Money Matters

Putting Your Money to Work

For You

Can

Star

t Tod

ay •  Most people are uncertain when it comes

to !nances.

•  You know it’s important to start now - take control of your money and make it work for you.

•  But navigating the maze of all things !nancial can be a daunting and confusing journey.

Your

Fin

anci

al F

utur

e

Where do you begin?

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Begin With World •  WFG is dedicated to serving the

!nancial needs of individuals and families from all walks of life who are often overlooked by the !nancial services industry.

•  We are driven by our mission to help families achieve !nancial independence.

Financial Group

A Different Kind of Company for A Different Kind of Consumer

•  Everyday our associates in the United States and Canada educate clients and business owners that !nancial choices made today are critical in the determination of their !nancial futures.

•  WFG believes creating a !nancial strategy is not something reserved for the wealthy; it is an opportunity for all people no matter what their income.

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A Different Kind of Company

•  There’s no “one size !ts all” attitude here - WFG advocates the power of choice for our clients.

•  WFG is aligned with several leading companies in the !nancial services industry to provide clients with a broad array of products and services so they can choose the ones that best !t their needs.

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Providers & Products

Our provider companies include industry leaders such as:

1 Maintains current selling agreement(s) with World Financial Group Insurance Agency, Inc. (WFGIA) or its subsidiaries and/or World Group Securities, Inc. (WGS). 6

1 1

1

1

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-  Mutual Funds2 -  Annuities2 -  Life Insurance2 -  IRAs/Roth IRAs2

-  College Funding/ 529 Plans3

-  Pensions/401K3 -  Brokerage Services2

-  And much more.

Products offered through our alliances include:

2 Securities offered through World Group Securities, Inc. (WGS). WGS is not a licensed insurance entity. Insurance products are offered through World Financial Group Insurance Agency, Inc. (WFGIA) or its subsidiaries. In California such services are provided under the name World Financial Insurance Agency, Inc.

3 This product is offered through securities registered representatives. An investor should consider the investment objectives, risk, and charges and expenses associated with municipal fund securities before investing. More information about municipal fund securities is available in the issuer’s official statement.

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Providers & Products

WFG: Investment Reminder

•  Carefully consider all information before making any investment decisions.

•  Make sure to ask your WFG associate any questions you may have about the products and services being offered.

•  If necessary, consult with a tax or legal advisor.

•  Remember, with any investment there are risks involved.

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WFG: Built on Strength

  AEGON is an international life insurance, pension and investment company based in The Hague, The Netherlands.

  AEGON has businesses in over twenty markets in the Americas, Europe and Asia and AEGON companies employ approximately 27,500 people and have over 40 million customers across the globe.

The Baby Boomer Challenge Social Security -  Social Security’s outlays for bene!ts is projected to

regularly exceed tax revenues beginning in 2016.4

-  The median household income reported by Americans ages 65 and older in 2009 was only $19,157.5

-  66% of current workers have accumulated less than $50,000 in retirement savings, while 70% say they will continue to work for pay after they retire.6

4 “CBO’s Long-Term Projections for Social Security: Additional Information, Congressional Budget Office, October 2010. 5 Employee Bene!t Research Institute estimates of data from the Current Population Survey, March 2010 Supplement. 6 The 2010 Retirement Survey: Age Comparisons Among Workers, Employee Bene#t Research Institute, March 2010.

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The Senior Dilemma

•  Wealth Transfer -  Estimates indicate that between the years 1998

and 2052, there will be a minimum wealth transfer of $41 trillion.7

-  If something is not done now, a substantial amount of this money could be lost to taxation.

7 “Wealth Transfer and Philanthropy: An Interview with Paul G. Schervish, PH.D. and John J. Havens”, Investments and Wealth Monitor, June 2009.

