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					                           Introduction to
                     Retirement Income Planning

                 Live Richer in Retirement
                    Than Ever Before!
                                          Phillip Roy Financial Services
                         Office locations: Clearwater/Tampa, Sarasota, Naples, Boca Raton,
                                          North Palm Beach, Fort Lauderdale, Orlando


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                             What is Retirement?
    Social behaviorists say:
    •                Retirement is an uncertain social experiment
                     evolving out of the need to retire older workers
                     to make room for younger workers.

    •                Over time, the concept of retirement became the
                     reward for decades of hard work and many times,
                     unfulfilling work.

Source: Survey by gerontologist Ken Dychtwald, Ph.D., president and CEO of AgeWave, February 2005.



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             Retirement is a Gift of Time
• “Aging is humanity’s greatest, most important, and
   most enduring discovery. The discovery and exploitation
   of human longevity is what has led to the globe-dominating
   species we have become.” Dr. William Thomas, M.D.

• We have the most awesome resource in our retirees to
  help solve society’s most difficult problems.
      – Retirees can give of their time, skills, wisdom, and shared experiences.
      – This legacy will make for better individuals and communities.
      – To do this, retirees must have a safe, sustainable retirement income.



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                  Why Wealthy Americans Worry
                   Can't maintain income level

      High taxes will decimate our estate

          Unpredictable long-term returns

                              Taxes will rise steeply
                                                                                                            2005
           Stock market gains will be lower                                                                 2004


             Inflation will erode investment

                 Education costs grow too fast

                 Terrorism will hurt economy

 Children will have it tough financially
                                                        0%       20%        40%         60%          80%           100%
                                                             Source: U.S. Trust Survey of the Affluent, 2005



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              Downward Trend in U.S. Savings
          12%



          10%
                                                                                     Personal Savings
                                                                                    % Disposable Income

           8%



           6%



           4%

                                                             Net National Savings
                                                                 % GDP

           2%



           0%
                  70


                          72


                                   75


                                              78


                                                       81


                                                                84


                                                                          87


                                                                                   90


                                                                                            93


                                                                                                      96


                                                                                                               99


                                                                                                                      02


                                                                                                                               05
                 19


                         19


                                 19


                                            19


                                                     19


                                                               19


                                                                        19


                                                                                  19


                                                                                           19


                                                                                                    19


                                                                                                              19


                                                                                                                     20


                                                                                                                             20
                                          Source: Bureau of Economic Analysis, U.S. Department of Commerce, 2005




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 The Perfect Retirement Storm




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       The Perfect Retirement Storm
         is when you:
(1) Undersize your retirement nest egg
      - A TIAA-CREF Institute study on spending in retirement reported that more households
        are surprised by how high expenditure needs are.
      - People often underestimate health care costs, a growing concern as more and more
        employers drop coverage for retirees or spouses.

(2) Underestimate how long you are likely to live
      - Most people think of life expectancy as a target date by which you are likely to die
        rather than the point estimate at which about half the people of a certain age will still
        be alive. If a 65 year-old man has about a 30% chance of living to 90, this means, in
        actuarial science, that half of the people studied are expected to live longer.

(3) Overestimate how much you can withdraw from your
    retirement portfolio without depleting it
      - Using Retirement Income Planning (RIP), retirees develop more awareness about how
        different withdrawal rates can affect the odds that their retirement assets will last.
         Source: Society of Actuaries and LIMRA International (a life insurance marketing and research organization),
                 Retirement Storm Clouds by Walter Updegrave, Money Magazine, November 2003

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                              Threats to Your

                  Retirement Nest Egg



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Threats to Your Retirement Nest Egg

                             Inflation    Risk/Volatility


       Health                                                       Fees



       Age                                                         Taxes



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                                      Age & Health

                   Retirement Threat #1




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 Age & Health - Retirement Threat #1

Don’t underestimate your life expectancy
• If you are 65, there is 50% chance you will live beyond 85.
• If you are a 65-year-old man, there is at least a 30% chance
  you will live to 90.
• If you are a 65-year-old nonsmoking woman, there is at
  least a 50% chance you will live to 90.
• Widows live, on average, about 18 years beyond the death
  of their spouse.
     Source: Ask the Expert, American Online, November 29, 2003.
             Raymond James financial seminar, September 28, 2005.


