1. 2013-10237 1 What’s Your Retirement Income Plan 2013-10237 GO ON A JOURNEY TOWARDS RETIREMENT

2. 2013-10237 Agenda 2 The Retirement Risk The Retirement Realities Retirement Planning Options The Way Forward: Plan, Act, Review The Way Forward: Plan, Act, Review #1 #2 #3 #4

3. 2013-10237 The Retirement Realities

4. 2013-10237 4 Planning for Retirement Raises Many Questions How will I spend my time? Will I outlive my savings? How much will things really cost? How long will I live? Will I have enough money to leave my family protected? Will I have enough income to maintain my lifestyle?

5. 2013-10237 What’s your Retirement Income Gap? 5 AMERICAN ARE PROJECTED TO BE WORKERS $6.6 TRILLION SHORT OF THEIR NEEDS Source: Boston College's Center for Retirement Research, 2010 – Retirement USA study.

6. 2013-10237 6 Expected Retirement Age % % Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2013 Retirement Confidence Survey.

7. 2013-10237 7 Top Reasons for Retirement Age Change

8. 2013-10237 Worker Retirement Confidence: By Debt Level 8 Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2013 Retirement Confidence Survey.

9. 2013-10237 Retirement Crisis: Financial Realities 9 Source: The Retirement Savings Crisis: Is It Worse Than We Think?, Nari Rhee, PhD, National Institute on Retirement Security, June 2013. Source: The 2013 Retirement Confidence Survey, Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., March 2013. Source: Getting Paid In America Survey, American Payroll Association, September 2012. Source: A Summary of the 2013 Annual Social Security and Medicare Trust Fund Reports

10. 2013-10237 “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” ― Sun Tzu 10 Retirement Reflection

11. 2013-10237 The Retirement Risk

12. 2013-10237 12 Retirement Risks For Consideration Market Risk Longevity RiskInflation RiskHealthcare Risk Sequence of Returns Risk

13. 2013-10237 Longevity Risk: The risk of outliving your assets Average Life Expectancy at Age 65 and Age 75 83 87 82 86 84 88 70 75 80 85 90 Age 65 All Chart Source: Centers for Disease Control, “Life Expectancy at Birth, at 65 and 75 Years of Age by Race and Sex” (Table 26). Health, United States 2010. Age 75 Males Females

14. 2013-10237 Market Risk: Keep a Long Term Perspective with Retirement 14 About the data This is for illustrative purposes only and not indicative of any investment. Stocks in this example are represented by the S&P 500® index, which is an unmanaged group of securities and considered to be representative of the U.S. stock market in general. An investment cannot be made directly in an index. Bonds are represented by the Bank of America Merrill Lynch 3-month U.S Treasury bill. Government bonds and Treasury bills are guaranteed by the full faith and credit of the United States government as to the timely payment of principal and interest, while stocks are not guaranteed and have been more volatile than the other asset classes. Source: Zephyr STYLEAdvisor

15. 2013-10237 Inflation Risk: The inevitable increase of costs of goods and services 15 Ford Mustang Nursing Home (annual cost) Average Home Price $2,814 $31,395 $2,983 $83,585 $14,950 $271,600 1968 2010 Chart Source: Ford Motor Company; ElderWeb; U.S. Census Bureau (Average Home Price)

16. 2013-10237 *Source: Say Goodbye to the 4% Rule for Retirement, The Wall Street Journal, March 1, 2013 Withdrawal Risk According to a Wall Street Journal article* you may Withdrawal Risk: What’s your income distribution strategy? Retirement Cash Machine Say Goodbye to the 4% Rule

17. 2013-10237 17 Healthcare Care Risk: Medical costs are on the rise Present Value of Savings Needed to Fund Out-of-Pocket Health Care Costs for Retirees With Employer Medical Coverage MenWomen Retire in 2010 MenWomen Retire in 2020 Source: Employee Benefit Research Institute. Issue Brief No. 351, December 2010. This analysis uses a Monte Carlo simulation model to cover health insurance premiums and out-of-pocket expenses in retirement. These observations were used to determine asset targets for having adequate savings to cover retiree health costs 50 percent, 75 percent and 90 percent of the time. Estimates are also jointly presented for a stylized couple both of whom are assumed to retire simultaneously at age 65. $354,000 $406,000 $187,000 $242,000 $100,000 $146,000$183,000 $245,000 Represents an average chance (50%) of having enough money to cover health care expenses Represents a higher chance (90%) of having enough money to cover health care expenses $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000

