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Financial StrategiesJust for Women

Life Insurance and annuity products are issued by AXA Equitable Life Insurance Company (New York, NY). Variable products are co-distributed by AXA Advisors, LLC and AXA Distributors, LLC. AXA Equitable, AXA Advisors and AXA Distributors are affiliated companies and do not provide tax or legal advice.

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“You cannot escape the responsibility

of tomorrow by evading it today.”

Abraham Lincoln

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Main Menu

Funding Your Child's Education

Having a Plan Helps

Concerns in Widowhood

Concerns in Divorce

Estate Planning

For the Executive

For the Business Owner

Conclusion

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Funding Your Child’s Education

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Source: The College Board; Trends in College Pricing 2007

Today’s Costs

Average Published Tuition and Fee and Room and Board Charges at Four-Year Institutions, Five-Year Intervals, 1977-78 to 2007-08 (Enrollment-Weighted)

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Source: The College Board; Education Pays 2007

People with a bachelor’s degree generally earn an average of 62% more than people with a high school education.

Those with master’s degrees earned almost twice as much, and those with professional degrees earned over three times as much per year as high school graduates.

Over a lifetime, the difference in earning potential between a high school diploma and a college degree is more than $800,000. For those who earn higher degrees, the lifetime earnings premium is over $1,000,000.

Education Does Matter

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What type of college or university?

How many years?

What expenses do you plan to cover?

What are any expected sources of funding?

To what extent will education planning supercede other financial goals?

In the event of death or disability, do any assumptions change?

What to Consider: Define the Goal

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Grants• Federal Pell Grant

Scholarships• Academic, social and athletic• Private groups, philanthropic organizations,

religious groups and colleges

Borrowing• Up to 52% of total aid awarded each year*

Work-Study

Gifts *Source: The College Board, “How the Borrowing Process Works” Copyright ©2007 collegeboard.com, Inc.

Non-Investment Funding Options

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Coverdell Savings Accounts• Allows for contributions up to $2,000/year• Contributions subject to income limits• Funds grow tax-free• Considered an asset of the account custodian

UTMA/UGMA• Custodial accounts set on behalf of a minor• Contributions not subject to income limits• Subject to income and capital gain taxes• Contributor maintains control over account until

beneficiary reaches majority

Investment Funding Options

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Section 529 Plans• Saving through a special state education

program• Some states allow very large contributions• No income limits• Growth and withdrawals are currently

federal tax free• Everyone is eligible• Account owner maintains control in naming

beneficiary and directing distributions

More Investment Funding Options

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Having a Plan Helps

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Determining how much you’ll need to maintain desired lifestyle after retiring

Knowing what you need to save each year

Reviewing regularly and revising as necessary

Preparing for long-term needs

What Does It mean to Have a Plan?

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On average, women live longer than men: 80 years for women –– 75 years for men as of 2007*

Retirement period likely to be longer

Health care needs are likely to be greater for women

*Source: National Vital Statistics Report 8/21/07: Deaths, Final Data for 2004.

Why Have a Plan?

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Source: 2006 Retirement Confidence Survey—Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.

From a Retirement Confidence Survey

• 41% of women tried to calculate how much they will need

• 13% of women believe they need to accumulate $1 million or more for retirement

Planning to Achieve

Do you know how much you should save for your retirement?

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Who’s Helping You to Plan for Retirement?

-Started saving for retirement 57.78%

- Working with a financial advisor 32.15%(i.e. more than half of those who are saving)

- No plan 29.52%

Source: Forrester Research, Inc., 2007 Summer Recontact Mail Survey

What’s Your Goal?

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Concerns in Widowhood

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Source: U.S. Census Bureau, Current Population Survey, 2006 Annual Social and Economic Supplement

Widow Population in the U.S.

Age Men Women

18+ 2.5% 9.9%

65+ 13.1% 42.4%

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Q: What to do first?

A: Find the important papers.

