OAK BROOK BENEFIT RESOURCES

2625 Butterfield Rd., Suite 224SOak Brook, Illinois 60523

630-954-3444

Thomas J. Murphy, CLUPatty Tipton, CLU

ASSET PROTECTION IN RETIREMENT

Consider Your Income Needs

Lifestyle Expenses

Income Sources

Typically 60-70%

of retirement income

EssentialHousingMedical

Long Term CareFood

Lifetime Payments

Pension PlanSocial SecurityAnnuity Income

ReliableConsistentProtected

Typically 30-40% of

retirement income

DiscretionaryTravel

EntertainmentPursuits

Other Assets401(k)

IRATaxable

Investments

FlexibleMarket

exposure

When reviewing the income sources you have along with your projected lifestyle expenses

Will your essential expenses be covered by income sources that are reliable, consistent and protected?

Or, will you need to tap into investments that have more flexibility and exposure to market volatility?

Concerns Facing Your Retirement Dollars

Safety

Accessibility

Taxation

Outliving your income

Locking in interest credits

Probate Costs

IS WALL STREETTHE ANSWER?

Bear Markets(S&P 500 1929-2009)

11/07 to 2/091/00 to 10/027/90 to 10/908/87 to 12/8711/80 to 8/821/73 to 10/7411/68 to 5/702/66 to 10/6612/61 to 6/628/56 to 10/575/46 to 3/48

11/38 to 4/423/37 to 3/387/33 to 3/359/29 to 6/32

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

51%47%

22%34%

27%48%

36%22%

28%22%

28%46%

55%34%

87%

Losses Hurt

Loss Gain RequiredAverage bear market decline

-38% +61%

Last bear market decline

-50.9% +92%

What is Warren Buffet’s #1 rule for investing?

Don’t go backwards

How about rule #2?

Facts About The S&P 500 Index

It consists of 500 companies that are listed on the New York Stock Exchange, American Stock Exchange and NASDAQ

Recognized since 1923, as the preferred benchmark of the U.S. stock market and the U.S. economy

The S&P 500 Index is simply a representative number indicating the movement of the 500 companies that make up the index

S&P 500 Index vs. Managed Funds

Only 19% of all actively managed funds, with managers whose job it is to pick winning stocks, beat the S&P in 2006

Out of more than 8,000 mutual funds, Manu’s Daftary Quaker Strategic Growth Fund, is the only one that has out-performed the S&P 500 for the past eight calendar years

Predicting the MarketThe rise and fall of the market are beyond anyone’s

control

As the stock bubble was bursting in 2000 - 95% of all stocks in the S&P 500 had no sell recommendation

“The idea that any individual can beat the market is extraordinarily unlikely. Yet the market is full of people who think they can and full of other people who believe them. This is one of the great mysteries of finance. Why do people believe they can do the impossible? And why do other people believe them?

Where Should My Money Go?

Do I invest in Wall Street for greater upside potential and take the risk of market

downturns?

OR

Do I invest for a high degree of safety to avoid losses and miss out on market

gains?

Introducing Indexed AnnuitiesThe Best of Both Worlds

Principal is always protected from market risk Interest earnings are based on a percentage

of the upward movement of an index such as the S&P 500 while providing a minimum guaranteed return

Annual gains are “locked in” and can never be lost due to future market declines

In other words - We win by not losing

Win By Not LosingKeeping your money safe

98 99 00 01 02 03 04 05 06 07 08 09$80,000

$90,000

$100,000

$110,000

$120,000

$130,000

$140,000

$150,000

$160,000

S&P 500Index linked

Concerns Facing Your Retirement Dollars

Safety

Accessibility

Taxation

Outliving your income

Locking in interest credits

Probate Costs

Safety

Competitive yield with guarantees Diversification

Fixed Interest Rate Bond Indexed – Linked Equity Indexed – Linked

Never lose money due to market downturn Automatically locks in gains

No Upfront sales charges Some offer a bonus on all new money for five years or

longer Only insurance companies have regulatory reserve

requirements with conservative portfolios and high liquidity to meet contract owners’ needs

Accessibility

Annuities have guaranteed, penalty-free withdrawal options that allow you to access a portion of your money without paying any penalties or charges

In the event you are confined to a nursing home, you have access to a larger portion of your money, penalty-free

A guaranteed lifetime income access to money in case of emergencies is preserved

Taxation

How annuities really work Earnings compound on top of principal Earnings compound on top of earnings And earnings compound on top of the dollars

that you normally send to the government in taxes

You do not pay taxes on your annuity’s growth until you take it out

Outliving Your Income

We are living longer . . .

In 2000, there were 50,000 people age 100 years or older. In the year 2010 there were over 131,000 people age 100 or

older!

