Helping You Plan for a New Retirement

Ameriprise Financial Services, Inc., offers financial advisory services, investments, insurance and annuity products. RiverSource® products are offered by affiliates of Ameriprise Financial Services, Inc., Member FINRA and SIPC. CA License #0684538.

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© 2006 – 2008 Ameriprise Financial, Inc. All rights reserved. 1/08

Helping You Plan for a New Retirement[Presenter name], [Presenter title][Date]

1As of September 30, 2007. Source: Ameriprise Financial Second Quarter 2007 Statistical Supplement, Page 3.2Based on the number of financial plans annually disclosed in Form ADV, Part 1A, Item 5, available at adviserinfo.sec.gov as of December 31, 2006. 3Based on the number of CFP® professionals documented by the Certified Financial Planner Board of Standards, Inc..

• Approximately 2.4 million branded advisor clients1

• Ameriprise is America’s largest financial planning company2, 3

• More people come to Ameriprise for financial planning than any other company2

What would you like to retire to?Rethinking retirement

> What will you retire to?

> Will you have enough money?

> How should you invest along the way?

> How to access your money when you need it?

> What do you want to leave behind?

The five key questionsRethinking retirement

• What does retirement mean to you?

• Take time to answer this key question

• Indulge yourself. Go ahead and dream

• Take “trial” retirements to see what you like

What will you retire to?Rethinking retirement

• Step 1

>Document your current expenses

• Step 2

>Project your future expenses

• Step 3

>Determine your future income needs and sources

Will you have enough money?Rethinking retirement


How much will your retirement cost as a percentage of your current income?

Document yourcurrent expenses

Project your futureexpenses

Determine yourfuture incomeneeds and sources

• Sources of income

>Social Security

>Qualified retirement plans

>Stock options

>Personal savings & investments

>Part-time work

*Source: Sources of Income for Older Persons in 2003, AARP Public Policy Institute, 2005.





• Future income considerations

>Live long, live well

>Over half the people living today will live to be 82 yearsor older

>Average CPI increase from 1963 – 2003 was 3.06%




*Source: Life Tables for the United States Social Security Area 1900 – 2100. Actuarial Study No. 116 by Felicitie C. Bell and Michael L. Miller.


$40,000

*Assumes an after-tax portfolio with a tax rate of 25%, 7% annual yield (a moderately aggressive risk tolerance portfolio), 4% annual inflation, and depletion of funds after a 30-year retirement. Does not take account of investment or product fees. Income is increased annually at rate of inflation. This information is shown for illustrative purposes only, and does not represent any specific product or investment. Your actual investment results will vary.





• How big of a nest egg will you need?

• The size of nest egg you’ll need may surprise you

>You may need retirement income for two or moredecades

>Use a modest withdrawal rate to avoid depletingyour assets

>Social Security is indexed for inflation, but somepensions are not

Annual amountdesired

Nest eggneeded*

$85,000

$100,000

$963,922

$2,048,334

$2,409,804

• Will you have enough money?

>Most people have a gap between income and expenses

>Plan to bridge the gap with your investments





• Portfolio considerations

>Asset allocation and rebalancing

>Risk management

>Tax management

Asset allocation and rebalance

Risk management

Tax management

Advanced strategies

How should you invest along the way?Rethinking retirement

Asset allocation does not assure a profit or protect against loss in declining markets.

• Asset allocation

>Traditional asset recommendations focus on just three types of investment


Risk management

Tax management

Advanced strategies


Bonds offer a fixed rate of return and value is influenced by changes in interest rates. Stocks do not offer a fixed rate of return and fluctuate with changes in market conditions. Each asset class has specific risk characteristics. Talk to your advisor and understand these risks before investing.

32Stocks1 Bonds Cash

An investment in a money market fund is not guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Stocks of small- and mid-capitalization companies involve substantial risk. Historically, these stocks have experienced greater price volatility than stocks of larger companies, and they can be expected to do so in the future. Stocks of mid-capitalization companies may be slightly less volatile than those of small-capitalization companies but involve substantial risk.International investing involves increased risk and volatility, not typically associated with domestic investing, due to changes in currency exchange rates, foreign government regulations, differences in auditing and accounting standards, potential economic and political instability, limited liquidity, and volatile prices. The risks of international investing are particularly significant in emerging markets.There are risks associated with an investment in bonds, including the impact of interest rates, credit, and inflation.

• Asset allocation – beyond the basics

> Many investors don’t take full advantage of diversification opportunities within each asset class


Risk management

Tax management

Advanced strategies


– Large-cap

– Mid-cap

– Small-cap

– Growth

– Value

– International

– Long-term

– Short-term

– Government

– Corporate

– High-yield

– International

– Tax-exempt

– Money market

– CDs

– Savings account

– Tax-exemptmoney market

32Stocks1 Bonds Cash

*Source: Zephyr Associates, 2004*Ranking based on annual return for that asset class

• Asset allocation

>No investment outperforms all the time


Risk management

Tax management

Advanced strategies



Risk management

Tax management

Advanced strategies


Risk management

Inflation risk

Market risk

Default risk

Interest rate risk

Currency risk

The possibility that your investment’s value will lag inflation

The chance that your investment’s price will fall

The chance that a bond issuer won’t be able to pay interest due

The likelihood that bond prices will fall when interest rates rise

The possibility that your investment will lose value due to fluctuations in foreign currencies

1Specific tax issues may require consultation with an attorney.2Dividends are taxed currently. Interest may be taxable even if not paid such as, but not limited to, Original Issue Discount. Capital gains, if any, are taxed when realized. Dividends and capital gains may be taxed at a lower rate.3Savings accounts are FDIC insured.4Withdrawal before age 59 ½ may result in a 10% IRS penalty.5Most annuities have a tax deferred feature. So do many retirement plans under the Internal Revenue Code. As a result, when you use an annuity to fund a retirement plan that is tax-deferred, your annuity will not provide any necessary or additional tax deferral for that retirement plan. But annuities do have features other than tax deferral that may help you reach your retirement goals. You should consult a tax advisor prior to making a purchase for an explanation of the tax implications to you.6Certain income may be subject to the alternative minimum tax, or state or local taxes. Taxable capital gains/losses may be incurred.7Necessary requirements must be met. Consult with your tax advisor.


