Tom hegna

AUGUST 5-7, 2015 THE VENETIAN | LAS VEGAS

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BY TOM HEGNA


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The information in this presentation is for general use and, while we believe the information is reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. You need to take into account your health and legacy goals. Neither the information presented or any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services.

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The information provided is not intended as tax or legal advice and may not be relied on for the purposes of avoiding any Federal or State tax penalties. Tom Hegna, his employees or representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax and legal counsel. They are also encouraged to seek advice from their own financial advisor and their family. The examples shown are hypothetical. Rates can and do change often. Rates may depend on your age, health, and gender. Please ask your financial advisor to run an illustration based on your information.

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BY TOM HEGNA


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Best-selling author, international speaker and economist: • Paychecks and Playchecks: Retirement Solutions for Life • Retirement Income Masters: Secrets of the Pros • Don’t Worry, Retire Happy! Seven Steps to Retirement Security • As seen on national Public Television • Featured in Forbes, Fox Business, Money Rate and numerous

industry publications Former First Vice President with New York Life and Financial Advisor with Met Life

• Qualified for Million Dollar Round Table, National Quality Award and National Sales Achievement Award

22 years US Army • 6 years active duty and 16 years Reserve • Retired as a Lieutenant Colonel with numerous awards and

decorations North Dakota State University • Honors Graduate • 3 Majors in 4 years • Distinguished Military Grad

Resides in Fountain Hills, AZ Married for 31 years 4 children

Tom Hegna CLU, ChFC, CASL

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Do you Believe in Free Speech?

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http://rds.yahoo.com/_ylt=A0PDoX4pY3VNiQcACiWjzbkF/SIG=12bahqeuq/EXP=1299567529/**http:/www.mediaroots.org/uploads/images/FreeSpeech.jpg


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When You Retire, Everyday Is Saturday!

RETIREMENT

When Everyday is Saturday!

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Don’t Worry, Retire Happy! Seven Steps to Retirement Security

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“Life begins at retirement”


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BY TOM HEGNA

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7 Steps to Retirement Security Have a plan for retirement Maximize social security benefits Consider a hybrid retirement Protect savings from inflation Secure guaranteed retirement income Plan for long-term medical costs Use home equity wisely

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Step 1

Have A Plan!

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“Those who have planned for retirement are three times more likely to be

confident they will have sufficient income in retirement as compared to those who have not planned.”

Source: The Hartford Investments and Retirement Survey, December 2009

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Retirement Income – Your Parents vs. You

NEST EGG

SOCIAL SECURITY

PENSION

NEST EGG

SOCIAL SECURITY

PENSION

1983 2013

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Two Key Questions What do I NEED my retirement income to do?

What do I WANT my

retirement income to do?

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How Much Income Do I Need to Replace?

80%

70% 50%

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100%


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Join the Country Club Buy a Boat See the world!

Have you done that yet?

In retirement, you may want to…


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Don’t Live A

Just In Case Retirement!

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Step 2

Maximize Social Security Benefits

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© 2014 Tom Hegna • All Rights Reserved www.TomHegna.com

What Is Your Largest Retirement Asset?

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Lifetime Social Security Benefit (single)

up to: $500,000 Lifetime Social Security Benefit-Married/Combined

up to: $1,000,000

Source: Social Security Administration

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How Benefits are Funded Benefits are wage driven

Employee and employer each pay • 6.2% for Social Security (OASDI)

- $118,500 cal on taxable earnings for Social Security (2014 limit)

• 1.45% for Medicare Hospital Insurance (HI)

- Affordable Care Act increase

Source: www.ssa.gov/cola/Oct2015

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Earning Benefits

40 quarters (10 years) of wages that were subject to Social Security payroll taxes

Quarters do not need to be consecutive - Quarters do not expire

and will remain on Social Security record

Becoming eligible

$0 used in all years less than 35

Will result in lower benefit

Benefits calculated based on average of the 35 highest years of earnings

Source: SSA Publication No. 15-10003, ICN 451385. February 2012

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Difference in Benefit Amounts

Age You Choose to Start Receiving Benefits

$750 $800 $866

$933 $1,000

$1,080 $1,160

$1,240 $1,320

$0

$300

$600

$900

$1,200

$1,500

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Monthly Benefit Amounts Differ Based on the Age You Decide to Start Receiving Benefits

This example assumes a benefit of $1,000 at a full retirement age of 66

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Difference in Benefit Amounts

Age You Choose to Start Receiving Benefits

$750

$1,320

$0

$300

$600

$900

$1,200

$1,500

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Monthly Benefit Amounts Differ Based on the Age You Decide to Start Receiving Benefits

This example assumes a benefit of $1,000 at a full retirement age of 66

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What is my Breakeven Point?

