Entaire Programs Overview

Entaire Programs Overview
Jon A. Scaman
Manager of Business Development
Entaire Global Companies
Today’s Agenda
•
Who Entaire Programs are for:
• Business Owners
•
What the Programs are:
• Financed Planning™
•
How the Programs work:
• Overview of the Programs
•
Case Study:
• Paul Smith
Financed Planning™ is a trademark of Entaire Global Intellectual Property, Inc.
Who Entaire Programs are for:
Business Owners
The Business Owners’ Challenge
• 47% of Business Owners surveyed
indicated that they do not believe that they
are financially prepared for their retirement1
• 68% of Business Owners believe that they
will live below their current lifestyle when
they retire2
So, what’s the challenge?
1 Harris Interactive on behalf of Sharebuilder 401(k)
2 LIMRA, 2006
Phases of the Entrepreneurial Business
Maturity
Expansion
Growth
Startup
Limited
Excess
Money
Excess
Money
Reinvested
Excess
Funds
Available
Cashing
Out
Phase
The Entrepreneur’s Dilemma: Restrictions
Government Mandated Restrictions
Retirement
Health
The Answer
Programs:
• designed solely for you, the Business Owner,
• that allow for large sums of money to grow
tax deferred,
• that are tax efficient and cost effective,
• that use your business checkbook, and
• that will create less risk and more stability in
your portfolio
What the Programs are:
Financed Planning™
Rule of 72
The Rule of 72
How long does money take to double?
Divide 72 by the assumed rate, the result is
the number of years until a sum doubles.
$4M
$2M
$1M
$500K
$500K
0 Years
Assumptions:
$500K
10 Years
$500K
20 Years
Net Book Value of Business - $500K
Note:
Hypothetical results for illustrative purposes only and not a representation of past
or future results.
$500K
30 Years
Interest Rate – 7.2%
Compressed Time Frame Concept
Accelerated Funding
Choice 1 - $ 16,667 per year X
Choice 2 - $ 50,000 per year X
Choice 3 - $500,000 only once X
30 years = $500,000
10 years = $500,000
Today
= $500,000
$16,667
$1,684,584
$50,000
$2,860,393
$500,000
$3,808,127
Today
30 Years
Note:
A hypothetical crediting rate of 7%. Represents approximations and should not be relied upon as tax or investment
advice. The performance of financial products fluctuate over time. The actual time to achieve any result cannot be
predicted with certainty.
Compounding with Real Estate
7%
average annual growth
over 20 years
Asset Value = $500,000
$500k Mortgage
Asset Value = $1,934,842
7%
Interest-Only
$35,000 annual cost
$500k Mortgage
Point A
Point B
$1,434,842 gross gain - $700,000 interest cost = $734,842 Net Gain
Note:
This is a hypothetical example, not indicative of actual results. Actual results will vary.
The Stability of Equity Indexed Products
• Allows client to participate in market upside
• No downside risk to principal and prior period
Annual
earnings
Crediting $1,134,000
Annual Crediting
0%
Annual
Crediting
8%
$1,000,000
5%
$1,080,000
Market Down Turn
- 8%
$993,660
Needed to
Catch Up
14.12%
Keep in mind…
If you received the 5% as shown in this example on the $993,660, you would
have a total of $1,043,343. That is a $90,657 difference because of the
guaranteed floor.
How the Programs Work:
An Overview
Program Overview
Step 1
Step 2
Step 3
Commercial Loan
Transfer Method
Product Funding
You
Your Business
Your Business
Global One Financial
Universal Life
and/or
Annuity
Products
Application
Recent Cases
Industry
Case Size
•
•
•
•
$200,000
$600,000
$2,400,000
$1,000,000
Furniture
Dentist
Doctor
Nuts & Bolts
Case Study: ABC Company
Case Study – ABC Company
• Paul Smith, Small Business owner
• 25 Years in Business
• Desired Retirement Age – 63
Summary – Paul Smith
•
•
•
•
•
Current Age:
Years Until Retirement:
Desired Annual Income:
Number of Payout Years:
Personal Tax Bracket:
50
13
$115,000
25
35%
Paul needs a lump sum of at least $1,340,162 at
retirement to support an income of $115,000 per
year for 25 years.
Solution – Paul Smith
ABC Company implements a Financed Planning™ program in the
amount of $600,000.
The $600,000 is placed into an Equity Indexed Annuity, owned by
Paul Smith (assumed annual tax deferred earnings of 7%).
After 13 years, Paul’s annuity value will have grown to $1,445,907,
which gives Paul an income in the amount of $115,957 per year for
25 years.
ABC Company makes interest payments of approximately
$40,500 annually (assumed interest rate of 6.75%).
(This example assumes that the loan is repaid at retirement using assets that are not part of the program’s
financed product - preferably assets with the then-current lowest yielding performance.)
Equivalent Yield – Paul Smith
ABC Company makes interest payments for the Entaire Program
of approximately $40,500 annually.
If the company were to distribute this amount to Paul directly, he
would have to pay income tax at 35%, leaving him with $26,325 per
year to invest.
Paul’s investment of $26,325 per year for 13 years would have to
earn an annual rate of return of 19.26% in order to provide the
same annual income of $115,957 for 25 years.
Value of the Entaire Programs
• Provides alternative to traditional retirement
plans
• Allows catching up on retirement planning
• Activates dormant assets
• May provide various levels of asset
protection to the corporation, its owners
and the policy holder.
Program Structure – Asset Protection
Corporate Level
We lend directly to the corporation, which by
pledging certain assets, may diminish the
attractiveness of law suits against the corporation.
Individual Level
The product is owned by the individual, not the
corporation. If the corporation is sued, the
product is not its asset.
Product Level
Product protection varies depending on state law.
These laws define available protection regarding cash
value and policy attachment by creditors.
Q&A
The Next Step
For more information contact
Agent Name
Agent Phone Number
Agent E-mail @ .com