Risk management

Tax management

Advanced strategies


Tax management1

– Taxable investment accounts2

– Savings accounts3

– Other cash reserves

– Traditional IRAs4

– Traditional 401(k)s and 403(b)s4,7

– Fixed and variable annuities5

– Municipal bondsand funds6

– Roth IRAs4,7

– Roth 401(k)s (available starting in 2006)4,7

Taxable1 3 Tax-free2 Tax-deferred

Investments using after-tax dollars for potential capital gains taxable (fully or partially) when realized, interest taxable (fully or partially) when accrued or dividends taxable (fully or partially) when paid.

Investments using pre-tax dollars for tax-deferred growth; taxable when withdrawn.

Investments and insurance using after-tax dollars for tax-deferred growth and/or potential tax-free income.

• Tax management

>Taxable interest is taxed as ordinary income

>Qualifying dividends taxed at lower rate through 2010

>Long-term capital gains generally taxed at lower rates

>Retirement plan distributions taxed as ordinary income

>Work with financial and tax advisors to create best strategies for your situation


Risk management

Tax management

Advanced strategies


• A balanced tax strategy

>Maximize employer-sponsored plan contributions

>Consider additional tax-deferred savings

– Traditional IRA

– Variable annuity

>Consider opportunities for tax-free earnings

– Roth IRA

• Maintain some assets outside tax-deferred accounts


Risk management

Tax management

Advanced strategies


Most annuities have a tax-deferred feature. So do many retirement plans under the Internal Revenue Code. As a result, when you use an annuity to fund a retirement plan that is tax deferred, your annuity will not provide any necessary or additional tax deferral for that retirement plan. But annuities do have features other than tax deferral that may help you reach your retirement goals. You should consult a tax advisor prior to making a purchase for an explanation of the tax implications to you.

Annuities are insurance products that are long-term investment vehicles. Before you invest, be sure to ask your sales representative about the annuity’s features, benefits, risks, and fees, and whether the annuity is appropriate for you based on your financial situation and objectives. Variable annuities are subject to market risk, including the potential loss of principal invested.

• Roth conversion considerations

> If converting before 2010, taxpayer’s adjusted gross income for year of conversion must not exceed $100,000

>Until 2010, Roth conversions not available for married couples filing separately

>After 2010 all individuals, regardless of income or filing status, will be able to convert to Roth IRA


Risk management

Tax management

Advanced strategies


• Benefits of Roth IRA

>No tax on earnings.

>Tax-free qualified withdrawals.

>No required minimum distribution after 70 ½.

>Stretch out may be available — to younger spouse, child or grandchild.

• Long-term care

>Live with the risk and do nothing

>Self insure

>Transfer the risk to an insurance company

• Most importantly – don’t put it off


• Your personal choices and decisions

>Revocable

> Irrevocable

>Postpone-able

How to access your money when you need it?Rethinking retirement

• Qualified plans – accessing your money

>Leave money in plan

>Begin withdrawals at/after age 59 1/2

>Pre-59 1/2 – Internal Revenue Code section 72(t)


• Roth 401(k) and Roth 403(b) plans – accessing your money

>Begin tax-free withdrawals anytime after:

– You turn 59 1/2 AND

– You have owned the account for five years

>Rollover to Roth IRA*

– No taxes due on direct rollover

– Roth IRA not subject to RMDs


*Upon rollover the value of your investment may be worth less than the original amount invested.

*Annuities are only one of many retirement strategies available. Talk to your financial advisor to find out whether an annuity fits your individual needs or situation.

Most annuities have a tax-deferred feature. So do many retirement plans under the Internal Revenue Code. As a result, when you use an annuity to fund a retirement plan that is tax-deferred, your annuity will not provide any necessary or additional tax deferral for that retirement plan. But annuities do have features other than tax deferral that may help you reach your retirement goals. You should consult a tax advisor prior to making a purchase for an explanation of the tax implications to you.

• Using annuities to create a stream of income*>Consider using a portion of your assets to buy

an immediate annuity

>Annuity generates steady stream of income you can’t outlive

>With certain level of income guaranteed, you can invest remainder of your portfolio more aggressively

– All guarantees are based on the continued claims paying ability of the issuing company and do not apply to the performance of the variable subaccounts, which will vary with market conditions.


• What is in your estate?

>Home or home equity

>Cars

> Investments

>Personal property

>Other items or interests

What do you want to leave behind?Rethinking retirement

• Expenses that may reduce your estate:

>Estate taxes

> Income taxes

>Probate


• Understand beneficiary designations

>Tax ramifications

>Payout requirements

>Ownership and beneficiary designationson your accounts


• Ask yourself…

>What do I want to retire to?

>Do I have the plan to get me there successfully?

>Can I use any help?

• Imagine your dream retirement. Then put a plan together to make it happen.


Let’s get started.

Ameriprise Financial Services, Inc., offers financial advisory services, investments, insurance and annuity products. RiverSource® products are offered by affiliates of Ameriprise Financial Services, Inc., Member FINRA and SIPC.© 2006 – 2008 Ameriprise Financial, Inc. All rights reserved

Helping You Plan for a New Retirement

Economy & Finance

Transcript of Helping You Plan for a New Retirement