intended to be, and should not be construed as legal, tax, and/or investment advice. Laws of specific states of laws relevant to a particular situation may affect the applicability, accuracy,

or completeness of this information. Federal and state laws and regulations are complex and subject to change.

*Surrender charges may apply at withdrawals.

Please consult your tax professional and/or attorney for specific tax and/or legal information as it

pertains to your individual situation.


Introduction

Characteristics of Term & Permanent Life Insurance

Premium for Term Life Insurance vs.Permanent Life Insurance

Premium

Permanent

Term

Time

This example is shown for illustrative purposes only.


Introduction

How It Works With

Universal Life Insurance

Universal LifeInsurancePolicy

  • Cost of Death Benefit and other potential policy charges:

  • Surrender charges

  • Monthly deductions

  • Loan interest

Premium $

$potential cash value

X

Minus fee, or load

Minimum Premium Company Requires

Max Premium IRS Allows


Legacy for your loved ones

Legacy For Your Loved Ones

Are you and your family sufficiently protected?

Life insurance can help meet all, or a portion of these needs:

  • Help pay for final expenses

  • Chronic Illness Rider

  • Income replacement

  • College expenses

  • Mortgage and other debts

  • Estate tax coverage

  • With life insurance, you have the confidence that your loved ones willhave financial options available.

  • You also may have a way to potentially accumulate cash value on a taxdeferred basis that may be accessible down the road.


Key considerations

Key Considerations

  • The main purpose of life insurance is to provide death benefit protection for the beneficiaries

  • There is a medical and financial underwriting process

  • Types of life insurance available

  • Amount of coverage needed

  • Policy illustration

  • Policy benefits, assumptions, fees, guarantees, surrender and withdrawal charge

  • Loans and withdrawals may affect the tax status of a policy

For most policies, withdrawals are free from federal income tax to the extent of the investment in the contract and policy loans are also tax-free so long as the policy does not terminate before the death of the insured. However, if the policy is a Modified Endowment Contract (MEC) , a withdrawal or policy loan may be taxable upon receipt. Further, unpaid loan interest on a MEC may also be taxable. A MEC is a contract received in exchange for a MEC or for which premium paid during a seven-year testing period exceed prescribed premium limits (7-pay premiums).

Policy Loans and withdrawals will reduce the death benefit and cash value of the policy and may cause the policy to lapse or

affect guarantees against lapse. In the event of lapse, outstanding policy loans in excess of cost basis

will be subject to tax.

Midland National and its agents do not provide tax or legal advice.

You should consult with and rely on your own tax advisor before

making the decision to take a policy loan.


Introduction

Taxable Money vs.

Tax-advantaged Money

Tax-advantaged Money(when received)

Taxable Money(when received)

Wages

Tax-qualified plans

Roth IRA

Life Insurance

Non-Qualified Investments

Income

Capital Gains

The information we are providing in the next few slides is for educational purposes only and is not to be construed as tax advice. You should always consult with and rely on your own tax advisor.

Please note that these “tax advantaged” products all have terms and conditions associated with receiving the funds tax advantaged or generally free from

current income taxes. In addition, each product is designed for a specific purpose and may not be suitable for all clients.

Policy loans will reduce available cash values and death benefits and may cause the policy to lapse,

or affect guarantees against lapse. Additional premium payments may be required to keep the policy in force.

In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject

to ordinary income tax. Tax laws are subject to change and your clients should consult

their tax professional.


Next steps

Next Steps

  • Complete your needs analysis

  • Determine which option is right for you

  • Taxable Money

  • Tax-advantaged Money

  • Both


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