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                                         U.S. National Center for Health Statistics
                                                                          Life Expectancy
                    90


                    80


                    70


                    60
Lifespan in Years




                    50


                    40                                                    U.S. Census Bureau (2000) estimates the number of seniors
                                                                          age 65 and older will double by the year 2030 to 70 million
                    30
                                                                          (over 25%) of the U.S. population.

                                                                          The fastest growing segment of society over the next 50 years
                    20
                                                                          is the 85 and older population.

                    10
                          Source: National Vital Statistics Report, March 18, 2002

                     0
                         1880        1890         1900         1910         1920     1930   1940   1950   1960   1970     1980     1990       2000


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                    Health is Unpredictable
         • If you are 65, there is 50% chance you will need
           Assisted Living care at least once during your life.
              - If you are 70, there is at least a 68% chance you will need it.
              - If you are 80, there is at least a 75% chance you will need it.


         • Many U.S. retirees skip doses of prescription drugs or
           don’t fill prescriptions because of the high cost.
              - Over one-third of nearly 11,000 Americans over age 65 who were surveyed
                said they skimped on prescribed drugs to save money.
              - This study included people with chronic and costly diseases, including
                diabetes and heart disease, for whom prescription drug treatment is essential.

               Source: Commonwealth Fund and Kaiser Family Foundation study, Washington Times, August 1, 2002.



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The High and Rising Cost of Care
                              Nursing Home: Private and Semi-Private Room
                                        Caution: Costs vary widely by location. Check your local area.

                              $200
National Average Daily Cost




                                                              $192
                              $150                    $181
                                            $168                                                 $169
                                                                                      $158
                                                                              $143
                              $100


                               $50


                                $0
                                                    Private                      SemiPrivate
                                                   2002               2003                     2004
                                     Source: MetLife Annual Surveys

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Age & Health - Retirement Threat #1

 Average Annual Costs for Assisted Care

   • Private Room in a Nursing Home                                              $ 70,080

   • Semi-private Room in a Nursing Home                                         $ 61,685

   • Home Health Aides (HHAs)                                                    $ 52,416
        provided by a home care agency at an
        average rate of $18 per hour


    Source: MetLife Mature Market Institute annual survey of nursing home costs in the U.S., 2004




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Age & Health - Retirement Threat #1


                                   Spending Down
               Your Retirement Assets




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      Don’t outlive your money
•              People retiring at 65 often assume their
               assets have to carry them only 20 years.
               They are going to be wrong about half
               the time.
•              This means a lot of retirees could be
               entering their nineties with investment
               portfolios that are already depleted or
               on the verge of running dry.
                Source: Ask the Expert, American Online, November 29, 2003.


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  Spending Down Retirement Assets
How Much Money Do You Need?
• A MetLife survey asked what percentage of pre-retirement income
  will be required to support yourself after your career. More than
  half of the respondents said 50% or less.
                This might be the case, but only if you:
                      – Pay off your mortgage
                      – Remain in excellent health
                      – Live in an area where living costs are low
                      – Prefer low-cost retirement activities only


• A 2001 study conducted by Georgia State University and others found,
  on average, people needed about 80% of pre-retirement income.
    Source: MetLife survey results, Money Magazine, November 2003.

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  Spending Down Retirement Assets
           How Fast Can You Draw Down
                   Your Assets?
 A MetLife survey asked what percentage of your portfolio could
 be withdrawn each year to ensure assets last a lifetime. About 27%
 of the respondents said 4% per year withdrawal rate.
                                     But, it depends upon:
                                     •    How your money is invested
                                     •    How financial markets perform
                                     •    Inflation and Taxes
                                     •    Age and Health
   Source: MetLife survey results, Money Magazine, November 2003.

