Pamela Yellen is President of Bank On Yourself Programming offered by Pamela Yellen entitled How to Fire Your Banker, Bypass Wall Street, and Take Control of Your Own Financial Future shall exhibit fair content balance, providing the audience with information of different perspectives from which to develop an informed professional opinion. Pamela Yellen has no actual or potential conflict of interest in relation to this program. Speaker Disclosure
The Institute for Wellness and Education is accredited by the Accreditation Council for Pharmacy Education as a provider of continuing pharmacy education. Attendees who participate in the interactive portion and submit the completed evaluation form at the conclusion of the program will have credit for 1.0 hour(s) of continuing pharmacy education (0.10 CEU(s)) uploaded to CPE Monitor within 60 days after the program date. ACPE program number is L04-P. Initial release date is 02/28/2014.
At the completion of this activity, the participant will be able to: Describe the advantages and disadvantages of various retirement plan accounts to determine which one will allow them to best reach their financial goals and objectives Explain the three steps to becoming their own source of financing for major business and personal expenses Discuss a plan for constructing a retirement strategy which allows them to know what their retirement account will be worth on the day they plan to tap into it Identify the differences between paper wealth and real wealth, and provide examples of each Outline the tax consequences of common retirement planning methods Learning Objectives
On the day you plan to tap into it? Would it be helpful to know? Is it even possible to know? Will tax rates go up? … or down? How long does your money need to last? What Will Your Retirement Account Be Worth
Its based on things you cant predict or control The Problem with Conventional Planning
More than half of all boomers wont have enough money for basic living expenses in retirement Food Heating Medical care Source: The National Retirement Risk Index: An Update. Center for Retirement Research at Boston College, Oct Result
Three in four boomers expect to postpone retirement Half think they may never retire Source: 2012 AARP survey, Boomers Anxiety Index High Result
Almost half of all retirees were forced out of work earlier than planned Layoffs Poor health Need to take care of a loved one Source: Employee Benefit Research Institute Work Till You Drop?
After a lifetime of hard work, many seniors will find themselves forced to choose between putting food on the table and buying their medication. U.S. Senate Committee on Health, Education, Labor, and Pensions, July 2012
I have enough money to live comfortably for the rest of my life … if I die by next Tuesday if I die by next Tuesday
Q:$20 stock … goes up by 40 percenthow much money did you make? A:Noneunless you sold your stock and locked in your gain Test Your Money IQ
Paper wealth is meaningless when it comes to financial certainty and security
S&P 500: Lost 49% from March 2000October 2002 Recovered by October 2007 Lost 57% from October 2007March 2009 Thats two losses of 49%+ in just one decade Stock Market Facts
Two Losses of 49%+ Just Since the Year 2000 Are you confident there wont be another crash in the next 5-10 years … or even tomorrow?
Leo Cullum, The New Yorker, used with permission
Sources: Yahoo Finance, InflationData.com 2,077 The S&P 500 would need to be at 2,077 in todays depreciated dollars, just to equal its year 2000 high of 1,527 The S&P 500 closed only 14% higher on February 3, 2014, than it did on March 24, During those 14 years, we experienced 36% inflation. The S&P 500 has had only 0.95% annual growth over 14 years! February 3, 2014: S&P closes at 1,742 March 24, 2000: S&P 500 closes at record high of 1,527 Your Retirement Plan Powered by Wall Street: 14 Years of the S&P 500 Index
Real Life Experience Dan Proskauer Vice President of Technology The picture thats making everyones jaw drop If I can help a few people start Bank On Yourself this year instead of next yearor instead of never its worth it.
Real Life Experience
How Is This Possible? Volatility is removed Saving becomes fun You have flexibility and control, because your money isnt locked up in a government-controlled plan Your confidence is restored, so you can enjoy more of lifes luxuries
Bank On Yourself Isnt a Magic Pill Your plan value wont equal your contribution in the early years But because the volatility is removed, youll quickly see your net worth go in just one direction – UP!
Real Life Experience Would you like your net worth to grow like this?
With Bank On Yourself … Your Paper Wealth IS Your Real Wealth!
You can t eat a number on paper
An asset that has … Increased in value … Every single year … For more than 160 years Dividend-paying whole life insurance What Is Bank On Yourself?
Not the kind Suze Orman and Dave Ramsey love to hate Options (riders) to supercharge the growth Commissions are reduced by 50–70% Can be a powerful financial management tool from day one Plans available for people up to age 85 Dont rule yourself out due to health problems Dividend-Paying Whole Life Insurance
Predictability and guarantees Control Liquidity Safety Tax Advantages Provides an Unbeatable Combination
Guaranteed Growth Cash value (money you can use now) Death benefit (money for your family and charity, later) Potential for dividends No luck, skill, or guesswork required Know the value of your account the day you plan to tap into it … And at any point along the way Predictability and Guarantees
Putting your money in a government-blessed-and- controlled retirement plan is like putting it in prison You dont control the money in your 401(k) or IRA, or any similar plan The government controls your money They change the rules any time they want! Control
The prison warden has your money under lock and key While your moneys in the slammer, they can arbitrarily impose any new restrictions or regulations they come up with You have no recourse Control
Who Controls Your Money in a Bank On Yourself Plan? You Do!
