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INVESTMENT PRODUCTS: NOT FDIC INSURED • NOT BANK GUARANTEE • MAY LOSE VALUE INVESTMENT PRODUCTS: NOT FDIC INSURED • NOT BANK GUARANTEE • MAY LOSE VALUE

INVESTMENT PRODUCTS: NOT FDIC INSURED • NOT BANK GUARANTEE • MAY LOSE VALUE - PowerPoint Presentation

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INVESTMENT PRODUCTS: NOT FDIC INSURED • NOT BANK GUARANTEE • MAY LOSE VALUE - PPT Presentation

INVESTMENT PRODUCTS NOT FDIC INSURED NOT BANK GUARANTEE MAY LOSE VALUE LEARNING OBJECTIVES Covers the changing nature of retirement Encourages investors to visualize their ideal retirement and consider the realities and roadblocks to retirement savings they may encounter ID: 771049

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INVESTMENT PRODUCTS: NOT FDIC INSURED • NOT BANK GUARANTEE • MAY LOSE VALUE

LEARNING OBJECTIVESCovers the changing nature of retirement.Encourages investors to visualize their ideal retirement and consider the realities and roadblocks to retirement savings they may encounter.Helps investors estimate living expenses and calculate how much they need to save to retire comfortably.

CPE PROGRAM REFUND POLICYFor more information regarding administrative policies such as complaints, cancellation, and refunds, please contact :Rosie Bueti, CE Credits Program Administrator (203) 703-6510 rbueti@leggmason.com 3

What do you imagine for your retirement? LOOK INTO YOUR FUTURE Your retirement may include: Traveling to far-flung destinations Indulging in your favorite hobbies Enjoying unhurried time with friends and family Devoting more time to volunteering Starting your own business

LOOK INTO YOUR FUTUREVisualize your retirement A successful retirement begins with envisioning a rewarding, healthy and responsible lifestyle. A few questions to consider: What would make a perfect week for you? What would you like to do during each season of an ideal year? What day-to-day activities would motivate your mind, maintain your health and help build relationships in your community?

Healthcare is a key considerationCONSIDERTHE REALITIES A recent report published in the Proceedings of the National Academy of Sciences . That report estimates that more than half of Americans will be in a nursing home at some point in their lives (e.g., rehabilitation or 24/7 care) Hospitals are discharging and moving patients more quickly to nursing homes and the incidences of dementia are on the rise Source: “More Than Half of Americans Will Need Nursing Home Care: Study,” By, Steven Reinberg. U.S. News & World Report. August 28, 2017.

What senior citizens spend on health care from their Social Security benefits* CONSIDER THE REALITIES Sources: Central Intelligence Agency, The World Factbook (last updated January 2019). CRS Report for Congress: Life Expectancy in the U.S., August 16, 2006; Liqun Liu, Andrew J. Rettenmaier and Zijun Wang, “The Rising Burden of Health Spending on Seniors,” National Center for Policy Analysis, NCPA Policy Report No. 297, February 2007; Social Security Administration, Monthly Statistical Snapshot, November 2018, www.ssa.gov/policy/docs/quickfacts/stat_snapshot; Median and Average Sale Prices of New Homes Sold in United States, https://www.census.gov/construction/nrs/ pdf/uspricemon.pdf; The U.S. Energy Information Administration Regular Conventional Retail Gasoline Prices ; U.S. Bureau of Labor Statistics, Consumer Price Index — Average Price Data as of November 2018.

