Key strategies >Help you rethink your current situation.
>Provide choices on how to rebuild your retirement savings.
>Guide you in reestablishing your plan to retire on your terms.
2 rethink rebuild retire
Slide 3
You are not alone >At the start of 2008, 40% of 401(k)
participants age 55 - 65 had more than 70% of their account
balances in stocks. >Participants with large account balances
had an average loss of more than 25%. 3 rethink rebuild retire
Source: VanDerhei, Jack. The Impact of the Recent Financial Crisis
on 401(k) Account Balances. Issue Brief No 326. Executive Summary.
EBRI (Employee Benefit Research Institute). February 2009.
Slide 4
Rethinking retirement 4 You can't have a better tomorrow if you
are thinking about yesterday all the time. - Charles F. Kettering
rethink rebuild retire
Slide 5
The new economic reality is >Inflation is inevitable.
>This is one of the longest recessions in history. >Expect
unemployment rates of 8% as the new norm. >A global economy
drives international interests. >Real estate, commodities, and
foreign stocks purchased with foreign currency should be
reconsidered. >Rebuilding retirement savings may take up to 10
years. 5 rethink rebuild retire
Slide 6
Historically speaking 6 rethink rebuild retire Black Monday
Gulf War and S&L Crisis Source: Chart data. Dana Anspach. A
Year by Year Look at the S&P 500 Stock Market Returns Since
1973. About.com.
http://moneyover55.about.com/od/howtoinvest/a/marketreturns.htm.
Slide 7
Ten-year forecast 7 rethink rebuild retire Source: Anspach,
Dana. Historical Bear Market and their Subsequent Recoveries.
About. com.
http://moneyover55.about.com/od/howtoinvest/a/bearmarkets.htm. (The
calculations above are based upon the raw index value of the
S&P 500 and thus would not include the impact of any reinvested
dividends.)
Slide 8
Your current situation >Review financial statements.
>Determine income. >Reduce expenses. >Revisit your
retirement goals. >Evaluate your time horizon. >Decide the
tradeoffs that you are willing to make. 8 rethink rebuild
retire
Slide 9
Rebuilding retirement 9 If you come to a fork in the road, take
it. - Yogi Berra rethink rebuild retire
Slide 10
The truth is >The road to recovery might include working
longer, saving more, and fixing your investment mix in order to
rebuild your retirement. 10 rethink rebuild retire
Slide 11
Why work longer? >60% view retirement as an opportunity for
a new, exciting chapter in life. >70% stated they want to
include work in their retirement. 11 rethink rebuild retire Source:
Retirement Tipping Point. A National Study Exploring How Four
Generations are Rethinking Retirement. Age Wave and Harris
Interactive.
http://www.agewave.com/research/landmark_retirementTipping
Point.php. March 2009.
Slide 12
Work longer because we live longer >50% chance one spouse
will live beyond 92 >25% chance for a couple age 65 to live
beyond 97 12 rethink rebuild retire
Slide 13
Benefits of working longer >More years to keep earning.
>Access to employers medical plan. >Employer matching in
qualified plans. >Social Security annual payments are larger the
longer you wait to begin receiving them. 13 rethink rebuild
retire
Slide 14
Why save more? 14 Individuals generally should spend no more
than 5% of their retirement savings each year to make it last for
over 30 years. If they spend more, they may outlive their money. -
EBRI 2007, How are New Retirees Doing Financially in Retirement?
brief. rethink rebuild retire
Slide 15
Saving during a recession 15 rethink rebuild retire Past
performance does not guarantee future results. This example is
hypothetical only and is not based on any specific investment fund.
Based on historical data. Source: Hypothetical example created by
Acumen. July 2009. The years 1932, 1949, and 1982 were used as low
points in prior U.S. recessions to develop an average recovery
rate.
