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USA-1274a (R-8/2007) For Broker/Dealer use only – Not for use with the public. Retirement readiness with the 3-7-5 strategy Re-Engineering Retirement SM.

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Presentation on theme: "USA-1274a (R-8/2007) For Broker/Dealer use only – Not for use with the public. Retirement readiness with the 3-7-5 strategy Re-Engineering Retirement SM."— Presentation transcript:

1 USA-1274a (R-8/2007) For Broker/Dealer use only – Not for use with the public. Retirement readiness with the strategy Re-Engineering Retirement SM Insurance and annuities are issued by Allianz Life Insurance Company of North America Neither Allianz, its agents, or representatives offer tax or legal advice. Clients should always consult with qualified tax/legal advisors concerning their own situation. © Copyright 2008 Allianz. All rights reserved.

2 USA-1274a (R-8/2007) For Broker/Dealer use only – Not for use with the public. Transition from accumulation to income Types of retirement expenses Sources of income Options for making income cover expenses

3 ENT-578 (R-1/2009) 3 Income Earning Years Accumulation Stage Retirement Years Income Stage

4 ENT-578 (R-1/2009) 4 Income Earning YearsAccumulation Stage Income Earning Years Accumulation Stage Retirement Years Income Stage

5 ENT-578 (R-1/2009) 5 How much will we have? How much money will we need? Will we have enough to get by? Will there be enough for extras? Will there be something for our heirs? Questions as you approach retirement:

6 ENT-578 (R-1/2009) 6 Majority of pre-retirees are not very confident about living comfortably in retirement Source: Are Pre-Retirees Thoroughly Prepared? Confusion Still Lingers On When Best to Retire, Sally A. Bryck, LIMRA International, Inc., 2007 How confident you will live comfortably in retirement? 50% 26% 17% 7%

7 ENT-578 (R-1/2009) 7 Pre-retirees uncertain when they will retire Have specific retirement date in mind? 54% 38% 8% Source: Are Pre-Retirees Thoroughly Prepared? Confusion Still Lingers On When Best to Retire, Sally A. Bryck, LIMRA International, Inc., 2007

8 ENT-578 (R-1/2009) 8 Lack of retirement preparedness Why? -The assumption that there are limited options for improving your financial situation once you reach retirement -Confusion about the complexity of financial issues in retirement -Limited knowledge of and/or help in the retirement income strategies process

9 ENT-578 (R-1/2009) 9 Re-Engineering Retirement

10 ENT-578 (R-1/2009) 10 Agenda: Re-Engineering Retirement How does it work? What is it? What are the benefits? What tools are utilized in this process? Hypothetical story

11 ENT-578 (R-1/2009) 11 What is it?

12 ENT-578 (R-1/2009) 12 Re-Engineering Retirement What is it?

13 ENT-578 (R-1/2009) 13 Retirement accumulation stage What is it? Retirement Accumulation Stage Retirement Income Stage Financial Objective Have enough money to retire Asset Allocation Portfolio allocation Time Horizon Known to retirement

14 ENT-578 (R-1/2009) 14 What is it? How much will we have? How much money will we need? Will we have enough to get by? Will there be enough for extras? Will there be something for our heirs?

15 ENT-578 (R-1/2009) 15 What is it? Retirement income stage Retirement Accumulation Stage Retirement Income Stage Financial Objective Have enough money to retire Not outlive assets Asset Allocation Portfolio allocation Withdrawal allocation Time Horizon Known to retirement Unknown to date of death

16 ENT-578 (R-1/2009) 16 How can we make the most of my retirement income sources? What should we reposition in consideration of tax and transfer issues? What should we spend first, next, last? What should we hold? What is it?

17 ENT-578 (R-1/2009) 17 Retirement income strategies Retirement Accumulation Stage Retirement Income Stage Financial Objective Have enough money to retire Not outlive assets Asset Allocation Portfolio allocation Withdrawal allocation Time Horizon Known to retirement Unknown to date of death What is it?

18 ENT-578 (R-1/2009) 18 Transition to: Retirement Income Stage Retirement income strategies Retirement Accumulation Stage Financial Objective Have enough money to retire Asset Allocation Portfolio allocation Time Horizon Known to retirement Not outlive assets Withdrawal allocation Unknown to date of death What is it?

19 ENT-578 (R-1/2009) 19 Re-Engineering Retirement Retirement Accumulation Stage Re-Engineering Retirement Retirement Income Stage Financial objective Have enough money to retire Maximize sources of income Not outlive assets Asset allocation Portfolio allocation Reposition assets to meet needs and goals Withdrawal allocation Time horizon Known to retirement Retirement transition Unknown to date of death What is it?

