September 4, 2018

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So just who are and what are the Smart  people doing for their Retirement Income to mitigate loses do to market volatility  and the imminent future increases from income taxation on their hard earned retirement income? 

Let’s take a look at the heavy hitters:

The big boss of Merrill Lynch, would love to manage your retirement for you, was guaranteed $3.4 million a year in retirement.

Bank of America CEO Ken Lewis has $53 million in his TAX EXEMPT SMART RETIREMENT PLAN AND is guaranteed to get $3.486 million a year as an annual retirement benefit beginning at age 60. How do you think Bank of America plans on fulfilling the promise of those benefits?

Stephenson at AT&T has $41 million in his TAX EXEMPT SMART RETIREMENT PLAN

Boeing CEO McNerney has $34 million in his TAX EXEMPT SMART RETIREMENT PLAN

Kent at Coca-Cola has $39 million in his TAX EXEMPT SMART RETIREMENT PLAN

Roberts at Comcast has $232 million in his TAX EXEMPT SMART RETIREMENT PLAN

Tillerson at Exxon’s has $43 million in his TAX EXEMPT SMART RETIREMENT PLAN

GE’s CEO has $52 million in his TAX EXEMPT SMART RETIREMENT PLAN

Marilyn Euston CEO at Lockheed Martin has $36 million in her TAX EXEMPT SMART RETIREMENT PLAN

Palmisano  at IBM has $28 million in his TAX EXEMPT SMART RETIREMENT plan however he is the only one from Barry Dykes research who had a 401(k) plan as well.

The rest of them DO NOT Have 401(k)s - I Repeat DO NOT Have 401(k)s!

They have their retirement income backed by the most secure tax exempt retirement plan available today that has the blessings of the infernal revenue!

And then there’s provisional income that put’s your social security in the cross hairs as well.  Is there a way to protect your retirement income from the impending tax hikes that appear to be coming down the stretch?  Yes, with proper planning!

Planning your dissent is more important than the climb!!!

I can’t imagine anyone looking forward to being stranded at the top of a mountain they just work so hard to climb. They knew in advance that they needed a plan to navigate their dissent before they even climbed that mountain. I also can’t imagine any retiree working hard to save and preserve the money they set aside for their retirement income during their working years just so they can pay much of it out in fees and then taxes after they retire only to be left stranded and burdened with exorbitant income taxation, relying primarily on Social Security to get them through their retirement years unable to enjoy the life style they envisioned in retirement.