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                                         Making Your Retirement Last
                                                 Source: MetLife Mature Market Institute, 2003
                                   100


                                    90

                                                       Example - A MetLife study indicates that to sustain your portfolio,
                                    80                 use an annual withdrawal rate of 4% based upon a T. Rowe Price
% Retirement Portfolio Remaining




                                                       forecast for a 60% stock, 40% bond portfolio.
                                    70
                                                       Note: A withdrawal rate that's fine in a bull market may deplete
                                                            your retirement assets much faster if the market slumps.
                                    60


                                    50                                                                         30 years
                                                                                                               35 years
                                    40


                                    30


                                    20


                                    10


                                     0
                                         4%      5%                  6%                    7%                       8%
                                                         Initial Withdrawal Rate


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                                          Inflation

                    Retirement Threat #2




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         Inflation - Retirement Threat #2

         If you had $1 million in 2000, (assuming 6% inflation)
         you need:

                                          $1.34 million in 2005, and

                                            $1.8 million in 2010

                                             Just to Stay Even!




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                   The High Cost of Inflation
                 $1,000,000 Today - Adjusted for Inflation
                             Years from now                            You will need over (rounded)
                                                                        Assume 6% annual inflation
                                          5                                      $ 1,340,000
                                          10                                     $ 1,800,000
                                          15                                     $ 2,400,000
                                          20                                     $ 3,210,000
                                          25                                     $ 4,290,000
                                          30                                     $ 5,740,000

                   Although the CPI inflation has averaged about 4% per year over the past two decades,
                   this rate does not take into account factors like housing, prescription drugs, travel, etc.
                   Source: U.S. Department of Labor, Bureau of Labor Statistics, October 2002

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                                    Risk/Volatility

                    Retirement Threat #3




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                “Safety” is Critical to Successful
                 Retirement Income Planning
              Risk Level                     Financial Vehicle
                     Higher               Stocks
                                          Limited Partnerships


                                          Mutual Funds
                                          Your Home


                                          Money Market Funds
                                          Fixed Annuities
                     Lower                Bank CDs

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                 Risk - Retirement Threat #3

    • Risk-taking is an inevitable ingredient in investing, and in life,
      but never take a risk you do not have to take. (Peter Bernstein quote)

    • Investing without research is like playing stud poker and never
      looking at the cards. (Peter Lynch quote, global-investor.com)

    • I never attempt to make money on the stock market. I buy on the
      assumption that they could close the market the next day and
      not reopen it for five years. (Peter Bernstein quote, global-investor.com)

    • Good planning involves understanding the risk, mitigating it and
      making trade-offs as needed. (What Not to Do in Retirement Planning, Forbes.com,
          May 12, 2005)




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                 Risk - Retirement Threat #3

          Tips about taking risk:
                   –   Recognize that we do not know the future

                   – You should take risk only if losses will not threaten
                     your survival

                   – You must focus on how serious the consequences
                     could be if you are wrong

                   – Make risk management a conscious part of the
                     investment process
               Source: Peter Bernstein interview, Money Magazine, October 2004



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              A Roadmap to Retirement
                            Assume Less Risk As You Get Older
                                                    Age 55 to 65
                                                     Balanced
                                     Age 45 to 55                       Age 65 to 75
                                      Growth                            Conservative

                                                                         No more than
                                                                         10% of your
                                                                                                 Age 75+
 ASSETS




                                                                        portfolio should
                                                                                                 Income
                                                                       be at risk (stocks)

                                                                                               None of your
                                                                                              portfolio should
                                                                                                 be at risk




                                                       AGE
          Source: “Why We Need to Fix the 401K”, Jane Bryant Quinn, Newsweek, August 19, 2002

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                 Risk - Retirement Threat #3

   Don’t lose money
   • In years 2000 to 2002, many people lost 20% to 50%
     of their portfolio.
          Source: Where was Your Broker in 2000-2002, Suze Orman



   • The first rule is not to lose money.
     The second rule is not to forget the first rule.
          Source: Warren Buffet quote, global-investor.com




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                 Risk - Retirement Threat #3



               Wall Street May Not Be
                                          Your Friend



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What’s Wrong in Corporate America?
• The American wage earners’ pension and 401K savings
  are now the major source of capital - making wealth more
  concentrated. (Jack Bogle, The Battle for the Soul of Capitalism, Yale Press, September 2005)

