Entaire Program Overview

Jon A. ScamanManager, Business Development

NetworkingMFG.com MeetingDecember 16, 2008

• Who are Entaire Programs for: • Business Owners

• What the Programs are: • Personal Retirement Planning

• How the Programs work:• Overview of the Program

• Case Study:• Paul Smith

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Today’s Agenda

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Who are Entaire Programs for:Business Owners

• 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

1 Harris Interactive on behalf of Sharebuilder 401(k)2 LIMRA, 2006

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So, what’s the challenge?

The Business Owners’ Challenge

Startup

Growth

ExpansionMaturity

LimitedExcessMoney

ExcessMoney

Reinvested

ExcessFunds

Available

Cashing Out

Phase

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Phases of the Entrepreneurial Business

Most Business Owners believe that they will sell their business to fund their retirement –

if they retire, that is

Unfortunately…………

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Selling the Business: The Perception

Approximately 1.2 million viable businesses go on the market for sale each year

Nearly 3/4 of these fail in their efforts to sell

Most of the businesses sold end up selling for much less than their expected Market Value, and in many cases, below their Asset Value

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Source:2005 Business Reference Guide, 13th Edition (West)

Selling the Business: The Reality

Government Mandated Restrictions

Retirement Health

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The Entrepreneur’s Dilemma: Restrictions

• A program designed solely for the Business Owner

• A program that uses the business checkbook

• A program that allows for large sums of money to grow tax deferred

• A program that is tax efficient and cost effective

• A program that will create less risk and more stability in their portfolio

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The Answer

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What the Programs are:Personal Retirement Planning

Note: Hypothetical results for illustrative purposes only and not a representation of past or future results.

$500K0 Years

$500K10 Years

$500K20 Years

$500K30 Years

$500K$1M

$2M

$4M

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.

Assumptions: Net Book Value of Business - $500K

Rule of 72

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Interest Rate – 7.2%

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.

Choice 3 - $500,000 only once X Today = $500,000

Choice 2 - $ 50,000 per year X 10 years = $500,000

Choice 1 - $ 16,667 per year X 30 years = $500,000

Accelerated Funding

$2,860,393$50,000

$3,808,127$500,000

$1,684,584$16,667

Today 30 Years

Compressed Time Frame Concept

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Compounding with Real Estate

Asset Value = $500,000

$500k Mortgage 7% Interest-Only

$35,000 annual cost

7% average annual growth

over 20 years

$500k Mortgage

Asset Value = $1,934,842

$1,434,842 gross gain - $700,000 interest cost = $734,842 Net Gain

This is a hypothetical example, not indicative of actual results. Actual results will vary.

Point A Point B

• Allows client to participate in market upside

• Limited downside risk

$1,000,000

Annual Crediting

8%

$1,080,000

Market Down Turn- 8%

$993,660

Annual Crediting

5%Annual Crediting0%

$1,134,000

Needed to Catch Up14.12%

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The Stability of Equity Indexed Products

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.

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How the Programs Work:An Overview of the Entaire Programs

Program Structure

Client Business

Global One Financial

Commercial Loan

Step 1

Asset Funding

Universal Life and/or

Annuity Products

Step 3

Transfer Strategy

Client Business

Step 2

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Global Gateway

Recent Manufacturing Cases

• Furniture $200,000

• Machining $600,000

• Plastics $2,400,000

• Nuts & Bolts $1,000,000

Industry Case Size

Case Study: Paul Smith

Case Study – Paul Smith

• Manufacturing Company

• 25 Years in Business

• Current Age – 50

• Desired Retirement Age - 63

• Annual Budget to Fund Personal Retirement Plan - $41,000

Summary – Paul Smith

• Age: 50• Years Until Retirement: 13• Desired Annual Income: $115,000• Number of Payout Years: 25• Personal Tax Bracket: 35%• Company Budget: $41,000

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

Paul’s company implements a leveraged

program in the amount of $600,000.

The $600,000 is placed into an Equity

Indexed Annuity, hypothetically earning

7% per year.

Paul’s company makes interest payments of

approximately $40,500 annually (assumed

Interest rate of 6.75%).

After 13 years, Paul’s annuity value has grown to

$1,445,907, which gives Paul an income in the amount of

$115,957 per year for 25 years.

(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

Paul’s company makes interest payments for the Entaire Program ofapproximately $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 $115,957for 25 years.

• Provides Alternative to Traditional Retirement Plans

• Allows Catching up on Retirement Planning• Provides Asset Protection Opportunities

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Entaire’s Value Proposition

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Q & A

For more information,

Jon Scaman678-218-1225

jascaman@entaire.comwww.financedplanning.com

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