© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 1 Investing Made Simple © 2009 Transamerica Corporation. All rights reserved TRS 3413INV-0209FOR EDUCATIONAL USE ONLY.

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 2 Learn about Asset Classes 1 Understand the Benefits of Asset Allocation and Diversification Identify Investment Strategies 2 3 Transamerica Retirement Services

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 3 Learn about Asset Classes 1

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 4 The Asset Classes Stocks – represent ownership in a corporation (most aggressive) Bonds – lending money to corporations or the government (moderate) Cash Equivalents – short-term investments (most conservative)

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 5 Stocks Represent ownership in a corporation Most opportunity for gain (historically) More risk than bonds or cash equivalents with highest return potential but also higher downside potential Historically, common stocks have provided greater long-term returns and have entailed greater short-term risks than other investment choices. Smaller or newer issuers carry more risk than larger, more established issuers. Past performance is no guarantee of future results.

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 6 Stocks may be categorized by: Market capitalization – total value of a company’s outstanding shares Large-cap, Mid-cap, and Small-cap Investment style Value, Blend, and Growth \ Stocks Market capitalization and investment style help explain investment behavior

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 7 Market Capitalization The total value of a company’s outstanding shares Current Stock Price Outstanding Number of Shares Market Capitalization $50 X 100 million $5 billion

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 8 Market Capitalization Higher Risk Lower Risk Small-cap Includes young companies that are just starting out Mid-cap Includes more established companies (though typically not recognized as household name companies) Large-cap Typically older, larger, and more well-known companies < $1.5 Billion $1.5 – $8.5 Billion > $8.5 Billion

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 9 Investment Style Value Stock prices are considered low relative to underlying value of the company Stocks are expected to increase in price as companies experience high rates of growth Growth Blend Often pay no dividends, since extra cash is reinvested in the company Typically pay higher dividends when declared Higher RiskLower Risk

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 10 Promise of repayment from a borrower to a lender Susceptible to interest rate fluctuation: as interest rates rise, bond values fall Typically have more risk than cash equivalents but less risk than stocks Bonds The values of bonds change in response to changes in economic conditions, interest rates and the creditworthiness of individual issuers. Investment choices that invest in bonds can lose their value as interest rates rise and an investor can lose principal.

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 11 Interest Rates and Bond Prices Generally interest rates and bond prices move in opposite directions. Interest Rates Bond Prices

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 12 Generally classified by: Who issues the bond corporation, municipality, or government When the bond matures short, intermediate, or long term How likely will the issuer be able to repay the higher the credit rating, the more likely the repayment (but the lower the interest rate) Bonds

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 13 Bonds Risk LowerHigher

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 14 Low risk, low return Liquid Very little fluctuation over time Examples: U.S. Treasury Bills, Certificates of Deposits (CDs), and Commercial Paper Cash Equivalents An investment in a cash equivalent investment choice is not insured or guaranteed by the FDIC or any other government agency. Although the investment seeks to preserve the value of your investment, it is possible to lose money by investing in the investment choice.

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 15 Risks and Rewards Value fluctuates very little over time May not keep pace with inflation Cash Equivalents Lower Risk Reasonably stable source of income Issuer may default* Value declines when interest rates rise Bonds moderate Historically outperformed other asset classes Fluctuates in short-term Stocks Higher Risk Rewards Risks *All bonds carry a risk of default or non-payment of principal and interest.

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 16 Historical Asset Class Performance Risk vs. Return Step 1 *See slide 26 for source and disclosures. $10, $7, $3,348.02

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY Understand the Benefits of Asset Allocation and Diversification 2

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 18 Importance of Diversification *See slide 26 for source and disclosures. Source: Morningstar, Inc. Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses.

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 19 The Benefits of Asset Allocation Reduces volatility Increases likelihood of achieving long-term goals Enhances potential for long-term gain Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future results.

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. Diversification Across Asset Classes *See slide 26 for source and disclosures.

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 21 Growth and Value Diversification *See slide 27 for source and disclosures. GrowthValue50% Growth/50% Value

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 22 Identify Investment Strategies 3

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 23 Power of Compounding The effects of starting early and compounding investments over time Hypothetical Investment in Stocks Anne (age 21) contributed for 14 years Tracy (age 35) contributed for 30 years $21,840 $46,800 $287,267 $152,769 This chart is for illustrative purposes only, and your circumstances may differ from this example. Example assumes a 7.2% average annual return. It is unlikely that any investments would have consistent returns. It does not reflect the actual return of any specific investment and is not intended to imply or guarantee future results. Assumptions do not include wage increases or price inflation.

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. Importance of Rebalancing Past performance does not guarantee future results. Your asset allocation can become “unbalanced” over time: *See slide 27 for source and disclosures.

