From the author of Bullet Proof My Wealth KEN CRUISE TRIPLE YOUR RETIREMENT DOLLARS Learn How to Retire With Enough
Table of Contents Chapter 1 - Retirees are Going Broke 3 Chapter 2 - What is 5 Chapter 3 - How Works 7 Chapter 4 - How Benefits Individuals 9 Chapter 5 - How Benefits Businesses 11 Chapter 6 - Solving Retirees Greatest Fears 14 Chapter 7 - Conclusion 16
Chapter 1 Retirees are Going Broke The biggest financial worry for American s approaching retirement is the fear of NOT having saved enough money to last throughout their retirement years. What would happen to you if you ran out of money and outlived your retirement savings? Who would take care of you? How would you survive? Who would help you financially? Would you lose your home and become a burden to your kids or relatives? These concerns are real. According to the New York Times, There has been a 500% increase in older Americans filing for bankruptcy in recent years. 3
If you are a well-to-do high-income earner, unfortunately, you too are not immune. Studies show that even high earners have not sufficiently saved to maintain their lifestyle over a 22-year (average) retirement. If you re not worried about outliving your retirement savings, you should be. Records indicate only 5% of Americans have saved enough for a comfortable retirement. Fortunately, you re reading this ebook, TRIPPLE Your Retirement Dollars. Inside it explains a retirement program that is helping tens-ofthousands of Americans save enough for their retirement years, so people just like you don t have to worry about outliving their savings. The retirement strategy that could substantially increase your retirement savings is called 4
Chapter 2 What is ROTH 2? ROTH2 is a strategy that can TRIPLE your retirement dollars through leverage. ROTH 2 is the ONLY strategy that uses leverage to help you acquire more of the benefits you need to protect you and your family financially. Its unique fusion of financing and insurance offers you more protection and the potential to earn more for retirement than you could obtain without leverage. Protecting your earnings is critical to ensuring your ability to save for retirement. Due to limitations, traditional retirement plans are typically insufficient for high-income earners. If you desire to maintain your lifestyle during retirement, you need a proactive strategy that puts more money toward protecting your future income without straining your current finances. ROTH 2 helps maintain your current lifestyle in the event of a chronic illness, premature death, or inability to sufficiently save for retirement. Bottom line, the ROTH 2 strategy allows more money to build and protect your future income. Every dollar you or your employer contribute can increase by up to three times with ROTH 2, TRIPLING YOUR RETIREMENT DOLLARS! 5
You can achieve your ideal retirement lifestyle with ROTH 2. See example results below. Results Achieved with ROTH 2 Self-Funded ROTH 2 STRATEGY Compare your own self-funded retirement program (above left) to ROTH 2 (above right). It s a substantial difference, with ROTH 2 almost doubling the amount of cash you could have in your retirement years. 6
Chapter 3 How ROTH 2 Works The ROTH 2 strategy is simple. Premiums are funded by bank financing and the participant or the participant s employer. The bank financing provides approximately 60-75% of the total premiums of the policy. The ROTH 2 strategy is designed so the participant is not required to go through financial underwriting or sign any loan documents for the bank loan used as leverage to increase retirement funds because most of the contribution to the plan and the insurance policy is the full security for the loan. TRIPLE Your Retirement Dollars with ROTH 2 Retirement Program Self-Funded Retirement vs. ROTH2 Retirement Program 7
Use Leverage to Accumulate More Retirement Dollars The ROTH 2 concept is not much different than financing a house you use a mortgage to leverage the assets you have on hand to buy more house than you can afford on your own. With ROTH 2, the same type of leverage is used to BUY MORE CASH ACCUMULATION (with a non-recourse bank loan) AND RETIREMENT BENEFITS, without the risk of losses due to declines in a market index. Using leverage is a prevalent practice for most people. We use leverage to finance a home, buy an investment property, or buy a business. It makes sense if properly structured to use leverage to enhance your retirement benefits as well. Think of leverage in the following ways. You purchase items today with the hope that they will appreciate. Leverage allows you to enjoy more, sooner, and for a more extended period. Some examples of