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The Generation X & Y Factors

•  Retirement Savings -  56% of workers age 25-34 and 46% of workers

age 35-44 have less than $10,000 saved for retirement.8

8 The 2010 Retirement Survey: Age Comparisons Among Workers, Employee Bene#t Research Institute, March 2010.

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•  According to the US Federal Reserve, total consumer debt was down from 2008 but still amounted to more than $2.4 trillion in 2009.9

•  Nearly 30% of Americans have no savings outside retirement plans and only 24% are saving more than they did a year ago because of the current economic climate.10

9 U.S. Federal Reserve, April 7, 2010. 10 “National Financial Literacy Survey Reveals Silver Lining to Financial Crisis”, National Foundation for Credit Counseling, April 14, 2010.

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Debt & Savings

Consumer Challenges:

•  2010-2011 college year: The average cost - including room, board and fees - for a four-year public university was $16,140 and for a four-year private college it was $36,993.11

•  A married couple, both 45 years old, earn $100,000 a year and plan to retire in 20 years; with average in#ation of 4.5% over the next two decades, they will need more than $241,000 a year to equal their current $100,000 income.

•  Without proper planning, an unexpected death could cause your family serious !nancial concerns.

11 Trends in College Pricing, The College Board, 2011.. 14

College, Retirement and the Unexpected

Consumer Challenges:

Help Make Your Money Work

12 The WFG Financial Dream Map is a suitability and needs analysis that is based upon information obtained from sources believed to be complete and accurate. However, discuss any legal, tax or #nancial matter with the appropriate professional. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any speci#c security or #nancial service.

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When investing, there are certain risks, fees and charges, and limitations that one must take into consideration.

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Cash Flow

•  An important step on the path to !nancial independence is increasing the amount of money available to you.

•  The extra funds can help you reduce debt and, more importantly, build a nest egg.

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•  To achieve this: -  Manage expenses by:

•  Striving to spend less then you earn •  Creating a budget - weigh your wants versus your needs •  Raising deductibles to an appropriate level on insurance •  Looking for ways to reposition low-interest savings

accounts •  Dropping Private Mortgage Insurance when equity in

your home reaches 20% of the home’s value •  Canceling credit life insurance on auto loans, mortgages

and credit cards •  Exploring a quali!ed plan option •  Earning tax deductions by starting your own business

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Cash Flow

Cash Flow •  To achieve this:

-  Increase your available income by: •  Taking on a second career or part-time opportunity for

additional income

•  Consulting with your tax advisor about adjusting your W-2 allowances if you expect a tax refund

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•  The Principle of Building Equity -  This principle illustrates your need to protect you

and your family should you die too soon or live too long.

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Proper Protection

•  How much life insurance is enough? -  Factors to take into consideration to identify how

much insurance is enough include: •  Age •  Medical condition •  Number of dependents •  Income/Current !nancial status

-  A basic rule of thumb is to have life insurance to provide about 10 times your family income.

-  There are limitations to the protection that life insurance can offer, so please discuss these with your WFG associate.

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Proper Protection

•  One of the biggest problems facing consumers today is debt.

•  It’s important to create a strategy to eliminate or consolidate debt.

•  Pay off credit card/consumer debt.

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Debt Management

•  Credit Card Debt Facts & Figures -  Average American household credit card debt is

more than $16,000.13 -  At an 18% interest rate paying a 2.5% minimum

monthly payment of $112.50 on a beginning balance of $4,500, it will take someone more than 25 years to pay off the debt while paying more than $6,000 in interest.14

-  By paying slightly more - $145 per month - the debt could be paid in less than four years with approximately $1,600 in interest paid.14

13 U.S. Federal Reserve, February 2011, as reported on www.creditcards.com 14 “Credit Card Calculator: The True Cost of Paying the Minimum,” Bankrate.com. 22

Debt Management

Debt Management •  Strive to pay off credit card/high-interest loan

debt sooner rather than later.

•  Pay more than the minimum payment on credit cards/loans with high interest rates.