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 25 TRANSAMERICA RETIREMENT SERVICES Our Experience Will Help You On Your Journey! Provider of retirement plans and investment products for more than 70 years 1 More than $13.2 billion 2 in assets under management More than 15,000 2 retirement plans in place More than 675,000 2 retirement plan participants ¹Transamerica Retirement Services (“Transamerica”), a marketing unit of Transamerica Financial Life Insurance Company (“TFLIC”), 4 Manhattanville Road, Purchase, New York 10577, and Transamerica Life Insurance Company (“TLIC”), 4333 Edgewood Road NE, Cedar Rapids, Iowa 52499, and other TFLIC and TLIC affiliates, specializes in the promotion of retirement plan products and services. TFLIC is not authorized and does not do business in the following jurisdictions: Guam, Puerto Rico, and the U.S. Virgin Islands. TLIC is not an authorized insurer in New York and does not do business in New York. The Transamerica Advisor Series II plan administration services are provided by Diversified Investment Advisors and funds are distributed by Diversified Investors Securities Corporation. Investors should consider the investment objectives, risks, and charges and expenses of the fund carefully before investing. The prospectus for each fund contains this and other information about that fund. For copies of any prospectuses, please call (800) Read each prospectus carefully before investing. 2 As of December 31, 2008.

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 26 Disclosures Slide 16 Calculated by Transamerica Retirement Services using data from Morningstar, Inc. Stocks are represented by the S&P 500® Index, an unmanaged index generally considered representative of the stock market. Bonds are represented by the Barclays Capital Aggregate Bond Index. Cash is represented by the Citigroup 3-month U.S. Treasury Bill Index. This chart is for illustrative purposes only, and your circumstances may differ from this example. Chart assumes $1,000 invested in December 1983 through December It does not reflect the actual return of any specific investment and is not intended to imply or guarantee future results. Transamerica Retirement Services is not affiliated with Morningstar, Inc., Standard and Poor’s, Barclays Capital, and Citigroup. One cannot invest directly in an index. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. There is no guarantee that any asset class will achieve a certain rate of return or outperform another asset class. Past performance is not a guarantee of future performance. Slide 18 Source: Calculated using data from Morningstar, Inc. Transamerica Retirement Services is not affiliated with Morningstar, Inc. Slide 20 Source: Calculated by Diversified Investment Advisors. Bonds represented by Barclays Capital Aggregate Index. Stocks represented by Russell 1000 Index. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund so performance may differ. It is not possible to invest directly in an index. There is no guarantee that any asset class will achieve a certain rate of return or outperform another asset class. Diversification does not guarantee a profit or protect against loss. Transamerica Retirement Services is an affiliate of Diversified Investment Advisors. Transamerica Retirement Services is not affiliated with Barclays Capital and Russell Investments. This chart is for illustrative purposes only, and your circumstances may differ from this example. It does not reflect the actual return of any specific investment and is not intended to imply or guarantee future results. One cannot invest directly in an index. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. There is no guarantee that any asset class will achieve a certain rate of return or outperform another asset class. Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is not a guarantee of future results.

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 27 Disclosures Slide 21 Source: Calculated by Diversified Investment Advisors. Large Value represented by Russell 1000 Value Index. Large Growth represented by Russell 1000 Growth Index. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. It is not possible to invest directly in an index. There is no guarantee that any asset class will achieve a certain rate of return or outperform another asset class. Transamerica Retirement Services is an affiliate of Diversified Investment Advisors. Transamerica Retirement Services is not affiliated with Russell Investments. This chart is for illustrative purposes only, and your circumstances may differ from this example. It does not reflect the actual return of any specific investment and is not intended to imply or guarantee future results. One cannot invest directly in an index. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. There is no guarantee that any asset class will achieve a certain rate of return or outperform another asset class. Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is not a guarantee of future results. Slide 24 Source: ChartSource, Standard & Poor’s Financial Communications. Domestic stocks are represented by the S&P 500. Foreign stocks are represented by the Morgan Stanley Capital International Europe, Australia, Far East (EAFE®) Index. It is not possible to invest directly in an index. Bonds are represented by long-term Treasuries (10+ years) as published by the Federal Reserve. Cash is represented by the yield of 90-day Treasury bills, as published by the Federal Reserve. Past performance does not guarantee future results. Transamerica Retirement Services is not affiliated with Standard & Poor’s, Morgan Stanley, or the Federal Reserve. This chart is for illustrative purposes only, and your circumstances may differ from this example. It does not reflect the actual return of any specific investment and is not intended to imply or guarantee future results. One cannot invest directly in an index. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. There is no guarantee that any asset class will achieve a certain rate of return or outperform another asset class. Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is not a guarantee of future results.

© 2009 Transamerica Corporation. All rights reserved.. FOR EDUCATIONAL USE ONLY. 28 Transamerica. Master Retirement. ® © 2009 Transamerica Corporation. All rights reserved For Educational Use Only. TRS 3414INV-0209 Power Choice Freedom