Life insurance policies are private, unilateral contracts The company cant change the rules without your consent Thats the law You Control Your Money in a Bank On Yourself Plan
No government-imposed limits on how much you can put in No government restrictions or penalties for early withdrawal or waiting too long No penalties for taking too little each year No Required Minimum Distributions Retirement income when and how you want it You Control Your Money in a Bank On Yourself Plan
You can borrow against your cash value any time you want No rules requiring you to pay it back on a certain schedule You Control Your Money in a Bank On Yourself Plan
I had very limited control of my money in my 401(k). I couldnt put in as much as I wanted, and I needed permission to borrow my own money if necessary. Bank On Yourself gives me control over my money. David Shelton, healthcare company vice president
Financing through Bank On Yourself beats financing, leasing, and even directly paying cash! You finance everything you buy Either you pay interest when you finance or lease Or you lose interest and investment income when you pay cash Liquidity: Fire Your Banker
Fund a Bank On Yourself plan first, then … Use the money in your policy whenever you want For any purpose at all Set your own repayment schedule Your plan continues growing as though you never touched a dime of it! Liquidity: Fire Your Banker
The Bank On Yourself strategy solves the problem of having to constantly interrupt the growth of your money, whenever you spend or invest it!
Life insurance companies are audited regularly by the state insurance commissioners office to ensure they maintain sufficient reserves to pay future claims Theyre audited regularly by several independent rating companies Safety
State insurance commissioners office can take over and run the company in the interests of policyholders Historically, a failed insurers business is taken over by another company, according to the National Organization of Life and Health Insurance Guaranty Associations Additional protections are available in each state Safety
May be protected from creditors and lawsuits Rules vary from state to state Extra Benefit: Asset Protection
Does having money safe and available to you take away any of your options?
You have safety, liquidity, and control Greater growth than savings or money market accounts, without the risk or volatility of traditional investments Access to your money when and how you wantfor purchases or investments Get continuous growth, even on the money youre using More options and flexibility, not less You Are Not Putting Your Money in a Straitjacket
Independent Pharmacy Owner Michael Bemis of Bemis Drug: My Bank On Yourself plan gives me easy access to capital, and Im receiving a dividend even on the money I borrowed. It works great for purchasing equipment for my pharmacy, such as a new counting machine. Why borrow from a bank, when you can borrow from yourself? I get to pay myself interest on the money I loan to the pharmacy for purchases, and it grows my Bank On Yourself plan.
Can give you a retirement income with no taxes due Reduce the taxes you may have to pay on your Social Security benefits Extra tax breaks for pharmacy owners and other business owners Death benefit passes to your loved ones income tax-free … and avoids probate Tax Advantages Of Bank On Yourself
You pay your taxes up front while you know what they are No taxes due on your gains in retirement* Avoid unwelcome surprises Both Roth plans and Bank On Yourself plans offer that strategy But only Bank On Yourself has all the additional advantages and guarantees were talking about today Tax Advantages Of Bank On Yourself * Under current tax laws
But everyone knows its better to defer taxes with a 401(k), IRA, etc. … Isnt it?
You need $70,000 per year in retirement You retire with an average tax rate of 25% Quick Case Study Tax Deferred Plan You need$93,333 You pay taxes($23,333) You net $70,000 Bank On Yourself Plan $70,000 ($ 0) $70,000
How Would You Prefer to Spend That Extra $23,000 Per Year? Enjoying life more?Paying more taxes?
And … if tax rates go up and youre successful growing your nest egg in a tax-deferred plan, youll only end up paying higher taxes on a bigger number
Retirement Plan Checklist Does Your Retirement Plan … 401(k)s and 403(b)s IRAs Roth Plans Bank On Yourself Plans Give you guaranteed growth?
Retirement Plan Checklist Does Your Retirement Plan … 401(k)s and 403(b)s IRAs Roth Plans Bank On Yourself Plans Lock in your principal and growth?
Retirement Plan Checklist Does Your Retirement Plan … 401(k)s and 403(b)s IRAs Roth Plans Bank On Yourself Plans Give you control of your money?
Retirement Plan Checklist Does Your Retirement Plan … 401(k)s and 403(b)s IRAs Roth Plans Bank On Yourself Plans Give you tax-free retirement income?
Retirement Plan Checklist Does Your Retirement Plan … 401(k)s and 403(b)s IRAs Roth Plans Bank On Yourself Plans Let you use your money without penalties?
Retirement Plan Checklist Does Your Retirement Plan … 401(k)s and 403(b)s IRAs Roth Plans Bank On Yourself Plans Let your money grow while you use it ?
Retirement Plan Checklist Does Your Retirement Plan … 401(k)s and 403(b)s IRAs Roth Plans Bank On Yourself Plans Let you access your money without liquidating?