20 ENT-578 (R-1/2009) 20 What are the benefits of re-engineering?

21 ENT-578 (R-1/2009) 21 What are the benefits of re-engineering? Help you to learn about some of the complex issues relative to retirement income Assist you with an analysis of your goals and resources to see where you stand now compared to what you need and want during retirement Provide practical strategies for helping you make decisions at a time when it may be getting too late to sit back and dream Help to ensure that your money last as long as you do Benefits

22 ENT-578 (R-1/2009) 22 How does Re-Engineering Retirement work?

23 ENT-578 (R-1/2009) 23 How does re-engineering work? Introductory meeting -Learn about the re-engineering process to better understand the value of retirement income Data collection and analysis -Complete worksheets with your financial data -Receive analysis of your financial data Review results and discuss strategies -Review income status and discuss appropriate strategies for improvement How it works

24 ENT-578 (R-1/2009) 24 How it works

25 ENT-578 (R-1/2009) 25 Three levels of retirement expenses Expenses Legacy Desired Survival How it works Expenses to cover your most basic needs Lifestyle extras Funds remaining for your beneficiaries

26 ENT-578 (R-1/2009) 26 Seven sources of income for retirement Sources of Income Welfare - charity Nonqualified Assets (NQA) Roth IRA Traditional IRA Qualified ERISA Social Security Continued employment Expenses Legacy Desired Survival Them Me Them/Me Us How it works The base Employer sponsored plans Contributions and rollovers from ERISA plans Tax deferred / tax free Mutual funds, CDs, stocks, bonds Phase into retirement gradually Not desirable

27 ENT-578 (R-1/2009) 27 Seven sources of income for retirement Expenses Legacy Desired Survival Sources of Income Welfare – charity Not desirable Nonqualified Assets (NQA) Roth IRA Traditional IRA Qualified ERISA Social Security Continued employment How it works

28 ENT-578 (R-1/2009) 28 Hypothetical story Ken and Patty at retirement How it works This example is shown for illustrative purposes only and does not represent actual Allianz clients. All figures are pre-tax estimates.

29 ENT-578 (R-1/2009) 29 Ken & Patty – age 66 This example is shown for illustrative purposes only and does not represent actual Allianz clients. All figures are pre-tax estimates. How it works Combined Social Security$2,000 per month Defined Benefit (Pension) income$500 per month Home is mortgage freeZero IRA (including rollover)$500,000 Savings portfolio$400,000 Estimated annual retirement expenses Survival expenses: $36,000 Desired expenses: $20,000 Desire to leave a legacy

30 ENT-578 (R-1/2009) 30 Survival $36,000 Desired $20,000 Legacy Expenses Re-Engineering Retirement Sources of Income Welfare – charity Not desirable Nonqualified Assets (NQA) Roth IRA Traditional IRA Qualified ERISA Social Security Continued employment $400,000 None $500,000 $24,000 $6,000 How it works Ken & Patty This example is shown for illustrative purposes only and does not represent actual Allianz clients. All figures are pre-tax estimates.

31 ENT-578 (R-1/2009) 31 Re-Engineering Retirement Survival $36,000 Desired $20,000 Legacy Expenses Sources of Income Welfare – charity Not desirable Nonqualified Assets (NQA) Roth IRA Traditional IRA Qualified ERISA Social Security Continued employment $24,000 $400,000 None $500,000 $6,000 How it works Ken & Patty This example is shown for illustrative purposes only and does not represent actual Allianz clients. All figures are pre-tax estimates.

32 ENT-578 (R-1/2009) 32 Re-Engineering Retirement Survival $36,000 Desired $20,000 Legacy Expenses Sources of Income Welfare – charity Not desirable Nonqualified Assets (NQA) Roth IRA Traditional IRA Qualified ERISA Social Security Continued employment $6,000 $24,000 Pattys pension plan $6,000 $24,000 $400,000 None $500,000 How it works Ken & Patty This example is shown for illustrative purposes only and does not represent actual Allianz clients. All figures are pre-tax estimates.

