1. Presented by: Jason E. Lea, CFP ®

2. 14.4% (.144) 73.3% (.733) 87.6 % 11 22 0.00% Red Sox Team World Series Batting Average David Ortiz World Series Batting Average Likelihood you will stay awake for 1:45 today! David Ortiz # hits Rest of Team- total hits (not including Ortiz) Koji Uehara’s W/S ERA

3. Changing Landscape Economy, Politics, and Interest Rates Our Mission Today 3 Main Client Objectives 5 Simple Steps Strategies Carrier Panel

5. 1 conversation every day Work with your BSMG advisors Have the right tools to present solutions Understand the risks For your clients To your practice

6. U.S. Total Retirement Market Trillions of dollars, end-of-period, selected periods $20.9 Trillion * The Investment Company Institute“The U.S. Retirement Market, Second Quarter 2013.”The U.S. Retirement Market, Second Quarter 2013

7. Retirement Assets by Type Billions of dollars, end-of-period, 2013:Q1–2013:Q2 * The Investment Company Institute “The U.S. Retirement Market, Second Quarter 2013.”The U.S. Retirement Market, Second Quarter 2013

8. The Financial Crisis – what’s the impact? A wake up call for clients Clients realize they need advice on retirement Clients feel more secure when they work with a financial professional

10. Guaranteed to Not Lose Value Protects Lifetime Income from Market Losses Provides Guaranteed Rising Income Provides for My Family If I Die or Become Disabled Has Higher Returns

11. Rising Cost of Healthcare Inflation and the rising cost of living Insufficient funding for Social Security & Medicare Higher Taxes The Gov’t budget deficit Global crisis and uncertainties

12. 3 ways Retirement Income taxed Ordinary Income Capital Gains Tax-Free

13. from 1913-2013

16. *2012 AIG Retirement Reset Study

17. Doubled in the last 100 years Average Length of Retirement for a married couple age 65? 27 Years! (Age 92)

18. Slow recovery, unemployment remains high Washington refuses to collaborate Persistently low interest rates Market Volatility

21. Financial Independence Needs Wants Dreams Legacy Travel, entertainment, gifts, motorcycle Food, shelter, clothing Grandchild’s education, vacation home, RV Heirs, charities Frequency Less More

22. Retirement Income Asset Protection Legacy Planning

23. Income Spend it Assets Save it Legacy Give it away

24. Income Needs (Non- Discretionary) Wants (Discretionary) Assets Emergency Fund Diversified Portfolio Protection against Healthcare & LTC Costs Legacy Life Insurance death benefits Assets transfer to spouse/heirs

25. Income Mortgage Monthly Bills 2 nd home Travel Gifts Assets Emergency fund Unexpected health-related expenses Grandkids’ education Legacy Surviving Spouse Kids Grandkids Charity

26. Defined Benefit “Pension Plans” Social Security Will these be enough for your clients? Clients can create their own personal “pension” plans

27. HealthCare and LTC costs Market Risks Interest Rate Risks Inflation

28. Spend Pennies on the Dollar to: Take Care of your spouse when you’re gone Take care of Kids and Grandkids Give to Charities/Organizations that have meaning to you

29. Income Pension Social Security Annuities Life Insurance Cash Value Assets Cash Investment portfolio Protection products for LTC costs Legacy Will Life Insurance Trusts, if applicable

30. Be able to “Yellow Pad” it with your clients

31. 1.Define Your Relationship with the client 2.Ask key questions, gather data 3.Evaluate client’s financial status 4.Develop and present your recommendations 5.Implement your plan 6.Yearly or quarterly check-ups

32. Let them know this is conversation you are looking to have with your clients Ask if they are willing to discuss with you, and explain that it’s a very important What Retirement goals do they have?

33. Use a Fact Finder Determine Client goals and priorities for income, asset protection and legacy Determine client needs

36. Client goals often > Client resources Good fact-finding will reveal their actual needs and those should be addressed first. Advising is easier your client once you understand their needs. Clients appreciate good homework.

37. Do they have adequate: Cash Protection from HealthCare and LTC costs Sources of Retirement Income Life Insurance Do they have an estate planning attorney who has drafted a will, health care proxy, power of attorney, trusts if necessary

38. Findings determine: Income Gap Asset protection needs Legacy objectives

39. Income Pension Social Security Annuities Life Insurance Cash Value Assets Cash Investment portfolio Protection products for LTC costs Legacy Will Trusts, if applicable Life Insurance

41. Annuities Lump-Sum funded Retirement Income Fixed Asset to protect from market losses LTC Products Lump Sum or Flex-pay funded Protect assets from largest risk in retirement Life Insurance Lump sum or-Flex pay funded Provides Death benefit and now access while alive to DB for LTC expenses Access cash value for income after 15 years

42. Build Client Trust over time Chance to uncover other opportunities Become a Center of Influence, and develop retirement referrals

43. Retiring in 5 years Current income = $7.5k / month after taxes Current expenses Net Savings $1.5k/month ($500 to NQ savings, $1,000 to 401(k)) (2) Children – 28 & 30 years old (1) Grandchild – 2 years old

