GUIDANCE. Retirement Income Strategies. Seminar Workbook. saving : investing : planning SEMINAR SERIES I A L I N A N C I T E R A C Y

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1 GUIDANCE Retirement Income Strategies Seminar Workbook F I N A N C I A L SEMINAR SERIES saving : investing : planning L I T E R A C Y F I N A N C I A L SEMINAR SERIES L I T E R A C Y

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3 Prioritize your retirement savings live retirement on your terms Retirement as we understood it even just a few years ago has changed, resulting in new and challenging realities for most people trying to save for retirement. These new realities are making it difficult for people to plan for their retirement income. To help ensure a comfortable retirement, many people may need financial solutions that provide the opportunity to help grow their assets and help protect their retirement income. What are these challenges? > > Many American families are facing distress due to high levels of debt.1 > > People are living longer in retirement, so retirement income needs to last longer.2 > > People have a greater responsibility to plan and save for retirement.1 While it is certain that these challenges are impacting how much people save, it does not diminish the need to build income for retirement. It is possible to live comfortably in retirement, if you plan. That means determining your investment goals, addressing essential income needs, and implementing an overall retirement income strategy; an income strategy that can help maximize the growth potential of your money and protect your retirement income from market downturns. This seminar provides information to help you make informed choices about your retirement savings so you can live retirement on your own terms. During the workshop, use this guide to capture your notes. Take it home for further thought or to discuss today s presentation with your spouse or partner. Finally, if you decide to meet with a VALIC financial advisor, bring it with you to the consultation you ll be one step ahead in the planning process! Retirement Confidence Survey, Employee Benefit Research Institute (EBRI). 2 The Longevity Conundrum: Could Your Retirement Savings Last You to 120? August 9,

4 Plan to manage the five risks of retirement Another reality of retirement is that once you retire, you ll face a unique set of risks. Most of these risks are unavoidable and you may have little control over them; however, you can soften their impact by planning now how you will manage them in the future. Did you know? Today, centenarians (people age 100 and older) are a growing segment of the population. In the U.S. alone there are over 53,000 centenarians. 1 A married couple entering retirement today can expect to spend at least $255,000 through the remainder of their lives for healthcare premiums and out-of-pocket medical expenses.2 Figure doesn t include potential costs of over-the-counter medicines, dental care and long-term care. Sources: 1 Centenarians: U.S. Census Report. 2 Funding Savings Needed for Health Expenses for Persons Eligible for Medicare: Some Rare Good News. Monthly Newsletter. Vol. 34, No. 10. EBRI. October What are the risks of retirement? The five risks of retirement include: > > Longevity > > Healthcare > > Inflation > > Investment > > Withdrawal Longevity risk Longevity is among the top concerns for pre-retirees worried they will outlive their money. And it s a valid concern because the longer you live, the more time there is for various factors (e.g., market downturns, disability, medical expenses, etc.) to affect your retirement savings. Here are some ways to manage longevity risk: > > Reduce living expenses and save more. Spending less means more set aside for retirement. One way to see what you re spending is to start a budget. A good budget can highlight areas where you can reduce and save. Once in retirement, use your budget to help keep you on track. > > Adjust your investment allocation to produce income during retirement. Income doesn t have to stop just because you retire. There are many ways your investment dollars can help generate income during retirement. Diversifying your retirement portfolio and evaluating guaranteed income for life solutions are two options worth exploring. > > Work longer and retire later in life. Working longer can put more money in your pocket from both your paycheck and Social Security. At full retirement age, you can draw full Social Security benefits. Retire prior to full retirement age and your benefits are reduced. 2

5 Healthcare risk The most common ways to pay for healthcare services are Medicare, Medicaid, long-term care insurance, or to self-insure. Medicare was designed to provide medical coverage for those on Social Security: > > Medicare is a federally managed health insurance program similar to private health insurance. > > Medicare does not pay for long-term care services. It pays only for certain services based on the coverage you choose. Medicaid was created to provide medical care for those living in poverty. Although Medicaid is a federal program like Medicare, it s managed independently by each state. Medicaid pays for long-term care services, if certain conditions are met. For more information about Medicare and Medicaid, visit to download the free Medicare & You handbook. 3