News

  • In 2013 MorningStar published a study of their finding on low yields and safe withdrawal rates for retirement plans. The authors of the study were notable and accomplished PhD’s with advanced degrees in economics and finance. They concluded that our ability to avoid running out of money in retirement was based on taking no more than 2.8% a year from our accounts. Now just think about that: 2.8%. On $100,000 account for our retiree, that would be $2800 – quite a difference from the $3649 the IRS is requiring to be taken out. In fact restore 30% more than the MorningStar’s expert consider safe if the goal is to be highly certain you won’t run out of money in retirement.
  • • “The banks and the bigs are robbing the country blind in broad daylight. Barry Dyke calls it like it is.” Gerald Celente, Trends Research Institute, world renown trends forecaster
    • “Barry Dyke has rendered us all a great service, much like Paul Revere when he alerted the colonists that ‘the red coats are coming said Pat Boone, Beverly Hills, California, speaking about The Pirates of Manhattan.
  • • “Guaranteed Income: A Risk-Free Guide to Retirement" - is strong in passion and rich in detail, a fine combination. I especially enjoyed your “take” on annuities.” John Bogle, Founder, Vanguard Investments
    • “Barry Dyke called it.” Jay Leno, Burbank, California
    • “Barry is one of the most insightful, provocative and informed people in the industry.” Laurence Barton, PhD, former President of The American College, Bryn Mawr, Pennsylvania
  • • Why Wells Fargo, Bank of America, JPMorgan Chase, PNC Bank and Bank of New York Mellon who make billions speculating with your money in the stock market use guaranteed annuities and life insurance products to stabilize their balance sheets and fund their benefit plans. See why mutual fund giants, Fidelity and Vanguard, also use annuities to provide guaranteed income for their well-healed client base.
  • • Why the nation’s top financial regulator, The Federal Reserve System, in 2008 used annuities to dodge the stock market meltdown in its 401(k). Learn how Fed chairs, Ben Bernanke and Janet Yellen, count on and invest in annuities to finance their retirement.
  • • How General Motors, Verizon, Bell System, NCR, TRW, Kimberly-Clark and others are “de-risking” their pension plans from stock-market volatility by purchasing multi-billion dollar annuities.
    • Why top executives from AT&T, Bank of America, Boeing, Coca-Cola, Comcast, General Electric, IBM, Lockheed Martin and hundreds more fund retirement programs with monster annuities and cash-value life insurance.
  • We are witnessing the collapse of the “American Pension” and facing a “Retirement Income Crisis.” America’s solution to this problem has been to adopt the 401(k). Funded with highly speculative mutual funds, the 401(k) has proven to be a colossal failure in providing the guaranteed lifetime income stream which we all want in our retirement years. There is a solution. Best-selling author, Barry James Dyke, in his third book, "Guaranteed Income: A Risk Free Guide to Retirement", provides meticulous, groundbreaking research showing how consumers can create their own pensions by using annuities and life insurance products.
  • GE’s CEO with $52 million qualify deferred compensation plan, which is also likely insurance base. Palmisano is the only one from Barry Dykes research who had a 401(k) plan. The rest of them did.
  • As of 2010, JP Morgan had $10 billion. Bank of America arose Merrill Lynch had $20.3 billion. PNC Bank had $7.4 billion. And Mellon had $3.7 billion. Amounts of money that they have in high cash value life insurance based products.
  • Why is that Wells Fargo has $18.2 billion of life insurance and annuity cash value in its one capital? One capital is the safest capital in the bank. They have more life insurance and annuity values on the book than they have money in their defined benefit pension plan to pay out for their future retirement benefits. They’ve got more of these values on their books then they have invested in physical bank buildings.
  • On the corporate annual report, they show $53.4 million in cans SERP. Where is he? Is a high cash value life insurance policy. That’s with the usually to ensure that they’re able to make good on can Lewises 3.4 million lower all year special pension. Let’s think about that for a second.
  • Bank of America CEO Ken Lewis is guaranteed to get $3.486 million a year as an annual retirement benefit beginning at age 60. How do you think Bank of America plans are fulfilling the promise of those benefits? Well, they’re going to use Bank of America refers to as their annual statement as a SERP. The SERP is not the company 401(k) where a defined benefit plan. It’s a special plan for their most senior executives.
  • I can’t imagine anyone looking forward to being stranded at the top of a mountain they just work so hard to climb. They knew in advance that they needed a plan to navigate their dissent before they even climbed that mountain. I also can’t imagine any retiree working hard to save and preserve money during their working years just so they can pay much of it out in taxes just a few years after retirement and be left stranded, relying primarily on Social Security to get them through their retirement years to enjoy the life style they envisioned in retirement. You have to plan your dissent and exit strategy in advance of reaching your retirement age destination.
  • They have their retirement income backed by the most secure tax exempt retirement plan available today that has the blessings of the infernal revenue!

    And then there’s provisional income that put’s your social security in the cross hairs as well. Is there a way to protect your retirement income from the impending tax hikes that appear to be coming down the stretch? Yes, with proper planning!
  • > Stephenson at AT&T has $41 million
    > Boeing CEO McNerney has $34 million
    > Kent at Coca-Cola has $39 million
    > Roberts at Comcast has $232 million
    > Tillerson at Exxon’s has $43 million
    > GE’s CEO has $52 million
    > Marilyn Euston CEO at Lockheed Martin has $36 million
    > Palmisano at IBM has $28 million

    > Palmisano plan however is the only one from Barry Dykes research who had a 401(k) plan as well.
    > The rest of the heavy hitters DID NOT Have 401(k)s.
    > They had Insurance based plans!!!
  • The big boss of Merrill Lynch, would love to manage your retirement for you, was guaranteed $3.4 million a year in retirement.
    Bank of America CEO Ken Lewis has $53 million in his TAX EXEMPT SMART RETIREMENT PLAN AND is guaranteed to get $3.486 million a year as an annual retirement benefit beginning at age 60. How do you think Bank of America plans on fulfilling the promise of those benefits?
  • So just who are they and what are they, the Smart Retirement Planning people doing to mitigate the imminent future increase in taxation on their hard earned retirement income?

