1. INVESTMENT PRODUCTS: NOT FDIC INSURED NOT BANK GUARANTEE MAY LOSE VALUE

2. What do you imagine for your retirement? LOOK INTO YOUR FUTURE Your retirement may include: Traveling to far-flung destinations Indulging in your favorite hobbies Enjoying unhurried time with friends and family Devoting more time to volunteering Starting your own business

3. LOOK INTO YOUR FUTURE Visualize your retirement A successful retirement begins with envisioning a rewarding, healthy and responsible lifestyle. A few questions to consider: What would make a perfect week for you? What would you like to do during each season of an ideal year? What day-to-day activities would motivate your mind, maintain your health and help build relationships in your community?

4. Healthcare costs are rising CONSIDER THE REALITIES It’s estimated that four out of every 10 people turning age 65 will use a nursing home at some point in their lives Many will need home care and other related services According to the National Center for Policy Analysis (NCPA): o Older Americans currently spend an average of 17% of their income on health care o By 2030, that average is expected to rise to close to 24% Source: Liqun Liu, Andrew J. Rettenmaier and Zijun Wang, “The Rising Burden of Health Spending on Seniors.” National Center for Policy Analysis, NCPA Policy report No. 297, February 2007. Historical U.S. inflation rate 1914 to present.

5. What senior citizens spend on health care from their Social Security benefits* CONSIDER THE REALITIES Source: *Liqun Liu, Andrew J. Rettenmaier and Zijun Wang, “The Rising Burden of Health Spending on Seniors.” National Center for Policy Analysis, NCPA Policy report No. 297, February 2007. Historical U.S. inflation rate 1914 to present.

6. Did you know that a 65-year-old man has a 50% chance of living beyond age 85? Also, if a husband and wife are both age 65, there’s a 50% chance that one spouse will live beyond age 92. * CONSIDER THE REALITIES Source: Society of Actuaries Annuity 2000 Mortality Tables. We’re living longer, so retirement lasts longer: Growing focus on health and fitness Availability of excellent medical care Ongoing scientific advancements Today’s retiree is likely to live 20 or more years after retiring

7. CONSIDER THE REALITIES The effects of inflation on everyday costs Inflation reduces your purchasing power Sources: Median and Average Sale Prices of New Homes Sold in United States, www.census.gov/const/uspricemon.pdf; http://www.thepeoplehistory.com/1989.html; http://www.marketwatch.com/story/new-car-transaction-prices-jump-nearly-3-percent-in-august-2014-according-to-kelley-blue-book-2014-09-03; U.S. Bureau of Labor Statistics, Consumer Price Index — Average Price Data as of November 2014. 2039 estimates assume a 3.2% annual rate of inflation.

8. USE EVERY LIFE STAGE TO BUILD A FUTURE OF WEALTH AND STABILITY Life stagePotential roadblocks to savingTips Paying for your wedding Repaying student loans Paying rent while saving for 1 st home Start contributing to your employer- sponsored retirement plan Making a down payment on a home Monthly mortgage payments Life and medical insurance Child care expenses Continue to contribute to retirement plan; if spouse takes time off to care for children, remember that they can open an IRA as long as household has income. Saving for college Adoption or fertility treatment Health care costs Family vacations Lessons/activities for children Maximize all retirement plan options, such as 401(k)s and IRAs. If you have your own business, see whether you can take advantage of higher contribution limits offered through SIMPLE or SEP IRAs.

9. USE EVERY LIFE STAGE TO BUILD A FUTURE OF WEALTH AND STABILITY Life stagePotential roadblocks to savingTips Paying for child’s college expenses, wedding or home purchase Providing financial support to parents, sibling or adult child Economic recession Take advantage of catch-up contribution provisions to 401(k)s and IRAs. This can be an important way to compensate if you have not saved regularly before. Retirement eliminates income Loss of employer-provided health insurance Seek advice from a qualified professional about your options for when to begin collecting Social Security benefits and making withdrawals from retirement accounts, and the implications for your long-term financial situation. Health care costs Inability to work Nursing home Outliving your savings If you continue to work, seek out advice on how earned income may affect retirement benefits. Get advice on estate planning and college saving plans such as 529 plans.

10. Three main sources: Social Security benefits Employer-provided retirement plan accounts Personal savings SAVING FOR RETIREMENT IS UP TO YOU Where will your retirement income come from?