• “Our economy has suffered because managers have
  placed their own economic interest ahead of those of
  owners and investors.” (Eliot Spitzer, Attorney General, New York)

• “Capitalism has too many characters and not enough men
  of character.” (Cliff Asness, Ph.D., Managing and Founding Principal, AQR Capital Management)

• “Individual investors and beneficiaries remain helpless,
  intermediaries are passive or conflicted, and boards not
  yet effective.”(Ira Millstein, Senior Partner, Weil, Gotshal & Manages LLP)
  Source: Review comments about John Bogle’s new book, The Battle for the Soul of Capitalism, www.yalepress.yale.edu


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     Wall Street May Not Be Your Friend

 Brokerage Firms
 • “The broker is not your friend”
        He is more like a doctor who charges patients on how often they change
        medicines. He gets paid far more for the stuff the house is promoting than
        the stuff that will make you better. (Warren Buffet quote)


 • “Be careful, even if your broker is fee-based”
        Brokerage firms often team up with money managers to create personalized
        portfolios of stocks and bonds, much like a mutual fund. You won’t pay a
        commission, but fees can be very high. (Arthur Levitt quote, former SEC Chairman)

   Source: How to Sleep as Well as Your Broker, Arthur Levitt, Take on the Street, Vintage Books, 2003, p. 20, 37




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     Wall Street May Not Be Your Friend

 Brokerage Firms
 • Do you think your mutual fund - the one you
   hope will pay for your retirement - is in good
   hands?
        “When you have strong managers, weak directors, and
         passive owners, it’s only a matter of time until the
         looting begins.”

   Source: Interview with John Bogle, founder of Vanguard - one of the world’s biggest mutual
           funds, NOW WITH BILL MOYER, www.pbs.org, October 2003



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     Wall Street May Not Be Your Friend

 Fire Your Broker
 “If you have more than $50,000 to invest, you should
  fire your broker and find an investment adviser.”
     (Arthur Levitt quote)


 •      Brokerage firms would like you to think that they perform the same functions as investment
        advisers. But they’re not the same as independent investment advisers.
 •      Most brokers do not have a fiduciary duty (a legal obligation) to put your interests above his/her
        interests or that of the firm. In any case, an investment adviser’s fiduciary duty is on a higher
        plane.
 •      There are different kinds of investment advisers, depending upon their qualifications and how
        they are paid. Most charge fees or commissions.
 •      Be sure you find an adviser who can offer you a wider array of investments to lessen the chances
        of conflict of interests and provide you with more diverse investment choices.

     Source: How to Sleep as Well as Your Broker, Arthur Levitt, Take on the Street, Vintage Books, 2003, p. 34-36

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                                          Fees

                    Retirement Threat #4




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       Fees Can Drastically Affect
             Your Returns
       • Most individuals ignore the effects of
                high investment fees

       • They watch the tab for dinner more
       closely than examining the fees they see
                   . . . or don’t see!

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                 Fees - Retirement Threat #4
   Many retirees consider a 2 percent annual fee
   to be quite low, but they don’t realize that it is
   “really a punishing levy”.
      Example:
                    If you invest $10,000 in a domestic stock fund with an
                    expense ratio of 2 percent and a sales load of 3 percent, and
                    you get an annual return of 7.5 percent for 20 years, your
                    money would almost triple to $27,508. But, you would have
                    lost $14,970 in fees and foregone earnings over the 20 years.

                    Therefore, you made only: $27,508 - $14,970 = $12,538 or 46%.
                    Due to fees, you lost the opportunity to realize 54% of the gain.
       Source: High Fees Strangle Returns, Arthur Levitt, Take on the Street, Vintage Books, 2003.


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                  Fees - Retirement Threat #4
    Mutual Funds
  Americans have over $3 trillion invested in actively
  managed stock mutual funds and another $800 million
  invested in actively managed bond funds.
  • Experience clearly shows that fund managers’ stock and bond picking
    abilities usually fall short of their considerable fee-imposing abilities.
  • Mutual fund companies run up at least $70 billion per year in costs for
    investors in their attempts to beat the market.
  • “In total, expect to pay something in excess of 4% (fees) on your fund assets
    for a load fund. If you are good at picking only no-load funds, you should
    still expect (fees) totaling close to 3% per year. Compound these (fees) over
    your lifetime and you’ll see the serious bite they take out of your savings.”