    Let’s take a look at the heavy hitters:
  • Back in the 1950s there were 16 workers for everyone Social Security recipient. That allowed us to spread the responsibility to a wide number of workers so they didn’t really fill the pitch. The government could fulfill its promises. Today our population is aging and we are inching toward a 3 to 1 ratio. That means we’ve only got three workers for everyone Social Security recipient. So the workers feel the pinch a heck of a lot more, but so far the government can still carry out promises.
    How long will the government be to do that? Possibly for another 16 years or so.

Most Americans couldn't tell you what their 401(k) fees are, or if they even have them. Thirty-seven percent believe their 401(k) has no fees at all, while another 36% either don't know their fees or don't know where to find them, according to a recent TD Ameritrade report.

The easy answer is that all 401(k) plans have fees. And there are two general categories: administrative (also known as "participation") fees and investment fees.

Ninety-five percent of 401(k) plans charge administrative fees, and these cover the costs of things such as record keeping, legal services, customer support and transaction processing.

In addition, all 401(k) plans charge investment fees (or at least I've never heard of one that doesn't). These are fees charged by the investment funds you choose and are typically listed as "expense ratios" in your plan's literature.

These fees are expressed as a percentage of assets, and the average 401(k) costs 1% of assets every year for all fees. In other words, the average 401(k) participant will pay $1,000 for every $100,000 in plan assets.

However, this can vary tremendously. Generally speaking, large-scale 401(k) plans are cheaper, while small business 401(k) plans tend to have the highest fees. All fees are clearly disclosed in your plan's literature, or you can ask your plan administrator for information on your fees.

A Quick Guide to Mutual Fund Expenses

You may be surprised at how expensive some mutual funds' expenses and fees are over the long run.

Mutual funds can be great investing options for people who want the high-growth potential of the stock market, but don't want to choose individual stocks to buy. However, the convenience of mutual funds isn't free -- there are several types of expenses investors may need to pay, and these fees can really eat away at your long-term performance.

The three main types of mutual fund expenses

When you invest in a mutual fund, there are three main expenses you may have to pay. Not all mutual funds have all three expenses, and you can find the details in a fund's prospectus.

front-end sales charge, also called a sales load, refers to money you pay upfront when you invest in a mutual fund. This is a form of commission paid to financial planners, brokers, or investment advisors. If you limit your search to "no load" funds, you can avoid this expense altogether.

back-end sales charge, or back-end load, refers to money you pay when you sell, or redeem, your shares of a mutual fund. This expense can be a flat fee, or can gradually decrease over time to incentivize investors to hold their investments. Like front-end sales charges, these are commissions paid to third parties, and are not a part of the fund's operating expenses.

An expense ratio is the fund's annual operating expenses, expressed as a percentage of assets. Unlike the sales charges, this cost applies to all mutual funds. This covers management fees as well as other expenses of running the mutual fund. For example, a 1% expense ratio means that for every $1,000 you have invested, you'll pay $10 in expenses per year.

You may see two expense ratios listed – gross and net. A fund's gross expense ratio refers to the total annual operating expenses, while the net expense ratio may be reflective of a temporary discount, and may therefore be lower. Simply put, the net expense ratio is what the fund's investors are paying now, while the gross expense ratio is what the fund's expenses could be in the future. As a long-term investor, it's a good idea to base your decisions off of the gross expense ratio – in other words, don't assume that the lower net expense ratio will last forever.

You might be surprised at how much these expenses can really cost

As an example, let's say that you have $10,000 to invest. The S&P 500 has historically averaged returns of about 9.5% per year, and $10,000 compounded at this rate for 30 years is $152,200.

Now, let's say that you invest in a mutual fund that does just as well as the overall market. That is, the fund's investments generate total returns of 9.5% per year on average. However, to invest in this particular fund, you'll need to pay a 3% front-end sales charge, as well as a 1% expense ratio on an ongoing basis.

These may sound like small percentages, but these small fees result in a 30-year investment value of $109,200. In other words, the front-end sales charge and expense ratio reduced your investment gains by $43,000.

With that in mind, here's a calculator to use while you're shopping around for mutual funds that can help you understand the long-term impact of the fees.

It may surprise you how sales charges, management fees and lost opportunity cost can erode the total return on your mutual fund. Use this calculator to estimate the impact these charges may have on the growth of your investment.

Is an Iul better than a 401k?  401(k) or IUL - Which is Better?

