VALIC Financial Advisors, Inc. An array of financial planning and investment services SAVING : INVESTING : PLANNING
Your financial advisor will work with you to help make sure your financial plan fits your individual situation and goals.
You already know it s important to save for retirement. But you also know life is unpredictable, which means financial obstacles and opportunities can pop up long before you retire. Take steps to realize your goals VALIC Financial Advisors, Inc. gives you access to a broad range of investment and financial planning products and services. As your single source of financial solutions, we help keep it simple. We promise To help you plan for the future by offering objective and expert financial planning and investment services To offer advice and choices from an array of products and services To help you learn about financial issues through a coordinated, comprehensive and objective education program that continues through all life stages Click VALIC.com 1
ONE SOURCE of financial services = simplicity 2
It s easy to feel overwhelmed by financial decisions. Using VALIC Financial Advisors, Inc. can help simplify your financial life and make sure your decisions fit with a comprehensive financial strategy. We offer: 1. 2. 3. 4. 5. 6. 7. 8. Financial planning Brokerage services Asset management IRAs Mutual funds Annuities Insurance Investments for education expenses Click VALIC.com 3
We help you develop a plan... and put it into action It begins with an in-depth look at your present situation. From this analysis you will develop: A clear picture of your current financial status A prioritized list of your most important financial goals Investment strategies to help you reach each of your goals Well-defined steps to take, now and in the future Implementing your plan Just having a plan doesn t help if you don t put it in motion and then monitor it. Your VALIC financial advisor will be there to help every step of the way. Your financial advisor can help you create individual solutions to achieve your financial goals. 4 4
1 Financial planning Your VALIC financial advisor can come up with an investment strategy based on your unique financial circumstances. Then they ll recommend approaches based on that strategy. First, we work with you to clarify your current financial situation and what is important to you. Then we can determine your investment plan. Your financial advisor can help you implement the plan and stay involved to help you keep it on track. As your life changes, your financial advisor will revisit that plan with you to make sure your goals are properly reflected. 2 Brokerage services Do you hold stocks, bonds, mutual funds and other financial instruments? Consolidate your assets and investments into one convenient brokerage account, and you ll receive a single statement with your complete investment picture. Transferring money among investments becomes convenient and easy. Choose from different levels of brokerage services. You may want a traditional brokerage account. You may prefer a cash management account that combines traditional brokerage services and banking services. Of course, when considering consolidation of assets, be sure to determine any associated costs. There can be surrender fees from the original investment as well as the possibility that the new consolidated investment could be subject to new fees and charges. 3 Asset management Successfully managing money takes time and expertise. That s why many people retain professional money managers to help them. The Managed Investment Program (MIP) is a feebased service that provides access to independent money managers who design and manage a portfolio tailored to your needs. With MIP, your financial advisor will consult with you to develop a personalized asset allocation and portfolio. The service includes consolidated record keeping. Once implemented, your portfolio will be continuously monitored. All positions are reviewed for a variety of characteristics and will be replaced as needed. The portfolio will be rebalanced to conform to your original asset allocation. To make sure your MIP portfolio continues to meet your needs, your financial advisor will offer to meet with you to review your portfolio and your financial situation, and then discuss situations that might call for changes. MIP is a personalized solution to help you achieve your financial goals through professional money management. Click VALIC.com 5
4 IRAs Investing in an Individual Retirement Account (IRA) is a well-known strategy for helping to accumulate tax-advantaged retirement savings. You can use an IRA to supplement an employer-sponsored retirement plan and complement your overall savings program. Depending on your income level and participation in an employer-sponsored plan, your contributions to a traditional IRA might be fully or partially deductible. When you contribute to an IRA, your savings may grow at a faster rate than with taxable accounts. That s because the taxes on interest and earnings are deferred until withdrawal. With a Roth IRA, contributions are not deductible, but qualified withdrawals are tax-free if you meet certain conditions. IRAs are designed specifically to help bridge your retirement income gap the difference between what you have and what you need. Almost anyone can establish at least some type of IRA, even if you re an active participant in an employer-sponsored retirement plan. Your VALIC financial advisor can help select the IRA type that best suits your particular situation. There s one more way that IRAs come in handy. Do you still have retirement accounts from employersponsored plans at previous jobs? All those accounts can be tough to monitor and manage. Consider rolling them over