Death Certificate All Insurance Policies Social Security Number Military Discharge Papers Marriage Certificate

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… more documents

Dependent Children’s Birth Certificates & Social Security Numbers

Will and/or Estate Plan Complete List of All Assets/Property Most Recent Federal Income Tax Return Credit Report

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In the following months, you will need to update or change ownership, title or beneficiaries of:

Insurance Policies Automobiles Your Home and Other Property Your Will Bank Accounts, Stocks, Bonds Safe Deposit Box Credit Cards

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In 2006, 42.4 % of all older women were widows

or 8.6 million widows.

Source: “A Profile of Older Americans: 2007.” Administration on Aging based on data from the 2007 Current Population Survey of the U.S. Bureau of the Census.

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28.3% of female households with no husband present were below poverty in 2006.

Source: U.S. Census Bureau, Current Population Survey, 2006 and 2007 Annual Social and Economic Supplements.

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Q: What should I do now, today?

A: Plan ahead!

Set up an “Important Papers” file Open your own bank account Save or invest money in your own name Establish credit in your own name Balance the family checkbook and pay the

bills yourself Know what your family owns and owes Source: “Sad Business:

Managing Financial Issuesin Bereavement” in Women and Aging Newsletter, Winter 2002, Vol. 5, No. 4.

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Concerns in Divorce

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Source: Press Office Fact Sheets, “Social Security Is Important to Women,” September 2007. www.ssa.gov.

$859 –– women’s average retirement monthly benefit paid in 2006

$1,137 –– men’s average retirement monthly benefit paid in 2006

Women’s benefits average about 32% lessthan men’s

You and Social Security

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Source:Press Office Fact Sheets, “Social Security Is Important to Women,” October 2007. www.ssa.gov.

Must have been married for at least 10 years and not remarried

Both of you must have reached age 62 Can receive 50% of ex-spouse’s benefits Benefits based on your own work history must

be less than half his benefits at age 65 Must be divorced at least two years to make

a claim

You and Social Security

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For more complete information or answers to other questions, contact the Social Security Administration at:

www.SSA.com

You and Social Security

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Make sure all payments are made on time Learn your rights regarding property distribution Find out what your credit rating is Establish credit in your own name Establish your own bank account

Before You Divorce

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Statements or Documents for: All Accounts Employee/Group Insurance Benefits Other Benefits Retirement Plans Insurance Policies Real Estate Household Furniture/Antiques

Financial Assets and Property Checklist: What to Track

Tax Returns: Payroll Stubs Federal, State, Local Federal W-2 Forms Past 5 Years

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Domestic Records: Of Other Received Income Of Monthly Living Expenses Pre- and Post-Nuptial Agreements Information on Previous Divorce Settlements Wills and/or Trust Documents

Work/Business: Business Tax Returns Business Financial Statements

Financial Assets and Property Checklist:What to Track

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Estate Planning

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Proper estate planning can help:

Increase the amount of assets transferred to beneficiaries; Avoid forced liquidation of assets; Distribute estate assets fairly among heirs; Maintain control of assets while you are alive; Retain some control over the distribution of assets at death; and Can help to reduce the tax bill that may confront your executor, heirs

and estate.

Why Have an Estate Plan?

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The estate planning process involves: Assessing the current value and nature of your assets

(including business valuations); Implementing tax-saving strategies through the proper use

of gifts and trusts; Deciding on the best forms of property ownership; Periodically reviewing estate documents; Naming a personal representative or executor for

your estate.

What Is Estate Planning?

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If you die without a will, the Probate Court:

Names an executor to distribute your assets;

Appoints a guardian for your minor children;

Will decide how to divide your estate.

Why Have a Will?

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By having a will, you can:

Name your executor to distribute your assets;

Designate a guardian for your minor children;

Outline your personal bequests;

Specify any financial arrangements to be made upon your death for the benefit of your heirs.

What Does a Will Do?