6 Planning ahead for long-term care is important because there is a good chance you will need some long-term care services if you live beyond the age of 65. At least 70 percent of people over age 65 will require long-term care services at some point in their lifetime. Source: Medicare & You. National Medicare Handbook. Centers for Medicare and Medicaid Services. Revised November

7 Did you know? The annual national average costs of longterm care services in the United States are: > > Semi-private room in a nursing home, $75,405 > > Assisted living facility, $41,400 > > Home health aide, $44,479 > > Adult day center, $16,900 Source: Cost of Long-Term Care Survey. Genworth Financial Long-term care insurance Another way to pay for healthcare (specifically long-term care services) is to buy long-term care insurance. Long-term care insurance pays for assistance when you cannot perform at least two of the Activities of Daily Living such as eating, bathing, or dressing. Eligibility requirements also apply for longterm care insurance and vary with each insurance company. Long-term care insurance does not hinder your eligibility to receive Medicare benefits. Also, some partnership-qualified policies work with Medicaid to pay for long-term care services, if certain requirements are met. 3 Self-insure to pay for healthcare Self-insuring may be the most expensive way to pay for healthcare, especially if you need long-term care services. It forces you to spend your retirement savings during retirement to pay for medical services. And, unless you have unlimited financial resources, spending your nest egg in this way could reduce your lifestyle in retirement considerably. To self-insure, you ll need to: > > Create an immediate savings plan and make certain you re putting aside the right amount to cover estimated costs of healthcare in retirement. > > Save aggressively and consistently for years to come. Managing your healthcare risk Here are some ways to manage healthcare risk: > > Review your family medical history. > > Investigate costs of long-term care facilities in your area. > > Research long-term care insurance policies. > > Understand the rules surrounding Medicare and Medicaid. Work with a financial advisor to address healthcare risk in your overall financial plan. 3 Source: What is Long-Term Care Insurance? U.S. Department of Health and Human Services, longtermcare.gov. Retrieved March 12,

8 Inflation risk Inflation occurs when the price of goods and services increases over time. Higher prices mean less purchasing power because your money decreases in value. You could be living on a fixed income when you retire, and it may take more money to buy the things you need. Even modest inflation over time can have a major impact on your retirement savings. Take a look at how the price of bread has increased over the years per loaf per loaf per loaf 2013 $1.42 per loaf Source: Consumer Price Index. Bureau of Labor Statistics. January Managing inflation risk Although inflation is not something you can control, you do have options when it comes to managing this risk in your personal finances: > > Consider working with a financial advisor to address inflation in your overall financial plan. A financial plan helps you analyze your current financial situation; determine areas in your savings strategy that need adjustment; and stay on track to meet your investment goals. > > Monitor your investment portfolio and implement a diversified strategy. Although diversification cannot ensure against a loss or guarantee a profit, a diversified investment allocation can help with market volatility and should strive to outpace inflation in order to maximize income in retirement. > > Develop guidelines for spending and distribution in retirement. Determining which order to spend assets and how you want to take distributions can enhance the tax efficiency and growth potential of your savings, while at the same time keeping inflation at bay. 6 6

9 Investment risk Understanding how to minimize investment risk is one of the most important parts of developing a sound financial strategy. Investment risk is the chance that the actual return will be different than expected. Depending on the type of investment, there is a risk of losing some or all of your investment. Typically, high-risk investments have a potential for above-average returns and the low-risk investments are much safer but have lower potential for high returns. How you perceive yourself as a risk-taker will play an important role in your investment decision making. Most people fall into one of these investor categories: Investor categories Conservative Less risk Low potential High risk High potential Aggressive Moderately Conservative Moderate Moderately Aggressive Considerations Before you invest, know what to expect and what you need from your investments. Consider the following questions: What is your risk tolerance level? (Check one) Conservative. I do not wish to accept the risk that my investment mix will decline in value, and I will accept lower returns to help protect against declines. Moderately Conservative. Although protection of principal is a concern, I am seeking moderate returns with minimal risk, and I can tolerate some volatility. Moderate. I am willing to accept some fluctuations of principal to achieve a better return. Moderately Aggressive. I am willing to tolerate greater fluctuations of principal in an attempt to achieve an even higher return. Aggressive. I am seeking high returns and am willing to accept much greater fluctuations of principal for the opportunity to achieve long-term gains. 7