 

Since indexed universal life insurance (IUL) is often mentioned as an alternative to a401K, IRA, or other qualified plan, let's look into the basics of IUL vs401K. ... First,IUL provides a life insurance benefit, which can be substantial depending on how it is structured.

Since indexed universal life insurance (IUL) is often mentioned as an alternative to a 401K, IRA, or other qualified plan, let's look into the basics of IUL vs. 401K.

Feedback from clients show that the biggest advantage IUL has over 401Ks and IRAs is that you can have reason to hope for double digit gains, but still sleep at night, knowing that the investment component of IUL will never incur a loss! The prospects for higher returns are enhanced by the use of leverage - not available with a 401(k), IRA, or other types of qualified plans. Also, even if you put some or all of the money into the policy's Fixed Account, many of these policies currently pay interest at above 4% - much higher than the banks. Using the Early Cash Value Rider, available with some carriers, the client may also be able to have access to 90% or even 100% of his cash the first year. No more waiting around for years the achieve a high level of liquidity, thus lessening the need to keep his liquid assets in banks. This effect is also highly useful with alternative and supplemental plans called 409A or SERPs.

IUL is a bit like a Roth IRA, but with important differences. First, IUL provides a life insurance benefit, which can be substantial depending on how it is structured. Some carriers offer a Waiver of Specified Premium Rider that can make your retirement plan self-completing in the event you cannot work due to disability. Imagine asking your 401K provider to make your contributions for you if you can't work!

Have you ever reached the end of the year, only to find that you haven't been able to fund your 401K to the maximum allowable? Even worse, have you been in a position to put in extra the following year? Any qualified plan, including a 401K, do not allow catch-up contributions for past years. IUL, on the other hand, is only limited as to cumulative contributions. If you under-fund in one year, in most cases you can play catch-up anytime in the future. In the real world, this feature may turn out to be one of the most critical advantages IUL has over a 401K, an IRA, a Simple IRA, or a SEP.

IUL has virtually no restrictions on the amount one may contribute or when one can distribute funds. A person usually accesses funds from IUL through policy loans. While many people are apprehensive about adopting a pattern of borrowing, the leverage made possible via IUL is generally considered an acceptable risk once understood.

But what about the "bottom line"? Which approach can result in more retirement income for an individual after income taxes are taken into consideration? The surprising answer may be "IUL". The newest uncapped index strategies sometime back-test at returns approaching 10% - pretty impressive when you also know you will never get an index return of less than zero thanks to hedging.

With 401Ks, the higher yields are only achieved by investing in stocks, ETFs, or mutual funds. All of these are unprotected against investment loss. Remember 2008? There was no place to hide! If you owned the S&P in your 401K, you lost over 30% in one year.

The biggest contributing factor to the potentially stronger performance of IUL has to do with  leverage.

Also, the government only lets you get two out of three potential income tax breaks:

1 ) Tax-deductible contributions;

2 ) Tax-deferred accumulation of earnings;

3 ) Tax-free distributions.

IRA's, 401K's,  Roth IRA's, and IUL all get 2 out of 3. See CPA Ed Slott's video>

While contributions to IUL and Roths are not deductible, the investment buildup has the same tax deferral as for a qualified plan. And unlike a non-Roth qualified plan, IUL retirement distributions (via loans) are not not taxable. Roth distributions are only tax-free if taken after age 59 1/2 with certain exceptions, and participation in a Roth has significant contribution limits and other restrictions.

However, the 401(k) or traditional IRA get a deduction now, while some of the Roth or IUL tax advantages come later. Therefore, it is important to run the numbers for given contributions, durations, changes in tax rates now vs. during retirement, and of course, investment return assumptions.

Another way of looking at this is to consider a farmer in one state being told there was to be a 10% tax on the value of seed. Another farmer in a neighboring state is taxed 10% on the value of all harvested grain. If you were a farmer, which state would you rather live in? The "seed" money for IUL is taxed now, but the harvest at retirement may be able to be taken tax-free. On the other hand, the 401K, IRA, or other qualified plan may not be taxed now before assets grow, but the "harvest" at retirement is taxed at ordinary income rates. Of course, it's not that simple. Having more seed to plant can result in a larger harvest. It also depends upon the elapsed time before the harvest. And what if the tax on the harvest were at a different rate than the tax on seed?