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Durable Power of Attorney

Medical Power of Attorney (a.k.a Health Care Proxy)

Living Will (Advanced Medical Directive)

Additional Documents

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A legal relationship created when an owner of a property (the grantor) transfers property to another person (the trustee) to hold such property for the benefit of a third party or person (the beneficiary).

What Is a Trust?

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A trust established by the terms of a will to become effective upon probate of the will.

Testamentary Trusts

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There are several potential benefits to a Trust. A Trust can: Provide management of assets for the grantor’s convenience or for legally, mentally, or financially incapacitated beneficiaries;

Accumulate income for later distribution to a beneficiary;

Enable the grantor to provide one person with lifetime benefits, while ensuring the remainder will go to another person at the life beneficiary’s death;

Can provide income, gift and estate tax savings.

Why Use a Trust?

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Gift Tax

Estate Tax

Unlimited Charitable Deduction

Unlimited Marital Deduction

Unified Credit

What Are All of Those Taxes?

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How does the Unified Credit work?

Total Estate $5,000,000

Surviving Spouse $5,000,000

Federal Estate Tax $1,635,000

Net to Heirs $3,365,000

Net to heirs without using the Unified Credit

Net to heirs with Unified Credit Planning

Total Estate $5,000,000

Surviving Spouse $3,500,000

Federal Estate Tax

$450,000

Net to Heirs $4,550,000

By-Pass Trust $2,000,000

$900,000 Federal Tax

Savings

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Q: What is it?

A: A Traditional IRA or Roth IRA that is inherited from a deceased owner.

Q. Why set one up?

A: If an IRA is paid as a lump-sum distribution, the income tax consequences can be substantial and may deplete a significant amount of the IRA funds inherited.

The Inherited IRA: Q&A

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Q: What are the benefits?

A: An Inherited IRA: Can provide an income stream that, over time, may possibly exceed

the amount your beneficiary would have received had the IRA been distributed in a lump-sum taxable payment;

Retains its tax-deferred status so remaining funds stay invested for continued potential growth;

May also help reduce income taxes; Provides an income stream in the form of annually required minimum

distributions based on the beneficiary’s single life expectancy.

The Inherited IRA: More Questions & Answers

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Some things to keep in mind: Estate and income taxes Annuities and the Internal Revenue Code

The Inherited IRA:

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For the Executive

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Pay living expenses while you are unable to work

Pay for training or other assistance

Avoid depleting savings for children’s education or retirement

What Can It Do for You?

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Employee Benefits

Social Security Benefits

Other Resources

But First, What Are Your Other Resources?

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Definition of disability

Amount of income

Income taxes

Premiums

Comparing Policies

Waiting or elimination periods

Length of benefit coverage

Cost-of-living adjustment (COLA)

Renewability

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Many variables.

Different needs.

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The Pension Predicament:

The Single Life Option

or

The Joint and Survivor Option

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If one spouse dies shortly after retirement, the surviving spouse faces a lifetime of reduced pension benefits.

If both spouses live well into retirement but die within a year or so of each other, little benefit is gained.

When both die, no benefit to pass on to children or other heirs.

The Joint and Survivor Option

What Are the Costs?

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Purchase a permanent life insurance policy on the life of the participant prior to or at retirement designed to provide the surviving spouse with a death benefit that would provide for a monthly income benefit and take the “Single Life” pension option.

Individuals must qualify to obtain life insurance necessary for this concept. A life insurance policy is a contractual agreement in which premiums are made to an insurance company. In return for these premium payments, the insurance company will provide benefit to a beneficiary upon the insured’s death.

Life insurance policies have exclusions, limitations, and terms for keeping them in force. Fees and charges associated with life insurance include mortality and expense risk charges, cost of insurance, surrender charges and administrative fees. Guarantees are based on the claims-paying ability of the issuing insurance company. It is important to review the terms of your individual pension to ensure that no additional benefits, such as health insurance, are lost by not taking the joint/survivorship benefit.