this would be: You use leverage to buy a bigger house. You use leverage to purchase an investment property. You use a loan to expand a business without tying up your cash flow. The decision to use leverage is driven by the idea that the money you contribute will grow at a higher rate of return than the cost of borrowing. And, at the very least, you get to enjoy the benefits of these purchases today. With ROTH 2 you can use leverage to obtain more benefits today and potential cash accumulation for your retirement. As you can see from the chart diagram above, the addition of bank funding would give you the potential to significantly enhance your retirement dollars and available benefits for your retirement. TRIPLE Your Retirement Income with Below is an example of money available to you if you were to self-fund your retirement vs. total dollars at retirement using the ROTH 2 strategy. 8
Chapter 4 How ROTH 2 Benefits Individuals ROTH 2 Provides More Benefits for Your Retirement The unique and compelling aspect of the ROTH 2 strategy is the participant's contributions are leveraged 3 to 1. By using bank financing, the ROTH 2 strategy allows you to realize benefits beyond your expectations while keeping contributions within your means. Below is an example of total retirement dollars if you were to self-fund your retirement vs. total dollars at retirement leveraging the ROTH 2 strategy. As you can see from the chart below, the addition of bank funding gives you the potential to significantly enhance your retirement dollars and available benefits for your retirement. Self-Funded Retirement VS Roth 2 Retirement Program Compare your retirement contributions ($165k example) to your contribution with ROTH 2 9
Benefits That Provide More for Your Retirement If you are concerned about your retirement and don t think you are saving enough, you will realize how the ROTH 2 strategy is a better and smarter way to fund your dream retirement. ROTH 2 utilizes financing to supplement the funding you have available to buy more financial retirement benefits you need. The ultimate result is more financial comfort than savings and traditional life insurance alone. Death Benefit Protection A permanent life insurance policy with living benefit riders* that can provide benefits in the case of: Critical Illness (Cancer, Heart Attack, Stroke, etc.) Critical Injury (Coma, Brain Injury, Paralysis, Burns) Chronic Illness (assistance with daily living, bathing, eating, dressing, transferring, etc.) Terminal Illness (a disease where death is expected within 12-24 months. Term varies by state.) Cash Accumulation** Upside Crediting Potential (Interest Credited Based on Market Index) No Loss of Cash Value, 0% Floor (Due to Declines in an Index) Potential Growth Tax-deferred Potential Tax-free Withdrawal (Access to cash value using Tax-Free policy loans and withdrawals) *Policy loans and withdrawals reduce the cash value and death benefit and may result in a taxable event if the policy is surrendered or lapses. DISCLAIMER *Receipt of benefits depends on rider and meeting certain qualifications and varies by state. The use of one benefit may reduce or eliminate other policy and rider benefits. Payment of living benefits will reduce the cash value and death benefit. Substantial tax ramifications could result upon contract lapse or surrender. **Surrender charges may reduce the policy s cash value in early years. It is possible that coverage will expire when either no premiums are paid following the initial premium, or subsequent premiums are insufficient to continue coverage. The ROTH 2 Strategy is dependent on the employer making contributions for the first 5 years and not defaulting on the payment commitment, failure of which could result in policy lapse. The employee will not have access to the policy, the cash values, the death benefits or the living benefits until the loan is repaid and the assignment is released. This can be done at any time but must come first. The lender has the right to discontinue funding new premiums, exit the market, or to demand loan repayment based on the terms and conditions signed by the Master Trust. See the Master Trust documents for additional information. Receipt of accelerated benefits may be taxable and may affect eligibility for public assistance programs. This information is not intended as tax advice. Please consult with your tax advisor regarding your own situation. Not all riders are available by all life insurance companies. 10
