Longevity What does it mean to you?

What if you knew your Life Expectancy? It sure would make retirement planning much easier.

Lifespan in the US The average life expectancy in the US is 78.09 years. Basing your retirement off of the average lifespan can be dangerous. What are the risks? Data from World Bank Last updated: Mar 9, 2012

Running out of Money Average Life Expectancy 78.09 Years 60 Year Old Male: 20% chance of living to age 95 60 Year Old Female: 30% chance of living to age 95 60 Year Old Couple: 40% chance one of them lives to age 95 Data from World Bank Last updated: Mar 9, 2012. https://www.wellsfargo.com/investing/retirement/planning/longevity

Living Under Your Potential Lifestyle If the fear of running our of money causes you to live too conservatively, you may not live the retirement lifestyle that you could have had. Data from World Bank Last updated: Mar 9, 2012 https://www.wellsfargo.com/investing/retirement/planning/longevity

Consider Your Goals Maximize Retirement Income Protect Against Longevity Risk Stay in Control of Your Money What options do you have? Data from World Bank Last updated: Mar 9, 2012 https://www.wellsfargo.com/investing/retirement/planning/longevity

Guaranteed Lifetime Income Why? Take the guess work out of retirement and guarantee yourself a lifetime income stream. How? Invest a portion of your money with an insurance company who can use average life expectancy which can work in your favor.

Law of Large Numbers Life Expectancy = ??? Insurance carriers can look at groups of people instead of individuals. Life Expectancy :78.09 yrs

Law of Large Numbers Benefit: Guarantee yourself an income that is based on average life expectancy without the risk of running out of money.

Calculating Income Gap Jim Smith Current Age 55 Retirement Age 65 Assets Qualified Money: $350,000 Non Qualified Money: $300,000 Total: $650,000 Retirement Income Social Security Income: $2,513/Month Pension: $2,000/Month Total: $4,513/Month Desired Retirement Income $6,000/Month Current Retirement income $4,513/Month Income Gap: $1,487/Month

Solving for the Income Gap $1,487/Month = $17,844/Year Deposit American General (AIG) Lifetime Income Plus Rider GMWB Base Double initial premium after 10 years as GMWB base $178,440 $356,880 5.00% Withdrawal For Life Deposit Needed: $178,440 $17,844/Year

Income Goals Accomplished Desired Retirement Income = $6,000/Month Social Security Income $2,513/Month Pension $2,000/Month AIG Annuity $1,487/Month Total: $6,000/Month

3.26% Accumulation Goals: Replace the Invested Assets Assets : Qualified Money $350,000 Non Qualified Money $300,000 Total $650,000 Invested in AIG Annuity: $178,440 Remaining Assets = $471,560 What Interest Rate Do We Need to Earn? 3.26%

Hypothetical Accumulation Beginning Account Value Interest Rate Ending Account Value 1 $ 471,560.00 3.26% $ 486,932.86 2 $ 502,806.87 3 $ 519,198.37 4 $ 536,124.24 5 $ 553,601.89 6 $ 571,649.31 7 $ 590,285.08 8 $ 609,528.37 9 $ 629,398.99 10 $ 650,000.00

10-Year plan Jim at Age 55 Assets: $650,000 Income at Retirement: $4,513/Month Jim at Age 65 Income at Retirement: $6,000/Month

Goals Accomplished Protection Against Longevity Risk Remain in Control of Assets Principal Preservation

Thank you for joining us today!