Source: The Great Mutual Fund Trap, Gregory Baer & Gary Gensler, Broadway Books, 2003, p. 108-109
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                 Fees - Retirement Threat #4
Mutual Funds
Over 55 years ago, John C. Bogle (founder and former Chairman of the
Vanguard Group) sat in Princeton University’s Firestone Library and
contemplated his thesis topic on mutual funds.

• Over a half-century ago, Jack Bogle noted that the mutual fund industry was an
  industry in which the idea was to “sell funds that offer the small investor peace
  of mind, an industry primarily focused on stewardship”.

•     In contrast today, Bogle notes the mutual fund industry is one “focused
      primarily on salesmanship”, an industry in which “marketing (determines)
      what we sell, and in which short-term performance is the name of the game”.


    Source: Remarks before the Harvard Club of Boston, John C. Bogle, January 14, 2003


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                 Fees - Retirement Threat #4
   Mutual Funds
 “The way mutual funds are sold and managed reveals a
  culture that thrives on hype, promotes short-term
  trading, and withholds important information.”
        - The industry can mislead investors into buying funds on the basis of past
          performance, which should be only one of several factors to consider.

        - The industry spends millions of dollars on marketing, but does a
          relatively poor job explaining the effect of annual expenses, sales loads,
          and taxes on investment returns.

   Source: The Seven Deadly Sins of Mutual Funds, Arthur Levitt, Take on the Street, Vintage Books,
          2003, p. 46-47

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                 Fees - Retirement Threat #4

       Fees - a “Punishing Levy”
 • The way fees are automatically deducted from a fund’s returns makes
   them all but invisible. You never see an invoice and you never have
   to write a check.

 • Fees can be confusing, but not impossible to figure out if you know what to
   look for:
       - The fee table at the front of the prospectus lists one-time fees (e.g. front-end and back-end loads)
         and recurring charges (e.g. advisory fees and distribution fees that can include advertising).

      - The Expense Ratio is the percent of total fund assets (your money) eaten up by annual fees.
        Although it is used to comparison shop among funds, beware that it does not include the loads,
        which are charged only once.


   Source: High Fees Strangle Returns, Arthur Levitt, Take on the Street, Vintage Books, 2003, p. 50-51


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                 Fees - Retirement Threat #4

       Fees - Hidden from View
 • Stock pickers, accountants, distributors, transfer agents, brokers,
   advertisers, attorneys, custodians and others suck steadily at the
   $7 trillion inside mutual funds.

 • Once recent challenge by New York Attorney General Eliot Spitzer is
   that “fund companies hide steep trading expenses from their customers”.

 • “For every dollar you know you spend on fund expenses, another 40 cents
    is hidden from view,” said Mercer Bullard, a University of Mississippi
    assistant professor who acts as an investor advocate at www.fund democracy.com

   Source: Constant drip of fees can soak mutual fund owners, Mark Davis, Business Spotlight,
           news-press.com, 2004

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                 Fees - Retirement Threat #4

 “Just follow the money”
 •      Variable annuities, mutual fund B shares, and brokerage firms’ in-house
        funds rank among Wall Street’s more dubious offerings. Yet brokers often
        are relentless in pushing these products, even when they aren’t in the
        client’s best interest.

 •      Fund A shares charge big upfront commissions, while B shares levy both
        higher annual expenses and a back-end sales charge if you sell in the first
        six years or so.

 •      But, regardless of the fund type, the brokerage firm immediately collects a
        4% or 5% commission from the fund company. The selling broker then
        gets perhaps 40 percent of this 4% or 5% commission.