to an IRA with VALIC. It may be more convenient, and you might also gain access to expanded investment options. Be sure to check with your current provider to determine if there are surrender charges to consider before you request a rollover. Your VALIC financial advisor can help you figure out which type of IRA matches your situation. Traditional IRA Contributions may be deductible depending on your level of income and participation in an employersponsored plan Tax-deferred growth of your investment Income taxes are payable upon withdrawal (A 10% federal early withdrawal tax penalty may apply to withdrawals prior to age 59½) Roth IRA Non-deductible contributions Tax-deferred growth of your investment Withdrawals are tax free after the end of the five-year period beginning with the first year in which a Roth contribution was made and one of these conditions applies: Reaching age 59½ Due to disability or death The purchase of a first home A 10% federal early withdrawal tax penalty may apply to withdrawals of earnings if at least one of the above conditions has not been met 6
The advantages of a tax-deferred plan Taxable account Tax-deferred account $142,000 $97,000 $45,000 $57,000 $16,000 $18,000 10 years 20 years 30 years This chart compares the hypothetical results of contributing $100 each month to (1) a taxable account and (2) a tax-qualified retirement account. Bear in mind that a $100 pretax contribution to a tax-qualified account has a current cost of $75 (assuming a 25% income tax bracket) and also reduces current taxable income. The chart assumes an 8% annual rate of return. Remember investing involves risk, including possible loss of principal. Fees and charges, if applicable, are not reflected in this example and would reduce the amount shown. Income taxes on tax-deferred accounts are payable upon withdrawal. Federal restrictions and a 10% federal early withdrawal tax penalty may apply to withdrawals prior to age 59½. This information is hypothetical and only an example. It does not reflect the return of any investment and is not a guarantee of future income. Lower maximum capital gains rates may apply to certain investments in a taxable account (subject to IRS limitations, capital losses may also be deducted against capital gains), which would reduce the differences between the performance in the accounts shown in the chart. You should consider your personal investment horizon and current and anticipated income tax brackets when making investment decisions as they may further impact the results of the comparison. Deferral of taxes on earnings helps money in a tax-deferred account grow faster than in a taxable account. Click VALIC.com 7
5 Mutual funds Mutual funds can be an excellent way to invest for the future. They provide broad diversification and professional management all in one convenient vehicle. Through VALIC Financial Advisors, Inc. you have access to thousands of mutual funds from nationally recognized mutual fund companies. These mutual funds are managed by professional investment managers with extensive knowledge and research capabilities. Your financial advisor can help you evaluate the different mutual fund options to determine those that best suit your investment goals. Fees that apply to mutual funds are described in the current fund prospectus and include Fund Annual Operating Expenses and/or sales charges. 6 Annuities Annuities offer the advantages of tax-deferred accumulation and can provide a guaranteed lifetime income, plus a death benefit for the protection of your family. Choices include fixed or variable annuities, also immediate income or deferred income annuities. With a fixed annuity, your investment receives a guaranteed rate of return. With a variable annuity, you invest in variable investment options. Returns on variable investments depend on market conditions and will fluctuate over time, so that the value of your investment, when withdrawn, could be more or less than the original cost. Variable annuities are insurance contracts with investment options that offer tax-deferred growth and feature a variety of attractive payout options. Fixed annuities may be impacted by inflation. Variable annuities have market risk, can lose value and are sold by prospectus. Guarantees are backed by the claims-paying ability of the issuing company. 7 Insurance A financial plan with a thoroughly diversified portfolio will do little to protect loved ones in the aftermath of a family tragedy like the sudden loss of a breadwinner or the prolonged financial drain of long-term care. That s why no financial plan is complete without proper insurance coverage to pay off a mortgage, fund a college education or pay for long-term care. But how much insurance coverage do you need? Too much could be a financial drain. Not enough could be a catastrophe. Your financial advisor offers a wide variety of flexible and competitively priced insurance products to provide the right amount of coverage for each individual or family. No financial plan is complete without proper insurance coverage. 8
