1. 1. Investment Strategies for Retirement Retirement Matters Presented by Women
2. 2. Financial Matters SeriesFinancial Matters Series Financial Planner Investment advisory services offered through Women & Wealth - Dallas, a registered investment adviser. This site is published for residents of the United States only. We only conduct business with residents of the states and jurisdictions in which we are properly registered. Women & Wealth - Dallas Reinventing Wealth Management for Women Susan Iverson, CFP
3. 3. About my Background Firm Commitment The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult a professional for specific information regarding your individual situation.
4. 4. Click to Play
5. 5. Retirement: Crucial Considerations How long should retirement last? How much is it expected to cost? What sources of income do Ianticipate having? What investment strategiescould help me?
6. 6. How Long Will Retirement Last? Average Life Expectancy Sources: CDC National Center for Health Statistics, 2013; Society of Actuaries 2000 Mortality Table 80 55 75 50 70 45 65 40 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2011 60 years 49.2 years 78.7
7. 7. How Much Is It Expected to Cost? Expenses Dreams& Goals Unique Circumstances
8. 8. Estimating the Cost of Retirement
9. 9. Retirement Plans Social SecuritySavings & Investments Potential Sources of Income
10. 10. The Long-Term Trend of Aging Source: Department of Health and Human Services, 2014 40,000,000 20,000,000 35,000,000 15,000,000 30,000,000 10,000,000 25,000,000 5,000,000 20101910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2009 million 3.9 million 40.2 U.S. Population Age 65 and Older
11. 11. Source: Bureau of Labor Statistics, 2013; (most recent data available) Rise & Fall of Retirement Plans 5% 25% 30% 35% 20% 15% 1979 1983 1987 1999 1991 2003 1995 2007 2011 10% Percentage of Employees Who Participate Defined Benefit Plans (traditional pensions) Defined Contribution Plans (401(k), 403(b), and 457 Plans
12. 12. Retirement Investment Objectives Protect Principal Generate IncomePursue Growth Mutual funds and variable annuities are sold only by prospectus. Please consider the charges, risks, expenses, and investment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money. Certificates of Deposit Money market funds Individual bonds Income-oriented mutual funds Fixed annuities Individual stocks Growth-oriented mutual funds Variable annuities
13. 13. Objective: Protect Principal Certificates of Deposit Cash Alternatives Money Market Funds
14. 14. Watching the Money Flow 1,800 $500 2,000$550 1,600 $450 1,400 $350 1,000 $300 1,200 800$250 Money Market Fund Assets S&P 500 Sources: Investment Company Institute, 2014, Standard & Poors Company, 2014. For the period January 1, 2004, to December 31, 2013. Index performance is not indicative of the past performance of a particular investment. Past performance does not guarantee future results. Individuals cannot invest directly in an index. Actual results will vary. 2004 2005 2006 2007 2008 2009 2010 2012 2013 2011 INBILLIONS
15. 15. Objective: Generate Income Individual Bonds Fixed Annuities Income-Oriented Mutual Funds
16. 16. Bond Laddering $10,000 at 1% $10,000 at 2% $10,000 at 2%$10,000 at 1% $10,000 at 2% A D B E C This is a hypothetical example used for illustrative purposes only. It is not representative of any specific investment or combination of investments. Past performance does not guarantee future results. Actual results will vary. Diversification is an approach to help man- age risk. It does not eliminate the risk of loss if security prices decline. Year 1 (matures in 1 year) (matures in 2 years) (matures in 3 years) (matures in 3 years) (matures in 3 years) Year 2 Year 3 Year 4 Year 5
17. 17. Bond Laddering This is a hypothetical example used for illustrative purposes only. It is not representative of any specific investment or combination of investments. Past performance does not guarantee future results. Actual results will vary. $100 $150 $200 $150 $200 $200 $200 $450 1.5% $200 $550 1.83% $200 $600 2% Year 1 Total Year 2 Average Return Year 3 A B D D B C E C C
18. 18. Income-Oriented Mutual Funds Mutual funds are sold only by prospectus. Please consider the charges, risks, expenses and invest- ment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money.
19. 19. Fixed Annuity Accumulation Phase Premiums Payout Payout Phase
20. 20. Objective: Growth Potential Individual stocks Growth-oriented funds Variable annuities
21. 21. Asset Allocation: The Determining Factor Source: Brinson, Singer, and Beebower, Determinants of Portfolio Performance II: An Update, Financial Analysts Journal, May-June 1991. Past performance does not guarantee future results. Asset allocation is an approach to help manage investment risk. It does not elimi- nate the risk of loss if security prices decline. Other factors Overall asset allocation
22. 22. What Investment Strategies Could Help Me? Source: Thomson Reuters, 2014. Past performance does not guarantee future results. Actual results will vary. Stocks 20% Bonds 20% Cash 60% Stocks 80% Bonds 10% Cash 10% Aggressive Portfolio Best Year.........33.3% Worst Year.....-32.8% Average..........10.1% Conservative Portfolio Best Year..............16.1% Worst Year...........-12.7% Average..............5.9%
23. 23. The $ 370,000 Difference This is a hypothetical example used for illustrative purposes only. It is not representative of any specific investment or combination of investments. Past performance does not guarantee future results. Actual results will vary. $ 700,000 Start Year 20Year 10 $ 500,000 $ 300,000 $ 100,000 $ 200,000 $ 400,000 $ 600,000 $681,864 Aggressive Portfolio $313,509 Conservative Portfolio
24. 24. Retirement Investment Strategies
25. 25. Financial Matters SeriesFinancial Matters Series Reinventing Wealth Management for Women Investment advisory services offered through Women & Wealth - Dallas, a registered investment adviser. This site is published for residents of the United States only. We only conduct business with residents of the states and jurisdictions in which we are properly registered. Women & Wealth - Dallas