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$1,200,000

$1,400,000

$1,600,000

$1,800,000

$1,000,000

$800,000

$600,000

$400,000

$200,000

$0

Monthly Payment Claim at 62: $1,500 Claim at 66: $2,000

Claim at 70: $2,640

$1,531,112

$1,285,117

$1,039,143

62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94

Breakeven Points:

Age 70 vs. 66: Age 81

Age 66 vs. 62 vs. Age 76

Age 70 vs. 62: Age 79

This is a hypothetical example for illustrative purposes only. This assumes a Full Retirement Age Benefit of $24,000 a year, an annual cost of living adjustment of 3%, and the client living to age 95.


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Three Benefits to Understand

Source: SSA.gov as of October 2014

YOUR Benefit

Personal Earnings record, or Spouses earnings record

Spousal Benefit

Spousal benefit is up to 50% of their spouse’s Social Security benefit Cannot claim spousal benefit until

spouse files for benefits

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Survivor Benefits Surviving spouse can receive or step up to the benefit of the deceased spouse

Survivor benefits generally begin at age 60

Survivor benefits reduced if received before full retirement age – up to 28.5%

Exceptions for widowers with children who are under 16

Survivor can switch to his or her own benefits

Advantageous if greater when full retirement age reached

Source: SSA.gov as of October 2014

If survivor is full retirement age, 100% of spouse’s benefit

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Important Strategies to Know

File and Suspend

File a Restricted Application

Collect on your Ex

This is a hypothetical example for Illustrative purposes only

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Step 3

Consider A Hybrid Retirement

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“Retirement at 65 is ridiculous. When I was 65, I still had pimples.” George Burns

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Benefits of A Hybrid Retirement • Increased earnings

• Increased savings

• Increased Social Security benefits


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Step 4

Protect Your Savings From Inflation

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What might $10,000 buy in the future? Hypothetical Inflation Rate

Retirement Income Concerns - Inflation

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Years From Now 0% 1% 2% 4% 6% 8% 10%

1 $10,000 $9,901 $9,804 $9,615 $9,434 $9,259 $9,091

5 $10,000 $9,515 $9,057 $8,219 $7,473 $6,806 $6,209

10 $10,000 $9,053 $8,203 $6,756 $5,584 $4,632 $3,855

15 $10,000 $8,613 $7,430 $5,553 $4,173 $3,152 $2,394

20 $10,000 $8,195 $6,730 $4,564 $3,118 $2,145 $1,486

25 $10,000 $7,798 $6,095 $3,751 $2,330 $1,460 $923

30 $10,000 $7,419 $5,521 $3,083 $1,741 $994 $573

35 $10,000 $7,059 $5,000 $2,534 $1,301 $676 $356


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Step 5

Secure More Guaranteed Income

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“Securing at least a base level of lifetime income should be every retiree’s priority - at least if they want to live happily ever after.”

Source: TIME magazine - Lifetime Income Stream Key to Retirement Happiness, July 2012

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Sources of Guaranteed Income During Retirement

Social Security

Pensions

Annuities

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The Success of your Retirement is really NOT about your assets…

Assets can be lost, stolen, swindled, sued, divorced or decimated in a market crash.

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Why do YOU need to Secure Guaranteed Income? Longevity Risk Deflation Risk Market Risk Withdrawal Rate Risk Sequence of Returns Risk

Long Term Care Risk Mortality Risk (Death) Inflation Risk

Regulatory Risk Taxation Risk

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So which RISK is #1? Longevity Risk is HANDS DOWN the #1 Risk in Retirement!

Why? Because it is NOT just a Risk. It is a RISK MULTIPLIER of the other Risks!

Longevity Risk Deflation Risk Market Risk Withdrawal Rate Risk Sequence of Returns Risk

Long Term Care Risk Mortality Risk (Death) Inflation Risk

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How do you take Longevity Risk OFF the table?

Traditional Investments such as Managed Money, Real Estate, and CD’s CANNOT Do It!

A Lifetime Income Annuity, a Deferred Income Annuity or an Income/Withdrawal Benefit Rider from

a Fixed or Variable Annuity CAN Do It!

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What Is A Lifetime Income Annuity?

A personal “pension-like” stream of guaranteed lifetime income from a financial institution.

A GUARANTEED Paycheck for Life!

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Annuity Payout Rates

Age Life Only Life w/Guarantee

65 7.1% 6.45%

75 9.73% 8.02%

85 14.57% 10.46% Source: www.immediateannuities.com (January 2015)

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OK, What are Longevity Credits?