Slide 16
Save more >Committing to save more might require you to
spend less. >Take advantage of your employers plan by saving the
maximum allowed by law. >If you are age 50 or older, you can use
the catch-up provision to save more. 16 rethink rebuild retire
Slide 17
Save with dollar-cost averaging >Dont try to time the
market. >Compounding interest is extremely powerful and a good
way to re-grow savings. >At age 50, you could live 30 or more
years, so you still have a chance for compounding to work for you.
17 rethink rebuild retire
Slide 18
Dollar Cost Averaging > It does not assure a profit and does
not protect against market loss. > This type of investing
involves continuous investment in securities regardless of
fluctuating price levels so investors should consider their
financial ability to continue their purchases through periods of
both high and low price levels. 18 rethink rebuild retire You need
to know
Slide 19
Fix your mix Diversification >Its not just stocks and bonds
anymore. Rebalancing >Keeps risk level in check to help minimize
risk. >Adjusts asset mix based on investment strategy. 19
rethink rebuild retire Note: Neither asset allocation nor
diversification ensure a profit or protect against market
loss.
Slide 20
What if you could protect against losses? >Lifetime
withdrawal benefits Lock in market gains automatically Lock out
market downturns Guaranteed income for retirement 20 rethink
rebuild retire
Slide 21
Funding your retirement >Jackie and Jason each have a
$100,000 nest egg invested 70% in stocks and 30% in bonds. >They
are both age 65 and retired. >They are both withdrawing 5% per
year during this current down market. >They are no longer
contributing to their accounts. 21 rethink rebuild retire
Slide 22
Year Rate of Return Acct Value before Withdrawal Withdrawal
Amount Acct Value After Withdrawal 10%$100,000$0$100,000
2-2.60%$96,750$5,000$91,750 3-6.00%$85,632$5,000$80,632
4-11.59%$70,701$5,000$65,701 520.81%$78,821$5,000$73,821
68.66%$79,690$5,000$74,690 74.07%$77,239$5,000$72,239
812.10%$80,525$5,000$75,525 95.82%$79,497$5,000$74,497
10-24.03%$56,202$5,000$51,202 22 $45,000 This illustration is
hypothetical and assumes past performance of the S&P 500 Index.
Calculations based on actual rate of return experienced from 2000
2008. This illustration is not intended to be indicative of the
performance of any specific investment. Indexes are unmanaged and
you cannot invest directly in them. The performance illustrated is
not indicative of future results. Source: Acumen. July 2009.
rethink rebuild retire Guaranteed lifetime withdrawal benefit
Slide 23
Year Rate of Return Acct Value before Withdrawal Withdrawal
Amount Acct Value After Withdrawal 10%$100,000$0$100,000
2-2.60%$97,400$4,870$92,530 3-6.00%$86,983$4,349$82,634
4-11.59%$73,056$3,653$69,403 520.81%$83,846$4,192$79,653
68.66%$86,547$4,327$82,220 74.07%$85,562$4,278$81,284
812.10%$91,119$4,556$86,563 95.82%$91,601$4,580$87,021
10-24.03%$66,106$3,305$62,801 23 This illustration is hypothetical
and assumes past performance of the S&P 500 Index. Calculations
based on actual rate of return experienced from 2000 2008. This
illustration is not intended to be indicative of the performance of
any specific investment. Indexes are unmanaged and you cannot
invest directly in them. The performance illustrated is not
indicative of future results. Source: Acumen. July 2009. $38,111
rethink rebuild retire No guaranteed lifetime withdrawal
benefit
Slide 24
Income for life Year Acct Value before Withdrawal Withdrawal
Amount Acct Value After Withdrawal 200$00 Year Acct Value before
Withdrawal Withdrawal Amount Acct Value After Withdrawal 200$5,0000
24 $5,000 for life $0
Slide 25
GMWB Guaranteed Minimum Withdrawal Benefit > With this type
of investment, you can typically withdraw a certain percent (i.e.,
5%, 10%) of your Benefit Base (the total guaranteed amount
available for withdrawal) each year, depending on when you take
your first withdrawal. > A guaranteed lifetime income of a
maximum percent (i.e. 5%) is typically available if you wait until
a certain age to take your first withdrawal. Guarantees >
Guarantees are backed by the claims-paying ability of the issuing
company. > This optional feature is generally available for an
annual percentage fee of the benefit base and may not be offered to