The Third Option

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If you die, your spouse’s income can continue in the form of life insurance proceeds* that can be set up as an annuity if desired.

If your spouse dies, your maximum pension benefit continues and you could:

• Make systematic withdrawals of any potential policy cash values to help supplement your retirement income.

• Cash in the life insurance policy to obtain any potential cash value available.

• Change the beneficiary.

*Provided insurance premiums have been paid, the policy has not lapsed, and a death benefit is paid.

The Benefits

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Irrevocable choice Spousal consent Spouse’s health care benefits Income trade-off

Other Considerations

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Women who usually worked full time had median earnings of $618 per week, or 79.8% of the $774 median for men.

Women retirees generally receive less pension benefits than men.

Declining coverage by traditional pension plans

Sources: US Department of Labor Bureau of Statistics, “Usual Weekly Earnings Summary Q4’07”, 1/17/2008

Why Save in Your 401(k)?

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Part or all of contributions can be pre-tax

Investments grow tax-deferred

Company may match all or part of contributions

Deducted directly from paycheck

Some Benefits of Participating

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Learn as much as you can about the plan

Invest pre-tax

Use the over 50 catch-up

Don’t touch it!

Get Started Now!

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Watch your rate of return

Don’t put all of your eggs in one basket

Invest for the Future

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Q. What is it?

A. A promise by an employer to pay an executive a benefit in the future.

Deferred Compensation

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Benefit Maximums 2008 Defined Benefit Maximum: $185,000 2008 Defined Contribution Maximum: $46,000

401(k) Maximum Salary Deferral 2008 Maximum: $15,500

Maximum Compensation That May Be Considered 2008 Maximum: $260,000

Income Subject to Social Security Tax 2008 Maximum: $102,000

Caps on Retirement Benefits

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70% of Final Compensation

?

=

Company Pension

+

Social Security

+

401(k) Income

Retirement Income Resources

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Increased Financial Independence• Retirement Benefits

• Death or Disability Benefits

Defer Taxes

Individualized Planning

Overcomes Limitations of Qualified Plan and Social Security

Potential Benefits to the Employee

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For the Business Owner

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The process of defining what will happen to a business owner’s stock at his or her death, disability or retirement.

What Is Business Continuation Planning?

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No disruption or sale

Avoid unwanted ownership

Establish a fair price

Facilitate estate settlement

Why Establish a Business Continuation Plan?

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A contract between two or more owners of a business

Sets out the conditions under which transfer of ownership will take place

A Key Component of Business Planning:

The Buy/Sell Agreement

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Cross-Purchase Agreement• Each stockholder owns and is a beneficiary of a policy on

the life of every other stockholder.• Surviving shareholders or partners agree to buy the interest

of any deceased shareholder.

Stock Redemption Plan (a/k/a entity purchase)• The business owns and is the beneficiary of the insurance.• The business pays the former owner, or her heirs, for their

outstanding stock from the proceeds of the policy.• Stock is then retired.

Funding the Buy/Sell Agreement

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Disruption

Loss of profits

Loss of confidence

Delays in business

Weakened credit rating

What Would Happen to Your Business If You or a Key Person Were to Die?

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To financially protect your company from the adverse impact of the sudden loss of a key employee.

The Objective:

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• Your company purchases a permanent life insurance policy using a key employee as the insured;

• Your company owns the policy and is the beneficiary;

• Your company pays the premium and any cash value has the opportunity to grow tax-deferred;1

• After death, the company collects the policy proceeds, generally income tax free.1

1In some instances, the corporate alternative minimum tax may apply.

How Does It Work?

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Does Your Company Need Key Person Insurance?

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In Conclusion

“You have to have confidence in your ability,

And then be tough enough to follow through.”

Rosalynn Carter

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Please be advised that this presentation is not intended as legal or tax 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 transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances form an independent tax advisor.