Presenter’s NamePresenter’s Title

 Is a Roth IRA conversion right for you?

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The Roth IRA opportunity

Lower account values may make conversions attractive today

Lock in today’s low tax rates

Take advantage of special tax treatment for 2010 & 2011

In 2010, Adjusted Gross Income (AGI) limits on Roth IRA conversions are eliminated

Agenda

What is a Roth IRA?

Why convert to a Roth IRA?

Why convert now?

Agenda

What is a Roth IRA?

Why convert to a Roth IRA?

Why convert now?

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What is a Roth IRA?

Roth IRA

Contributions are on an after-tax basis

Earnings grow free of Federal taxes

When an investor reaches retirement and begins withdrawing money, there are no taxes to pay on the earnings

Traditional IRA

Contributions may be tax deductible

Earnings grow tax deferred Federal taxes

When an investor reaches retirement and begins withdrawing money, taxes must be paid on any earnings

Two primary types of IRAs: Roth and Traditional. Great differences in income limits and tax advantages

Agenda

What is a Roth IRA?

Why convert to a Roth IRA?

Why convert now?

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Potential conversion opportunities

1. Traditional IRAs

2. 401(k) Plans*

3. 403(b) Plans*

4. SEP IRAs*

5. Simple IRAs/401(k)s*

* In order to be eligible to roll over your employer sponsored retirement account, you must have had a qualified “triggering event” such as separation of service or attainment of age 59½

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Why convert to a Roth IRA?

1. Tax-free withdrawals

2. Tax-free stretch

3. Tax diversification in retirement

4. Other unique benefits of Roth IRAs

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1. Power of tax-free withdrawals

Janet is 45-years old

She will retire at age 65 Converted $100,000 IRA

(Paid taxes out of pocket)

35% tax bracket before and after retirement

8% rate of return before and after retirement

Needs income for 25 years

Distribution Phase

income from IRA $28,381 N/A

Side account income* $9,037 N/A

Yearly income from Roth IRA N/A $43,663

Annual after-tax income $37,418 $43,663

Monthly after-tax income $3,118 $3,639

Accumulation PhaseTraditional

IRARoth

IRA

Estimated balance $466,097 $466,097

Estimated side account balance* $96,468 N/A

Estimated balance at retirement (before taxes)

$562,565 $466,097

* To account for the ‘opportunity cost’ of paying for the taxes on the Roth out of pocket, a “side account” was established under the Traditional IRA. The side account illustrates how the sum paid in taxes might have grown if it was invested at a consistent rate of 4%

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2. Tax-free stretch

Assumptions Bill is 70 years old and does not need the money

to fund his retirement His daughter Judy is 30 years old At 70½ will take RMDs if the account stays in IRA Current tax rate is 35% Anticipated tax rate at retirement is 35% Pay conversion tax of $35,000 out of pocket 7% rate of return

Example: Bill has a $100,000 IRA; wants his daughter to inherit

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2. Tax-free stretch

Bill dies at age 86

$1,025,853* $1,578,843

Total lifetime distributions if IRA is not converted

Total lifetime distributions if IRA is converted

Judy stretches the IRA over her lifetime

*The required minimum distributions (RMDs) from the IRA were reinvested back into a side account to show a more accurate comparison.

The stretch IRA example assumes that tax laws and IRS rules remain constant for the life of the IRA; but tax rules and rates are subject to change at anytime.

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3. Tax diversification in retirement

What other investments grow “tax free”?

What other strategies allow a taxable investment

to be converted into a tax-free investment?

Expect to be in a higher income-tax bracket when retired?

Believe income tax rates will go up?

A few questions to ponder

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3. Tax diversification in retirement

Keep taxable income within lower tax bracket

In 2009, a married couple filing jointly with standard deduction could have income as high as $79,300 and still be in the 15% tax bracket

Build your tax-free Roth assets and have more flexibility to manage retirement taxes

Tax-free income in retirement may help keep you in a lower tax bracket while retired

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4. Other unique Roth IRAs benefits

No Required Minimum

Distributions

Contributions allowed after

age 70½

Agenda

What is a Roth IRA?

Why convert to a Roth IRA?

Why convert now?

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Why convert to a Roth IRA now?

For the first time, higher-income individuals with adjusted gross income (AGI) of more than $100,000 are eligible!

In addition, the current market provides…

1. A low-cost conversion opportunity

2. The ability to lock in today’s low tax rates

3. Special tax treatment for 2010 and 2011

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1. It’s a low-cost conversion opportunity

It’s now worth $70,000

She decides to convert the IRA while it’s “cheap to do so”

IRA subsequently grows to $95,000– $25,000 growth is tax free

Convert now, while IRA value is low

Donna contemplated doing a Roth conversion when her IRA was worth $100,000

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1. It’s a low-cost conversion opportunity

Example Donna converts $70,000 IRA in

January 2010. Value then drops to $50,000

Re-characterize by 10/15/11 and avoid $70,000 of income for 2010

What if the market goes down more?

A converted Roth IRA can be “recharacterized” as a traditional IRA up to October 15th of the

year following the year of conversion

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2. Lock in today’s low tax rates

For decades, the U.S. had a top marginal tax rate as high as 50%, 70% and 90%

For the past 50 years, there have only been 5 years (1988-1992) where the

top rate was less than the current 35%

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2. Lock in today’s low tax rates

Source: Pension Protection Act of 2006

0%

20%

40%

60%

80%

100%

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58

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63

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68

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73

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78

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88

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93

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98

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03

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08

?

Consider the current budget deficits and costs of bailouts and stimulus packages…do you think that taxes will go up?

If you think taxes will go up, consider paying taxes now rather than wait.

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3. Special tax treatment for 2010 & 2011

For conversion in 2010 only, taxpayers can elect to defer half of their tax liability to their 2011 tax return and the other half

to their 2012 tax return

The Roth IRA can grow and be distributed tax free

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Conversion considerations

Investment time horizon

Current income-tax brackets

Anticipated income-tax bracket at retirement

Available assets to pay the resulting conversion taxes

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Coming in November 2009 to jhfunds.com

John Hancock Roth IRA conversion decision tool

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Let John Hancock help you!

Research materials

Retirement education

Retirement tools

A Roth conversion is based on you as an individual—it is important to discuss with your advisers whether or not it makes sense for you

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The opportunity is here!

ROTHCLIENTPPT 10/09

John Hancock Funds, LLC • MEMBER FINRA | SIPC • 601 Congress Street, Boston, MA 02210-2805 • www.jhfunds.comNOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE. NOT INSURED BY ANY GOVERNMENT AGENCY.

This material does not constitute tax, legal or accounting advice, and neither John Hancock nor any of its agents, employees or registered representatives are in the business of offering such advice. It was not intended or written for use and cannot be used by any taxpayer for the purpose of avoiding any IRS penalty. It was written to support the marketing of the transactions or topics it addresses. Anyone interested in these transactions or topics should seek advice based on his or her particular circumstances from independent professional advisers.

A funds investment objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information about the fund. For a prospectus, call 1-800-225-5291. Please read the prospectus carefully before investing or sending money.