Whitepaper - Safely Structured Retirement Planning Strategies

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The figures included here are for illustrative/ informational purposes only and are not guaranteed unless expressly stated in the insurance policy/ contract as such. The potential results of the Safely Structured Retirement planning Strategies/ SSRPS™ case design are not guaranteed and assume all stated returns and values in any example / conversation provided, are realized over the exact time frame stated/ discussed, which is not possible to predict. Actual returns for any client will vary, perhaps significantly, based on a number of factors, but not limited to, market conditions, changes in guaranteed or non-guaranteed interest rates, actual realized rates of return, product fees and charges, taxes, inflation or the length of time in which this strategy is implemented. Past performance may not be used to predict or project future results. The various scenarios stated/ discussed do not indicate the probability of the scenario occurring but rather the potential outcomes if the scenario were to occur. The SSRPS™ information provided may use terms to describe certain products or features that might vary among insurance carriers and products. Always refer to the carrier’s brochures and illustrations for the complete and accurate terms and descriptions of values.

Although an external index may affect the interest credited to an annuity or a life insurance policy, associated with the SSRPS™ case design, such contracts do not directly participate in any equity or fixed income investments. You or your clients if you are an advisor, are not buying shares in an index. The Values discussed do not include any dividends. Variable annuities or variable life insurance policies cannot be used in any SSRPS™ case design.

Annuity and insurance product rates, guarantees and death benefits are backed by the financial strength and claims-paying ability of the issuing company. Life insurance if involved in any Safely Structured Retirement planning Strategies/ SSRPS™ case design involves fees and charges, including surrender penalties for early withdrawals. Applying only to life insurance, life insurance may require medical and potentially financial underwriting to qualify. Loans and partial withdrawals will decrease the death benefit and cash value and could cause the policy to lapse or require additional premiums to remain in-force. Annuities if part of your SSRPS™ case design require financial underwriting to qualify.

Any withdrawals taken from qualified accounts (including an annuity within a qualified plan) prior to age 59-1/2 may be subject to a 10% federal additional penalty in addition to ordinary income taxes. There is no additional tax-deferral benefit derived from placing IRA or other tax- qualified funds into an annuity. Features other than tax-deferral should be considered in the purchase of a qualified annuity. IMPORTANT: While some of these hypothetical scenarios discussed on this website may utilize general past stock market performance known and discussed in the media/ market place, data or projected future returns, a person’s actual returns or your clients’ actual future results will be different, either better or worse, so these results should not form the sole basis of yours / your clients’ retirement planning/ estate planning/ income planning strategy.

There may be other products that are not considered in the SSRPS™ methodology that can be just as or more effective at addressing retirement risks and goals. Many annuities may offer benefit riders with additional guaranteed options or benefits, such as enhanced income for health care or other medical expenses. Some options are part of the contract and others are optional and available for an additional stated cost. Benefit riders offer an income account value (commonly referred to as the benefit base, protected value or income base), which is not the same as the contract accumulation value. Unlike the annuity’s accumulation value, often spoken of as an account value (which can be accessed at any time as a lump sum, subject to potential surrender charges), the income account value is generally not available as a lump sum withdrawal; it is most often used only for calculating the income amount available under the benefit rider provisions. Be aware that sometimes the Income Account Value can be utilized as an enhanced / alternative death benefit usually subject to a “payout over a stated number of years”, often 5 or more years. These benefit riders often include other limitations and restrictions as well, so always review the contract carefully. Health care benefits and riders are NOT a replacement for long-term care insurance.

For Fixed Index Annuities, the Accumulation values, Income Account Values, and Death Benefit Values will be affected by the interest crediting strategy chosen, which may be derived from a) movements of an external market index, b) by the guarantees of a lifetime income rider, and c) by costs/fees, participation rates, caps, or spreads. These examples should not be used to demonstrate the potential performance of the index or to predict future contract values. As many people learn best through demonstrations, and pictures, the SSRPS™ Case Design Explanatory Software /Worksheets are intended to provide a view and/ or an “educational experience” relative to the workings of particular types of annuity products, and relative to “case design”. We intend to help the financial professional and indirectly the consumer, see the merit, or the effect of adding other elements/ products into the case design, such as life insurance and/or to provide coverage for a potential future health care crisis (nursing home, home healthcare). This “educational experience” may not be possible by simply viewing a company illustration pr by reading a brochure. Certain annuity and life insurance withdrawals will reduce the contract value and the value of any income rider or protection benefits. Early withdrawals or surrender of the contract can result in a withdrawal or surrender charge and will be subject to ordinary taxes. Loans and partial withdrawals will decrease the death benefit and cash value, and for life insurance policies, may require additional premiums to keep the policy in force. In some instances, annuity contracts may be subject to a market value adjustment, relative to any “surrender of a policy”.

In addition to being taxed as ordinary income, if withdrawals are taken prior to age 59 1/2, they can also be subject to a 10% federal additional tax. Bonus annuities may include higher surrender charges, longer surrender periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don’t offer a bonus feature. The SSRPS™ software is in no way an attempt to provide tax advice; it does not provide tax or legal advice. The information contained in any SSRPS™ website/ report / output/ case design should be used for informational purposes only. The appropriate professionals should be consulted on all legal and accounting matters prior to or in conjunction with implementation of any strategy. Tax laws may change, which may affect the validity of any scenario/assumption discussed.

This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal, state or local tax penalties. This material is written to support the promotion or marketing of the transaction(s) or matter(s) addressed by this material. Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor or attorney.

American Brokerage Services