 Source: Brokers’ sales tactics stunt investment growth, Jonathan Clements, Wall Street Journal, 2004



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                 Fees - Retirement Threat #4

 “Just follow the money”
 •      Many variable annuities charge both hefty annual expenses and a high
        surrender charge, making it tough to earn decent returns.
 •      While investors may not like variable annuities, brokers love them. As with
        Fund B shares, there are usually no breakpoints (reduced commission) on
        large investments and investors tend to sit tight due to surrender charges.
 •      Brokerage firms often collect commissions of more than 5% commission
        on variable annuities, making them a tempting product for income-hungry
        brokers.
 •      The best way for brokers to collect a fistful of commissions is to land new
        accounts. But, because brokers spend so much time hunting for new
        customers, they tend to neglect existing clients.
 Source: Brokers’ sales tactics stunt investment growth, Jonathan Clements, Wall Street Journal, 2004


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                                          Taxes

                    Retirement Threat #5




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               Taxes - Retirement Threat #5
      Income Tax Mistakes
      • Retirees who pay income tax on earnings
        they are not using, for example:
                       Last year, one senior couple earned $64,000 from their investments.
                       and received $20,000 in social security income. They spent $24,000
                       of the investment earnings and all of the $20,000 social security income.

                       By moving the extra earnings of about $40,000 (the $84,000 income earned
                       less $44,000 income used) to a tax-deferred vehicle, they could save about
                       $15,000 in income taxes.

      • Retirees who pull too much money out of
        IRA funds instead of taking money out of
        regular non-IRA accounts
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               Taxes - Retirement Threat #5
 Estate Planning Mistakes
 Retirees who do not plan their estate properly can leave
 much of their wealth in the hands of the IRS upon death.

          • The so-called “Death Tax” threshold in 2005 is $1.5 million,
            the amount below which no federal estate tax is paid

          • Since 2003, the top death tax rate has dropped from 50% by
            1% per year (e.g. 45% in 2009)

          • In the year 2010, the top estate tax rate is scheduled to be 0%

          • But, unless new legislation is passed, the estate tax threshold
            will return to $1 million in 2011, with a top tax rate of 50%

© 2005 - Phillip Roy Financial Services                     Call us Toll Free: 1-888-225-8161
                                          This Means
                         for Sizeable Estates,

                                          The IRS is
                                      Your Partner!

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               Taxes - Retirement Threat #5
    Estate Planning Mistakes
    Retirees who do not properly use gift tax rules to
    reduce their taxable estate

             • Retirees may gift $11,000 to anyone on an annual basis
                  e.g. This money could be used to pay premiums on a life insurance policy


             • Life insurance can be used to help assist heirs in paying
               estate taxes

             • Life insurance can also be used to transfer wealth tax-free



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                                          Einstein
                                            and
    The Wonder of Tax Deferral



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          The Wonder of Tax-Deferral
     Compound Interest and the Rule of 72
•                                 Albert Einstein is credited with discovering the
                                  compound interest Rule of 72.


• Albert Einstein (1879-1955) called compound interest the
  8th Wonder of the World - it can work for you, or against you:
                 - When you invest, it works for you.
                 - When you borrow, it works against you!
• Making interest on interest, the power of compounding interest,
  is truly magical:
                                  At 15% interest for 25 years, $10,000 would grow to $330,000.

      Source: Compound Interest . . . The 8th Wonder, brainyquote.com/quotes/authors


© 2005 - Phillip Roy Financial Services                                                Call us Toll Free: 1-888-225-8161
          The Wonder of Tax-Deferral
     Rule of 72
•     Find the average annual return on your investments from your
      financial statements. This is your growth rate.

•     Divide 72 by your growth rate. This is the number of years it
      will take for your investment to double, assuming your rate of return
      remains constant. Keep in mind that rates of return for most
      investments are not guaranteed.
      Example:
           If you put $2,000,000 in a tax-deferred retirement account, it will grow to $4,000,000
           in 9 years, assuming a constant growth rate of 8%.

                However, it will take 14 years for the $2,000,000 to double in a taxable account
                at that same 8% annual rate of return (assuming a 33% tax rate).