•  Once one of the high-interest credit cards/loans are paid, begin paying off the one with the next highest interest.

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•  Transfer credit card/loan balances to a card with a promotional, no-fee transfer rate with a lower interest rate.

•  For any account charging more than 14% in interest call the creditor to ask for a lower rate.

•  If you are a homeowner, investigate taking out a low-interest home equity loan to pay off your debt. The interest on equity loans is tax deductible.

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Debt Management

•  Consider re!nancing your mortgage

-  Consider the type of mortgage, the mortgage amount, re!nancing fees and how long you plan to live in the home.

-  Bottom line in deciding whether to re!nance: Determine how much time it will take to recoup expenses associated with re!nancing and how much you will save.

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Debt Management

Emergency Fund

•  Unexpected emergencies always seem to arise.

•  To ensure you are ready when these “life disasters” occur, it’s important to have an emergency savings fund.

•  WFG believes that the amount equal to three to six months’ expenses should be set aside.

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•  To provide security later in life, it’s important to have an asset accumulation plan in place designed to outpace in#ation and reduce taxation.

•  When building a program consider: -  How many years you may be living in retirement. -  How much it will cost to live comfortably during

those years.

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Asset Accumulation & Preservation

•  The Rule of 72 -  If you divide 72 by the interest rate being earned

on your savings/investment, you will obtain the number of years required for your initial investment to double.

15 The Rule of 72 is a mathematical concept that approximates the number of years it would take to double the principle at a constant rate of return. The performance of investments $uctuate over time, and as a result, the actual time it will take an investment to double in value cannot be predicted with any certainty. Additionally, there are no guarantees that any investment or savings program can outpace in$ation. Please note that high risk has been historically associated with higher rates of return.

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•  The Rule of 72

In the following chart, see how much can be earned over time with an initial investment of $10,000.

16 All #gures are for illustrative purposes only and do not re$ect an actual investment in any product. They do not re$ect the performance risks, expenses or charges associated with any actual investment. Past performance is not an indication of future performance. The Rule of 72 is a mathematical concept that approximates the number of years it would take to double the principle at a constant rate of return. The performance of investments $uctuate over time, and as a result, the actual time it will take an investment to double in value cannot be predicted with any certainty. Additionally, there are no guarantees that any investment or savings program can outpace in$ation. Please note that high risk has been historically associated with higher rates of return.

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•  The following chart is a historical view of different investment markets from 1926 to 2010. The chart illustrates how much $1 invested could have grown based on investment in stocks, bonds or treasury bills, and how that compares to the rate of in#ation.

•  Remember: There are certain risks when investing and past performance does not guarantee future returns.

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©2011 Morningstar, Inc. All rights reserved. Used with permission. Note: This chart does not re$ect past or future performance of any speci#c product (Data Jan.1,1926-Dec.31, 2010). This chart is for illustrative purposes only and is not indicative of any investment. The data assumes reinvestment of all income and does not account for taxes or transaction costs. The average return represents a compound annual return. Government bonds and Treasury bills are guaranteed by the full faith and credit of the United States government as to the timely payment of principal and interest. Bonds in a portfolio are typically intended to provide income and/or diversi#cation. U.S. government bonds may be exempt from state taxes and income is taxed as ordinary income in the year received. With government bonds, the investor is a creditor of the government. Stocks are not guaranteed and have been more volatile than the other asset classes. Large company stocks provide ownership in corporations that intend to provide growth and/or current income. Small company stocks provide ownership in corporations that intend to seek high levels of growth. Small stocks are more volatile than large stocks and are subject to signi#cant price $uctuations, business risks, and are thinly traded. Capital gains and dividends received may be taxed in the year received. Underlying data is from the Stocks, Bonds, Bills, and In$ation® (SBBI®) Yearbook, by Roger G. Ibbotson and Rex Sinque#eld updated annually. An investment cannot be made directly in an index. Past performance is no guarantee of future results. Source: In this example, small stocks are represented by the #fth capitalization quintile of stocks on the New York Stock Exchange (NYSE) for 1926-1981 and the performance of the Dimensional Fund Advisors, Inc. (DFA) U.S. Micro Cap Portfolio thereafter; large stocks are represented by the Standard & Poor’s (S&P) 500®, which is an unmanaged group of securities and considered to be representative of the stock market in general; government bonds are represented by the 20-year U.S. government bond, Treasury bills by the 30-day U.S. Treasury bill and in$ation by the Consumer Price Index.

