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Charting a New Course:Life After an Employment Transition

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Please be advised that this presentation is not intended as tax or legal advice. Accordingly, any tax information provided in this document 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 was written to support the promotion or marketing of the transactions or matters addressed, and you should seek advice based on your particular circumstances from an independent tax advisor.

Securities offered through AXA Advisors, LLC, member FINRA, SPIC. Annuity and insurance products are offered through AXA Network, LLC and its subsidiaries. AXA Advisors and AXA Network are affiliated companies and do not provide legal or tax advice.

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Welcome

“We all have big changes in our lives that are more or less a second chance.” ~Harrison Ford

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Agenda

Seminar Objectives

Preparing For A Transition

Preparing For Retirement

Streamlining Your Next Steps

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Seminar Objectives

Identify and address transition concerns

Identify transition opportunities

Develop an action plan

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“To be prepared against surprise is to be trained. To be prepared for surprise is to be educated.” ~James Carse

Preparing For A Transition

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Risk Management Considerations

Objective: Identify and address employmenttransition concerns.

1. Cash Flow

2. Health Insurance

3. Life Insurance

4. Disability Income Insurance

5. Long-term Care

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1. Cash Flow

How should I manage cash flow issues?

Develop a personal plan– Identify 3-4 discretionary expenses that you can do without

for a while

– Discuss suspended activities with your family

Loans for company-purchased products must be paid back– Decide what money you will use to repay the loan

Many people opt to suspend membership dues to health clubs and other social organizations. Sometimes these memberships provide very important networking opportunities.

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1. Cash Flow

How should I manage cash flow issues?

401(k) loans may have tax implications if they are not repaid– Depending on your tax situation, you might be taxed

approximately ½ of the money you borrow

Take advantage of personal benefits for which you are eligible– If personal benefits are available, act promptly to avoid a

missed opportunity

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2. Health Insurance

Guaranteed coverage through COBRA– Coverage for 18 months (36 months, if disabled)

– Enrollment within 60 days

– Very expensive; you pay the full cost

Compare offerings from other insurance carriers

Evaluate your options

Check spouse’s plan, you may be eligible before your termination date

If you are considering early retirement, remember that although Social Security can start at age 62, Medicare (if eligible) does not begin until age 65.

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3. Life Insurance

Term Life – temporary coverage – usually cheapest in early years

Whole Life: – permanent coverage – level guaranteed premium and cash value

Universal Life – permanent coverage– builds cash value based on an established interest rate– flexible premium

OtherAll guarantees are based on the claims-paying ability of the issuer.

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Your Life Insurance Needs

How much insurance coverage do I need?

Calculate need based on your personal circumstances

– Income Differential

– Final Expenses

– Education Fund

It takes about 45 days to complete the insurance underwriting process, which will determine the amount of your premiums.

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Current Life Insurance

Should I convert my group term coverage?

In some states, conversion is guaranteed; typically expensive to convert

In most cases, company will provide conversion to a Whole Life policy

If you are not in good health, conversion may be the best option

If you only need insurance until you get another job,consider a Yearly Renewable policy

– Initially inexpensive, then price increases with time

– Not a guaranteed issue, so health and age are important considerations

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4. Disability Income Insurance

Replaces a portion of lost income due to disability

Can help pay for rehabilitation services

Can be rather expensive

Only available to you if employed

Coverage may be available through your spouse

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5. Long-Term Care

Am I covered for my long-term care needs?

Five options to cover long-term care expenses:

– Self insure

– Medicare

– Medicaid

– Veterans coverage (available to some individuals)

– Long-Term Care insurance

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“You are free to choose, but the choices you make today will determine what you will have, be, and do in the tomorrow of your life.”

~Zig Zigler

Preparing For Retirement

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What should I do with my retirement plandistribution?

Leave the money where it is

Roll the money into a new plan

Take a lump sum payment

Roll the money into an IRA

Distribution Options

Consult your tax advisor before making a decision.

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Option 1: Leave the money where it is

Immediate Tax Consequences = None Advantages

– Money continues to benefit by tax deferral on any growth potential

– You don’t have to make any changes or pay current taxes or penalties if eligible

– Some plans may continue to offer special investment options such as employer stock

Disadvantages– Investment options are limited to those in the plan– Plan determines how much access you have to your savings– This option may not be available if your account is < $5,000

Withdrawals are taxed as ordinary income and may be subject to federal 10% penalty if made before age 59 !/2

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Option 2: Roll into a new plan

Tax Consequences = None (for direct rollovers or properly executed indirect rollovers within 60 days)

Advantages– Money continues to potentially grow tax deferred– Some plans offer special investment options such as

employer stock or special features such as participant loans

Disadvantages– Investment options are limited to those in the plan– Plan determines how much access you have to your

savings

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Option 3: Take a Lump Sum Payment*

Tax Consequences– Distribution generally taxed at the applicable income tax

rate**– Typically a 10% additional tax on withdrawals made before

age 59½– Tax deferral ceases

Advantages– Immediate access to savings

Disadvantages– Savings are reduced by taxes and penalties (up to 50%)– Can never be rolled over to an IRA or other retirement plan

after the initial 60-day period following the distribution

*If allowed by your company. ** Some distributions of employer stock may get capital gains treatment

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Option 4: Roll the money into an IRA

Tax Consequences = None (for direct rollovers or properly executed indirect rollovers within 60 days)

Advantages– IRAs offer a wide range of investment choices, including

mutual funds and variable annuities– Money continues to benefit by tax deferral on any growth

potential– IRAs offer planning flexibility, including an early retirement

option and the ability to stretch tax deferral

Disadvantages– IRAs do not offer loans– No special tax advantages for assets held in employer stock

Consult your tax advisor regarding your particular circumstances.

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Retirement Plan Considerations

Is it beneficial to exercise stock options?– look at current value and your strike price – consult your tax advisor

401(k) options– Leave the money where it is

– Tax free rollover

Consider Pension Maximization – use life insurance to “stretch” out your pension

benefits over time

Consult your tax advisor regarding your particular circumstances.

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Summary

Payout Options

Payroll Deductions

Cash Flow

COBRA

Life Insurance

Disability Income Insurance

Long Term Care Insurance

Retirement and Pension money

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Evaluating your opportunities

The Professional Strategy

The value of professional advice

Where do you go from here?

Streamlining Your Next Steps

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Objective: Identify employment transition opportunities. Re-enter the workforce

Retire

Continue your education

Start your own business

Evaluating Your Opportunities

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The Common Strategy

Products purchased with no professional advice or strategy

Portfolio of unrelatedproducts

Poor foundationfor

success

The Professional Strategy

Goal-focusedoptimal use of

resources

Portfolio of coordinated,

purposeful productsProfessional strategy based

on client’s goals and priorities

The Professional Strategy

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Professional guidance

Third party point of view

Decipher your options

Develop a strategy

Access to many resources

The Value of Professional Advice

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Objective: Develop an action plan.

Review and consider what you’ve learned today

Use the workbook to help with your planning

Make an appointment with your tax professional

If you have questions or need additional help evaluating your situation, contact us

Don’t procrastinate; timing is important

Where Do You Go From Here?

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Workshop Evaluation

Please complete evaluation form and hand it in before you leave

Schedule an appointment for a personal consultation