10 1. What are your investment goals? 2. When do you plan to start using the savings? 3. What is your investment strategy? Notes: 8

11 Creating a diversified retirement portfolio Once you have answered the risk tolerance questions, you can create a diversified retirement portfolio with a mix of investments that matches your needs and goals. At this stage, you can match investment options to the asset classes that suit your investment goals. Select investment options Stocks Growth Increasing risk of loss Possibly increasing return through appreciation Bonds Fixed income Decreasing risk of loss Possible loss of purchasing power through decreasing returns Cash Diversification By mixing a variety of asset classes in a portfolio, diversification helps to smooth performance of a portfolio, increasing your chances of a more consistent performance. Conservative Portfolio Aggressive Portfolio 10% Cash 10% Cash 70% Bond funds 20% Stock funds 80% Stock funds 10% Bond funds These charts illustrate diversified investment allocations in conservative and aggressive portfolios. The first sample would be for a conservative investor. Note the larger share of the investment pie is allocated to bonds, which generally are not as risky as stocks. However, in the aggressive sample, the percentage of stocks is much greater than the percentages of bonds and cash equivalents. Keep in mind, while diversification is a proven investment tool, it doesn t guarantee a profit or protect against loss. 9

12 Did you know? According to an AARP survey, non-retired baby boomers are experiencing increased anxiety about their retirement prospects. Seventy-two percent fear that they will be forced to delay retirement while fifty percent have little confidence about ever being able to retire. 1 The financial reality for most of the 77 million baby boomers in the U.S. is that funding retirement will be more difficult than they anticipated. They will have to review their sources of income and create spending plans for when they no longer have a steady paycheck. 2 Sources: 1 Boomer 'Anxiety Index' High, Voter Survey Reveals. AARP.org. August 22, Ready or Not, First Baby Boomers Turn 65 This Year. FoxBusiness.com. January 28, Diversifying your portfolio with income-generating annuities Another way to diversify your portfolio is to add an income-generating annuity. Annuities offer the option to turn your assets into an income stream you ll never outlive through annuitization (process of converting the annuity funds into a series of income payments). > > An annuity is a savings contract with an insurance company. Guarantees are backed by the claims-paying ability of the issuing insurance company. > > It s a long-term investment for future retirement income, and it will make income payments to you at regular intervals in return for the premiums you have paid. Why consider an annuity? A key advantage of annuities is that your payments and earnings grow tax deferred while in the accumulation phase. Also, you can purchase an annuity that provides an income stream for as long as you live, and even after your death to your beneficiaries. The insurance company that issues your annuity guarantees the income stream backed by its claims-paying ability. Additionally, to live well in retirement, many of us need to consider investments that can help us maximize the growth potential of our money, and protect our retirement income from market downturns. Annuities allow you to do just that through an add-on living benefit option called a guaranteed minimum withdrawal benefit. > > With a guaranteed minimum withdrawal benefit, if your account value falls because of investment losses, your payment is never less than the amount guaranteed by your contract even if your account value falls to $0. Certain contract provisions must be followed, so review the contract information closely. > > Most guaranteed minimum withdrawal benefits also offer a range of features, including lifetime income at a set annual percentage of the balance if you wait until age 65 or later to take withdrawals. > > A guaranteed minimum withdrawal benefit is available only with certain annuities, for an added fee. Managing investment risk Here are some things you can do to manage investment risk: > > Establish your investment goals. > > Determine your risk tolerance. > > Calculate your retirement time horizon. > > Formulate your own investment strategy. > > Select investment options. 10

13 In deciding when to retire, it is important to remember that financial experts estimate you will need percent of your preretirement income to have a comfortable retirement. Source: Retirement Benefits, SSA Publication No Social Security Administration. April

