Today s Retirement Landscape Know where you stand today. Once you know where you stand today, you can begin to see how to get to the place you want to be tomorrow. The future is yours to protect. The retirement picture has changed dramatically Client Name: Social Security Number Then Very few employers 1 Guaranteed pension 2 Social Security was certain Booming economy Life expectancy: 79 years 3 Now 10 or more employers 1 Fewer company pensions 2 Social Security in doubt Uncertain economy Life expectancy: 84 years 3 Client DOB: U.S. Citizen Are you currently retired? Retirement is dramatically different from what it was a short time ago. Traditional sources of income like pensions and social security no longer provide the protection they once did. Retirees must now take responsibility for their own savings and income planning. Confidence in Retirement Expectations 4 You (are doing/did) a good job of preparing financially for your retirement You (and your spouse) will have enough money to live comfortably throughout your retirement years You will have enough money to take care of your medical expenses during your retirement such as paying for doctor visits, prescription drugs, or hospital stays You will have enough money to pay for long-term care, such as nursing home or home health care, should you need it during your retirement 0% 20% 40% 60% 80% 100% All respondents Respondents who own annuities Responses reflect those who indicate they were extremely, very or somewhat confident 1. U.S. Department of Labor, June 2006 (for persons born 1957-1964) 2. Employee Benefit Research Institute (EBRI), March 2010 3. National Center for Health Statistics, based on age 65 in 1950 (then) vs. 2006 (now), January 2010 4. Boomer Expectations for Retirement, April 2011, Insured Retirement Institute If not, what age do you plan to retire? When do you anticipate needing retirement income? h less than 1 year h 1-5 years h 6-10 years h 11 years or more h never Are you confident you have enough income to cover your expenses in retirement? How would you describe your risk tolerance? h Low Risk h Moderate Risk h High Risk Page 1
Employers have shifted responsibility for retirement planning to individuals Percent of Workers With Pension Coverage by Type of Plan, 1983 and 2007 5 Do you have a pension benefit? What is your monthly benefit? 80% 1983 2007 60% 40% What is the value of your 401(k)/403(b)? 20% What is the value of your IRA? 0% DEFINED BENEFIT ONLY DEFINED CONTRIBUTION, 401(K) PLANS ONLY BOTH Social Security Uncertainty Social Security Replacement Rates for Average Earner Retiring at Age 65 5 Are you currently receiving social security benefits? If yes, what is your monthly benefit? 50% 40% 30% What do you estimate your monthly benefit will be? 20% 10% 0% 2002 2030 Reported replacement rate (2030 incorporates extension of full retirement age) After Medicare SMI deductions (2030 incorporates Part D prescription drug deduction.)* After personal income taxation* Do you have any other guaranteed monthly income? Amount What are your approximate monthly living expenses? Do you anticipate any significant changes in your future income needs? If yes, please provide details: *Calculations based on Social Security Administration estimates 5. Source: The National Retirement Risk Index: After The Crash, October 2009, Number 9-22, Center For Retirement Research At Boston College Page 2
Longevity Risk Did you know that your life expectancy actually increases as you age? Thanks to healthier lifestyles and medical advances, you may generally look forward to 20 to 30 years or more in retirement. That s good news, but you may need more money than you planned to make your income last as long as you do. If you live to age 65, there is a high probability you will live to be 80 or even 95! 5 120% 100% 80% 60% 40% 20% 0% 93% 96% 99% To Age 70 71% 81% To Age 80 94% Male Female Couple (probability of one living) 16% 23% To Age 95 36% Are you concerned about outliving your income? Do you anticipate inflation impacting your cost of living in retirement? What is your financial objective? (check all that apply) h Income h Potential Growth h Death Benefit h Safety of Principal h Ability to Invest in Index Accounts h Medical Expense Planning Family Protection According to recent data from LIMRA the most common uses for death benefit include: Final expenses 78% Income replacement 53% Wealth transfer 20% Source: 2010 U.S. Life Ownership Study, LIMRA Page 3
