Great Western Consulting LLC Welcome to Our Exclusive Workshop on how to INCREASE your monthly income and reduce your taxes My Promises to you • Promise # 1: I will prove that, just because you become ill, you do not have to give your dignity and assets away. • Promise #2: I will introduce you to ways you can INCREASE your monthly income and save on taxes. • Promise #3: I will explain to you about the new types of ANNUITIES that increase your monthly income and cut your taxes. • Promise # 4: How to mathematically design your portfolio so you never lose your principal or run out of money. • Promise # 5: How to use annuities to protect your assets and still qualify for Medi-Cal assistance by using Medi-Cal Retirement. 7 Ways Seniors Mess Up Their Finances. • Paying too much in taxes. • Not protecting your • How To Make Your assets. Capital Work Harder for • Protecting yourself from You. Health Care • Having your assets in Catastrophes. joint tenancy. • The shocking truth how • Avoiding Federal Estate seniors spend more time Taxes with Tax Reduction planning a vacation Strategies. rather than planning their estate. Let Me See A Show of Hands. How Many People Own CD’s or Money Market Accounts? How Many Have Annuities or IRA’s or Roth IRA’s? How Many Feel their Paying Too Much in Taxes? How To Reduce your Taxes and Increase your Income. • Tax reduction strategies • Ways to increase your monthly income. • Now you can have deduct up to $2,000,000.00 in Estate Tax-free Tax Reduction Stategies • By having your money in non tax deferred products like CD’s you will lose from 15- 40% in taxes. • By investing in a tax deferred annuity you can increase your monthly income. How To Make Your Capital Work Harder for You • How to reduce your taxable income • How to increase your monthly income Advantages of Joint Tenancy • Probate Avoidance: Assets held in joint Tenancy do not require a formal probate. • Convenience: At the time of death accounts can be withdrawn at death or managing during incapacity by the Joint Tenant. Disadvantages of Having Your Assets in Joint Tenancy • Loss of control • Assets may not reach your children • Increased liability • Potential tax penalties * Capital gains tax penalty * Gift tax penalty * Estate tax penalty Avoiding Federal Estate Taxes with Tax Reduction Strategies • Just like any other asset, it’s included in your estate for estate taxes--plain and simple. • But unlike other types of assets, several annuities we sell come with estate tax riders (from 28% to 40%) to pay for estate taxes! Not Protecting Your Assets • Avoiding Probate • Avoiding Estate Taxes • Avoiding Catastrophic health problems Our Goal… • Help you Protect and Preserve your Assets for you and your Loved Ones. An Entire Lifetime of Work to Build your Estate Could be Greatly Reduced at Death by PROPATE. Peace of Mind What is Probate? Probate is the legal process that your family may go through when you die with or without a will. The probate court and your executor, or court appointed administrator, makes sure your debts are paid, establishes clear title to your property and then distributes what is left of your assets according to your will. Disadvantage of Probate • Public Disclosure of Personal Wealth • The Cost of Probate • Delays to Your Heirs • Legal Fees • Executor Fees • Physical and Emotional Stress • Possible Forced Asset Liqidation One Advantage of Probate One advantage of the probate process is that creditor claims must be filed within a set time period, such as three to six months from the start of probate to be considered against estate. This can v\be valuable if decedent was in an occupation susceptible to lawsuits. What Do You Know About… • Estate Planning • Living Trusts • Probate • Wills You and your family’s financial security and the ability to achieve your estate planning goals rests on your ability to make good decisions. If you Don’t Plan your Estate, the Courts Will! Protecting yourself from Health Care Catastrophes. • Home Health Care • Nursing Home Costs • Medicare & Medi-cal The shocking truth how seniors spend more time planning a vacation rather than planning their estate. • Is there anyone in the room that feels they’ve spend more time planning their vacation than planning their estate. • Please don’t raise your hands! Would you invest in this investment property? The following is Guaranteed in writing: • Price is $250,000 • No Annual fees apply • No repairs or maintenance required • You pay nothing in taxes until it is sold • And in just five years your local Banker will buy it back from you for $319,000. • Let me see a show of hands who would be interested in buying