14 Withdrawal risk One of the keys to making your money last in retirement is to understand when to start taking withdrawals from your tax-deferred accounts and how to minimize the taxes you ll pay on those distributions. When can you start taking money out of your retirement account [e.g., 401(k), 403(b) or governmental 457(b)]? Generally, depending on your employer's plan, your account contributions may be distributed in any of the events shown below. Attain age 59 ½ or 70½ Withdrawals from 401(k), 401(a), 403(b) type plans Severance from employment Death or disability Financial hardship Ordinary income taxes are due upon withdrawal and a 10% federal early withdrawal penalty may apply if you are under age 59½. Special note: Distribution requirements are different for governmental 457(b) plans. Generally, withdrawals may begin in any of the following events: severance from employment, your death (at which time the beneficiary becomes eligible for distributions) or an unforeseeable emergency. The 10% federal withdrawal penalty for early withdrawal does not apply. Generally, you must begin taking distributions by April 1 of the year following attainment of age 70½ or retirement, whichever is later. Withdrawal methods The most common ways to withdraw funds from a tax-qualified retirement plan are: > > Lump-sum withdrawal > > Systematic withdrawals > > Rollovers > > Annuitization 12

15 Lump-sum withdrawal You may choose to take your full account balance in one lump-sum withdrawal if you have a distributable event (e.g., attainment of age 59½, severance from employment). This type of distribution is subject to mandatory federal income tax withholding, income taxes, and a 10% early withdrawal penalty may apply to withdrawals prior to age 59½. For example, let s assume you take a lump-sum distribution of $200,000 from your retirement plan account and that you are under age 59½. This table shows what you could pay in taxes and penalties if the $200,000 is your only income. Lump-sum withdrawal $200,000 Additional income tax, assuming a 28% federal tax bracket Federal early withdrawal penalty, 10% (For withdrawals before age 59½) Total net income from lump-sum withdrawal after taxes and early withdrawal penalty -$43,247 -$20,000 $136,753 You might want to consider other distribution methods that will maximize your retirement income and save on taxes. Also, once you take the distribution, you no longer have the benefit of a tax-deferred investment. Systematic withdrawals Systematic withdrawals let you receive income automatically at specified intervals. But you still maintain access to your accumulated retirement account balance. You can request systematic withdrawals by specified dollar amount, specified percentage, substantially equal periodic payments, or the five-year payment method. > > The systematic withdrawal method may help limit the risk of taking a large lump sum during a time when your account value had dropped because of a market decline. > > However, there s no guarantee of lifetime income, so it s possible to deplete your account more quickly than the rate at which it s growing. Ordinary income taxes are due on the amounts you withdraw. A 10% federal early withdrawal penalty may apply, if you are under age 59½ when you start taking withdrawals. Generally, the 10% federal early withdrawal penalty does not apply to distributions which are substantially equal periodic payments over an individual s life (or life expectancy), or the joint life (or life expectancies) of the participant and the participant's designated beneficiary, taken at least annually, for the later of a period of five years or attainment of age 59½. Changes to substantially equal periodic payment can result in retroactive tax penalties. 13

16 Rollovers A rollover is the movement of assets from one tax-qualified plan or account to another. > > Direct rollover. A direct rollover is accomplished when funds are transferred directly from your qualified plan to an IRA or another qualified plan. With a direct rollover, federal income tax withholding does not apply and you do not pay income taxes or penalties. > > Indirect rollover. With an indirect rollover, you take possession of the cash. Even if you plan on rolling it over to another qualified plan or IRA, federal income tax withholding of 20% will apply. You have 60 days to roll your funds over into another qualified plan or an IRA tax-free. You must replace the 20% withheld from your distribution with funds from other sources to avoid paying current taxes and potential early withdrawal penalties on the amount withheld. If you do not roll your funds over within 60 days, you ll pay income taxes on the entire distribution and a 10% federal early withdrawal penalty may apply if you are under age 59½. Beginning in 2015 indirect rollovers among IRA accounts will be limited to one per year. (IRS Announcement ) Direct rollover Qualified plan Direct rollover IRA or new qualified plan No income taxes No penalties No withholding Indirect rollover Qualified plan 60 days to roll over After 60 days Indirect rollover Lump-sum cash distribution 20% withholding No income taxes No penalties Replace 20% withholding Taxes are due on entire distribution 10% federal early withdrawal penalty may apply if under age 59½ 14 Notes:

17 Annuitization Annuitization is the process of converting an annuity (the money you have accumulated within the annuity product) into a series of periodic income payments. With an annuity, you ll need to decide whether to annuitize all or only a portion of your account balance and how often you d like to receive payments. Keep in mind that annuitization is generally an irrevocable decision. Annuities offer many payout options, and some provide income for as long as you live. Annuity investment Periodic payments Lifetime income Period certain Fixed payout Variable payout Ordinary income taxes; 10% federal early withdrawal penalty, if under age 59 ½ Ordinary income taxes are due on the taxable portion of your payments/withdrawals. For nonperiodic distributions, a 10% federal early withdrawal penalty may apply if you are under age 59½. Managing your withdrawal risk There are many ways to withdraw your retirement savings. Figuring out which one is most beneficial to your overall retirement income strategy requires careful thought and planning. You may want to consult a tax advisor before you begin taking distributions. You ll want to make sure your income lasts in retirement to pay for the essential expenses of daily living, and also minimize the amount you pay in taxes and penalties. Here are some ways to manage withdrawal risk: > > Identify the distribution options available in your retirement plan. > > Analyze the financial benefits of each distribution option. > > Evaluate the tax implications associated with each distribution option. Notes: 15

18 Essential income planning It s important to know and understand your sources of income in retirement and to figure out how your essential living expenses will be covered. Sources of retirement income What are the sources of income in retirement? Typically, Social Security supplements about 40% of a retiree s income. That leaves the individual to come up with the remainder through personal savings and investments. Keep in mind that the percentages will vary depending on your individual situation. 14% Savings/other 17% Retirement/pension plan 34% Post-retirement wage 35% Social Security Sources: Income of the Aged Population, Shares of Source: Aggregate Income. Fast Facts and Figures About Social Security, SSA Publication No Released September But, what does the income percentage from Social Security look like in real dollars? As of October 2014 Annual Social Security benefits paid in 2010 $31,956 $26,112 $15,936 Estimated average annual benefit for a retiree Estimated average annual benefit for a retired couple Maximum annual benefit for a retiree at full retirement After 1.7% COLA. Fact Sheet: 2015 Social Security Changes. Average amounts can change monthly. Source: socialsecurity.gov October The bar graphs above show the estimated and maximum annual Social Security benefits for the current year. As you can see, Social Security was never designed to do more than supplement retirement savings. And, remember if you retire before full retirement age, your benefits are reduced. If, however, you wait until full retirement age to start drawing Social Security benefits, you may have to start drawing down your retirement savings depending on when you retire. Either way, there will be a gap to fill; whether it s at the start of retirement or when savings run out. Clearly, there is a need to implement an income-generating strategy that can help cover your essential living expenses in retirement. 16

19 Essential income planning three-step process You might consider working with a financial advisor to implement an essential income strategy. It's a simple three-step process. > > Step 1. Pay for essential expenses with guaranteed sources of income. These are income sources you cannot outlive such as pensions, Social Security and guaranteed lifetime income annuities. Essential (basic) expenses include food, housing, insurance, healthcare, transportation and lifestyle needs. > > Step 2. Pay for nonessential expenses with income from financial assets. Nonessential income needs are things you want, like hobbies, travel and entertainment, to name a few. Income from financial assets includes IRAs, CDs, personal savings, investments and tax-deferred annuities. > > Step 3. Plan a legacy for your beneficiaries. Legacies can be funded with both financial assets and/or lifetime guaranteed income by designating beneficiaries on the appropriate documentation. Legacy3Generational planning Nonessential income need Travel, leisure, hobbies 2 Variable income Mutual funds, annuities, money market funds, certificates of deposit, managed accounts Essential income need Food, shelter, clothing, transportation, healthcare 1 Income designed to last a lifetime Pension, Social Security, guaranteed minimum withdrawal benefit, annuitization, other Notes: 17