Looking for a tax-advantaged way to save for the education of your child or grandchild? Your VALIC financial advisor can help you choose the right investment for your situation. 81 Investments for education expenses Saving for children or grandchildren to help pay for education expenses is important to many families. Fortunately, there is a tax-advantaged way to save for education. Section 529 plans The assets in Section 529 savings plans, named for that section of the Internal Revenue Code, grow tax deferred and, if used for qualified higher education expenses, distributions are tax free. Typically, qualifying expenses can be used toward tuition, room, board and books at any eligible U.S. two- or four-year college, university, graduate school or vocational training institution. Tax-free transfers can be made from one Section 529 plan to another on behalf of the same beneficiary. Another advantage: If there are unused funds, you can change the beneficiary to a different family member. The definition of a family member for the purpose of a beneficiary change includes siblings and first cousins. Investments in Section 529 plans can lose value and are not government or FDIC insured. The value of an investment in a Section 529 plan will fluctuate and, when withdrawn, can be worth more or less than its original value. There is no guarantee that the plan will grow to cover college expenses. In addition, some states offer favorable tax treatment to residents only if they invest in their state s own 529 plan. Plans are subject to enrollment, maintenance, administration/ management fees and expenses. You should consult with a tax advisor regarding the state tax consequences of any investment in a 529 plan. Contributions to a Section 529 plan may be subject to federal gift tax consequences. Click VALIC.com 9
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Don t wait. Get started today! Your VALIC financial advisor can help you reach your financial goals. Determine your needs and objectives Understanding your objectives, time frame and risk tolerance, and an assessment of your insurance needs, will help your financial advisor recommend a personal pathway for you. Choose the right strategy Your advisor will help you select a financial strategy that suits your life s goals and circumstances. Put it all together With clear goals and your strategy in place, your financial advisor can help you select a suitable mix from the array of financial tools available through VALIC. Manage over time We ll make it easier to organize and track your finances. Because market conditions and your personal circumstances can change, we recommend an annual review of all your financial holdings and current life situation. After meeting to discuss your specific investment goals, your financial advisor can help you organize your financial life to help you realize your long-term goals. Click VALIC.com 11
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VALIC has more than half a century of experience helping Americans plan for and enjoy a secure retirement. We provide real solutions for real lives by consistently offering products and services that are innovative, simple to understand and easy to use. We take a personal approach to retirement plans and programs, offering customized solutions for individual needs. We are committed to the same unchanging standard of one-on-one service we have delivered since our founding. Our goal is to help you live retirement on your terms. Your Future is Calling. Meet It with Confidence. CLICK VALIC.com CALL 1-800-426-3753 VISIT your financial advisor Mutual fund shares are redeemable at the then-current net asset value, which may be more or less than their original cost. Investment values will fluctuate and there is no assurance that the objective of any fund will be achieved. Investing involves risk, including the possible loss of principal. Please bear in mind that annuities are long-term investments. Income taxes are payable upon withdrawal. Federal withdrawal restrictions and a 10% federal early withdrawal tax penalty might apply to withdrawals before age 59½. Investment involves risk, including possible loss of principal. Retirement plans and accounts that satisfy relevant qualification rules, such as 403(b)s, IRAs, 401(k)s, etc., can be tax deferred regardless of whether or not they are funded with an annuity. If you are considering funding a tax-qualified retirement plan or account with an annuity, you should know that an annuity does not provide any additional tax-deferred treatment of earnings beyond the tax deferral of the tax-qualified retirement plan or account itself. However, annuities do provide other features and benefits. This information is general in nature, may be subject to change, and does not constitute legal, tax or accounting advice from any company, its employees, financial professionals or other representatives. Applicable laws and regulations are complex and subject to change. Any tax statements in this material are not intended to suggest the avoidance of U.S. federal, state or local tax penalties. For advice concerning your individual circumstances, consult a professional attorney, tax advisor or accountant. Securities and investment advisory services offered through VALIC Financial Advisors, Inc. ( VFA ), member FINRA, SIPC and an SEC-registered investment advisor. VFA registered representatives offer securities and other products under retirement plans and IRAs, and to clients outside of such arrangements. Annuities issued by The Variable Annuity Life Insurance Company ( VALIC ). Variable annuities distributed by its affiliate, AIG Capital Services, Inc. ( ACS ), member FINRA. VALIC, VFA and ACS are members of American International Group, Inc. ( AIG ). VALIC represents The Variable Annuity Life Insurance Company and its subsidiaries, VALIC Financial Advisors, Inc. and VALIC Retirement Services Company. AIG is a leading international insurance organization serving customers in more than 100 countries and jurisdictions. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the United States. All products and services are written or provided by subsidiaries or affiliates of AIG. Non-insurance products and services may be provided by independent third parties. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange. www.aig.com. Copyright The Variable Annuity Life Insurance Company. All rights reserved. VC 11786 (04/2017) J01229 EE