1. THE GOVERNMENT PLAN
IRA 401(k)

2. Let’s Take A Hypothetical Look…
I have a business proposal for you
You front all the money.
You take all the risk.
You manage the business on a day to day basis.
30 years from now I’ll tell you how much I own.
Do you want to go into business with me?

3. THE GOVERNMENT PLAN 25-35% Ordinary Taxable Income
40 Years
10% Penalty
Age 19-1/2
11 Years
100%
Age 59-1/2
30 Years
50% Penalty
Age 70-1/2
25-35% Ordinary Taxable Income
10% Early Withdrawal Penalty
35-45% TOTAL TAXABLE
80 to 85% of the time
THE OWNER IS IN THE PENALTY PHASE
What value does money have if you can’t use it?
IS THIS DESIGNED FOR YOU, YOUR FAMILY,
OR UNCLE SAM?
Let’s look at what the government has planned for our retirement. Read the slide.

4. Putting Dollars in Perspective
One Million Seconds…………
One Billion Seconds………….
One Trillion Seconds…….
11.5 days
31.6 years
31,688 years

5. Future Tax Rates
What do you think? %
Lower
Higher
Stay the Same

6. Four Phases of Retirement Planning
If we think taxes are going to be Higher….
Is postponing taxes really a good idea?
When should we start doing tax planning?
YFB
11/12/2018

7. Getting a Plan in Place Design Accumulation Distribution YFB
11/12/2018

8. Four Phases of Retirement Planning
Tax Favored
Contribution
Accumulation
Taxed
Withdraw
Transfer
YFB
11/12/2018

9. Annual Taxes Deferred = $1,200
Annual IRA or 401k Contributions
$6,000
for 40 Years = $240,000
Tax Bracket 20%
Annual Taxes Deferred = $1,200
40 year savings = $48,000
YFB
11/12/2018

10. Annual IRA or 401k Contributions
7% for 40 years =
$1,281,657
Withdrawal Annually =
$175,000
28.00% Federal Tax Bracket
-$36,247*
Net Income = $138,743
*2014 Tax Table: ($175,000x28%)-$12,753 = $36,247 Married filing jointly
YFB
11/12/2018

11. Annual IRA or 401k Contributions
During the retirement years
(ages 65-87)
$834,302 in taxes are paid
Vs.
$48,000 taxes saved during the contribution years
YFB
11/12/2018

12. Annual IRA or 401k Contributions
In the first 1.5 years of retirement, every dollar of taxes saved is paid back.
A person living a normal life expectancy drawing income from a qualified retirement plan can pay more than 17.5 times the taxes saved during the contribution years.
YFB
11/12/2018

13. What About Contributing to an 401(k)?
You Contribute $6,000 a year for 40 years at a 7% rate of return with no match.
Your account would be worth $1,281,657!
YFB
11/12/2018

14. You get to defer $1,200 a year for 40 years in a 20% tax bracket.
You get to defer the TAX!!!
You get to defer $1,200 a year for 40 years in a 20% tax bracket.
$48,000 Deferral
YFB
11/12/2018

15. The Withdraw Period You run out of Money at age 73!
You withdraw $175,000 a year at age 65 with a 4% rate of return.
You run out of Money at age 73!
YFB
11/12/2018

16. The TAX BILL!!!
You withdraw $175,000 a year for 9.45 years. If this were your only income, you would be in a 28.00% tax bracket.
That’s $36,247 a year for taxes.
Total taxes for 9.45 years: $342,534.
Deferral: $48,000 for 40 years.
YFB
11/12/2018

17. 714% RETURN ON YOUR DEFERAL!!!
The IRS loves you…
714% RETURN ON YOUR DEFERAL!!!
YFB
11/12/2018

18. So the company will contribute $3,000 to your 401(k).
What About the Match???
You make $100,000 a year and want to contribute 6% to your 401(k) to max out the match.
Your Company matches 50% of your contributions for the first 6% of salary that you contribute.
So the company will contribute $3,000 to your 401(k).
YFB
11/12/2018

19. What About the Match???
You Contribute $6,000 a year for 40 years at a 7% rate of return.
Your Company matches 50% of your contribution up to 6% of your salary-
Total $9,000 each year.
Your Account would be worth $1,922,486!
YFB
11/12/2018