Health Care Risk Health care costs could quickly drain retirement income plans if not properly planned for. With employer-sponsored health care coverage for retirees quickly vanishing, rising medical costs are a major concern. Since you can t predict how much you ll need or when you ll need it, be sure your retirement plan gives you plenty of flexibility to access your money. Less Than 1/3 of Employers Offer Retirees Health Care Coverage 6 Employers with 500+ employees providing retiree health coverage Do you have: h Medicare Supplement Policy h Long Term Care Policy h Veterans Benefits or h other insurance policy that will cover medical expenses that Medicare won t cover? If yes, please indicate benefit amount, including maximums and duration. Medicare Eligible Retirees 40 30 20 10 40% 1993 35% 1995 31% 1997 28% 1999 23% 2001 21% 21% 21% 21% 2003 2005 2007 2009 If no, how do you plan to pay for this potential need? Retirees Health Care Expenses Could Exceed $400,000 Over 20 Years Medigap insurance for 20 years 7 $67,820 Health premiums/out of pocket costs (20 years) 8 $162,000 Three years in an assisted living facility 9 $97,719 One year in a skilled nursing home 9 $74,806 $402,345 Possible expenses per person, in today s dollars. These are hypothetical time frames based upon the potential needs of an individual during a retirement period of 20 years, a three-year period of assisted living and a one-year period needing skilled nursing care. Would you be interested in a product that offers a care benefit? How is your overall health? h Excellent h Good h Fair h Poor Have you had any serious or life threatening medical conditions? If yes, please explain: 6. Source: Mercer s National Survey of Employer-Sponsored Health Plans, 2009. 7. www.medicare.gov, 2008 8. EBRI Issue Brief 351, December 2010 9. Genworth Financial, 2010 Cost of Care Survey, March 2010 (based on average private room cost) Page 4
Secure Your Retirement Does any proposed owner or covered person currently reside in a hospital, Hospice facility, nursing home, or participate in an assisted living program? Has any proposed owner or covered person been diagnosed by a licensed medical professional or health care provider as having a terminal illness? Does any proposed owner or covered person have any known indications of cognitive impairment, such as dementia, Alzheimer s disease, Parkinson s disease or other neurological disorders? Do you have any of the following products? h Checking/savings h CD h Fixed Annuity h Fixed Indexed Annuity h Variable Annuity h Stock/bonds/mutual funds h h Life insurance Face amount Cash value Source of Funds What is the source of premium for this annuity? (check all that apply) h Variable Annuity h Fixed Annuity h Indexed Annuity h Life Insurance h Certificate of Deposit h Checking/Savings Account h Money Market Account h 401k h 403b h Pension Plan h Profit Sharing Plan h Brokerage Account h Stock/Bonds h Loan/Reverse Mortgage/Mortgage/ Home Equity Line of Credit Are any losses incurred (i.e. surrender charges, settlement fees, bonus recapture charges, loss of annuitization, loss of interest and/or index credits, etc.) or other penalties associated with annuity s source of premium checked above? h NA Page 5
Secure Your Retirement If this purchase is replacing an existing annuity or life insurance product, please provide the issue date of the product being replaced. Do you have any of the following riders associated with the contract being replaced? If YES, please indicate the amount of benefit the rider(s) provide: Waiver of Surrender Charge Guaranteed Accumulation Benefit Enhanced Death Benefit Guaranteed Withdrawal Benefit Terminal Illness/Nursing Home Guaranteed Income Benefit Is the product being replaced? Are you are currently invested in a fixed or indexed annuity? If YES, what are the applicable caps, rates and triggers? Participation Rate Index Cap Minimum Guaranteed Interest Rate Index Spread Does the product have a Guaranteed Lifetime Withdrawal Benefit rider elected? What are the applicable fees you currently pay in the contract you are replacing, such as administrative fees, rider fees, mortality and expense fees, etc.? Replacement Company Name Estimated Premium Surrender Charge MVA (+/-) (specify) #1 #2 #3 Page 6
Retirement Needs Analysis Identify your monthly retirement expenses. Expense Category Expense Details Monthly Expenses Shelter Primary home mortgage/rent Property taxes & homeowners insurance Utilities (heat, electric, phone, cable, etc.) Food Groceries Dining out Health Care Medicare and Medigap Health insurance premiums Co-payments/prescriptions/out-of-pocket Transportation Auto insurance Vehicle payments/maintenance Fuel Personal Insurance Life insurance premiums Long-term care payments Personal Care Clothing Services (hair, spa, gym membership, etc.) Entertainment Hobbies, sports, arts Taxes Income Expenses Page 7
Retirement Needs Analysis Identify your sources of retirement income. Lifetime Income Sources (enter monthy totals) Social Security Pension (from employer) Annuities (as income stream today) Lifetime Income Sources Assets IRAs 401(k), 403(b), 457(b) plans Annuities Savings Life insurance cash value Assets Recurring/Temporary Income Working income Rental Income Recurring/Temporary Income My Income My Expenses - = My Personal Needs Analysis A5112 2016 The Phoenix Companies, Inc. 9-16 BPDXXXXX Page 8