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Tools and Strategies forTools and Strategies forLife’s Financial DecisionsLife’s Financial Decisions

Presented By:

Brian H. Grant, CLU, ChFC, MSFSCertified Financial Planner™

President

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Hypothetical Case StudyHypothetical Case Study

Maxine T., MD

26 years old

Single, female

Second-year, Rheumatology Resident

Annual income $38,000

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Financial Planning Financial Planning

Develop a budget – control spending

Have an emergency fund

Build strong personal savings base

Consider buying vs. renting a home

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Financial Planning (cont.)Financial Planning (cont.)

Leasing vs. purchasing a car

Investing vs. paying off loans

Risk management / insurance needs

Saving for retirement

Education planning

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Financial CalculatorsFinancial Calculators

Available on our website: trinityfp.com

Retirement Savings Taxes Loans and mortgages Business Auto Insurance

(See last handout for additional detail)

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What is a Mutual Fund?What is a Mutual Fund?

FUNDInvestInvest

$$$$$$$$

Buy Buy Shares

Shares

Earnings

EarningsPotential

Potential

ProfitsProfits

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Variety of Mutual FundsVariety of Mutual Funds

Money MarketMoney Market

Fixed IncomeFixed Income

BalanceBalance

Growth &Growth & IncomeIncome

InternationalInternational

AggressiveAggressiveGrowthGrowth

HigherHigher RiskRisk

LowerLower RiskRisk

HigherHigherPotentialPotential

ReturnReturn

LowerLowerPotentialPotential

ReturnReturn

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Why Invest in a Mutual Fund?Why Invest in a Mutual Fund?

Diversification and stability

Collective buying power

Professional management

Convenience

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Investment StrategiesInvestment Strategies

Remember that past performance doesn’t guarantee future returns

Buy selectively with a purpose

Know your fund’s portfolio objectives

Disciplined savings program

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Investment StrategiesInvestment Strategies

Maintain long holding periods

Diversify– Asset allocation

Dollar cost averaging– Purchase more in down markets; less in

higher markets

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What Affects Portfolio Return?What Affects Portfolio Return?

1.8% Market timing

4.6% Security selection

91.5% Asset allocation

2.1% Other factors

Source: Financial Analysts Journal

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The Power of TimeThe Power of Time

CINDY TOMMY

Age started 18 27

Age ended 21 65

Rate of return* 12% 12%

Contributions 4 x $2,000 39 x $2,000

Total Contributed $8,000 $78,000

At age 65 $1,567,501 $1,532,183

Start Saving for Retirement TODAY!Start Saving for Retirement TODAY!* These are hypothetical examples and are not intended to portray the results of any particular investment.

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Reduce TaxesReduce Taxes

Qualified retirement plans

Mutual funds

Nonqualified strategies using life insurance

Nonqualified strategies using annuities

* Early withdrawals may be subject to a surrender charge. In addition, distributions prior to age 59 ½ may be subject to a 10% tax penalty.

** Tax free income is achieved by withdrawing from the policy cash value an amount equal to the total premiums paid (cost basis), then using policy loans for the balance. Outstanding policy loans at death, and withdrawals, will reduce the policy death benefit and cash values. If the policy is allowed to lapse with a loan outstanding, the amount of the loan in excess of your cost basis will be taxable as ordinary income to the extent of the gain in the policy and may be subject to a 10% income tax penalty prior to age 59 ½.

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The Power of Tax DeferralThe Power of Tax Deferral

Tax deferral means you don’t reduce your investment by income taxes during accumulation.

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Disability InsuranceDisability Insurance

Insure the goose or the eggs?

Ensure your future insurability

“Own Occupation” definition

Cost of living rider

Residual Benefit Rider

Non-cancelable policy

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Power of Life InsurancePower of Life Insurance

Tax deferred growth

Tax free retirement income

Income tax free death benefit

* Tax free retirement income is provided by first withdrawing premiums you have paid then taking any additional funds by using policy loans. Under current law, policy loans are income tax free provided this policy remains in force and is not a modified endorsement contract as defined by IRC7702A. If the policy is allowed to lapse with a loan outstanding the amount in excess of your cost basis will be taxable. Policy withdrawals or outstanding loans will reduce the cash value and death benefit to your beneficiaries.

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Life InsuranceLife Insurance

Four basic reasons– Income replacement– Final expenses– You love someone– Giving to charity

The need and why…The need and why…

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Life InsuranceLife Insurance

Four Types–Whole life– Term– Universal life– Variable universal life

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Life InsuranceLife Insurance

What financial formula was used to estimate your need?

How much is enough?

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Life InsuranceLife Insurance

The amount you need at a price you can afford.

What is the best type?

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FAQ’s About WillsFAQ’s About Wills

Q. What is the effect of a will on life insurance?

A. If a life insurance policy is payable to an individual, then the will of the insured has no effect on the proceeds. If the life insurance policy is payable to the estate of a person, then the disposition of the proceeds can be directed by will in the same manner as any other kind of property.

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FAQ’s About WillsFAQ’s About Wills

Q. Can taxes be saved by a will?

A. Under certain conditions, definite savings can be made by the carefully planned disposition of a family estate in accordance with provisions of a skillfully drafted will. In this regard, the will may provide especially for the surviving spouse (by trust or otherwise) to minimize or eliminate taxes payable on the death of the survivor.

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FAQ’s About WillsFAQ’s About Wills

Q. When should a will be made?

A. A will should be made while the maker is in good health and free from emotional stress. A will that is hastily planned and drafted under pressure seldom does credit either to the maker or the draftsman. The “deathbed” will is often the subject of long, expensive, and sometimes bitter litigation. Because of changing conditions in family, in size of estate, and in tax laws, a will should be reviewed periodically. A will should always be reviewed when there is a change in marital status.

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FAQ’s About WillsFAQ’s About Wills

Q. Who should prepare the will?

A. Generally, a will must be written and witnessed in a special manner provided by law. The drafting of a will requires learning, skill, and experience obtained only by study, training, and practice. Only a practicing lawyer can perform this service.

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Premier Financial Group, Inc.Premier Financial Group, Inc.1522 Old York Road1522 Old York RoadAbington, PA 19001Abington, PA 19001

(215) 887-4750(215) 887-4750

E-mail: briang@trinityfp.comE-mail: briang@trinityfp.com

MemberMemberTrinity Financial PartnersTrinity Financial Partners

Visit our websites:Visit our websites:trinityfp.comtrinityfp.com

www.premierfinancialgroup.comwww.premierfinancialgroup.com