this property Plus, You Can Purchase This Property Without Paying a Commission. • What I’ve just described in the previous panel is a 5% Interest, Tax-Deferred, Fixed Annuity! IF your Looking For Safety Of Principal It’s Time for a Tax Deferred Annuity What I’ve just Described is a Five- Year, 5% Interest, Tax-Deferred, Fixed Annuity By having your money in a CD you will lose 15% to 35% due to taxes If you’re currently earning 3% on a CD and you’re in a 28% tax bracket, when over 1% of your return goes to pay taxes leaving you less than 2%. When you subtract from that what’s eaten up by inflation, which is currently averaging about 3.5%, you’re actually losing one- half percent in purchasing power! In that same 28% tax bracket, you would have to earn over 10% in a bank CD to beat the 7.5% Tax-Deferred return on the annuities that we offer. Annuities, simply put, are “TAX DEFERRED.” You don’t pay taxes until you take your money out to spend it. Benefits of Annuities • Avoids Probate • No Current Federal Tax • No 1099’s Issued • No Commissions charges to your principal • 100% of Your Principal earns interest. Just say NO to 1099s Unlike a bank CD, an annuity offers interest that grows tax-deferred. No income taxes are due until the funds are withdrawn. This graph shows the difference this tax-deferred advantage can make. This example assumes $100,000 invested at 5% annual compounded rate of return, at a 33% tax bracket. $265,330 tax-deferred $300,000 $250,000 $193,290 taxable $200,000 $150,000 $100,000 5 Years 10 Years 15 Years 20 Years Get the advantage of triple compounding with an annuity. Growth if tax-deferred You will: Growth if taxable .Earn interest on your money. .Earn interest on your interest. .Earn interest on the money you would have lost in taxes. Annuities Give You Triple Compounding: Your principal earns interest. Money you would normally pay the IRS every year earns interest. Your interest earns interest. The power of tax-deferral means your money can grow much faster, and because there are no sales charges, 100% of your money goes to work immediately. Can your CD get money to you quickly? Would you like more liquidity? CD Annuity Withdraw a certain percentage every year at any time? No Yes Withdraw in the event of nursing home needs? * No Yes Loan privileges? No Yes Start an income stream you cannot outlive? No Yes Withdraw penalty free required minimum distributions? No Yes Withdraw money for dollar cost averaging opportunities? No Yes Disappearing surrender charges? * No Yes * Availability of benefits vary by product. What is the Real Rate of Return on your Money? What cripples a CD the most? Returns Inflation Taxes Premium Amount $100,000.00 Interest rate 4.5% + $4,500.00 Taxes 33% - $1,485.00 Amount after tax = $103,015.00 Inflation 3.5% - $3,605.53 Amount left = $99,409.48 Net Loss ($590.52) Taxing of Social Security A single, retired person who receives $950 per month ($11,400 annually) from Social Security, a pension of $1,600 per month ($19,200 annually) 1/2 of Social Security $5,700 Pension + Taxable Accounts +33,600 Total Combined Income $39,300 Threshold (Single) -25,000 Exceeded Threshold $14,300 Income in excess of Threshold 50% x $9,000 = $4,500 85% x $5,300 = $4,505 SOCIAL SECURITY SUBJECT TO TAX $9,005 POTENTIAL TAX ON SOCIAL SECURITY *$2,521 (*Based on a 28% Federal 1999 income tax bracket.) An additional tax was created because Social Security became taxable. A potential tax increase of $2,521. (28% of $9,005 = $2,521 in taxes) Threshold Income Limits If income (which includes half of Social Security), exceeds the following thresholds, up to 85% of the amount received from Social Security could be subject to tax: Social Security In 1983 Congress legislated that up to 50% of Social Security could be taxed when combined income exceeded threshold limits. In 1993 the law was amended again to allow up to 85% of Social Security Income to be taxed under certain conditions. Can your CD get money to you quickly? Would you like more liquidity? CD Annuity Withdraw a certain percentage every year at any time? No Yes Withdraw in the event of nursing home needs? * No Yes Loan privileges? No Yes Start an income stream you cannot outlive? No Yes Withdraw penalty free required minimum distributions? No Yes Withdraw money for dollar cost averaging opportunities? No Yes Disappearing surrender charges? * No Yes * Availability of benefits vary by product. What Is Threshold Income? INCOME INCLUDED AS THRESHOLD Deferred Annuity No Pension Yes Income from Mortgages Yes US Treasuries Yes Certificates of Deposit Yes Money Market Accounts Yes Passbook Savings Yes Credit Union