PARTICIPANT INSIGHT. Investing Through Life s Stages. Winter Sample Asset Allocations. Factors That Affect Your Investment Decisions

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1 PARTICIPANT INSIGHT Publication of AXA Association Business Solutions Group DATE 2010 Winter 2017 Investing Through Life s Stages Investing is a lifelong process. The sooner you start, the better off you'll be in the long run. It's best to start saving and investing as soon as you start earning money, even if it's only $10 a paycheck. The discipline and skills you learn will benefit you for the rest of your life. But no matter how old you are when you start thinking seriously about saving and investing, it's never too late to begin. The first part of a successful lifelong investment strategy is disciplined savings habits. Regardless of whether you are saving for retirement, a new house, or just that extravagant dining room set, you will need to develop savings habits. Regular contributions to savings or investment accounts are often the most productive; and if you can automate them, they are even easier. Factors That Affect Your Investment Decisions Once you begin saving on a regular basis, you'll soon have to decide how to invest the money you are saving. Regardless of what financial stage of life you are in, you will have to decide what your needs are and how comfortable you are with risk. Growth or Income What do you need the money for? The answer to this question will help determine whether you want to put your savings into investment products that produce income for you, or that concentrate on growing the value of your investment. For instance, a retirement fund does not need to produce income until you retire, so your investing strategy should focus on growth until you are close to retirement. After you retire, you'll want to draw income from your investment while keeping your principal intact to the extent possible. CONTENT Investing Through Life s Stages 1 Hypothetical Case Study on Savings 2 Participant Education Center 4 Green is Good. Simple is Even Better 4 Sample Asset Allocations PORTFOLIO RISK LEVEL Percentage Low Moderate Aggressive Treasury Bills Bonds Growth Stocks Small Caps International Chart illustrates sample portfolio asset allocations: Low Risk (those nearing or in retirement); Moderate Risk (middle-aged investors); Aggressive Risk (younger investors). Allocations are presented only as examples and are not intended as investment advice. Please consult a financial professional if you have any questions about how these examples apply to your situation. Continued on page 3

2 fyi Gloria vs Brian, a hypothetical case study The cost of waiting to contribute toward your retirement can be significant. Just take a look at Gloria s experience versus Brian s. Why does Gloria have more money? Because she had time on her side! While Brian contributed $40,000 more to his employer s retirement savings plan, Gloria s projected account balance at age 62 is almost twice Brian s. That s because Gloria s account will have more time to potentially grow by the time she retires with each year's gains reinvested to potentially generate their own gains. * Assumes a hypothetical 6% (not guaranteed) annual potential rate of return. The 6% hypothetical rate of return is not based on the performance of actual investments or products. Actual rates of return will vary over time, particularly for long-term investments. Investments offering the potential for higher rates of return also involve a higher degree of risk. Actual results will vary. The amounts used in this hypothetical example do not take taxes or product-related charges into account. So, the sooner you start saving for your retirement, the more time your money will have to potentially benefit from taxdeferred growth. Of course, regardless of when you begin, it is never too late to start. 2

3 . Investing Through Life s Stages CONTINUED FROM PAGE 1 Time and Risk Tolerance All investing involves a certain amount of risk. How well you tolerate price fluctuations in your investments will need to be balanced against your required rate of return in determining the amount of risk your investments should carry. An offsetting factor to risk is time. If you plan to hold an investment for a long time, you will probably tolerate more risk because you have the time to make up any losses you may experience early on. For a shorter-term investment, such as saving to buy a house, you probably want to take on less risk and have more liquidity in your investments. Sound Strategies for Everyone Everyone lives his or her life differently, and everyone has complicated emotions about money, so investment decisions are highly personal and unique to each person. But there are some basic rules that apply to most investors. To provide liquidity for emergencies Another good idea is scheduling annual reviews of your investments with a financial professional. This habit will keep you up-to-date on your investments and help spot potential problems in your investment strategy. Finally, every investment decision should include tax considerations. Investments can be taxable, tax deferred, or tax free. You should be aware of the taxable status of your investments, meet with your own tax advisor concerning your personal circumstances, and take that into account when setting up and reviewing an investment strategy. Investing for Life Stages Although everyone's attitude toward investing and money is different, most investors share some common situations throughout their lives. For instance, where you are in your life cycle certainly affects how you invest for retirement, but what about other life stages that aren't so closely related to age? Hypothetically, let's say you're 40 and expecting your first child. You'll need to decide how to balance your finances to account for the additional expenses of a child. Perhaps you'll need to supplement your income with income-producing investments. Moreover, your child will be entering college at about the time you're ready to retire! In these circumstances, your growth and income needs most certainly could change, and maybe your risk tolerance as well. The following are some major life events that most of us share, and some investment decisions that you may want to consider: When you get your first "real" job: Start a savings account to build a cash reserve. Start a retirement fund and make regular monthly contributions, no matter how small. When you get a raise: Increase your contribution to your company-sponsored retirement plan. Increase your cash reserves. 3

4 Investing Through Life s Stages CONTINUED FROM PAGE 3 When you get married: Determine your new investment contributions and allocations, taking into account your combined income and expenses. When you want to buy your first house: Invest some of your non-retirement savings in a shortterm investment specifically for funding your down payment, closing, and moving costs. When you have a baby: Participant Education Center The Participant Education Center is available on the participant website and is designed to support the goal of providing you with the educational tools and resources to manage your accounts and to assist you as you plan, save, and invest to meet your retirement goals. For example you can watch a video on the importance of saving early for retirement which provides information on impact of not procrastinating and taking advantage of your employer s retirement plan. Increase your cash reserves. Increase your life insurance Start a college fund. When you change jobs: Review your investment strategy and asset allocation to accommodate a new salary and a different benefits package. Consider your distribution options for your company's retirement savings or pension plan. You may want to roll over money into a new plan or IRA. When all your children have moved out of the house: Boost your retirement savings contributions. When you reach 55: Review your retirement fund asset allocation to accommodate the shorter time frame for your investments. Continue saving for retirement. Go Paperless! When you retire: Carefully study the options you may have for taking money from your company retirement plan. Discuss your alternatives with your financial professional. Review your combined potential income after retirement and reallocate your investments to provide the income you need while still providing for some growth in capital to help beat inflation and fund your later years. Go to the secure participant web site today and you can choose to receive your quarterly statements online rather than in the mail. When they become available for you to retrieve online, we'll send you an . This content is for your informational purposes only. Please be advised that this content is not intended as legal or tax advice. Accordingly, any tax information provided in this content is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor. Withdrawals from retirement plans are subject to ordinary income tax treatment and if taken prior to age 59½ may be subject to an additional 10% federal income tax penalty. 4

5 AXA Association Business Solutions is a marketing name for the various AXA Equitable annuity products that can fund retirement plans for association members. AXA is the brand name of AXA Equitable Financial Services, LLC and its family of companies, including AXA Equitable Life Insurance Company. AXA S.A. is a French holding company for a group of international insurance and financial services companies, including AXA Equitable Financial Services, LLC. The obligations of AXA Equitable Life Insurance Company are backed solely by the claims-paying ability. AXA Equitable Life Insurance Company (NY,NY). Distributors: AXA Advisors, LLC and AXA Distributors, LLC (members FINRA, SIPC) AXA Advisors and AXA Network do not offer tax or legal advice. Please consult with your professional tax and legal advisors regarding your particular circumstances. GE (12/16) (Exp.12/18) 5