20. You get to defer the TAX!!!
You still get to defer $1,200 a year for 40 years in a 20% tax bracket.
$48,000 Deferral
YFB
11/12/2018

21. The Withdraw Period Then you run out of MONEY at age 79!
You withdraw $175,000 a year at age 65 with a 4% rate of return.
Then you run out of MONEY at age 79!
YFB
11/12/2018

22. The TAX BILL!!!
You withdraw $175,000 a year for years. If this were your only income, you would be in a 28.00% tax bracket.
That’s $36,247 a year for taxes.
Total taxes for years: $507,598.
Deferral: $48,000 for 40 years.
YFB
11/12/2018

23. 1065% RETURN ON YOUR DEFERAL!!!
The IRS loves you…
1065% RETURN ON YOUR DEFERAL!!!
YFB
11/12/2018

24. Let’s Compare At Age 65… No Match 50% match Rate of Return 7%/year
Account Value $1,281,657
Annual Withdraw $175,000
Tax Bracket 28.00% $36,257
Net Distribution $138,743
Total Distribution to 73 (Net) $1,248,687
Total Taxes Paid $342,534
Rate of Return %/year
Account Value $1,922,486
Annual Withdraw $175,000
Tax Bracket 28.00% $36,257
Net Distribution $138,743
Total Distribution to 79 (Net) $1,942,404
Total Taxes Paid $507,598
YFB
11/12/2018

25. Let’s Compare the YFB 401(k) Alternative with 401(k) Contributions
Let’s keep everything the same,
the only variable will be the investment.
YFB
11/12/2018

26. YFB 401(k) Alternative ($6,000 per year)
Let’s Compare Your 401(k) with the Maximum Match to the YFB 401(k) Alternative!!!
3% Match ($9,000 per year)
YFB 401(k) Alternative ($6,000 per year)
Rate of Return 7%/year Account Value at 65 $1,922,486 Annual Withdraw $175,000 Tax Bracket 28.00% $36,257 Net Distribution $138,743 Total Distribution to 79 (net) $1,942,402 Total Taxes Paid $507,598
Rate of Return %/year
Account Value at $1,381,403
Annual Withdraw $138,743
Tax Bracket Tax Free
Net Distribution $138,743
Total Distribution to 87 $3,052,346
Total Taxes Paid $0
-$541,083
+$1,109,944 Plus
+$507,598
YFB
11/12/2018

27. So What’s the Big Deal with the Match?? We have a Better Plan!
Conversion Alternative
Cost not to do the plan…
Rate of Return 7%/year
Account Value at $1,381,403
Annual Withdraw $138,743
Tax Bracket Tax Free
Net Distribution $138,743
Total Distribution to 87 $3,052,346
Total Taxes Paid $0
Addition Income: $1,109,944
Tax Savings: $507,598
Total: $ 1,617,542
YFB
11/12/2018

28. Let’s Compare Your IRA/401k With and Without Market Risk
What if we could show you how the Conversion Alternative performs 200%+ better than an IRA, and without market risk.
Assumptions: With S&P Market Risk
25% Income Tax Rate
S&P Interest Credit is 100%
Not including brokerage fees or fund expenses
YFB
11/12/2018

29. What is the return of $1.00 after 16 years With Market RISK and Tax?
IRA vs. Conversion Alternative Returns With and Without S&P Market Risk
YEAR
START
S&P Gain/Loss
Ending Value P +I
2000
1.00
-0.054
0.95
2001
-0.149
0.81
2002
-0.224
0.62
2003
1.231
0.77
2004
1.104
0.85
2005
1.056
0.90
2006
1.121
1.01
2007
1.024
1.03
2008
-0.393
2009
1.238
2010
1.134
0.88
2011
-0.022
0.86
2012
1.188
1.02
2013
1.254
1.28
2014
1.139
1.46
2015
-0.001
What is the return of $1.00 after 16 years With Market RISK and Tax?
Assumptions: With S&P Market Risk.
25% income Tax Rate.
S&P Interest Credit is 100%
No Brokerage Fees or
Mutual Fund Expenses.