investors over a certain age. > This fee is typically deducted
quarterly from the contract value as long as the contract value is
greater than zero. Of course, the fee for the protections provided
reduces the total growth potential of your account. > Keep in
mind that annuities are designed for long-term retirement
investing. Withdrawals are subject to ordinary income tax and
federal restrictions and a tax penalty might apply to early
withdrawals. 25 rethink rebuild retire You need to know
Slide 26
Tax Deferral > With a variable annuity, you wont pay taxes
on any interest, dividends or capital gains earned until you
withdraw your money. > Income taxes are payable on withdrawal
and tax penalties may apply to early withdrawals. Federal
restrictions on withdrawals may also apply if part of an
employer-sponsored plan. Investment Options > There are risks
associated with investing in a variable annuity, including possible
loss of principal. The contract, when redeemed, might be worth more
or less than the total amount invested. 26 rethink rebuild retire
You need to know
Slide 27
No withdrawals > If you decide not to take withdrawals under
the GMWB feature, or you surrender the contract, you will not
receive the benefits of this investment. You could pay for the
feature and not need to use it. Contributions > Contributions to
your variable annuity contract can qualify to be tax deferred,
subject to applicable contribution limits and related rules. >
That tax deferral is a result of issuing the contract, which
satisfies specific important tax law requirements, including plan
requirements, under your workplace retirement plan. > It does
not result from the mere fact that the contract is an annuity.
Therefore, you do not receive any additional tax-deferred treatment
of earnings beyond the treatment provided by the tax-qualified
retirement plan itself. 27 rethink rebuild retire You need to
know
Slide 28
Fees > Be sure to check the current prospectus for all fees
associated with this type of investment. These fees could include
Separate Account fees, fund management fees, and the GMWB fee. >
Additionally, account maintenance fees and surrender charges might
apply, depending on your contract. > Neither The Variable
Annuity Life Insurance Company nor its financial advisors or other
representatives give legal or tax advice. For information about how
an investment like this one is treated for income tax purposes,
consult a qualified tax advisor about your particular
circumstances. 28 rethink rebuild retire You need to know
Slide 29
Finish strong 29 The race is not always to the swift, but to
those that keep on running. - Author Unknown rethink rebuild
retire
Slide 30
Lessons learned Live within your means81% Begin saving at an
early age65% Avoid high-interest debt22% Learn how to invest
wisely14% 30 rethink rebuild retire Source: Retirement Tipping
Point. A National Study Exploring How Four Generations are
Rethinking Retirement. AgeWave.com. March 2009.
Slide 31
Implement a plan >Rethink your current situation.
>Rebuild by understanding your choices. >And, one more step
31 rethink rebuild retire
Slide 32
Take action >Contact an advisor today >Ask questions
>Be involved 32 rethink rebuild retire
Slide 33
What VALIC offers >Comprehensive financial planning
>Specialized retirement planning >Longevity in the financial
industry >Range of investment products 33 rethink rebuild
retire
Slide 34
Evaluation
Slide 35
Securities and investment advisory services are offered by
VALIC Financial Advisors, Inc., member FINRA and an SEC-registered
investment advisor. The VALIC logo represents The Variable Annuity
Life Insurance Company and its subsidiaries, VALIC Financial
Advisors, Inc. and VALIC Retirement Services Company. The
information in this presentation is general in nature and may be
subject to change. Neither VALIC nor its financial advisors or
other representatives give legal or tax 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 legal or tax advice
concerning your situation, consult your attorney or professional
tax advisor. Copyright The Variable Annuity Life Insurance Company.
All rights reserved. VALIC.com VC22733 (09/2009) J74946 EE 35
Slide 36
SAVING : INVESTING : PLANNING THANK YOU rethink, rebuild,
retire