Retirement Plan Checklist Does Your Retirement Plan … 401(k)s and 403(b)s IRAs Roth Plans Bank On Yourself Plans Let you fund it every year with no government limits?
Retirement Plan Checklist Does Your Retirement Plan … 401(k)s and 403(b)s IRAs Roth Plans Bank On Yourself Plans Finish funding itself if you die prematurely?
Retirement Plan Checklist Does Your Retirement Plan … 401(k)s and 403(b)s IRAs Roth Plans Bank On Yourself Plans Tell you the plan value on the day you plan to tap it?
Summary Does the Retirement Plan You Currently Have or Are Considering … 401(k)s and 403(b)s IRAs Roth Plans Bank On Yourself Plans Give you guaranteed, predictable growth? Lock in your principal and growth, even when the market crashes? Give you control of your money without government restrictions and penalties? Give you tax-free retirement income? Let you use your money in the plan without penalties, however and whenever you want? Let you use your money in the plan yet still have it grow as though you didnt touch it? Let you access your money without liquidating your investments? Allow you to fund it every year, without limits imposed by the government? Finish funding itself if you die prematurely? Tell you the minimum guaranteed value of the plan on the day you expect to tap into it, and at any point along the way?
As Texas Bix Bender once noted, Just cuz youre following a well-marked trail dont mean whoever made it knew where they were goin.
Joe and Jane Pharmacist Theyre both 45 years old Have $25,000 in credit card debt Have $135,000 in other personal and business debt Want a new $35,000 car every four years Want $100,000 for … pharmacy automation … kids college … or motor home Case Study
Joe and Janes Personalized Solution
You indicated your biggest financial concerns are: Putting $$$ into traditional retirement plans that have been going backwards for 15 years Lack of savings Lack of liquidity Current and future taxes You said your top financial goals are: Secure retirement Help pay for kids college Buy automation for the pharmacy Pharmacy renovation You indicated your biggest financial concerns are: Putting $$$ into traditional retirement plans that have been going backwards for 15 years Lack of savings Lack of liquidity Current and future taxes You said your top financial goals are: Secure retirement Help pay for kids college Buy automation for the pharmacy Pharmacy renovation
Approximately $675,692 in interest payments could leave your home over the next 10 yearsnever to be seen againif you keep doing what youve been doing. … And you could lose more than that, if you take on additional debt. Approximately $675,692 in interest payments could leave your home over the next 10 yearsnever to be seen againif you keep doing what youve been doing. … And you could lose more than that, if you take on additional debt.
Moves $50,000 from money market account earning 0.2% to Bank On Yourself plan Commits $2,500 monthly from current resources Redirects $1,000 monthly to build his personal, private Bank On Yourself plan, instead of a government-controlled plan No more premiums after age 70 Funding Joes Plan
Instant life insurance coverage of $1,900,000 Liquid emergency fund of $154,000 in three years Credit cards paid off in one year Retirement income of $80,000 per year from age 71 to 99 (little or no taxes due) Death benefit remaining at age 95: $660,000 Instant life insurance coverage of $1,900,000 Liquid emergency fund of $154,000 in three years Credit cards paid off in one year Retirement income of $80,000 per year from age 71 to 99 (little or no taxes due) Death benefit remaining at age 95: $660,000 Total potential retirement income: $2,320,000
Your plan would be custom- tailored to your unique situation and your short-term and long-term goals and dreams No Two Bank On Yourself Plans Are Alike
Top Seven Ways Pharmacists Use the Bank On Yourself Method 1.As a safe, predictable retirement plan alternative 2.To self-finance business and personal purchases, recapturing interest theyre now paying to banks and leasing companies 3.As a better way to save and pay for college 4.For investment opportunities (real estate, pharmacy acquisition, etc.)
Top Seven Ways Pharmacists Use the Bank On Yourself Method 5.To provide safe and liquid cash reserves that earn far more than CDs and money markets 6.To fund buy-sell agreements and for business succession planning 7.To take back control of their money and finances
Pitfalls to Watch Out For Beware of untrained advisors: If your plan isnt structured properly, it could grow much more slowly, lose the tax advantages, or both A different life insurance policy type may be recommended – No other product comes with as many guarantees as dividend- paying whole life insurance
Pitfalls to Watch Out For If your current financial advisor or insurance agent tells you he knows how to implement this, ask him: If you could have done this for me … why didnt you?
Only a Handful of Life Insurance Companies Offer the Right Policies What to look for: Must offer dividend-paying whole life policies Must have paid dividends every year for at least 100 years
Only a Handful of Life Insurance Companies Offer the Right Policies What to look for: Must offer non-direct recognition policy loans Must be among the financially- strongest companies in the country (Comdex rating of at least 95)
Theres an old African proverb: The best time to plant a tree is twenty years ago. The time may never be perfect to start. – We can always find a reason to put it off You Can Take Back Control of Your Financial Future! The second best time is today.