20 Essential income planning worksheet Are you at risk of running out of money during your retirement? If you re not sure, your VALIC financial advisor can help you figure out where you are now in your savings. First, you ll need information about your retirement income sources to help determine your fixed retirement income and the assets that are available to help fund your retirement. Step 1: Retirement planning inventory Identify your retirement income sources. Then, add up the corresponding dollar amounts to find out how much is available to help fund your retirement. Your fixed income sources Sources listed in this column are not vulnerable to market performance and can make predictable, fixed income payments. Annual income Your variable income sources Sources listed in this column are exposed to market risk. While they can provide income payments, the amounts may vary each year due to market performance. 403(b)/401(k): $ Pension benefits: $ 457(b): $ Social Security benefits: $ IRAs: $ Guaranteed annuity payments: Other: Total predictable annual income: $ $ $ Variable annuities: Stocks/Mutual funds: Bonds: CDs: Other: $ $ $ $ $ Total assets: $ Step 2: Annual income need List your current annual fixed expenses and estimate how much you re likely to spend for the same goods or services in retirement. Add the dollar amounts for the total income need. Services and goods Current fixed expenses Retirement income need Experts say about 80% of the last working year s salary is needed to cover expenses while in retirement. Think about which current expenses might increase or decrease during retirement. Housing/property taxes $ $ Food/dining + + Medical care/prescriptions + + Health insurance + + Transportation/insurance + + Income taxes + + Social Security taxes + + Utilities + + Loan payments + + Travel/entertainment + + Clothing/grooming + + Other: + + Total fixed expenses Total retirement income need = $ = $ 18

21 Step 3: Retirement income gap Insert the fixed annual income from step 1 and the annual retirement income need from step 2 and then subtract. How much money will you need? Predictable income $ Projected income need $ Your retirement income gap: = $ Take control of your future: Avoid running out of money. If you have an income gap, take steps to fill the income gap so your money lasts a lifetime. You might consider working with a financial advisor to help you develop an income-generating strategy that will provide the sustainable income stream you ll need to live a comfortable retirement. As you're preparing for retirement, it's important to think about the following questions: 1. Have you considered how long you will need to support yourself in retirement? 2. How do you think your retirement lifestyle and/or needs might change over time? 3. How do you think your income and investment needs might change over time? 19

22 Analyze the situation With today s economy, it s understandable that saving for retirement may not be at the top of your to-do list. Nevertheless, time does not stand still. The reality is we all are moving toward a point in time when our work will end and we will retire. But, you ve been down this road before. Not with retirement but other life changes: college, marriage, your first home, your first child. You looked forward to these events and planned for them. Why is it different with retirement? It doesn t have to be. You can look back from retirement without regret, knowing you planned well. To help you contemplate an overall income strategy, we ve prepared some questions below. Take a few moments and jot down your thoughts for each one. This will help you identify roadblocks that are standing between you and saving for a comfortable retirement. 1. What challenges are you facing when it comes to saving for retirement? 2. Rate these risks from 1 to 5 in order of importance. (1=most important and 5=least important) Longevity Healthcare Inflation Investment Withdrawal 3. Does your family have a history of longevity? If so, what concerns do you have about living 20 to 30 years in retirement? 20

23 4. Does your family have a history of illness requiring long-term care? If so, what are you doing today to prepare for long-term care services in the future? 5. What steps have you taken to help your retirement savings stay ahead of inflation? How confident are you that your investments will keep pace with inflation in retirement? 6. What is your process for making investment decisions? How often do you reassess those decisions? 7. Have you ever experienced a "bad market" that affected your retirement assets or income? If so, what strategy have you put into place to help minimize risk with your retirement income? 8. How much income will you need in retirement to ensure your essential living expenses are covered? Notes: 21