33 ENT-578 (R-1/2009) 33 Re-Engineering Retirement Survival $36,000 Desired $20,000 Legacy Expenses Sources of Income Welfare – charity Not desirable NQA Roth IRA Traditional IRA Qualified ERISA Social Security Continued employment $6,000 $120,000 annuity $6,000 $24,000 $280,000 (25 5% return) $24,000 None $500,000 Pattys pension plan $6,000 5% Rate of return is for illustrative purposes only. Guarantees are backed by the financial strength and claims paying ability of the issuing company. How it works Ken & Patty

34 ENT-578 (R-1/2009) 34 Re-Engineering Retirement Survival $36,000 Desired $20,000 Legacy Expenses Sources of Income Welfare – charity Not desirable NQA Roth IRA Traditional IRA Qualified ERISA Social Security Continued employment $6,000 $120,000 annuity $6,000 $24,000 Work part-time until age 70 $24,000 $280,000 (25 5% return) None $500,000 Pattys pension plan $6,000 How it works Ken & Patty This example is shown for illustrative purposes only and does not represent actual Allianz clients. All figures are pre-tax estimates.

35 ENT-578 (R-1/2009) 35 Re-Engineering Retirement Survival $36,000 Desired $20,000 Legacy Expenses Sources of Income Welfare – charity Not desirable NQA Roth IRA From IRA Traditional IRA IRA $500,000 Qualified ERISA Social Security Continued employment $6,000 $120,000 annuity $6,000 $24,000 IRA RMD $18,250 From non-qualified $1,750 Roth IRA $24,000 $280,000 (25 5% return) Work part-time until age 70 Pattys pension plan $6,000 How it works Ken & Patty This example is shown for illustrative purposes only and does not represent actual Allianz clients. All figures are pre-tax estimates.

36 ENT-578 (R-1/2009) 36 But what if …? How it works

37 ENT-578 (R-1/2009) 37 5 Options to improve income Sources of Income Welfare – charity Nonqualified Assets Roth IRA Traditional IRA Company retirement programs Social Security Continued employment How it works Survival Desired Legacy Expenses Options Lower your expectations Spend less and save more now Decide to work longer. Take on more investment risk Combination (or all) of above

38 ENT-578 (R-1/2009) 38 5 options at work How it works $ needed to supplement income $ now (401(k)) $ additional (401(k)) $ more 70? Conservative 4 - 6% Moderate 6 - 8% Aggressive % Combination of all options Current standard of living Age Time Retirement This example is shown for illustrative purposes only and is not intended to predict or project future results. Your actual results will vary. Please note that with the potential for greater returns comes greater risk and volatility.

39 ENT-578 (R-1/2009) 39 5 options How it works Lower your expectations for your standard of living during retirement Spend less and save more now in order to have more when you retire Decide to work longer before you retire or take a part-time job Take on more investment risk to increase the potential return on your assets Use a combination of the options

40 ENT-578 (R-1/2009) 40 Current standard of living 5 options at work How it works Age Time $ needed to supplement income $ additional (401(k)) $ more Combination of all options 65 68? Conservative 4 - 6% Moderate 6 - 8% Age Time This example is shown for illustrative purposes only and is not intended to predict or project future results. Your actual results will vary. Please note that with the potential for greater returns comes greater risk and volatility.

41 ENT-578 (R-1/2009) 41 What tools and support are available for this process?

42 ENT-578 (R-1/2009) 42 What tools and support are available? Re-Engineering strategic workbook -Survival expense worksheet -Desired expense worksheet -Financial legacy worksheet -Asset worksheet Tools

43 ENT-578 (R-1/2009) 43 Example of client workbook Tools

44 ENT-578 (R-1/2009) 44 Analysis and recommendations -Analysis and anticipated retirement expenses compared to anticipated retirement income -Recommendations for positioning resources to help enhance income -Options (if needed) designed to compensate for an anticipated shortfall of income Tools What tools and support are available? This analysis is not a comprehensive financial or retirement plan. Planning services are available at additional cost and offered only by appropriately licensed registered investment advisors.

45 ENT-578 (R-1/2009) 45 Summary Retirement strategies can help identify how well your retirement expenses match up with your retirement income Many people approaching retirement are worried about their financial security in retirement Re-Engineering Retirement offers the tools and support you need to help you successfully transition from accumulation to income

46 ENT-578 (R-1/2009) 46 Next steps Still considering? Need additional information? -Ask questions before you leave. -Schedule an appointment for further discussion. Ready to re-engineer your retirement? -Complete the worksheets in the Re-Engineering Retirement strategic workbook and return the data to me. -Well meet to review the results and discuss recommended strategies designed to help improve your retirement goals.

47 USA-1274a (R-8/2007) For Broker/Dealer use only – Not for use with the public. Name Contact information Thank you © Copyright 2008 Allianz. All rights reserved.


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