11. While Social Security benefits account for 45% of the average retiree’s monthly income: Current average monthly Social Security benefit payment is just $1,192* This amount may decline in the future as the ratio of workers paying into the system versus retirees collecting benefits continues to fall SAVING FOR RETIREMENT IS UP TO YOU * Social Security Administration. Monthly Statistical Snapshot, November 2013, www.ssa.gov/policy/docs/quickfacts/stat_snapshot/. Social Security benefits are not enough

12. SAVING FOR RETIREMENT IS UP TO YOU Making up the shortfall with retirement plans Employer-contributed retirement plans are being replaced with plans that require employee contributions (defined contribution plans), such as 401(k) plans More and more Americans must rely on themselves to build retirement savings through tax- advantaged savings plans at work including: o 401(k)s o Personal retirement savings plans like Individual Retirement Accounts (IRAs) *Alicia H. Munnell, Kelly Haverstick and Geoffrey Sarcenbacher, “Job Tenure and the Spread of 401(k)”, Center for Retirement Research at Boston College, An Issue in Brief, October 2006, number 55. Americans covered by traditional pension plans vs. defined contribution plans

13. Planning for the unexpected But what if the unexpected occurs? What if your elderly parents require financial assistance? What if your child’s education costs are more than anticipated? If the unexpected happens, a well- constructed retirement savings plan can help you stay on track to meet your retirement income goals and allow for adjustments along the way as needed. SAVING FOR RETIREMENT IS UP TO YOU You may think you are right on target with your retirement savings plan.

14. SAVING FOR RETIREMENT IS UP TO YOU How much will you need to maintain your standard of living? Look at your total financial picture Take into account all of your assets, including: o Money already in 401(k) and pension plans o Individual savings o Spouse’s retirement plan accounts o Projected Social Security benefits Your financial professional can help you assess all of these elements, plus potential risks such as inflation, and determine the appropriate savings goal for you

15. SAVING FOR RETIREMENT IS UP TO YOU Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2006 Retirement Confidence Survey.

16. First, estimate your retirement expense budget Consider: Your current annual fixed household expenses Your current annual discretionary household expenses Add these two together, then adjust for any expected increases/decreases in these expenses during retirement PLAN FOR YOUR FUTURE

17. Next, review your current financial situation Consider: Your current financial assets Your current financial liabilities To determine your current net worth, subtract total liabilities from total assets PLAN FOR YOUR FUTURE

18. How much to do you need to save before your nest egg is large enough to generate earnings comparable to your estimated retirement needs? Consider: How much annual income will your current net assets generate? What will your annual estimated Social Security benefit be? If you have an employer-provided pension, how much will the annual benefit be? Add together these three figures… and then subtract your estimated annual retirement budget The result is the annual income gap if you retired today…which helps you see how close or far you are now with respect to your goals ESTIMATE THE INCOME GAP

19. TAKE THE NEXT STEPS FOR YOUR FUTURE Visualize your retirement Envision a rewarding, healthy and responsible lifestyle Imagine what you would like to do during each season of your ideal year Visualize a day-to-day style of living that will motivate your mind, maintain your health, and build relationships within your community Consider the realities Health care costs are rising We’re living longer, so retirement last longer Inflation reduces your purchasing power

20. TAKE THE NEXT STEPS FOR YOUR FUTURE Source: Legg Mason, 2015. The above information is for illustrative purposes only. All three investors contributed $5,000 annually to an IRA. This illustration assumes a hypothetical pre-tax return of 7%, compounded annually. This example does not take into account any taxes, fees and expenses, and also it assumes no withdrawals were made and the fact that if they were considered, the results would be lower. Please note that Legg Mason, Inc., does not provide tax advice. Start investing early and stay disciplined

21. TAKE THE NEXT STEPS FOR YOUR FUTURE Diversification does not assure a profit or protect against market loss. Bridge the income gap Increase your annual savings rate and if possible, contribute to a tax- advantaged retirement account Maintain a diversified investment portfolio with an appropriate level of risk Defer, if possible, the date of your retirement Phase in your retirement. Consider if you would like spending a few days a week at your current workplace or perhaps a different one Consider all of your assets

22. WORK WITH A TRUSTED FINANCIAL PROFESSIONAL Action steps A trusted financial professional works with you to identify your goals, needs and aspirations and helps you choose and implement financial strategies that meet your particular goals and needs, given your risk tolerance and time horizon.

23. 23 www.leggmason.com 1-800-822-5544 youtube.com/leggmason linkedin.com/company/legg-mason @leggmason Brandywine Global ClearBridge Investments Martin Currie Permal QS Investors Royce & Associates Western Asset Legg Mason is a leading global investment company committed to helping clients reach their financial goals through long term, actively managed investment strategies. A broad mix of equities, fixed income, alternatives and cash strategies A diverse family of specialized investment managers, each with its own independent approach to research and analysis Over a century of experience in identifying opportunities and delivering astute investment solutions to clients This presentation does not address state or local tax rules concerning retirement accounts. Legg Mason, Inc., its affiliates, and its employees are not in the business of providing tax or legal advice to taxpayers. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties or complying with any applicable tax laws or regulations. Tax-related statements, if any, may have been written in connection with the “promotion or marketing” of the transaction(s) or matter(s) addressed by these materials, to the extent allowed by applicable law. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor. All investments involve risks, including possible loss of principal. © 2015 Legg Mason Investor Services, LLC. Member FINRA, SIPC. Legg Mason Investor Services, LLC is a subsidiary of Legg Mason, Inc. 6/15 FN1512498