24 Are you saving enough to retire on your terms? Maybe you have taken stock and question if the amount you can afford to save will make a difference. It s natural to feel that way. But, realize that small changes can make a big difference, especially if you contribute to a retirement plan regularly and consistently. Take a moment to answer the following questions and see if you re doing all you can to cover the costs of the type of retirement you want. 1. Will your savings and sources of income be enough to fund a 20- to 30-year retirement? 2. Are you contributing the maximum allowed to your retirement savings accounts and are you eligible for any catch-up contributions? 3. If it meant that you could save more for retirement, how many years would you consider working? 4. Would working longer place you at full retirement age so you could receive full Social Security benefits at retirement? 22

25 5. Are you going to rely, in part, on your retirement assets to generate retirement income for you? Would a decline in your income from these assets cause a decline in your retirement lifestyle? 6. What is your strategy for balancing the need to protect your long-term purchasing power with the need to protect your current retirement income? Notes: 23

26 Create an investment plan Saving and preparing for retirement can be complex. But you don t have to go it alone. Take the first step today by contacting a VALIC financial advisor. Once you ve chosen to work with a financial advisor, be sure to ask questions and stay involved in decisions along the way. Peace of mind comes from having and implementing a plan. And your VALIC financial advisor will create a customized financial plan geared to help you achieve your retirement goals. 1. How often are you reviewing your accounts to ensure they are allocated according to your needs? 2. As you approach retirement, are you concerned that market volatility will affect your retirement assets? 3. Do you feel your investment strategy should seek to limit volatility to the extent possible? How do you manage your money to limit volatility? 4. How confident are you that your current investment strategy will fund the lifestyle you'd like in retirement? 24

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28 Take action now! Sound financial planning addresses the most important aspects of saving for retirement. Let us help you develop a personal financial plan, as well as outline the action steps and strategies that will help you achieve your financial goals. To schedule a complimentary consultation with a VALIC financial advisor, simply check yes on the evaluation form on page 27. Be sure to complete the entire evaluation and turn it in at the end of the workshop. We ve provided an overview of items you ll need to bring with you to the consultation, as well as what you can expect from your VALIC financial advisor. What you ll need Once you ve decided to work with a financial advisor, you ll need to bring certain documents to your first appointment. These documents are listed below. Don t delay your meeting if some items are not available. Bring what you have. Current retirement account statement Recent statements from other investments Social Security Statement of Benefits Insurance policies (recent statement or billing) Financial strategies Let us create a financial plan that will help take you where you want to go in retirement CLICK VALIC.com CALL VISIT your VALIC financial advisor List of assets and liabilities (credit cards, loans, etc.) Recent paycheck stub Household budget What to expect VALIC is a leader in the financial services industry*, offering comprehensive financial planning and specializing in retirement income planning. Our longevity within the financial services industry and wide range of investment options means that we've helped hundreds of thousands of people like you plan for and enjoy a secure retirement. Most importantly, through our experience, our goal is to help you live retirement on your terms. Your VALIC financial advisor can help you: > > Prioritize investment goals. > > Determine the time horizon needed to achieve goals. > > Determine a financial strategy toward meeting your goals. *Source: LIMRA SRI Not-for-Profit Retirement Market Survey 12/31/14. 26

29 perf lin Seminar evaluation form Date of seminar: Name of presenter: Would you like to schedule a complimentary consultation? Yes No Name: Day phone: Evening phone: address: (Please indicate your preferred contact method.) Please rate the overall seminar Not very good Excellent 1. What did you find of particular interest in today s seminar? 2. How could we improve this seminar? 3. What other topics would you like to learn more about? 4. Would any of your friends or associates benefit from this presentation? If so, may we invite them to a future seminar? Name: Telephone: Name: Telephone: 27

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32 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. This information is general in nature and may be subject to change. All companies mentioned, their employees, financial professionals and other representatives are not authorized to give legal, tax or accounting advice. 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., member FINRA, SIPC and an SEC-registered investment advisor. Annuities issued by The Variable Annuity Life Insurance Company. Variable annuities distributed by its affiliate, AIG Capital Services, Inc., member FINRA. Copyright The Variable Annuity Life Insurance Company. All rights reserved. VC (09/2015) J96794 EE