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Retirement Planning (2014)

Presentations from 2014 NYSAAA conference.

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Retirement Planning (2014)

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  1. Retirement Planningwith a 403(b) TSA plan Robert Woodcock, CFP®, ChFC®,CLU AXA Advisors 5 Maxwell Drive, Suite 100 Clifton Park, NY 12065 Tel: (518) 373-7304 Email: robert.woodcock@axa-advisors.com www.axa.com

  2. Federal law403(b) tax-sheltered annuities (TSAs) • For employees of public education institutions, colleges, hospitals, and nonprofit organizations • Defer income taxes on your earnings • Encourage long-term savings for retirement

  3. Federal lawOther tax-deferred retirement vehicles • Traditional and Roth individual retirement accounts (IRAs) • $5,000 maximum contribution for those under age 50 • $6,000 maximum contribution for those age 50 or older • Other employers’ tax-deferred retirement plans

  4. Federal lawOther tax-deferred retirement vehicles • 457(b) employee deferred compensation (EDC) plans • Opportunity for double deferral — 403(b) TSA and 457(b) EDC

  5. Why a 403(b) TSA?Three reasons • Tax deferral • Automatic savings through payroll deduction • Supplement your retirement income

  6. Why a 403(b) TSA?Reason #1: tax deferral • Defer taxes on contributions* • Tax-deferred growth potential • For 2012 • Contribute up to $17,000 of compensation(or 100% of your compensation, if less) • Two catch-up contributions available • Age 50 or older — $5,500 • 15 years of service (or more) — special rules apply** • Contribution limits may be raised each year, based on cost-of-living index * Withdrawals are subject to normal income tax treatment and if taken prior to age 59 ½, may be subject to an additional 10% federal income tax penalty. ** If available under your employer’s plan.

  7. Why a 403(b) TSA? Reason #1: tax deferral — in each paycheck Contribute $1,000 per month to your 403(b) TSA… $1,000 403(b) TSA pre-tax contribution - $280 Tax “saved” (assumes 28% tax bracket) $720 Net deduction per month $360 $360 Amount deducted per pay period (assuming a semi-monthly pay cycle) Note: This hypothetical example does not take into account any state, local, or FICA taxes, or other payroll deductions.

  8. Why a 403(b) TSA? Reason #1: tax deferral — ongoing tax advantage Contribute $6,000 per year and after 30 years… This hypothetical example assumes a $6,000 contribution per year for 30 years and a 6% return per year. The account value shown at left (which is taxed annually) assumes the contribution and interest are taxed annually using the 28% federal tax bracket. This example does not account for any state, local, FICA taxes, product fees or charges. If these taxes and fees were considered, the values would be lower. Lower maximum tax rates on capital gains and dividends could make the return of the taxable investment more favorable, thereby reducing the difference in performance between the accounts shown. The tax deferred account value example shown at right assumes that the full account value is withdrawn and fully taxed in the 30th year. Withdrawals of earnings from the tax deferred account will be subject to ordinary income taxes and if taken prior to age 59 1/2, may also be subject to a 10% federal tax penalty.

  9. Why a 403(b) TSA? Reason #1 (continued): Roth 403(b) contributions • Roth 403(b) contributions made with after-tax dollars • Tax-free growth potential • Earnings distributed tax free if certain conditions are met • 403(b) plan contribution limits apply to the combined total of pre-tax and Roth after-tax contributions

  10. Why a 403(b) TSA? Reason #2: payroll deductions — a relatively easy way to save • Convenient • Built-in discipline • Keeps saving for retirement a priority • Immediate tax deferral

  11. Male 92 85 Female 94 88 Couple 97 92 50% Chance of Living Beyond 25% Chance of Living Beyond Why a 403(b) TSA? Reason #3: supplement your retirement income • Retirements now lasting 20 to 30 years • Inflation can erode purchasing power Source: Society of Actuaries Annuity 2000 Tables

  12. Why a 403(b) TSA? Reason #3: supplement your retirement income • Pension • Generally replaces only part of your salary at retirement • Social Security • Benefit can vary — amount / timing

  13. CompanyAXA Equitable Life Insurance Company • Founded in 1859 • One of the largest life insurance and annuity providers in the nation — $489.3 billion in assets under management* • Almost 3million clients nationwide • Strength and stability — Based on ratings from independent companies that rate insurance companies • Current ratings available online at www.axa-equitable.com * AXA Equitable's assets under management are inclusive of assets under management held by AllianceBernstein L.P. AXA Equitable has sole responsibility for its annuity and life insurance obligations. All statistics are as of December 31, 2011.

  14. ProductEQUI-VEST® Annuities are long-term financial products designed for retirement purposes. In essence, annuities are contractual agreements in which payments are made to an insurance company, which agrees to pay out an income or a lump sum amount at a later date. There are contract limitations and fees and charges associated with annuities, which include, but are not limited to, mortality and expense risk charges, sales and surrender charges, and administrative fees. Amounts in a variable annuity’s investment portfolios are subject to fluctuation in value and market risk, including loss of principal. A financial professional can provide cost information and complete details. • Outstanding variable deferred annuity product — EQUI-VEST®

  15. ProductEQUI-VEST® Personal Income BenefitSM Guaranteed Withdrawal Benefits for Life •  Lifetime payments—once withdrawals start, they continue for as long as you (or you and your spouse) live • Income Protection—the amount of your withdrawals will never decrease • Market Growth Potential—investment earnings can increase the withdrawal amount • The Personal Income Benefit is an optional feature • Available to participants between the ages 45 and 85

  16. Product (continued)EQUI-VEST® Please consider the charges, risks, expenses, and investment objectives carefully before purchasing a variable annuity. For a prospectus containing this and other information, please contact a financial professional. Read it carefully before you invest or send money. EQUI-VEST® is a variable deferred annuity that can be used to fund a 403(b) plan. Since 403(b) plans are tax deferred, annuities used to fund 403(b) plans do not offer any extra tax benefits. If you are buying an EQUI-VEST® variable deferred annuity to fund a 403(b) plan, you should do so for its features and benefits other than tax deferral. You should consider how these features and benefits—and the EQUI-VEST® annuity’s costs and risks—compare to other options available through your employer’s 403(b) plan.

  17. Next steps? • Start planning for retirement! • Any questions? Robert Woodcock, CFP®, ChFC®, CLU AXA Advisors 5 Maxwell Drive, Suite 100 Clifton Park, NY 12065 Tel: (518) 373-7304 Email: robert.woodcock@axa-advisors.com www.axa.com

  18. Thank you! Group variable annuities are issued by AXA Equitable Life Insurance Company (NY, NY), and are co-distributed by affiliates AXA Advisors, LLC, and AXA Distributors, LLC. AXA Advisors, AXA Distributors, and AXA Equitable do not provide legal or tax advice. Please be advised that this presentation is not intended as legal or tax advice. Accordingly, any tax information provided is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information presented was written to support the promotion or marketing of the transaction(s) or matter(s) addressed, and you should seek advice based on your particular circumstances from an independent tax advisor. GE-67786 (5/14) (Exp. 5/14) CAT# 149805

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