Chapter 5 How ROTH 2 Benefit Companies ROTH 2 is More Cost Effective than Traditional Plans The main reason businesses are not offering additional benefits to their key employees is cost. The ROTH 2 Strategy uses leverage to help cover the costs of the benefits needed to attract top talent. A unique feature of ROTH 2 is that there are no loan qualifications or loan documents signed by the employer or employee. The contributions made to the ROTH 2 strategy act to adequately secure the loan. Utilizing ROTH 2 allows companies to spend far less on employee benefits that would otherwise be a substantial expense. ROTH 2 can provide exceptional benefits, such as Key Person, Buy-Sell Agreements, Succession Planning at typically half the cost of traditional benefit programs. As a business owner (or Manager) this will ultimately improve your cash flow and decrease costs while offering the differentiation needed to compete for top employees. ROTH 2 Attracts the Best Employees To Attract the Best, You Need to Offer the Best Benefits! Key employees are the lifeblood of your company, and it is crucial to be more attractive than your competitors. Benefits are necessary to recruit and retain your best employees, but most companies offer the same benefits as everyone else. How do you provide more benefits than your competition that sets your company apart? ROTH 2 is a unique strategy that allows you to achieve a competitive advantage by offering the best benefits, provide more protection, and potentially save more for employees retirement. Simply put, the ROTH 2 Strategy provides you with the extra funding to set yourself apart without having to increase your budget. 11
ROTH 2 Helps to Recruit Key Employees Recruiting and retaining key employees is of extreme importance to most businesses. While most companies understand the need for competitive benefits packages to keep key employees, they are not able to provide everything without having to make significant financial sacrifices. It s crucial that your employees basic needs are not only met but exceeded to give your company a competitive advantage. Studies have shown that it costs as much as 30% of an employee s base salary to recruit and train a new executive. Wouldn t you rather use that money to benefit the key executive and motivate them to stay? ROTH 2 makes it easier to address these concerns with five planned contributions and a strategy that has the potential to grow over time. ROTH 2 helps Retain Key Employees, Protect Your Business, and Save Money So, you have used ROTH 2 to help you recruit top employees and key executives; how do you retain them? Nowadays, employees don t stay at companies for 20+ years anymore, and the competitive nature of headhunting has recruiters coming at your top talent from all directions. Having a proactive plan that deals with the partner, owner, co-founder or family buy-outs are equally critical. The problem is that people leave for a host of reasons: they get sick, retire, pass away, or move to another firm. Covering all these possible events is difficult. Even worse, funding all these contingent liabilities is an expensive ongoing cost, so most simply don t. This leaves companies exposed. ROTH 2 offers both a plan that can cover all these situations as well as bring the extra cash flow needed to fund them more effectively. 12
ROTH 2 is a Better Way to Informally Fund Deferred Compensation By financing an insurance policy as opposed to traditional investment alternatives, you get the added advantage of additional cash using leverage. With ROTH 2 you also receive potential tax-deferred growth, protection benefits should something happen to the employee all without downside market risk. ROTH 2 is a Better Way to Fund Contingent Business Liabilities Key executives leave for a variety of reasons which can cause a business to scramble to cover their loss. A key executive could become disabled, develop a chronic illness, retire, pass away, or simply leave. Most companies use their cash to grow their business and not to fund contingent business liabilities. ROTH 2 Plan is one of the few plans that covers key personnel if they leave, pass, or become disabled. ROTH 2 Helps to Fund Business Continuation In the case of business ownership, most partners would like to have something in place that would avoid having a large portion of the company passed on to a family member or someone who has no personal stake in the company, should one of the business owners become disabled, pass away, have a chronic illness or want to retire. ROTH 2 helps provide the funding needed to protect your business in a wide variety of circumstances. ROTH 2 Strategy helps provide the additional funding required to address the following business situations effectively: Executive Bonuses Buy/Sell Agreement Key Man Partner Buyout Succession Planning Highly Compensated Employee Incentives 14 13
