Vice President of Sales, Lincoln Financial Over 24 years experience in the insurance industry Covers the upper Midwest in the Brokerage Division

Transcription

1 Vice President of Sales, Lincoln Financial Over 24 years experience in the insurance industry Covers the upper Midwest in the Brokerage Division

2 LIFE SOLUTIONS Retirement planning for tax efficiency Life strategies to help protect wealth Presenter name Valerie N. Staublin, CLU, ChFC SVP, Brokerage Division September 22, 2014 Products issued by: The Lincoln National Life Insurance Company Lincoln Life & Annuity Company of New York 2013 Lincoln National Corporation

3 We focus on the affluent client and take a holistic approach to wealth accumulation through protection. Lincoln provides strategies and products to take clients from the accumulation phase to the retirement-spending phase, protecting wealth so that it passes on to the next generation. 3

4 FOCUS ON MAXIMIZING RETIREMENT DISTRIBUTIONS Advisors indicate that only 55% of their clients have a retirement income plan. Source: Cogent Research, The Cogent Discovery Series: Advisor In-Retirement Income TM,

5 AGENDA Tax exposure of assets Diversification of distributions Wealth protection 5

6 TAX EXPOSURE OF ASSETS A major factor in retirement income planning Source: The Wall Street Journal, MarketWatch, 10 Reasons Your Retirement Plan Won t Cut It, October 7,

7 TAX EXPOSURE OF ASSETS Not all assets selected in the accumulation phase are ideal for the distribution phase. Retirement Accumulation phase Distribution phase 7

8 RETIREMENT SOLUTIONS Government restrictions 401(k)s, IRAs, etc. Tax-deferred Municipal bonds, Roth IRAs 8

9 RETIREMENT SOLUTIONS Government restrictions IRS 401(k)s, IRAs, etc. Stocks, bonds, mutual funds, etc. Tax-deferred Municipal bonds, Roth IRAs Taxable Taxadvantaged $$ Taxes Income tax-free 9

10 NEW TAX INCREASES AMERICAN TAXPAYER RELIEF ACT (ATRA) Government restrictions 401(k)s, IRAs, etc. IRS Top tax rate +4.6% Medicare +0.9% Personal Exemption Phaseout (PEP) & PEASE % Stocks, bonds, mutual funds, etc. Tax-deferred Municipal bonds, Roth IRAs Taxable Taxadvantaged Capitals gains +5.0% UIMCT 2 (ACA) +3.8% $$ Taxes Income tax-free 1 Itemized Deductions Phaseout (Pease) The Pease provision (named after former Congressman Donald Pease who sponsored the legislation) reduces the value of itemized deductions by 3% of the amount that adjusted gross income (AGI) exceeds $300,000 for joint filers and $250,000 for individuals. 2 Unearned Income Medicare Contribution Tax (UIMCT) A 3.8% surtax on unearned income for taxpayers whose total modified adjusted gross income (MAGI) exceeds $250,000 for joint filers or $200,000 for individuals. This tax affects interest, dividends, capital gains, annuities, royalties and rents. 10

11 TAX EXPOSURE OF ASSETS Government restrictions IRS Distributions 401(k)s, IRAs, etc. Stocks, bonds, mutual funds, etc. Tax-deferred Municipal bonds, Roth IRAs Taxable Taxadvantaged $$ Taxes Income tax-free 11

12 TAX EXPOSURE OF ASSETS What happens at retirement Age 59½ Age 62 Age 65 Age 70½ Ordinary income tax + 10% penalty* Tax-deferred bucket becomes taxable Too much Modified Adjusted Gross Income: 85% of SS benefits taxed Too much Modified Adjusted Gross Income: Medicare Part B costs increase from $105 to $336/month RMDs add to tax exposure *The 10% penalty is applicable for withdrawals from qualified plan and IRA accounts before age 59 ½. 12

13 DIVERSIFICATION OF DISTRIBUTIONS Diversify to protect wealth with Lincoln life insurance. Tax-deferred growth No contribution limits Income tax-free distributions* No penalties for early retirement Nonreportable income An income tax-free legacy *Loans and withdrawals will reduce the policy s cash value and death benefit. 13

14 DIVERSIFICATION OF DISTRIBUTIONS Henry, age 45, $500K annual income, purchases a Lincoln life insurance policy. Age 59½ Age 62 Age 65 Age 70½ Income tax-free distributions, no penalties No income tax No impact on SS benefits No impact on Medicare Part B No RMDs When he dies his family has an income tax-free legacy. 14

15 DIVERSIFICATION OF DISTRIBUTIONS TO THE NEXT GENERATION Effective retirement planning is focused on distributions. Retirement Legacy Accumulation phase Distribution phase 15

16 HOW LINCOLN CAN HELP Why Lincoln? Our focus: Wealth accumulation through protection for affluent clients Retirement income Long-term care protection Wealth transfer solutions The breadth and depth of our product portfolio Expertise and support for your business 16

17 HOW LINCOLN CAN HELP Take charge with wealth protection solutions for your clients. Contact your Lincoln representative. 17

18 THANK YOU This material was prepared to support the promotion and marketing of investment and insurance products. Lincoln Financial Group affiliates, their distributors, and their respective employees, representatives, and/or insurance agents do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Please consult your own independent advisor as to any tax, accounting, or legal statements made herein. Lincoln life insurance policies are issued by The Lincoln National Life Insurance Company, Fort Wayne, IN, and distributed by Lincoln Financial Distributors, Inc., a broker-dealer. The Lincoln National Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so. Policies sold in New York are issued by Lincoln Life & Annuity Company of New York, Syracuse, NY, and distributed by Lincoln Financial Distributors, Inc., a broker-dealer. All guarantees and benefits of the insurance policy are subject to the claims-paying ability of the issuing insurance company. They are not backed by the broker-dealer and/or insurance agency selling the policy, or any affiliates of those entities other than the issuing company affiliates, and none makes any representations or guarantees regarding the claims-paying ability of the issuer. Products, riders and features are subject to state availability. Limitations and exclusions may apply. Check state availability. Not a deposit Not FDIC-insured May go down in value Not insured by any federal government agency Not guaranteed by any bank or savings association LincolnFinancial.com Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates. Affiliates are separately responsible for their own financial and contractual obligations. 1/14 Z05 Order code: LIF-TAX-PPT002 CWI