18. 2013-10237 "Obstacles are those frightful things you see when you take your eyes off your goal." - Henry Ford (1863-1947) 18 Retirement Reflection

19. 2013-10237 The Retirement Options

20. 2013-10237 19% 12% 25%2% Chart Source: Sources of Income of Elderly Men and Women (Age 65 and older), Employee Benefit Research Institute, EBRI Notes, September 2010, No. 176 Other Employment Earnings Income from Assets Pension & Annuities Income during retirement takes on a new meaning. 42% Where Will The Income Come From?

21. 2013-10237 21 TAKE A HOLISTIC APPROACH

22. 2013-10237 22 What Are Sources Of Guaranteed Income? Social Security Federal retirement income program with inflation protection Annuities Is a long-term financial product designed for retirement planning; provides income that can begin immediately or in the future Life Insurance Protection for your future with access during retirement Pension Plans Retirement income from employer defined benefit plans; guaranteed by the federal Pension Benefit Guaranty Corporation Certificates of Deposit Time deposits issued by financial institutions insured by up to $250,000 by the Federal Deposit Insurance Corporation

23. 2013-10237 The Way Forward

24. 2013-10237 Plan, Act, Review Understand what you value most Help you design a plan tailored to your goals Reach your most important financial objectives, including retirement 24

25. 2013-10237 Plan: Uncovering What Matters Most to You Start thinking about your life goals Define your income needs Identify any areas of concern Talk to your financial professional about tradeoffs: ◦ Retirement vs. Education Funding ◦ Spending vs. Saving ◦ Retirement Lifestyle vs. Legacy Planning 25 Step 1 2 3 4

26. 2013-10237 Take stock of where you are now ◦ Review sources of income ◦ Estimate budget / Identify gaps Discuss financial and lifestyle goals with your financial professional ◦ Visit our financial planning and educational websites: ─ MyRetirementWalk.com ─ RetirementStyleMatters.com Implement your plans 2 Act: Put Your Plan to Work 26 Step 1 3 3

27. 2013-10237 27 Act: How Much Retirement Income Will You Need? Basic NeedsDiscretionary NeedsLegacy Needs

28. 2013-10237 28 Act: How Much Retirement Income Will You Need? Basic NeedsDiscretionary NeedsLegacy Needs Mortgage/Rent Insurance Food Clothing Healthcare Entertainment Travel and Hobbies Gifts for Grandchildren New Car Provide for Spouse or Family Charitable Gifts Educational Scholarships

29. 2013-10237 29 Act: How Much Retirement Income Will You Need?

30. 2013-10237 Act: Take Advantage of Educational Resources Empower Yourself: Visit our Retirement Planning Site MyRetirementWalk.com Take our animated walk throughout life’s major milestones and learn saving and planning tips for your consideration Access valuable resources: articles, calculators, infographics, and videos Hear and learn from industry- recognized experts about a wide spectrum of retirement topics on our frequently updated blog 30

31. 2013-10237 31 Act: Leverage Educational Tools Infographics Calculators Financial Personality Quiz

32. 2013-10237 Review: Communicate Life Changes Meet regularly with financial professional to track your retirement portfolio Communicate any life changes to financial professional ◦ Getting married ◦ Purchasing new home ◦ Welcoming a grandchild Modify portfolio as your situation – and market conditions – shifts 32 Step 1 2 3

33. 2013-10237 Working Together Next Steps: A Financial Professional Can Help 33 Develop plan that balances competing financial goals Understand what the numbers really mean Create your personalized retirement savings strategy Find ways to increase your retirement savings Determine when you can retire Monitor and make adjustments over time

34. 2013-10237 34 In Summary Retirement Realities ◦ There are many reasons that cause inaction; you’re not alone and there are ways to prepare. Retirement Risk ◦ A number of risks exist that you need to consider over time; resist the urge to let your retirement plan go on autopilot. Retirement Options ◦ There are action steps you can take today to become better prepared for the retirement income stage of your life. ◦ Work with your financial professional to determine the right strategy; they can be one of your best allies when it comes to retirement planning.

35. 2013-10237 Discussion 2013-6046