Retirement Reality Check

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Retirement Planning for Women
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Agenda

• Does retirement planning differ for women?
• How do you determine retirement needs and develop
  goals?
• What are the investment options and factors you
  need to consider?

3
Retirement Facts for Women

• Women live longer than men.1
• Women earn less money than men.2
• Woman may leave the workforce temporarily to
  care for dependents.3
• Women are not as likely as men to have a
  pension.4

1 National Center for Health Statistics 2 U.S.
Census Bureau 3 Department of Labor 4 U.S. Bureau
of Labor Statistics
4
Retirement Facts for Women

• Women are more likely than men to fall below the
  poverty level in old age.1
• Women are more likely than men to be in a
  nursing home.2
• Women may not know or underestimate money needed
  for retirement.3
• The average monthly Social Security benefit in
  2005 was 909.4

1 U.S. Census Bureau 2 Center for Disease
Control 3 American Savings Education Council 4
According to Social Security Online, Monthly
Statistical Snapshot, June 2005
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Retirement Facts for Women

• Nearly 90 of women will end up managing their
  finances alone.1
• Older persons not living with family were 20
  more likely to be poor.2
• Nursing home expenses rose by 150 from
  1987-1996.3

1 U.S. Department of Labor Womens Bureau
Director, Women Work National Conference on
November 8, 2001 2 Dept. of Health and Human
Services conducted a study in 2000 called A
Profile of Older Americans. 3 Agency for
Healthcare Research and Quality gathered these
statistics in September of 2001
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What Can You Do AboutRetirement Planning Now?

• Determine what you are worth financially.
• Determine what is important to you.
• Develop financial goals.

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Financial Net Worth

• Assets you own
• Debts you owe
• Net Worth

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Cash Flow

• Money coming in from all sources
• Money being spent
• Cash Flow

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What Is Important to You?

• Consider what matters to you.
• Determine what you want out of life during
  retirement.
• Think about what makes you feel secure and why.
• Dream about the lifestyle you want to have.

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10 Ways to Put Your House in Order

1. Update your living will
2. Review All insurance coverage
3. Consider refinancing
4. List and photograph all your valuables
5. Review Social Security benefits

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10 Ways to Put Your House in Order

1. Lower interest expenses
2. Review sources of income
3. Anticipate major expenses
4. Establish durable power of attorney
5. Consider long term care insurance

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Develop Financial Goals

• Key components to a sound financial plan include
• Goals
• Time horizon
• Risk tolerance

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Pay Yourself First

• Maximize contributions to Qualified Plans
• 401(k) IRAs
• College Savings529 Plans
• Utilize pay increase to fund savings

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Examples of Investment Options

• Determining Equity Types
• Size
• Large Cap, Mid Cap and Small Cap
• Investment Orientation
• Growth and Value
• Market Diversity and Sector
• Domestic and International
• Sector
• Consumer Goods, Industrial, and Energy just to
  list a few

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Examples of Investment Options

• Types of Debt or Bonds
• U.S. Government Bonds, notes, bills
• Municipal rated, can be insured
• Corporate rated

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Examples of Investment Options

• Consider mutual funds
• Professional management
• Diversification
• Convenience
• Many styles of investing
• Many different objectives
• Liquidity

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Examples of Investment Options

• Consider annuities
• Tax deferred growth
• Distributions taken prior to annuitization are
  generally considered to come from the gain in the
  contract first. If the contract is
  tax-qualified, generally all withdrawals are
  treated as distributions of gain. Withdrawals of
  gain are taxed as ordinary income and, if taken
  prior to age 591/2, may be subject to an
  additional 10 federal tax penalty.
• Some contracts provide for guaranteed living
  benefits
• Any payments or benefits due on the annuity are
  backed by the claims-paying ability of the
  issuing insurance company, and are subject to the
  financial condition of the issuing insurance
  company

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Examples of Investment Options

• Consider annuities
• Some contracts provide for death benefits
• Payout phase of contracts is designed so that you
  wont outlive the income stream
• Can have subaccounts invested in variable
  portfolios
• Can provide fixed rate of return

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Examples of Investment Options

• Consider real estate
• Owning your own home is both an investment and a
  lifestyle choice that may save you taxes
• Owning rental income property may generate both
  cash flow and income tax deductions
• Real estate is a traditional hedge against
  inflation

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Time Horizons

• Longer time horizons Lower risk of falling
  short of goals
• Shorter Time Horizons Greater Risk
• Why put off until tomorrow what you can do
  today.
• Grandmother

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Risk versus Reward

• Stocks...Higher risk higher potential return
• Bonds....Reduced risk fixed returns w/little
  growth
• Asset Allocation helps you keep your balance
• Diversification helps to reduce, not eliminate,
  your risk
• Diversification and Asset Allocation do not
  guarantee a profit nor prevent loss.

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A Look BackWhat if?

• Investment

Amount
Date
Value as of 12-31-04
S P 500
1
1-31-1950
71.73
U.S. Treasuries
1
1-31-1950
13.17
What About Inflation???
8.00
Past Performance is no guarantee of future
results. This is a hypothetical illustration and
is not intended to give investment advice.
Individuals should consult an investment
professional for advice specific to their
particular circumstances. Stocks are represented
by the SP 500 Composite Stock Price Index, US
30-day Treasuries, and the Consumer Price Index.
Source data Thomson Financial Company
800.232.2285, 2005.
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Asset Allocation What You Should Know

• Wide variety of asset allocation models
• Choose a model that is aligned with your risk
  tolerance and will help you reach your financial
  goals
• Keep in mind your time horizon
• Most investment advisors have tools to help
  determine your financial goals

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Summary

• Womens retirement planning facts
• Check to determine net worth, cash flow and goals
• Considered investment types, time horizon and
  risk
• Whats Next?

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Developing Your Retirement Strategy

• I have put my goals in writing.
• My goals are specific, measurable and achievable.
• I am confident that the amount I am saving each
  month is enough to meet my savings goal.
• I am confident I have used a realistic inflation
  estimate and have factored inflation into my
  projected retirement income needsthroughout my
  retirement years.

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Developing Your Retirement Strategy

• I have used sound investment principles to choose
  my investments.
• I am confident I have chosen investments
  appropriate for my time horizon and return
  expectations.
• I am comfortable with the level of risk my
  investments carry.
• I regularly monitor the progress of my strategy
  and make changes if necessary.

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Developing Your Retirement Strategy

• If developing and implementing a retirement
  strategy seems overwhelming, consider working
  with your financial professional.
• Financial professionals have the skills and the
  resources to help you develop and implement
  strategies to set and achieve your financial
  goals.

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What Else?

• Never stop asking questions.
• Never stop learning.
• Never stop dreaming, for if you can dream it, you
  can make it so.

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Questions?

• Thank you

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Variable Annuities

• Notice to consumers Variable annuities are
  long-term investments designed for retirement
  purposes. You should carefully consider the
  investment objectives, risks, charges and
  expenses of the investment alternatives before
  purchasing a contract or investing money. These
  contracts have limitations and are sold by
  prospectus only. The prospectus contains details
  on the investment alternatives, contract
  features, the underlying portfolios, fees,
  charges, expenses and other pertinent
  information. To obtain a prospectus or a copy of
  the underlying portfolio prospectuses, please
  contact your representative, or call Lincoln
  Benefit Life Company at 800-865-5237. Please read
  the prospectuses carefully before purchasing a
  contract or sending money.