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Created with Fabric.js 1.4.5 EXPIRE 2008 RETIRE 1. Buy Term2. Invest the Difference in 401(k)3. Live Off Interest AQUIRE Bob & Betty Tom & Tina Contribute $30,000/Year to 401(k) Contribute $10,000/Year to Whole Life Stocks Combined Income: $200K $200K $18,000 $12,000 $18,000 $2,000 Whole Life Cash Value: $625,000 1970 2005 2011 Comparable ROR to Bonds -$930,000 Combined Income: Age: 30/30 Savings Rate: 15% Savings Rate: Product(s): 401(k) Product(s): 401(k) Retirement Balance: $3,000,000 $2,925,000 -$1,200,000 -$225,000 -$270,000 $355,000 $1,725,000 Retirement Balance: Retirement Balance: $1,575,000 Betty Widowed TinaWidowed $,157,500 $138,000 401(k) Withdrawal: -$150,000 Retirement Balance: $1,507,500 -$375,000 $2,883,000 Retirement Balance: Life Insurance on Tom: $1,380,000 2023 -$600,000 Retirement Balance: $907,500 $700,000 Age: 65/65 Betty Passes Life Style Life Style Age: 67/67 Age: 70 Life Style Age: 82 -$1,200,000 $1,630,000 Age: 30/30 25%Taxes on 401(k): -$226,875 $680,625 Legacy: $270,000 $225,000 $375,000 $1,200,000 $600,000 $1,050,000 Total $2,000,000 ASSET PROTECTION ASSET REPLACEMENT $150,000 Life Style Bob & Betty Tom & Tina 1. Spend time with family2. Travel around the world 3. Leave a legacy to -Children -Grandchildren -Charity. $2,300,000 Contribute $20,000/Year to 401(k) Stocks Whole Life Policy has riders: Term Life Whole Life Chronic Illness Accelerate Benefit Disability Waver of Premium Bonds 1. Spend time with family2. Travel around the world 3. Leave a legacy to -Children -Grandchildren -Charity. The Dream The Plan 1. Whole Life & 401(k)2. Asset Protection from Risks: -Market -Longevity -Disability -Inflation -Lawsuit -Tax Rate3. Asset Replacement 4. Live Off Interest & Principal The End The Retirement The Loss The Crisis 401(k) Withdraws: -$225,000 -$300,000 $300,000 Life Insurance on Tina: Retirement Balance: $2,883,000 Legacy: $680,625 The Plan: #3 Total Bob Dies: When Bob and Betty were young, they chose to buy Term insurance and kept the policy in force until retired. Atretirement age the cost of Term became unmanageable, soThey did not renew their policy. Tom Dies: When Tom and Tina were young they realized thatWhole Life will not only replace salary if one of them shoulddie in their working years, but also replace their assets throughout their retirement. Total Contributions to Retirement Savings: $1,050,000 Total Contributions to Retirement Savings: $1,050,000 $2,000,000 Spent on Life Style (Traveled to 27 Countries): Spent on Life Style (Traveled to 6 Countries): $2,000,000 Legacy: Legacy to Family and Charities: $680,625 $680,625 COLOR KEY: Retirement Savings Investment Insurance Life Style Legacy $225,000 $200,000 Retirement Balance: Balance 2014 15% $1,380,000 $2,300,000 $700,000 $420,000 Balance ------------------------------------ Global Ecconomic Crisis Bonds Savings at Retirement: $3,000,000 Duration: 35 Years Duration: 35 Years $2,300,000 $1,335,000 $2,200,000 $60,000 $100,000 $700,000 Savings at Retirement: $3,000,000 $2,300,000 $700,000 $2,300,000 $700,000 $,157,500 25%Taxes on 401(k): -$226,875 $,157,500 1. Buy Term Life2. Invest in 401(k)3. Live Off Interest4. Hang in and Wait The Global Economic Crisis of 2007-2008 wiped out 40% ofBob and Betty's Retirement Savings.Their Reaction: "Hang in there, the market will turn around". Their Reaction: Rather than drawing from their 401(k), they drew income from Whole Life. Since their 401(k) is at workcreating income, they want to give it a chance to recover. TinaPasses The Plan: #2 The Global Economic Crisis of 2007-2008 wiped out 40% ofTom and Tina's 401(k), but the cash value of their Whole Lifewas not affected since it is not connected to the market. The first three years Bob and Betty traveled to 4 countriesand spent 6 weeks visiting family. The first three years Tim and Tina traveled to 7 countriesand spent 6 weeks visiting family. $225,000 Whole Life Divedends: 401(k) Profit/Loss: 401(k) Increase: Bonds: 401(k) Profit/Loss: 401(k) Profit/Loss: 401(k) Profit/Loss: 401(k) Profit/Loss: 401(k) Profit/Loss: 401(k) Profit/Loss: 401(k) Withdraws: 3 Years 10 Years 3 Years 3 Years 401(k) Withdraws: 401(k) Withdraws: Whole Life Withdrawals: Bonds: Bonds Value: Bonds: 401(k) Withdrawal: 401(k) Withdrawal: 401(k) Withdrawal: Whole Life Divedends: Whole Life Withdrawal: Stocks Value: Whole Life Cash Value: Whole Life Cash Value: Whole Life Cash Value: Whole Life Divedends: Whole Life Divedends: Whole Life Withdrawals: --- $8,000 Whole Life Withdrawals: $8,000 $8,000 $8,000 Balance ------------------------------------ Balance ------------------------------------ Balance ------------------------------------ --- --- --- --- --- Stocks Value: Stocks Value: Stocks Value: Bonds Value: Bonds Value: Bonds Value:
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