Retirement by Design MKD-7118D-A EXP 30 NOV EDWARD D. JONES & CO., L.P. ALL RIGHTS RESERVED.

Transcription

1 Retirement by Design MKD-7118D-A EXP 30 NOV EDWARD D. JONES & CO., L.P. ALL RIGHTS RESERVED. Member SIPC

2 5 HOW CAN I STAY ON TRACK? 4 HOW DO I GET THERE? 1 WHERE AM I TODAY? MY FINANCIAL NEEDS 3 CAN I GET THERE? 2 WHERE WOULD I LIKE TO BE?

3 upset great calm concerned comfortable tense energetic neutral at ease skeptical relaxed discouraged panic worked up confident enthusiastic peaceful uncertain joyous upset terrified aggressive important optimistic frustrated fearful uneasy pessimistic frightened encouraged nervous powerless

4 Seminar Overview Your current situation Your vision for retirement Defining your goals Working toward your goals Taxes Preparing for the unexpected Staying on track

5 Your Current Situation

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7 Defining Your Goals

8 Expenses

9 Effects of Inflation 2038 (est.) $131 $60 $22 $1,685 $40,489 $601 $9,216 * $142 $1,386 Tank of Gas (17 gal) Monthly Groceries Health Care (per capita) Through 2013, inflation has averaged 4.2% (50 years), 4.2% (40 years), 2.8% (30 years), 2.4% (20 years) and 2.4% (10 years). The inflation rate used to calculate 2038 prices is based on historical inflation rates from 1982 to 2013: Car = 2.7%; Gas = 3.2%; Groceries = 4.6%; Health care = 6.1%. Car: MSRP for manual transmission Toyota Camry; Gas: National average for unleaded or regular gasoline; Groceries: Family of two with moderate cost plan. Sources: Bureau of Labor Statistics; U.S. Department of Agriculture; Centers for Medicare & Medicaid Services; The Wall Street Journal. *Estimate used for 2013 health care per capita.

10 Roth IRA Traditional IRA 401(k) Savings Investments Pensions Social Security

11 Rule of 25 $ 40,000 X 25 $ 1 million

12 Working toward Your Goals Power of 3 $ %

13 $ % Time

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15 Cost of Waiting $700,000 $640,000 $600,000 Portfolio Value at Age 65 $500,000 $400,000 $300,000 $200,000 $450,000 $310,000 $100,000 $ Age You Begin Investing Source: Edward Jones. Assumes investing $450 per month and a 6% average hypothetical annual return. This example doesn t include taxes, fees and commissions, which would reduce the return. Figures rounded to the nearest $5,000.

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17 The Potential Benefits of Waiting Portfolio Value $650,000 $770,000 $990,000 $1,250,000 $79,300 Initial Withdrawal from Portfolio (4%) $63,200 Social Security^ $42,500 $49,700 $39,600 $50,000 $26,000 $30,800 $16,500 $18,900 $23,600 $29,300 Age 62 Age 64 Age 67* Age 70 Source: Edward Jones. * Assumes Full Retirement Age (FRA) is 67 (for individuals born after 1959). Assumes a $1,250 contribution to 401(k)/IRA at end of every month until retirement, plus a 6.5% average annual return; income rounded to the nearest $100; portfolio values to the nearest $5,000. ^Based on a formula from Assumes $60,000 salary. Example does not include any cost-of-living adjustment (COLA).

18 $ % $ Money

19 Be smart with spending Use tax advantages Don t miss out on the employer match Reduce debt

20 Aggressive saving, not aggressive investing Smart spending Catch-up contributions

21 $ % % Return

22 Same Contributions, Different Returns, Different Results $1,000,000 7% Average Return $990,000 $800,000 $600,000 3% Average Return $405,000 $400,000 $200,000 $ Age Source: Edward Jones. Assumes saving $450 per month, rounded to the nearest $5,000.

23 Growth Focus Higher Risk 80 % 20 % Lower Risk Aggressive Growth Growth & Income Income Cash

24 Balanced toward Growth Higher Risk 65 % 35 % Lower Risk Aggressive Growth Growth & Income Income Cash

25 The Power of 3 $1,000,000 $990,000 $800,000 $600,000 $450,000 $640,000 $550,000 $550,000 % $ $400,000 $ % $200,000 $0 Current Strategy Power of Time Power of Money Power of Return Power of 3 Source: Edward Jones. This hypothetical example is for illustrative purposes only and does not reflect the performance of a specific investment. Income based on a 4% initial withdrawal rate. Portfolio values rounded to the nearest $5,000.

26 Taxes

27 Power of Tax Deferral $750,000 $750,000 $700,000 $650,000 $665,000 $600,000 Taxable Investment Account Traditional Retirement Plan Source: Edward Jones. Assumes $550 in monthly contributions from age 30 to age 65 and a 7% annual return. Growth in taxable account is taxed at 25% each year. Traditional IRA assumes tax-deductible contributions and is taxed at 25% at end of time horizon. Rounded to the nearest $5,000.

28 Which Retirement Account Is Right for You? Traditional IRA Roth IRA Employer-sponsored Retirement Plan

29 Preparing for the Unexpected Cash reserve Access to line of credit Insurance

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31 Now $ Tomorrow % Review

32 & Questions Answers

33 Thank You Please Complete Your Evaluation Now Member SIPC MKD-7118D-A EXP 30 NOV EDWARD D. JONES & CO., L.P. ALL RIGHTS RESERVED.