© 2005 - Phillip Roy Financial Services                                           Call us Toll Free: 1-888-225-8161
          The Power of Tax Deferral
                                    $100,000 Initial Investment
  $600,000                                                                                                                         $574,350


                          Hypothetical Example
  $500,000                Not representative of any particular product                                                                        $441,532



  $400,000                                                                                                              $355,654
                                                                                               $320,714

  $300,000                                                                                                $258,914
                                                                                    $232,998

                                                                 $179,084
  $200,000                                            $152,642           $156,940
                                $133,822
                     $123,488              $124,352

  $100,000

            $0
                        5 Years                         10 Years                       20 Years                            30 Years
                          Taxable Account                   Tax-Deferred Account                   Tax-Deferred Account After Tax


                      Assumes 28% Tax Bracket; Hypothetical Annual Return of 6%


© 2005 - Phillip Roy Financial Services                                                                              Call us Toll Free: 1-888-225-8161
    Wealth Management Pitfalls




© 2005 - Phillip Roy Financial Services   Call us Toll Free: 1-888-225-8161
    Top 10 Wealth Management Pitfalls
                    1.        Neglecting Your Retirement Savings
                    2.        Choosing the Wrong Investment Strategy
                    3.        Drawing Down Assets in Retirement
                    4.        Leaving Assets Unprotected
                    5.        Mismanaging Cash Flow
                    6.        Mismanaging Debt
                    7.        Mismanaging Windfalls
                    8.        Failing to Maximize Retirement Plan Benefits
                    9.        Failing to Plan Your Estate
                   10.        Leaving Heirs Unprepared

                    Source: Top 10 Wealth Management Pitfalls, Sue Stevens, Morningstar, May 13, 2004


© 2005 - Phillip Roy Financial Services                                                Call us Toll Free: 1-888-225-8161
    Top 10 Wealth Management Pitfalls
            1.      Neglecting Your Retirement Savings
                    - Have years flown by without increasing your retirement savings?
                    - Should you fire your broker and hire an independent financial advisor?

            2.      Choosing the Wrong Investment Strategy
                    - Do you know how to protect and preserve capital?
                    - Have you misjudged your risk tolerance?
                    - Are you re-balancing your portfolio periodically?

            3.      Drawing Down Assets in Retirement
                    - Will you run out of money?
                    - Do you know how to manage taking your Required Minimum Distributions?

            4.      Leaving Assets Unprotected
                    - Do you have adequate life insurance?
                    - Have you considered Long Term Care insurance?
                    - Do you have enough liability insurance coverage?

             Source: Top 10 Wealth Management Pitfalls, Sue Stevens, Morningstar, May 13, 2004


© 2005 - Phillip Roy Financial Services                                               Call us Toll Free: 1-888-225-8161
    Top 10 Wealth Management Pitfalls
            5.      Mismanaging Cash Flow
                    - Are you minimizing your taxes?
                    - Are your capital loss carry forwards being managed to
                      maximum advantage?

            6.      Mismanaging Debt
                    - Can you better use cash values of life insurance policies?
                    - Are you paying too much in fees and interest?
                    - Could you use a mortgage to better manage debt?

            7.      Mismanaging Inheritance
                    - Over the next 10 years, $10 trillion will pass from generation to generation.
                    - Most heirs don’t know how to integrate that wealth into their own portfolios.

            8.      Failing to Maximize Retirement Plan Benefits
                    - Do you know that when you take distributions from nonqualified plans,
                      they are immediately taxable?
                    - Do you know the tax issues, cash flow considerations, and potential penalties in
                      IRA rollovers?
               Source: Top 10 Wealth Management Pitfalls, Sue Stevens, Morningstar, May 13, 2004

© 2005 - Phillip Roy Financial Services                                                Call us Toll Free: 1-888-225-8161
    Top 10 Wealth Management Pitfalls
            9.      Failing to Plan Your Estate
                    - The best way to care for your family if something happens to you is to put
                       an Estate Plan in place.
                    - After setting up a plan, be sure to fund the trusts and change the beneficiary
                       designations on life insurance, IRAs, etc.
                    - Planning should include considerations for disability as well as death, and
                      include:
                           . Powers of attorney for health care and property
                           . Living trusts

            10. Leaving Heirs Unprepared
                    - A big concern for families with significant wealth is how to teach their heirs to
                      responsibly manage their inheritance.
                      You can set up children’s trusts within estate documents that stagger the ages for
                      access to the money over time - e.g. at ages 25, 35, and 45.