30. IRA With S&P Market Risk
YEAR
START
S&P Gain/Loss
Ending Value P +I
2000
1.00
-0.054
0.95
2001
-0.149
0.81
2002
-0.224
0.62
2003
1.231
0.77
2004
1.104
0.85
2005
1.056
0.90
2006
1.121
1.01
2007
1.024
1.03
2008
-0.393
2009
1.238
2010
1.134
0.88
2011
-0.022
0.86
2012
1.188
1.02
2013
1.254
1.28
2014
1.139
1.46
2015
-0.001
What is the return of $1.00 after 16 years With Market RISK and Tax?
Start with $1.00 and End with $1.46=$.46 Gain, or 46%.
$46%-25% tax = 35% return over 16 years after tax.
35%/16 years = 2.19 % average return per year.
35% with Market Risk, Tax and New Tax(s) Risk

31. Conversion Alternative Returns Without S&P Market Risk
YEAR
START
S&P Gain/Loss
Ending Value P +I
2000
0.75 0%
2001
2002
2003
1.13
Cap
0.85
2004
1.104
0.94
2005
1.056
0.99
2006
1.121
1.11
2007
1.024
2008
2009
1.28
2010
1.45
2011
2012
1.64
2013
1.85
2014
2.09
2015
Start with $0.75 Deposit after 25% Tax
Assumptions: No S&P Market Risk.
No Tax Rate.
S&P Interest Credit is 100%. Cost of insurance contract is not included.

32. Conversion Alternative Returns Without S&P Market Risk
YEAR
START
S&P Gain/Loss
Ending Value P +I
2000
0.75 0%
2001
2002
2003
1.13
Cap
0.85
2004
1.104
0.94
2005
1.056
0.99
2006
1.121
1.11
2007
1.024
2008
2009
1.28
2010
1.45
2011
2012
1.64
2013
1.85
2014
2.09
2015
Start with $0.75 Deposit after 25% Tax
Start with $0.75 and End with $2.09 = $1.34 Gain, or 179%.
179%/16 years = 11.2% average return per year.
179% with No Market Risk, Tax and New Tax(s) Risk

33. Conversion Alternative Returns Without S&P Market Risk
What is the return of $1.00 after 16 years With Market RISK and Tax?
Start with $0.75 Deposit after 25% Tax
Start with $1.00 and End with $1.46=$.46 Gain, or 46%.
$46%-25% tax = 35% return over 16 years after tax.
35%/16 years = 2.19 % average return per year.
35% with Market Risk, Tax and New Tax(s) Risk
Start with $0.75 and End with $2.09 = $1.34 Gain, or 179%.
179%/16 years = 11.2 % average return per year.
179% with No Market Risk, Tax and New Tax(s) Risk

34. Tax-Free Accumulation Tax-Deferred Growth Tax-Free Withdrawals
What about a Roth?
Tax-Free Accumulation Tax-Deferred Growth Tax-Free Withdrawals
A Roth IRA does have advantages. Read the Slide.

35. Start with $0.75 Deposit after 25% Tax
What about a Roth?
YEAR
START
S&P Gain/Loss
Ending Value P +I
2000
0.75
-0.54
0.71
2001
-0.149
0.60
2002
-0.224
0.49
2003
1.231
2004
1.104
0.66
2005
1.056
0.70
2006
1.121
0.79
2007
1.024
0.81
2008
-0.393
2009
1.238
0.61
2010
1.134
0.69
2011
-0.022
0.68
2012
1.188
2013
1.254
1.02
2014
1.139
1.16
2015 0%
Start with $0.75 Deposit after 25% Tax
Start with $0.75 and End with $1.16 = $0.41 Gain, or 55%.
55%/16 years = 3.44 % average return per year.

36. Roth IRA Retirement Savings
We started with $.75 and end with $1.16
That is gain of $0.41 or 55% return .
55%/16 years equals 3.44% average return per year.
55% with Market Risk
Conversion Alternative
178% with NO Market Risk, NO Tax and NO New Tax(s) Risk!
YFB
11/12/2018

37. The “Perfect” Investment
IRA
401K
Your Family Bank
Withdrawals
Growth
Risks?
Guarantee’s?
Penalties?
Liquid?
Protected/Creditors?
Leverage?
Tax Deferred?
Tax Free?
Collateral?
Disability?
Growth
Penalty +
Tax = 40% ?
(10% + 30%)
100%
Tax Free
Including
Cost Basis
Tax Deductible Or
Tax Deferred?
After Tax
(Not ded.)
Contributions
The “Perfect” Investment