Charting a path to your
Charting a path to your
Financial Future
Maggie Kulyk, CRPC
O M i K l k & A i t
Owner, Maggie Kulyk & Associates
Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some
Financial planning services and investments offered through Ameriprise Financial Services, Inc. Member FINRA and SIPC.
© 2007 Ameriprise Financial, Inc. All rights reserved.
products and services may not be available in all jurisdictions or to all clients.
© 2010 Ameriprise Financial, Inc. All rights reserved. (2/10)
Agenda
Financial position
Protection planning Investment planning Tax planning strategies
Retirement planningp g
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Financial Position
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Calculate your net worth
What you own What you own – What you owe = Your net worth = Your net worth
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Cash flow
Money coming in Money coming in – Money coming out
= Discretionary income = Discretionary income
Jill’
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Jill’s opportunity cost
> What was her opportunity cost for buying the car?pp y y g $25,000 distribution
– $8,750 taxes and penalty
$16,250
This hypothetical story is for illustrative purposes only. It is possible the fictional character could have sustained an investment loss instead of the gain discussed.
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Rule of 72
> Begin with the number 72 g
> Divide it by your rate of return — how much your investment earns in a year
> The result is the approximate number of years it will take for your money to double
9 years to double Rate of return 8% 72
Rate of return is for illustrative purposes only and not intended to reflect a specific investment or investment strategy. The value of your securities will fluctuate.
This illustration is only intended to demonstrate mathematical principles and should not be regarded as absolute. Furthermore, periodic declines in markets will result in diminishing the effective application of the Rule 72.
Jill’
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Jill’s opportunity cost
> What was her opportunity cost for buying the car?pp y y g
Rollover $25,000
8% return Nine years to double money, four doubling
periods by the time Jill is age 65
$25,000 to $50,000
to $100,000 t $200 000 to $200,000
to $400,000 in 36 years
Rate of return is for illustrative purposes only and not intended to reflect a specific investment or investment strategy. The value of your securities will fluctuate. Number of years is approximate.
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Cash Reserves
For opportunities
and emergencies
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Auto and home
> Auto and homeowner’s insurance
> Look at the cost of the premiums vs. the deductible
• Look for greatest coverage for smallest premium
> Lower annual premiums improve your cash flow
> Homeowner’s insurance
> Homeowner s insurance
• Buy enough to insure your home for at least 80% of its
replacement value
Auto and home insurance is underwritten by Ameriprise Insurance Company, AMEX Assurance Company or IDS Property Casualty Insurance Company, De Pere, WI. Each company is a wholly owned subsidiary of Ameriprise Financial, Inc.
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Most valuable asset
Emory’s Disability Insurance for Faculty: Emory s Disability Insurance for Faculty: Long Term Disability Insurance:
no enrollment necessary no enrollment necessary covers 60% of base salary benefits are taxable to you benefits are taxable to you
COLA 4%– available during open enrollment with evidence of insurability
evidence of insurability
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Long-term care
> You and/or your eligible family members can apply y g y pp y for group long-term care insurance at any time.
> The cost of coverage is based on your coverage selections and your age at the time your coverage takes effect.
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> You may be able to continue coverage when you retire.
Long Term Care Coverage through Emory Long Term Care Coverage through Emory Unum provides coverage
Coverage can be purchased in $1000 per month Coverage can be purchased in $1000 per month increments up to $6000 per month
You can elect benefits of 3 years, 6 years, or y , y ,
unlimited duration.
Other family members are eligible for Emory’s group rates
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The importance of life insurance
> Provide for the financial needs and security of people you love
> Provide for your own financial security
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Types of life insurance
> Term
> Whole life
> Universal life
> Universal life
Life Insurance available through Emory: Life Insurance available through Emory:
Group term is available for employee, spouse or domestic partner, and children.
Limits and evidence of insurability varies by dollar amount and time of election.
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Investing short course
> Get invested
> Diversify
> Stay invested
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Types of risk or “volatility”
> Specific riskp
> Market risk
> Industry risk
> Industry risk
Historical range of returns of S&P 500: 1970-2009
61 30 19 18 7 No change Positive change - 2 - 7 Negative change1 year 5 years 10 years 20 years
- 43
Source: Standard and Poor’s 500 Index. The Standard & Poor’s 500 Market Index (S&P 500) is an unmanaged list of common stocks frequently used as a measure of market performance. The index reflects reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other fees. The highest return is represented by the top of each bar and the lowest annual return is shown at the bottom. The rolling 5-,10- and 20-year ranges are also shown. Over time, lower performing years will be offset by higher performing years and vice versa. Therefore the range of the historical returns over the entire period is narrower than the range of returns in any single year. Returns over 1 year in length are annualized. It is not possible to invest directly in an index. Past performance is no guarantee of future results.
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Dollar-cost averaging
> Put market fluctuations to work for youy
> Can be an effective means of accumulating shares
> Does not guarantee profit or protect against losses due
> Does not guarantee profit or protect against losses due to declining prices
Dollar-cost averaging
Month You invest Share price Shares purchased January $100 ÷ $10 = 10 February $100 ÷ $8 = 12.5 February $100 $8 12.5 March $100 ÷ $5 = 20 April $100 ÷ $7 = 14.3 May $100 ÷ $9 = 11.1 June $100 ÷ $10 = 10 Total $600 = 77 9
Average price per share: (10+8+5+7+9+10)/6= $8.17 Average cost per share: (600/77.9)= $7.70
Total $600 77.9
Dollar-cost averaging not guarantee a profit or protect against losses in a declining market. Investors should consider their ability to continue investing during periods of low markets. This illustration is hypothetical and is not a forecast or guarantee of specific investment results.
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What helps determine market performance?
> Market timingg
> Security selection
> Asset allocation
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Tax planning strategies
Ameriprise Financial and its representatives do not provide tax or legal advice. Consult your tax advisor or attorney regarding specific tax issues.
2010 marginal tax rates
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$373,650 $373,650+ 35% 33% 35% $373,650 $373,650+ 35% 33% $209,250 $137,300 $171,850 $82,400 25% 28% 28% 25% , $68,000 $34,000 $16 750 $8 375 15% 10% 15% 10%Single Married, filing jointly
$16,750 $8,375
Roth IRA
>In 2010, the $100k income limit for conversions is removed.In 2010, the $100k income limit for conversions is removed.
> Non-deductible contributions potential for
• Earnings grow deferred and distribution of earnings can be tax-free if requirements are met
free if requirements are met
• Tax-free withdrawals after a five-year requirement has been met by any Roth IRA, and age 59½, death, disability or first-time home purchase (up to $10,000 lifetime limit)
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What will it cost?
> Percentage of current incomee ce age o cu e co e • 20%
• 70%
• 80%
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Sources of income
> Social Securityy
> Employer retirement plans
> Personal savings/investments
> Personal savings/investments
Estate planning strategies
Estate planning strategies
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Important documents
> Will
> Durable power of attorney
> Health care power of attorney
> Health care power of attorney
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Summary
Ameriprise Financial and its representatives do not provide tax or legal advice. Consult your tax advisor or attorney regarding specific tax issues.
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Thank you.
[Presenter name], [Presenter title] [Contact Information]
Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.