Chapter 6 How ROTH 2 Solves Retirees Greatest Financial Worries Below is a list of the TOP 10 financial concerns Americans have regarding retirement. 1. Not Enough Savings to Retire 2. Financial Emergency 3. Medical Expenses Due to Illness 4. Outliving Retirement Savings 5. Financial Identity Theft 6. Inability to Afford Healthcare 7. Financial Burden to Family 8. Losing Job 9. Extended Unemployment 10. Death of Primary Breadwinner Insufficient Retirement Savings Consider this: If you retire today, could you live off the money you ve saved for 22 years (the average retirement)? Could you maintain your current lifestyle for those 22 years of retirement? If you fully fund your 401K with 6% matching funds, you will have a 70% lifestyle drop in retirement if you earn over $250,000 unless you supplement your planning. Contrary to popular belief, spending does not drop at retirement but is merely spent on different things like medical expenses. For example, research indicates that 85% of all lifetime medical expenses occur in retirement. It is possible for people, even high earners, to outlive savings and become reliant upon a family member for financial care. The ROTH 2 strategy can add substantially more funds to your retirement plan while helping protect you in the event of future medical expenses. Financial Emergency Most Americans save to have enough money in case something unexpected happens and they need a large sum of cash. Because of this, they prepare by avoiding investing too much at one time. ROTH 2 is designed to not only make the most of your money but also protect you with coverage and access to cash in the case of a financial emergency. 14
Medical Expenses 1 in 3 Americans between ages 35-65 will become disabled for 90+ days 1 in 7 Americans 65+ years in age will become disabled for 5+ years A 65-year-old couple retiring in 2012 is estimated to need $240,000 to cover medical expenses throughout retirement. (American Council of Life Insurance, Fidelity Investments) The reality shown above is that it is quite common to lose an individual s ability to earn and a have a significant loss in retirement savings. If you are dependent upon your income, this would be a devastating event. Even worse, most benefits don t cover or only partially cover these events. In addition to potential disability, long-term care is essential for 41% of Americans BEFORE age 65 with the average cost at $75,000 a year (US Department of Health and Human Services). These are both genuine issues that call for action before it is too late. The ROTH 2 strategy covers major medical concerns. Death of Primary Breadwinner Approximately 70% of U.S. households would have trouble meeting everyday living expenses within just a few months if the primary wage earner were to pass away today. This occurs to 20% of U.S. households, so it is crucial to have a backup plan to pay expenses should this happen to you. ROTH 2 addresses the need to replace income lost for the death of the Primary Breadwinner. DISCLAIMER *Receipt of benefits depends on the rider and meeting specific qualifications and varies by state. The use of one benefit may reduce or eliminate other policy and rider benefits. Payment of living benefits will reduce the cash value and death benefit. Substantial tax ramifications could result upon contract lapse or surrender. **Surrender charges may reduce the policy s cash value in early years. It is possible that coverage will expire when either no premiums are paid following the initial premium, or subsequent premiums are insufficient to continue coverage. The ROTH 2 Strategy is dependent on the employer making contributions for the first five years and not defaulting on the payment commitment, failure of which could result in policy lapse. The employee will not have access to the policy, the cash values, the death benefits or the living benefits until the loan is repaid and the assignment is released. This can be done at any time but must come first. The lender has the right to discontinue funding new premiums, exit the market. 15
Chapter 7 The Conclusion hope you enjoyed and benefited from my short ebook, I TRIPPLE Your Retirement Dollars. If you feel ROTH 2 is something that may help you, email me at the email listed below, and I will get back to you. If you have family or friends who may be concerned about their retirement, you are welcome to pass along this ebook to them. I look forward to hearing from you and helping you prepare for the future, so you too can save enough and enjoy a stress-free retirement. Yours truly, Ken Cruise For More Information email us at: info@synergisticlifeservices.com 17