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Understanding the Benefits of Risk Pooling and Longevity Credits

= $500 $100 x 5

Suppose five 90 year-old women take a vacation together every year …

This example is hypothetical and intended for illustrative purposes only. It is not an indication of the actual performance of any particular product.

The five women place $100 in a box


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Unfortunately one of the ladies died that year. So, they meet to vacation again. Now the four Ladies split the $500. They now each have $125 That is a 25% rate of return Question: How much was invested in the market? What interest rate did it earn?

Explaining Longevity Credits


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Explaining Longevity Credits They decide to “let it ride”

The next year one more lady dies

Now the 3 ladies split the $500

They each get $167

That is a 67% return

All of this is based on longevity credits


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…but only an insurance company can

manufacture a mortality pool.

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Age

Payo

ut

Investment Growth Return of Principal Mortality Credits

Longevity credits are a new form of “Alpha” – Retirement Alpha!

Components of Lifetime Income Payout Male age 65, $100,000 investment

Lifetime income annuities deliver higher payouts because, in addition to distributing gains and principal, they subsidize those who die late with the capital of those who die early.

Source: New York Life, 2009

Investment Advisors Can

Manufacture This Payout…

…but only a life insurance company can manufacture mortality credits


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Source: New York Life Insurance Company and Financial Research Corporation 2011 disclosure for FRC whitepaper: this information is provided as general information and is not intended to be specific financial guidance. before you make decisions regarding your personal financial situation, you should consult a financial or tax professional to discuss your individual circumstances and objectives.


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“There is no other vehicle in the marketplace that can convert assets

into income as efficiently as the income annuity.”

“Our analysis shows that no other investment vehicle can rival the income annuity for retirement

security.”

“Income Annuities offer features others can’t – High cash flow, uncorrelated to market returns; retirement alpha in the form of mortality credits, which only life insurance companies can manufacture; longevity hedging and liquidity features…

Source: FRC White Paper, “Income Annuities Improve Portfolio Outcomes in Retirement”

Whitepaper from FRC


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Longevity Credits (Mortality Credits) are a NEW form of Alpha –

Retirement Alpha!


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The Happy Factor

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You’ve Read it in the Papers

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Providing Investment Solutions Lifetime Income Stream Key to Retirement Happiness A new study in a land of grumps reveals that retirees with a guaranteed lifetime income stream can find true happiness. By Dan Kadlec July 30, 2012 “securing at least a base level of lifetime income should be every retiree’s priority—at least if they want to live happily ever after.”

Read more: Retirement: Lifetime Income Streams Can Bring About Happiness. Study Says | TIME.com http://business.time.com/2012/07/30/lifetime-income-stream-key-to-retirement-happiness/#ixzz2kIuZujsZ

What Are Others Saying?

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Annuities and Retirement Happiness By Steve Nyce and Billie Jean Quade September 2012

Retirement satisfaction has steadily declined over the last decade.

Satisfaction is highest among those with high levels of wealth and income who are very healthy and annuitize their income.

Among retirees with similar wealth and health characteristics, those with annuitized incomes are happiest.

Annuities provide the biggest satisfaction boost to retirees with less wealth and those in poor health

What Are Others Saying? Providing Investment Solutions

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Dick Austin

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Step 6

Plan for Long Term Medical Costs

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GO-GO years

SLOW-GO years

NO-GO years

The 3 phases of Retirement

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The odds of your home burning down are about 3%

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Barry Rand, "Challenges of Long-Term Care," AARP Bulletin, November 2013.


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The odds of you totaling your car are about 18%

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The odds of someone 65 or older needing some form of long-term care are about 72%

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LTCi is a shield of protection to help preserve assets and income for a long life. – Investments and savings may be kept

intact. – Assets can be preserved to pass over

to a spouse or to children. – Funds can be used as wanted not as

needed

Hypothetical example for illustrative purposes only.

Long-Term Care Insurance Risk Management Tool

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Step 7 Use Your Home Equity Wisely

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Accessing the Equity in Your Home • Sell the home and downsize

• Take a loan against the equity

• A reverse mortgage

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Don’t Worry, Retire Happy Have a retirement plan Work a little longer and save a little more Cover your basic expenses with guaranteed

lifetime income Optimize the rest of your savings to address

inflation Maximize your social security benefits Use you home equity wisely

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Order from www.tomhegna.com and www.retirehappynow.com

Additional Tools Developed to Help!

http://www.tomhegna.com/


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Don’t Worry, Retire Happy! Seven Steps to Retirement Security

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Data & Analytics

Tom hegna