1. Retirement &
Investment Planning
g
in Today’s Market
Presented by: Matthew A. Morrow
y
Munroe Morrow Wealth Management
346 Commercial Street
Boston, MA 02109
617-600-5488
Date: April 24, 2012

2. Will you have enough money?
Future!income!needs!and!sources
> Most!people!have!a!gap!between!income!and!expenses
> Social!Security!will!not!be!enough
> Will!you!have!a!pension?
> Do!you!have!other!sources!of!income?
> Pl t b id th
Plan!to!bridge!the!gap!with!your!investments
ith i t t
1

3. Will you have enough money?
Future!income!needs!and!sources
The!size!of!the!nest!egg!you’ll!need
Annual!amount!desired Nest egg!needed*
$!40,000 $!963,922
$!85,000 $!2,048,334
$!100,000 $!2,409,804
2

4. Will you have enough money?
Percentage surviving by age
FPO
Percentage surviving by age: Death-registration
1900-1902,1949-51, 2004. National Vital
Statistics Reports, Vol. 56, No. 9, December 28,
3
2007

5. The High Cost of Waiting
Annual Rate of Return = 8%
AGE Investor A Investor B
21 $0 $2,000
22 $0 $2,000
23 $0 $2,000
24 $0 $2,000
25 $0 $2,000
26 $0 $2,000
27 $0 $2,000
28 $0 $2,000
29 $0 $2,000
30 $0 $2,000
31 $2,000 $0
32 $2,000 $0
33 $2,000 $0
34 $2,000 $0
35 $2,000 $0
36 $2,000 $0
37 $2,000 $0
38 $2,000 $0
39 $2,000 $0
40 $2,000 $0
41 $2,000 $0
42 $2,000 $0
43 $2,000 $0
44 $2,000 $0
45 $2,000 $0
46 $2,000 $0
47 $2,000 $0
48 $2,000 $0
49 $2,000 $0
50 $2,000 $0
51 $2,000 $0
52 $2,000 $0
53 $2,000 $0
54 $2,000 $0
55 $2,000 $0
56 $2,000 $0
57 $2,000 $0
58 $2,000 $0
59 $2,000 $0
60 $2,000 $0
$226,566 $291,547
Total Invested: $60,000 $20,000
What if you invested $2,000 per year for all 40 years? $518,113.04

6. How should you invest
along the way?
4

7. Investing!short!course
I ti h t
> Get!invested
> Diversify
> Stay invested
Stay!invested

8. Types!of!risk!or!“volatility”
T f i k “ l tilit ”
> Specific!risk
> Market!risk
> Industry risk
Industry!risk
> Interest!rate!risk

9. Historical range of returns of S&P
500: 1970-2009
61
30 19 18
Positive!change
No!change 7
"2
Negative!change "7
" 43
1!year 5!years 10!years 20!years
Source:!Standard!and!Poor’s!500!Index.!The!Standard!&!Poor’s!500!Market!Index!(S&P!500)!is!an!unmanaged!list!of!common!stocks frequently!used!as!a!measure!of!market!
performance.!The!index!reflects!reinvestment!of!all!distributions!and!changes!in!market!prices,!but!excludes!brokerage!commissions!or!other!fees.!The!highest!return!is!
represented!by!the!top!of!each!bar!and!the!lowest!annual!return!is!shown!at!the!bottom.!The!rolling!5",10" and!20"year!ranges!are!also!shown.!Over!time,!lower!performing!years!
will!be!offset!by!higher!performing!years!and!vice!versa.!Therefore!the!range!of!the!historical!returns!over!the!entire!period!is!narrower!than!the!range!of!returns!in!any!single!year.!
Returns!over!1!year!in!length!are!annualized.!It!is!not!possible!to!invest!directly!in!an!index.!!Past!performance!is!no!guarantee!of!future!results.!

10. Dollar"cost!averaging
D ll t i
> Put!market!fluctuations!to!work!for!you
> Can!be!an!effective!means!of!accumulating!shares
> Does not guarantee profit or protect against losses due to
Does!not!guarantee!profit!or!protect!against!losses!due!to!
declining!prices

11. Dollar"cost!averaging
Month You invest Share price Shares
purchased
January $100 ! $10 = 10
February $100 ! $8 = 12.5
March $100 ! $5 = 20
April $100 ! $7 = 14.3
May $100 ! $9 = 11.1
June $100 ! $10 = 10
Total $600 = 77.9
77 9
Average!price!per!share:!(10+8+5+7+9+10)/6=!$8.17
Average!cost!per!share:!(600/77.9)=!$7.70
Dollar"cost!averaging!not!guarantee!a!profit!or!protect!against!losses!in!a!declining!market.!Investors!should!consider!their!ability!to!continue!investing!
during!periods!of!low!markets.!This!illustration!is!hypothetical!and!is!not!a!forecast!or!guarantee!of!specific!investment!results.