                    - Another concern is who might actually inherit the estate that you intended to
                      leave to your children. A Dynasty Trust can be used to insure your bloodline
                      will inherit your estate regardless of unanticipated events like divorce.

                 Source: Top 10 Wealth Management Pitfalls, Sue Stevens, Morningstar, May 13, 2004

© 2005 - Phillip Roy Financial Services                                                 Call us Toll Free: 1-888-225-8161
                                  What is needed?
   • New financial products with up-to-date, expert advice:
                    – Old savings benchmarks and advice are simply outdated
                    – Tax codes and investment opportunities have changed


   • Retirement Income Planners (RIP) must be more
     creative and resourceful in helping clients decide:
                    – What retirement means to each individual, and
                    – How to achieve those financial and personal goals




© 2005 - Phillip Roy Financial Services                            Call us Toll Free: 1-888-225-8161
                           Solutions for
                     Your Retirement Nest Egg
                                        Beat      Reduce Risk/
                                      Inflation    Volatility
     Eat                                                                 Lower
    Healthy                                                               Fees

     Stay                                                            Minimize
    Active                                                            Taxes



© 2005 - Phillip Roy Financial Services                   Call us Toll Free: 1-888-225-8161
                                  What is needed?
 Comprehensive independent financial planning
 to:
         • Keep Your Retirement Money Safe
         • Help You Make Money on Your Money
         • Provide You With Easy Access to Your Money
         • Help with Estate Planning, Wealth Creation
           and Wealth Transfer
         • Minimize Your Tax Consequences

© 2005 - Phillip Roy Financial Services          Call us Toll Free: 1-888-225-8161
   About Phillip Roy Financial Services
Phillip Roy Financial Services, LLC (PRFS) provides financial services to qualified clients,
including opportunities to invest in hedge funds and alternative investments. Any discussion
of investments and investment strategies of funds (including current investment themes,
research and investment processes, and portfolio characteristics) represents the views of
PRFS at the time of publication. All expressions of opinion included herein are subject to
change without notice and are not intended to be a guarantee of future events.

This document is supplied by PRFS for information only and does not constitute a
solicitation to buy or sell securities. Opinions expressed herein may differ from the opinions
expressed by other businesses and activities of PRFS. Although information and opinions in
this document have been obtained from sources believed to be reliable, we do not warrant
the accuracy or completeness and accept no liability for any direct consequential losses
arising from its use. The information is representative of PRFS viewpoints at the time of
publication. Not all products and services are available at all locations and not all
instruments are suitable for all investors.




 © 2005 - Phillip Roy Financial Services                              Call us Toll Free: 1-888-225-8161
                                  Unforgettable Quotes
 • The most powerful force in the universe is compound interest.      (Albert Einstein)

 • A big part of financial freedom is having your heart and mind free from worry about the what-ifs
   of life. (Suze Orman)

 • You should invest in a business that even a fool can run, because someday a fool will.             (Warren Buffet)

 • The list of qualities an investor should have include patience, self-discipline, common sense, a
   tolerance for pain, open-mindedness, detachment, persistence, . . ., and the ability to ignore
   general panic. (Peter Lynch)

 • For some reason people take their cues from price action rather than from values. Price is what
   you pay. Value is what you get. (Warren Buffet)

 • Insanity: doing the same thing over and over again and expecting different results. (Albert Einstein)

 • The indispensable first step to getting the things you want out of life is this: decide what you want.
   You can do what you think you can do and you cannot do what you think you cannot. (Ben Stein)

 • Winning at money is 80 percent behavior and 20 percent head knowledge. Most of us know what
   to do but we just don’t do it. (Dave Ramsey)

 • First time a Victim; second time a Volunteer. (Suze Orman)



© 2005 - Phillip Roy Financial Services                                              Call us Toll Free: 1-888-225-8161

				
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Description: Introduction to Retirement Income Planning Phil Wasserman -Aging is humanity's greatest, most important,and most enduring discovery.