Stocks, Bonds, Bills, and In#ation 1926-2010

•  Besides procrastination, an enemy to building and maintaining savings is taxation.

•  Harness the power of tax advantages.

-  The following chart shows how much someone in the 35% tax bracket (combined federal and state) would have to set aside each month to accumulate $1 million in 30 years in taxable versus non-taxable scenarios.

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17 Assumes 35% tax bracket. The rates of return chosen are for illustrative purposes only, does not re$ect the actual investment in any product and should not be viewed as an indication of performance for any particular investment. They do not re$ect the performance risks, expenses or charges associated with any actual investment.

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•  The High Cost of Waiting -  Time can be the worst enemy or the greatest ally. -  The key to building an asset accumulation program

is to begin saving now. -  Following is an example of monthly retirement

savings required to achieve a $1 million retirement goal with an interest rate of 8%, tax deferred.

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•  Example of Monthly Retirement Savings18

18 All #gures are for illustrative purposes only and do not re$ect an actual investment in any product. They do not re$ect the performance risks, expenses or charges associated with any actual investment. Past performance is not an indication of future performance. 35

Put Time On Your Side. Get Started Now.


•  Don’t let a lifetime of successful savings be devoured by taxes, lawyers and unintended heirs. A proper estate plan can take care of your family during your life and after your death.

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•  A pitfall of not having an adequate estate plan.19

19 Strategic estate planning may include the proper use of: life insurance, wills, trusts, gifts, charitable donations, appropriate ownership of property, implementation of buy-sell agreements and should include consultation with an attorney knowledgeable in estate planning. Not all of these strategic-planning tools are offered by or through WFG or WGS. Tax/legal advice not offered by or through WGS, WFG or any affiliated companies. Please consult with your representative for services he/she can offer.

20 Under current 2009 U.S. tax law. Due to legislative activity announced in Spring 2001, estate tax rates are being reduced toward complete repeal by 2011. Tax and/or legal advice not offered by WFG, WGS or their affiliated companies. Please consult with your personal tax professional for additional guidance regarding the estate tax and other tax matters.

21 “Skipping Out on Probate Costs,” Steven Merkel, CFP, ChFC, Dec. 13, 2004, Investopedia.com 37

Your Life Insurance • Your Business Your Home • Your Pension

Your Personal Assets & Real Estate


Making Your Money

•  What are your next steps? -  Share information today to begin your

WFG Financial Dream Map. -  Set a follow-up appointment

to review the results of your personalized analysis.

-  Implement your personalized WFG Financial Dream Map.

-  Put your WFG associate in your referral network of trusted professionals.

Work For You

World Financial Group, Inc. (WFG) is a #nancial services marketing company whose affiliates offer life insurance and a broad array of #nancial products and services. Securities are offered through World Group Securities, Inc. (WGS), Member FINRA/SIPC. Insurance products are offered through World Financial Group Insurance Agency, Inc. (WFGIA) or its subsidiaries. In California such services are provided under the name World Financial Insurance Agency, Inc. WFG, WGS, WFGIA are affiliated companies. Headquarters: 11315 Johns Creek Parkway, Johns Creek, GA 30097-1517, PO Box 100035, Johns Creek, GA 30096-9403. Phone: 770.453.9300. WorldFinancialGroup.com ©2011 World Financial Group, Inc. 0455M/5.11

Economy & Finance

Money Matters