Year Life Expectancy

1850 39

1900 47

2006 77.9

Outliving Your Income

You need two guarantees for your retirement income:

Income that remains constant even when interest rates decline

Income for your entire life, no matter how long you live

Locking In Interest RatesClient Age – 60 Initial Premium - $110,000 (Incl. Bonus of 10%) Guaranteed Rate – 8% Compound

Client AgeAccumulation Account

ValueGuaranteed Interest Rate

GuaranteedPayout Percentage

Guaranteed Lifetime Income

Benefit

60 $110,000 8.00%

61 $118,800 8.00%

62 $128,304 8.00%

63 $138,568 8.00%

64 $149,654 8.00%

65 $161,626 8.00%

66 $174,556 8.00%

67 $188,521 8.00%

68 $203,602 8.00%

69 $219,891 8.00%

70 $237,482 5.25% $12,468

75 $12,468

80 $12,468

85 $12,468

90 $12,468

95 $12,468

Probate Cost

An annuity, with a properly designated beneficiary, may bypass the probate process and may avoid probate administrative costs, fee, delays and publicity

Therefore, at your death, more of your money goes to the family members you choose.

Retirement Planning is About Managing Risk

Risk of inflation and taxation eroding retirement savings

Risk of market downturns depleting needed assets and income

Risk of outliving your money Risk of long-term care

The Most Asked Questions About Long Term Care

Planning

WHY IS PLANNING IMPORTANT?

Needing long term care places an enormous emotional and physical strain on loved ones and family members. That’s why having a plan is so important.

20%

20%

12%

17%

31%

Estimated Years of LTC Needed After Age 65

2-5 YearsMore than 5 Years1 Year or Less1-2 YearsNone

What are the Odds I’ll Need Care?

The U.S. Government reports that 70% of people who reach age 65 will require

long-term care services at some point in their lives.

Your long-term care planning today must prepare for future costs. Double the

costs for a couple.1 Year of

Care3 Years of

Care5 Years of

Care

Cost Today $ 73,000 $225,570 $387,500

In 10 Years $ 98,100 $303,200 $520,800

In 20 Years $131,850 $407,500 $700,000

What’s The Best Age to Start Planning?

You will never be younger or healthier than you are today. That’s the reason to start planning now

when you have the most options.When Individuals Apply: New Coverage by Age

Applicants Rejected for Unacceptable Health

Under 54

26.5%Age 65+

19.5%Age 55 – 64

54%

Ages 50-59

14%

Ages 60-69

23%

Ages 70-79

45%

Ages 80+80%

What Are The Most Important Questions to Ask?

Where do I ultimately want to receive care – at home, in an assisted living community, or a nursing home?

What does care cost where I live – now or where I plan to retire?

What discounts do I qualify for? Does my employer offer a long term care

insurance benefit?Your Real Risks After ReachingAge 65, Men (M) – Women (W) M W2.2% 2.6%

M15.5%

W18.0%

M44.0%

W72.0%

Major House Fire Severe Car Accident Needing Long-Term Care

Why is it Important for Women to Plan?

Women are often impacted as providers of care for spouse and, ultimately, as recipients of care. Planning is especially important for

women living alone.Women Benefit More From LTC Insurance

67% of all long-term care insurance benefits are paid for care received by women.

Single Women 41%

Single Men 12%

Married Women 24%Married Men 22%

What Does Medicare Cover?

Very little because it is restricted largely to specific illnesses and injuries for short

periods of time.

MEDICAID is a joint federal and state program for those with low income and financial resources and only pays after

you have depleted your personal assets.

Why Buy Something I Might Never Use?

The two largest claims to date have exceeded $1 million. In

2010, the 10 largest LTC insurers paid over $10.8 million daily to 135,000 policyholders

Can I Get Care in My Own Home?

Yes. Most long-term care insurance policies today enable you to receive

qualifying care in your own home and that’s one of the reasons to

consider coverage.

How Much Coverage is the Right Amount?

Find out costs for care where you live or hope to retire

Be sure your coverage includes an inflation growth option so your pool of benefits increases each year

Ask about a “shared care” option that enables couples to link their policies in order to share benefits in the event one person’s benefits are exhausted

What Do They Buy?

New Sales By Benefit Period2 Years or Less 8.5%

3 Years 29.5%

4 Years 18.5%

5 Years 22.0%

6-10 Years 12.0%

Lifetime 9.5%

What’s My Next Step?

Speak with a professional who specializes in this area

Find out what coverage costs See if you can qualify Ask what discounts you qualify for There is never a cost or obligation when

you request this information

Thank you for attending

Congratulations to Dr. FloresEnjoy the weekend and the Induction

Ball!

Oak Brook Benefit ResourcesTom Murphy, CLUPatty Tipton, CLU

630-954-3444630-817-7041