1. The Income Flow Presentation
How strong will your income flow be in retirement?
Income

2. Income that you can spend
During your working years, your career may provide a steady flow of income – income that you can spend to support your lifestyle.
Your Career
Income that you can spend

3. Eventually, you may begin to plan for the likely possibility that you will not want to work forever.
Your Career
Income You Can Spend

4. So, you may divert some of your income into retirement savings.
Your Career
Income

5. Your ultimate goal may be for your retirement savings to be sufficient to keep the flow of money to your wallet going strong.
Your Career
Income

6. … even after you leave your career.
Income

7. You may have some income coming to you from Social Security and other sources.
Pensions
Income

8. … but will it all be enough?
Social Security
Pensions
Income 8

9. How strong will your income flow be in retirement?or
Income
Income

10. A potential fear for retirees: Running out of retirement savings, which can dry up a portion of their income flow.
Social Security
Income
Income
Pensions

11. Here are three factors that can impact your retirement savings
Rate of return risk
Your Career
Sequence of return risk
Not putting enough money into retirement savings
Income

12. Your Career You can’t control these Rate of return risk
Sequence of return risk
Income
Income
Not putting enough money into retirement savings
You can control this

13. What rate of return will you earn on your savings?
Rate of Return Risk
What rate of return will you earn on your savings?
Most people have most of their retirement savings in qualified plans such as IRA’s, 401(k)’s, 403(b), etc.
In our experience, this savings is then allocated to various assets. For example, an asset allocation could be:
Bonds, 30%
Cash, 5%
Stocks, 65%
Any transaction that involves a recommendation to liquidate a securities product, including those within and IRA, 401(k) or other retirement plan for the purchase of annuity or for other similar purposes, can only be conducted by individuals currently affiliated with a properly registered broker/dealer or registered investment adviser. If your financial professional does not hold the appropriate registration, please consult with your own broker/dealer representative or registered investment adviser for guidance on your securities holdings.

14. Stocks and bonds don’t have a guarantee of principal.
Stock values as measured by the S&P 500 over the last 10 years:
2006
2009
2013
This graph is for illustrative purposes only and does not represent any product. It is not possible to invest directly into an index. Individual results may vary. Standard & Poor's 500 index (S&P 500) is comprised of 500 stocks representing major U.S. industrial sectors.
Source: Yahoo! Finance, ^GSPC, 1/1/2006 – 1/1/2016, gathered on 5/20/16

15. They also don’t have a guaranteed rate of return.
10-year Treasury bond interest rates over the
last 5 years:
This graph is for illustrative purposes only and individual results may vary. Keep in mind that, depending upon the type of bond, a bond’s interest rate may be guaranteed until its maturity date.
Source: gathered on 5/20/2016

16. Varying returns could create very different future values.
This hypothetical example is based on a bundle of assets with the returns shown, assumes no taxes, and is for informational purposes only; the use of alternate rate, premium, and withdrawal assumptions could produce significantly different results.

17. Rate of Return Risk
Because this example asset allocation doesn’t have a guarantee of principal nor a guaranteed rate of return, rate of return risk is unpredictable.
Bonds, 30%
Cash, 5%
Stocks, 65%
This hypothetical example is for informational purposes only; the use of alternate rate, premium, and withdrawal assumptions could produce significantly different results.

18. Rate of Return Risk
Thus, consistently experiencing negative returns could reduce your retirement savings and could lead to a decrease in your retirement income.
Risk of depletion
due to rate of return risk
Social Security
Income source
Pensions
Income
Income source 18

19. Same returns, different order.
Now let’s consider …
Sequence of Return Risk
With the example asset allocation, there may be periods of high positive returns and some periods of negative returns. In what sequence will these occur?
Meet John.
He is going to have 2 years of -20% returns…
followed by 8 years of +10% returns.
Meet Beth.
She is going to have 8 years of +10% returns…
followed by 2 years of -20% returns.
Same returns, different order.
This hypothetical example is based on a bundle of assets with the returns shown, assumes no taxes, and is for informational purposes only; the use of alternate rate, premium, and withdrawal assumptions could produce significantly different results. This is for illustrative purposes only and your individual experience may vary.

20. Let’s suppose they each have $200,000 accumulating for 10 years with no withdrawals. The value of their assets after 10 years end up the same. The sequence of returns doesn’t affect the ending balance if they’re taking no withdrawals.
Poor returns come first
Good returns come first
This hypothetical example is based on a bundle of assets with the returns shown, assumes no taxes, and is for informational purposes only; the use of alternate rate, premium, and withdrawal assumptions could produce significantly different results. This is for illustrative purposes only and your individual experience may vary.

21. Now let’s take that same $200,000 but have them taking $20,000 annual withdrawals at the beginning of each year. John runs out of money after 8 years, whereas Beth doesn’t in 10 years. The sequence of returns can have a dramatic effect when they’re taking withdrawals.
Poor returns come first
Good returns come first
This hypothetical example is based on a bundle of assets with the returns shown, assumes no taxes, and is for informational purposes only; the use of alternate rate, premium, and withdrawal assumptions could produce significantly different results. This is for illustrative purposes only and your individual experience may vary.

22. Sequence of Return Risk
Thus, a poor sequence of returns could negatively impact your retirement savings and could lead to a decrease in your retirement income.
Risk of depletion
due to sequence of return risk
Social Security
Income source
Pensions
Income
Income source

23. a potential source of supplemental retirement income
Insured Income
One possible solution may be to purchase a fixed annuity with a portion of your assets, which guarantees a certain periodic payment level for life.
Fixed Annuity,
a potential source of supplemental retirement income
Social Security
Pensions
Guaranteed lifetime income available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC.
Income

24. a potential source of supplemental retirement income
Insured Income
One possible solution may be to purchase a fixed annuity with a portion of your assets, which guarantees a certain periodic payment level for life.
Fixed Annuity,
a potential source of supplemental retirement income
Social Security
Pensions
Guaranteed lifetime income available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC.
Income

25. a potential source of supplemental retirement income
Insured Income
Even if the rest of your retirement savings is impacted by the risks we discussed, the income amount from your annuity continues – guaranteed.
Fixed Annuity,
a potential source of supplemental retirement income
Social Security
Pensions
Guaranteed lifetime income available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC.
Income 25

26. By purchasing an annuity, which can provide supplemental retirement income …
You can have a guaranteed income amount, in addition to your Social Security and any pensions
It is not subject to rate of return risk
It is not subject to sequence of return risk
Your worst case scenario may be better than it was before
Income
Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC. Guarantees may also be subject to restrictions, limitations or early withdrawal fees.

27. a potential source of supplemental retirement income
Insured Income
How much of your retirement savings would you like to help create a dependable stream of income for life? In addition to other retirement savings vehicles, an annuity can be purchased to provide supplemental income for your retirement.
Fixed Annuity,
a potential source of supplemental retirement income
Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Carefully consider the risks, expenses, potential loss of principal and your individual objectives before reallocating existing monies into these products.
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