Did you know that a 65-year-old man has a 40% chance of living beyond age 85? Also, if a husband and wife are both age 65, there’s a 72% chance that one spouse will live beyond age 85.* CONSIDER THE REALITIES Source: 2011 Society of Actuaries Key Findings: Longevity. We’re living longer, so retirement lasts longer: Growing focus on health and fitness Availability of excellent medical care Ongoing scientific advancements Today’s retiree is likely to live 20 or more years after retiring

CONSIDER THE REALITIESThe effects of inflation on everyday costs Inflation reduces your purchasing power The effect of inflation on everyday costs (assuming 3.2% annual rate of inflation). Sources: Central Intelligence Agency, The World Factbook (last updated January 2019). CRS Report for Congress: Life Expectancy in the U.S., August 16, 2006; Liqun Liu, Andrew J. Rettenmaier and Zijun Wang, “The Rising Burden of Health Spending on Seniors,” National Center for Policy Analysis, NCPA Policy Report No. 297, February 2007; Social Security Administration, Monthly Statistical Snapshot, November 2018, www.ssa.gov/policy/docs/quickfacts/stat_snapshot; Median and Average Sale Prices of New Homes Sold in United States, https://www.census.gov/construction/nrs/ pdf/uspricemon.pdf; The U.S. Energy Information Administration Regular Conventional Retail Gasoline Prices ; U.S. Bureau of Labor Statistics, Consumer Price Index — Average Price Data as of November 2018.

USE EVERY LIFE STAGE TO BUILD A FUTURE OF WEALTH AND STABILITY Life stage Potential roadblocks to saving Tips Paying for your wedding Repaying student loans Paying rent while saving for 1 st home Start contributing to your employer-sponsored retirement plan Making a down payment on a home Monthly mortgage payments Life and medical insurance Child care expenses Continue to contribute to retirement plan; if spouse takes time off to care for children, remember that they can open an IRA as long as household has income. Saving for college Adoption or fertility treatment Health care costs Family vacations Lessons/activities for children Caring for aging parents Maximize all retirement plan options, such as 401(k)s and IRAs. If you have your own business, see whether you can take advantage of higher contribution limits offered through SIMPLE or SEP IRAs.

USE EVERY LIFE STAGE TO BUILD A FUTURE OF WEALTH AND STABILITY Life stage Potential roadblocks to saving Tips Paying for child’s college expenses, wedding or home purchase Providing financial support to parents, sibling or adult child Economic recession Take advantage of catch-up contribution provisions to 401(k)s and IRAs. This can be an important way to compensate if you have not saved regularly before. Retirement eliminates income Loss of employer-provided health insurance Seek advice from a qualified professional about your options for when to begin collecting Social Security benefits and making withdrawals from retirement accounts, and the implications for your long-term financial situation. Health care costs Inability to work Nursing home Outliving your savings If you continue to work, seek out advice on how earned income may affect retirement benefits. Get advice on estate planning and college saving plans such as 529 plans.

Three main sources:Social Security benefits Employer-provided retirement plan accounts Personal savings SAVING FOR RETIREMENT IS UP TO YOU Where will your retirement income come from?

While Social Security benefits account for 50% or more of the average retiree’s monthly income:Current average monthly Social Security benefit payment is just $1,259* This amount may decline in the future as the ratio of workers paying into the system versus retirees collecting benefits continues to fall SAVING FOR RETIREMENT IS UP TO YOU Source: Social Security Administration. Monthly Statistical Snapshot, September 2017, www.ssa.gov/policy/docs/quickfacts/stat_snapshot/. Social Security benefits are not enough

SAVING FOR RETIREMENT IS UP TO YOUMaking up the shortfall with retirement plansEmployer-contributed retirement plans are being replaced with plans that require employee contributions (defined contribution plans), such as 401(k) plans More and more Americans must rely on themselves to build retirement savings through tax-advantaged savings plans at work including: 401(k)s Personal retirement savings plans like Individual Retirement Accounts (IRAs) *Alicia H. Munnell and Anqi Chen, “401(k)/IRA Holdings in 2016: An Update from the SCF”, Center for Retirement Research at Boston College, An Issue in Brief , October 2017, number 17-18. Americans covered by traditional pension plans vs. defined contribution plans

Planning for the unexpectedBut what if the unexpected occurs? What if your elderly parents require financial assistance? What if your child’s education costs are more than anticipated? If the unexpected happens, a well-constructed retirement savings plan can help you stay on track to meet your retirement income goals and allow for adjustments along the way as needed. SAVING FOR RETIREMENT IS UP TO YOU You may think you are right on target with your retirement savings plan.