Savings Yes Dividends - Stocks Yes Dividends - Mutual Funds Yes Capital Gains Yes Municipal Bonds Yes Annuity - Withdrawals Yes It’s Important That You Plan Your Retirement • You need a “backup retirement plan” in case of a market disaster or if you personally have a health or economic disaster. • You need to check out all the alternatives that will protect your assets and save you money on taxes. The bottom Line It’s not just what you earn on your investments that matters…it’s what you keep that counts! How you can avoid Nursing Home Spend-down Rule and Protect your Assets from Greedy people and from Medi-Cal Are You Afraid that you Will Have To Go To A Nursing Home And Not Be Able To Afford It? Recent studies indicate that one in two people over 65 will spend time in a nursing home * The average stay in a nursing home is approximately 3 years. Did You Know? Did you know that according to the Select Committee on aging of the U.S. House of Representatives, the average American couple will have their entire savings wiped out in as little as 13 weeks of having someone confined on a nursing home? Common Myth “It will never happen to me.” Over 50% of all Americans will need long term care in their lifetime. Over 70% of Alzheimer’s Disease people live at home and receive 75% of their support and assistance from family. For a couple reaching 65, there is a 75% chance that one of them will enter a long-term care facility. My family or someone else can take care of me. Here Are Some Disturbing Facts… Today the average cost of nursing home care is over $40,000 annually. (1) Home health care costs an average of $30,000 annually. (1) Most nursing homes only have a limited amount of Medicaid beds. (2) The shocking truth is the government can take your estate to recover long-term care costs. (3) 1. Health Care Financing Review 1996 2. .Journal of Health Politics, Policy and Law 1994 3. US Health Care Financing Admin.2001 Remaining spouse at home can’t have more than $2,000 a month income from all sources. The spouse still living at home can keep the home and one car. Maximum limit of assets depend on each state. The average is $75,000. These assets will be established when the first spouse enters a nursing home. Remaining spouse at home can’t have more than $2,000 a month income from all sources. The spouse still living at home can keep the home and one car. Maximum limit of assets depend on each state. The average is $75,000. These assets will be established when the first spouse enters a nursing home. Common Myth “It will never happen to me.” Over 50% of all Americans will need long term care in their lifetime. Over 70% of Alzheimer’s Disease people live at home and receive 75% of their support and assistance from family. For a couple reaching 65, there is a 75% chance that one of them will enter a long-term care facility. My family or someone else can take care of me. The Odds are 1 Out of 2 While the general population perceives the risk of needing long-term care services to be less than 25%, the actual risk for needing long-term care (either home care or nursing home care) is greater than 50%. (1) Health Insurance Association of America/Life Plans. Which Assets Count for Medicaid Spend Down? • Non-Countable • Countable • Car • CD’S • Home • Bonds • Burial Plan • Stock • Jewelry • Vacation Homes • Mutual Funds • Cash Investments *36 Month Look-Back People Who Benefit from the Appointment 1. If you own annuities that have dropped in value or interest rate 2. If you have a desire to see if you can increase your monthly income and reduce your taxes. 3. If you have know idea what your investments are earning after taxes. 4. If you want to make sure the nursing home doesn’t take your life savings. May I see a show of hands of people in the last two years have lost between 10% to 70% of their portofolio? Wouldn’t you agree if you went to the emergency room the doctors would stabilize you and stop the bleeding? (While I stop the losses). This is important! We create a plan to make sure you never lose money again. IF YOU WANT TO INCREASE YOUR MONTHLY INCOME AND REDUCE YOUR TAXES... THEN MAKE AN APPOINTMENT AT THE END OF THE SEMINAR! MY JOB IS TO DESIGN A RETIREMENT PROGRAM THAT WILL GIVE YOU MORE MONTHLY INCOME AND SAVE YOU TAXES My goal is to make sure you never run out of money and you avoid any market risk to your principal IF YOU FEEL YOU’VE LEARNED SOMETHING FROM THIS WORKSHOP AND WOULD LIKE TO TELL A FRIEND. Please fill out a referral form and we will invite them to our next Dinner Seminar. THANK YOU FOR ATTENDING OUR WORKSHOP! John Let’s Eat!
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