44. Housing Costs Mortgage / Rent Real Estate Taxes Maintenance & Repair Home Insurance Personal Expenses ClothingVacationsGrooming Auto & Insurance Life Insurance LTC Insurance Living Expenses GroceriesEntertainmentUtilitiesPhoneCable Medical Expenses Prescriptions Medical Insurance Co-Pays

45. Non-discretionary expenses: $5,000/month (mortgage, bills, food) Discretionary expenses: $1,000/month (vacations) Pension @65 of $2,000/month Social Security @65 of $2,500/ month

46. $500,000 qualified plan +70,000 in additional (saved from 60-65) = $570,000 $250,000 NQ assets + $30,000 saved (saved from 60-65) = $280,000 $500k Term Insurance (5 years left), no plan for LTC $200,000 Vacation home Mortgage (Florida) $20,000 Auto loans Assumptions 4% IRR on investments, 3% inflation, 30% income tax rate Plan to retire in 5 years

47. Much more financially powerful than increasing income because the expense reduction (savings) double effect: Increases savings each month Permanently decreases the amount you’ll need each month for the rest of your life.

48. Inflation-protected lifetime income Keep remaining assets safe Travel Help with grandkids’ College Protect against LTC costs Leave a legacy for their kids & grandkids

49. Income -$5,000 Expenses -$1,000 Discretionary Expenses. $2,500 Pension$2,500 S. Security$1,000 Income Gap Assets $80,000 Cash$200,000 NQ$570,000 Q PlanNo LTC Plan Legacy $500k Term Life Insurance Beneficiaries & Charities Help Grandkids with College

51. Use a deferred annuity with a guaranteed joint lifetime withdrawal benefit. Client retains control of account value Guaranteed withdrawals for life Withdrawals can be started when the client wants Longer deferral = larger guaranteed w/d! Annual fee ranges between 0.65% - 1.25%

52. Age 65 $240,000 Qualified Funds Monthly after-tax Income $1,116 Annual Income $13,400 Age 70 $80,000 Qualified Funds Monthly after-tax Income $500 Annual Income $6,000 Age 75 $87,000 NQ Funds Monthly after-tax Income $1,000 Annual Income $12,000

58. Client has $850,000 in assets Used $407,000 to create $823,400 of after-tax guaranteed income over 30 years $443,000 remains for Liquidity, LTC, Legacy planning

59. LTC protection goals Legacy benefits if LTC not needed Transfers risk of LTC “Health Event” to Insurance Company Not an Expense, an “Asset Reposition” Once policy on each spouse

60. Mary $75,000 Michael - $85,000 $5,000 per month in LTC benefits 6 year min. benefit periodZero day elimination 100% Liquidity (return of Premium) Death benefit = $120k

61. Other Life insurance to create a legacy Portion of savings Cash savings Investments & retirement income $ 75,000 Premium $ 360,000 Income tax-free long-term care reimbursements $120,000 Income tax-free death benefit for beneficiaries $75,000 Money back guarantee OR

62. $443,000 remains after retirement income funding Use $150,000 of Qualified assets ($110,000 after taxes) Use $50,000 of NQ assetsNet After taxes = $160,000 $243,000 Remains after LTC Funding $200,000 allocated $160,000 deposited $720,000 LTC Pool $240,000 Death Benefit $160,000 Premium All LTC/Death Benefits Guaranteed & Tax Free

63. Buy (2) $250,000 Death Benefit UL Policies LTC Rider or Chronic Illness Rider 100% of DB available for LTC needs, tax free Guaranteed Lifetime DB Fully Underwritten, More DB than Linked Guaranteed DB = Max LTC Benefit

64. Life Pay Mary $4,100 Michael $4,900 Total = $9,000 $5,000 per month in LTC benefits50 Month Benefit Period90 day elimination period Return of Premium… available with some Carriers Death benefit = $250,000 LTC benefit = $250,000 20 Pay Mary $5,000 Michael $5,700 Total = $10,700 Single Pay Mary $68,000 Michael $78,000 Total = $146,000

68. $443,000 remains after retirement income funding Use $130,000 of Qualified assets ($100,000 after taxes) Use $46,000 of NQ assetsNet After taxes = $146,000 $267,000 Remains after UL with LTC Rider $176,000 allocated $146,000 deposited $500,000 LTC Pool $500,000 Death Benefit $146,000 Premium All LTC/Death Benefits Guaranteed & Tax Free

69. Client have spent Ability to Access Cash Value in 15 years Asset Maximization for beneficiaries/charities. Can liquidate cash value if needs change Survivorship UL (SUL) policy for $300,000 Annual Cost = $3,500 Use NQ $ until RMD age (70.5) then use Qualified RMD’s

72. Income $1,000 after-tax monthly Income Gap Need for inflation protectionPurchase 3 AnnuitiesTotal of $347,000Income funded for both lives Assets $50,000 Cash $200,000 NQ $500,000 Q Plan Purchase linked benefit solutions for $200,000 Or 2 UL polices for $180,000 $5,000 per month LTC Expenses Covered Legacy $500k Term Life Insurance Can look at conversion Added $300,000 SUL And Either $240k or $500k Plenty of Assets remain to Help with Grandkids College