SAVING FOR RETIREMENT IS UP TO YOUHow much will you need to maintain your standard of living?Look at your total financial picture Take into account all of your assets, including: Money already in 401(k) and pension plans Individual savings Spouse’s retirement plan accounts Projected Social Security benefits Your financial professional can help you assess all of these elements, plus potential risks such as inflation, and determine the appropriate savings goal for you

SAVING FOR RETIREMENT IS UP TO YOU Source: Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 20016 Retirement Confidence Survey.

First, estimate your retirement expense budget Consider: Your current annual fixed household expenses Your current annual discretionary household expenses Add these two together, then adjust for any expected increases/decreases in these expenses during retirement PLAN FOR YOUR FUTURE

Next, review your current financial situation Consider: Your current financial assets Your current financial liabilities To determine your current net worth, subtract total liabilities from total assets PLAN FOR YOUR FUTURE

How much to do you need to save before your nest egg is large enough to generate earnings comparable to your estimated retirement needs? Consider: How much annual income will your current net assets generate? What will your annual estimated Social Security benefit be? If you have an employer-provided pension, how much will the annual benefit be? Add together these three figures… and then subtract your estimated annual retirement budget The result is the annual income gap if you retired today…which helps you see how close or far you are now with respect to your goals ESTIMATE THE INCOME GAP

TAKE THE NEXT STEPSFOR YOUR FUTURE Visualize your retirement Envision a rewarding, healthy and responsible lifestyle Imagine what you would like to do during each season of your ideal year Visualize a day-to-day style of living that will motivate your mind, maintain your health, and build relationships within your community Consider the realities Health care costs are rising We’re living longer, so retirement last longer Inflation reduces your purchasing power

TAKE THE NEXT STEPSFOR YOUR FUTURESource: Legg Mason, 2017. The above information is for illustrative purposes only. All three investors contributed $5,000 annually to an IRA. This illustration assumes a hypothetical pre-tax return of 7%, compounded annually. This example does not take into account any taxes, fees and expenses, and also it assumes no withdrawals were made and the fact that if they were considered, the results would be lower. Please note that Legg Mason, Inc., does not provide tax advice. Start investing early and stay disciplined

TAKE THE NEXT STEPSFOR YOUR FUTURE Diversification does not assure a profit or protect against market loss. Bridge the income gap Increase your annual savings rate and if possible, contribute to a tax-advantaged retirement account Maintain a diversified investment portfolio with an appropriate level of risk Defer, if possible, the date of your retirement Phase in your retirement. Consider if you would like spending a few days a week at your current workplace or perhaps a different one Consider all of your assets

WORK WITH A TRUSTED FINANCIAL PROFESSIONAL Action steps A trusted financial professional works with you to identify your goals, needs and aspirations and helps you choose and implement financial strategies that meet your particular goals and needs, given your risk tolerance and time horizon.

For internal use only. Not for distribution to the public. © 2016 Legg Mason Investor Services, LLC, member FINRA, SIPC. Legg Mason Investor Services, LLC and all entities mentioned above are subsidiaries of Legg Mason, Inc. 1/16 This presentation does not address state or local tax rules concerning retirement accounts. Legg Mason, Inc., its affiliates, and its employees are not in the business of providing tax or legal advice to taxpayers. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties or complying with any applicable tax laws or regulations. Tax-related statements, if any, may have been written in connection with the “promotion or marketing” of the transaction(s) or matter(s) addressed by these materials, to the extent allowed by applicable law. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor. All investments involve risks, including possible loss of principal. © 2017 Legg Mason Investor Services, LLC, member FINRA, SIPC. Legg Mason Investor Services, LLC and all entities mentioned above are subsidiaries of Legg Mason, Inc. 11/17 Legg Mason is a leading global investment company committed to helping clients reach their financial goals through long term, actively managed investment strategies. Brandywine Global Clarion Partners ClearBridge Investments EnTrustPermal Martin Currie QS Investors RARE Infrastructure Royce & Associates Western Asset leggmason.com 1-800-822-5544