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YOUR PATH TO FINANCIAL SECURITY
Douglas MacDonaldFinancial Services Representative, Princor Registered Representative
The Principal Financial Group
Date
YOUR PATH TO FINANCIAL SECURITY
While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that none of the member companies of the Principal Financial Group® are rendering legal, accounting, or tax advice. It is not a
marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to
legal, tax, or accounting obligations and requirements.
Insurance products issued by Principal National Life Insurance Co. (except in NY) and Principal Life Insurance Co. plan administrative services offered by Principal Life. Securities
offered through Princor Financial Services Corp., 800-247-1737, Member SIPC and/or independent broker/dealers. Principal National, Principal Life, and Princor® are members of
the Principal Financial Group®, Des Moines, IA 50392.
No part of this presentation may be reproduced or used in any form or by any means, electronic or mechanical, including photocopying or recording, or by any information storage
and retrieval system, without prior written permission from the Principal Financial Group®.
Copyright © 2014 Principal Financial Services, Inc.
BB11147-01 I 04/2014 |t140226027b
YOUR PATH TO FINANCIAL SECURITY
While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject
matter covered and is provided with the understanding that none of the member companies of the Principal Financial Group® nor the representatives presenting this material are rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or
other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.
Insurance issued by many fine carriers.
Securities offered through Princor Financial Services Corp., 800-247-1737, Member SIPC and/or independent broker/dealers. Princor® is a member of the Principal Financial Group®, Des
Moines, IA 50392. <BGA Name> is not an affiliate of any member company of the Principal Financial Group®.
No part of this presentation may be reproduced or used in any form or by any means, electronic or mechanical, including photocopying or recording, or by any information storage and retrieval
system, without prior written permission from the Principal Financial Group®.
Copyright © 2014 Principal Financial Services, Inc.
BB11147-01 I 04/2014 |t140226027b
Discuss the foundation of financial security Discover why people don’t become financially
successful Identify steps to help you reach financial security
OBJECTIVES
YOUR PATH TO FINANCIAL SECURITY
FOUNDATION OF FINANCIAL SECURITY
Financial security can be achievedwhen built on a
solid foundation.
YOUR PATH TO FINANCIAL SECURITY
FOUNDATION OF FINANCIAL SECURITY
Four types of foundational assets
YOUR PATH TO FINANCIAL SECURITY
Personal and business assets
Governmentprograms
Insuranceplans
Employeebenefits
INSTANT POLL NO. 1
How solid is your foundation of financial security?
YOUR PATH TO FINANCIAL SECURITY
Personal and business assets
Governmentprograms
Insuranceplans
Employeebenefits
WHERE WILL YOU BE AT AGE 65?
Source: Social Security Administration, the Office of Policy, Income of the Population 55 or older, Table 3.A1, Total Money Income, 2010, March 2012.
Annual income levels: About half make less than
$25,000 About 1 in 5 make between
$25,000 and $40,000 17% make between
$40,000 and $70,000 Only 15% will have an
annual income over $70,000
$40-70K
> $70K
$25-40K
$25K
INSTANT POLL NO. 2
YOUR PATH TO FINANCIAL SECURITY
What roadblockskeep people from being more financially secure?
Inflation Taxes Investments Disability Saving to spend Procrastination
COMMON BARRIERS TO SUCCESS
YOUR PATH TO FINANCIAL SECURITY
*11
Managing your money effectively is
essential to your financial security.
YOUR PATH TO FINANCIAL SECURITY
PAY YOURSELF FIRST
YOUR PATH TO FINANCIAL SECURITY
Save then spend………….or spend then save?
PAY YOURSELF FIRST
YOUR PATH TO FINANCIAL SECURITY
People who save first are more likely to have money when they want it and money when they need it.
• Education funds
• Retirement income
• Other important goals
QUALIFIED VS. NONQUALIFIED
Qualified plans A tax-deferred* way to
save for retirement Most common examples
would be 401(k) plan or Individual Retirement Account (IRA)
IRS limits annual contributions
Nonqualified investments Offer wide variety of
features and benefits Examples include company
stocks and mutual funds Choices determine how
you contribute, tax treatment of growth and access to your money
* Ordinary income tax rates apply when money is withdrawn.
THE ADVANTAGE OFTAX-DEFERRED SAVINGS
Assumptions: 8% interest, 30% combined tax bracket, saving $1,000/yearHypothetical example used for illustrative purposes only. Actual results will vary.
End of year Taxable total Tax-deferred total
1 $1,056 $1,080
10 $13,660 $15,645
20 $37,216 $49,423
25 $54,776 $78,954
30 $77,836 $122,346
THE ADVANTAGE OFTAX-DEDUCTIBLE SAVINGS
Assumptions: 8% interest, 30% combined tax bracket, saving $1,000/year
End of year Non-deductible and taxable total
Tax-deductible and tax-deferred total
1 $739 $1,080
10 $9,562 $15,645
20 $26,051 $49,423
25 $38,343 $78,954
30 $54,485 $122,346
THE 401(K) ADVANTAGE
Assumptions: 8% interest, 30% combined tax bracket, saving $1,000/year, 50% employer match
End of year Taxable total Tax-deferred total
1 $739 $1,620
10 $9,562 $23,468
20 $26,051 $74,134
25 $38,343 $118,432
30 $54,485 $183,519
*18
What are somesteps to
financial security?
YOUR PATH TO FINANCIAL SECURITY
4 STEPS TO FINANCIAL SECURITY
YOUR PATH TO FINANCIAL SECURITY
1. Set and Prioritize Goals.
2. Create an Action
Plan.
3. Implement Your Plan.
4. Monitor Your Progress. FINANCIAL SECURITY
• Personal Assets• Employment Benefits• Insurance Plans• Government Programs
Save time and effort Find some peace of mind Create a formal record Get results Change your plans Develop a long-term relationship
BENEFITS OF FINANCIAL STRATEGIES
YOUR PATH TO FINANCIAL SECURITY
*21
Developyour
financial strategy.
YOUR PATH TO FINANCIAL SECURITY
Q&A
Questions?
YOUR PATH TO FINANCIAL SECURITY