12. How should you invest along the way?
Five!kinds!of!risk!to!manage
Inflation!risk
I fl ti i k The!possibility!that!your!investment’s!value!
Th ibilit th t i t t’ l
will!lag!inflation
Market!risk The!chance!that!your!investment’s!price!will!fall
Default!risk The!chance!that!a!bond!issuer!won’t!be!able!to!pay!
interest!due
Interest!rate!risk
Interest rate risk The!likelihood!that!bond!prices!will!fall!when!interest!
The likelihood that bond prices will fall when interest
rates!rise
Currency!risk The!possibility!that!your!investment!will!lose!value!due!
to!fluctuations!in!foreign!currencies
10

13. How should you invest along the way?
Asset!allocation!and!diversification
2001 2002 2003 2004 2005 2006 2007 2008
2008*
SMALL CAP SMALL CAP LARGE CAP
REAL ESTATE INT’L STOCKS REAL ESTATE BONDS
VALUE BONDS 10.25% GROWTH
33.16% 35.97%
GROWTH
14.02% 5.24%
14.02% 48.54% 11.81%
INT’L!Stocks!MSCI!EAFE!Index
SMALL CAP SMALL CAP HIGH YIELD
REAL ESTATE REAL ESTATE REAL ESTATE INT’L STOCKS INT’L STOCKS
VALUE VALUE BONDS
12.35% 3.58%
46.03% 22.25%
13.82% 26.86% 11.63%
-26.16%
Diversified!Portfolio!Hypothetical!portfolio!
with!quarterly!rebalancing!and!an!equal!
with quarterly rebalancing and an equal
BONDS
HIGH YIELD MID CAP
INT’L STOCKS
MID CAP SMALL CAP SMALL CAP DIVERSIFIED weighting!in!each!of!the!indices!listed!against!
BONDS STOCKS STOCKS VALUE GROWTH PORTFOLIO
8.44%
-1.41% 40.06%
20.70%
12.65% 23.48% 7.05% -28.58%
loss.
HIGH YIELD SMALL CAP MID CAP DIVERSIFIED LARGE CAP SMALL CAP
BONDS VALUE INT’L STOCKS BONDS
STOCKS PORTFOLIO VALUE VALUE
5.28% -11.43% 39.17% 6.97%
20.22% 7.46% 22.25% -28.92% *Data as of 12/31/08. Source: Morningstar
LARGE CAP
Direct.
Direct
DIVERSIFIED DIVERSIFIED DIVERSIFIED LARGE CAP DIVERSIFIED MID CAP
PORTFOLIO PORTFOLIO
REAL ESTATE
PORTFOLIO VALUE PORTFOLIO STOCKS VALUE Past performance does not guarantee future
36.18% -36.85%
-1.87% -11.74% 16.63% 7.05% 17.97% 5.60% results. Diversification and asset allocation
LARGE CAP
do not guarantee overall portfolio profit and
LARGE CAP LARGE CAP DIVERSIFIED LARGE CAP LARGE CAP MID CAP DIVERSIFIED
VALUE VALUE PORTFOLIO VALUE GROWTH STOCKS PORTFOLIO GROWTH do not protect against loss. It is not possible
-5.59% -15.52% 33.58% 16.49% 5.26% 15.26% 2.19% -38.44% to invest directly in any of the unmanaged
indices shown. There is no assurance that a
MID CAP LARGE CAP SMALL CAP SMALL CAP HIGH YIELD SMALL CAP
STOCKS
INT’L STOCKS
VALUE GROWTH
SMALL CAP
GROWTH BONDS GROWTH secondary market will be available for real
-15.66% VALUE 4.71%
-5.62% 30.03% 14.31% 13.35% 1.87% -38.54% estate invest trust, which may hinder
attempts to sell the investment.
SMALL CAP MID CAP LARGE CAP HIGH YIELD SMALL CAP HIGH YIELD LARGE CAP
REAL ESTATE
GROWTH STOCKS GROWTH BONDS GROWTH BONDS VALUE
-39.20%
-9.23% -16.19% 29.75% 11.13% 4.15% 11.85% -0.17% Diversification helps you spread risk
throughout your portfolio, so that
LARGE CAP LARGE CAP HIGH YIELD LARGE CAP HIGH YIELD LARGE CAP SMALL CAP MID CAP
GROWTH GROWTH BONDS GROWTH BONDS GROWTH VALUE STOCKS investments that do poorly may be balanced
–20.42% -27.88% 28.97% 6.30% 2.74% 9.07% -9.78% -41.46% by others that do relatively better.
SMALL CAP
INT’L STOCKS BONDS BONDS BONDS BONDS REAL ESTATE INT’L STOCKS
GROWTH
-21.21% 4.10% 4.34% 2.43% 4.33% -17.55% -43.06%
-30.26% 11

14. A new way to think about taxes
Tax"diversify!your!portfolio
Neither Ameriprise Financial nor any of its
representatives or agents provide tax 12
advice.

15. How should you invest along the
way??
2012!limits!for!a!contributory!Roth!IRA!
2012 limits for a contributory Roth IRA
> $5,000!maximum!contribution!in!202*
> $1,000!“catch"up”!contribution!for!those!age!50+
$ , p g
Advantages!of!Roth!IRAs:
• Tax!Deferred!Savings.
T D f dS i
• Tax"Free!withdrawals!of!earnings!after!age!59!½.
• Contributions!can!be!withdrawn!penalty!and!tax"free!at!!any!time.
• Earnings!up!to!$10,000!can!be!withdrawn!for!first!time!home!purchase!without!
i $ 0 000 b i hd f fi i h h ih
early!withdrawal!penalty.
*Maximum contribution limits may be 13
13
adjusted for inflation in future years.