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106748NLB 10/04/10 Winning in the Second Half. Setting a goal is not the main thing. It is deciding how you will go about achieving it and staying with.

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Presentation on theme: "106748NLB 10/04/10 Winning in the Second Half. Setting a goal is not the main thing. It is deciding how you will go about achieving it and staying with."— Presentation transcript:

1 106748NLB 10/04/10 Winning in the Second Half

2 Setting a goal is not the main thing. It is deciding how you will go about achieving it and staying with that plan. – TOM LANDRY Dallas Cowboys coach, 1960–1988 [ 1.1 ]

3 106748NLB 10/04/10 [ 2 ]

4 Primary Concerns Source: AgeWave/Harris Interactive Survey, 2010 [ 2.1 ] When you think about your financial security during retirement, which of the following are you most worried about? How will I handle unexpected medical expenses? Will I have enough income to sustain my lifestyle in the future?

5 People are living longer Average life expectancies continue to improve Source: Population Reference Bureau, 2009 World Population Data Sheet, [ 2.2 ] years Years

6 What are my chances of living a long life? Source: Genworth Financial data for healthy individuals, assuming 80% of A2000 Basic ANB mortality.

7 106748NLB 10/04/10 [ 4 ]

8 Extended healthcare is a reality 1 Source: U.S. Department of Health and Human Services National Clearinghouse for Long Term Care Information website, May Source: Genworth Financial Claims Data, December Source: National Institute on Aging, National Institute of Health, 2/ years 2 Average length of majority of long term care claims 4-7 years 3 Average life expectancy after Alzheimer's diagnosis after age people 1 out of People over 65 who will require long term care [ 4.1 ]

9 Extended healthcare is expensive today… In-home care: Source: Genworth 2010 Cost of Care Survey, conducted by CareScout ®, April Based on national median costs $43,472 $38,220 $75,190 Assisted living: Nursing home: Cost of care for one year in the United States [ 4.2 ] (44 hours/week) (private room)

10 $90,375 $79,457 $156,315 Future cost of care for one year in the United States*...and even more expensive 15 years from now [ 4.3 ] In-home care: Assisted living: Nursing home: (44 hours/week) $43,472 $38,220 $75,190 Source: Genworth 2010 Cost of Care Survey, conducted by CareScout ®, April Based on national median costs. * Estimates how much care might cost based on 5% annual inflation. (private room)

11 Extended healthcare is expensive today… [ 4.2 ]

12 Your options Avoid Risk 2 3 people out of People over 65 who will require long term care [ 4.4 ] AVOID ASSUMETRANSFER

13 Your options Property Managed Money Money Market Stocks Bonds Assume Risk [ 4.5 ] AVOID ASSUMETRANSFER

14 Can your portfolio sustain unexpected expenses? [ 4.6 ] AVOID ASSUMETRANSFER Assumptions: - $2M portfolio at beginning of retirement - $100,000 (5%) withdrawn annually, increased by 3% annually for inflation - Poor market performance early in retirement - Market performance shown is reverse order of S&P 500 returns from This graph is hypothetical for illustrative purposes only and does not represent past or future performance of any investment. This example does not include investment expenses or taxes on money received, which would reduce the amount of money received each year. Withdrawals may be subject to taxes and/or penalty fees imposed by certain investments. [ 4.6 ] Retirement account value Retire with a $2 million portfolio After 30 years, you have $1.9 million $3,000,000 $2,000,000 $1,000,000 $ $2M retirement account, with hypothetical market performance over a 30 year span, $100k withdrawn annually Market provides average 5% annual returns over a 30 year period except for years 4 through 7, when returns fell to 2%

15 $3,000,000 $2,000,000 $1,000,000 $ Retire with a $2 million portfolio Can your portfolio sustain unexpected expenses? [ 4.7 ] AVOID ASSUMETRANSFER Assumptions: - $2M portfolio at beginning of retirement - $100,000 (5%) withdrawn annually, increased by 3% annually for inflation - Poor market performance early in retirement - Market performance shown is reverse order of S&P 500 returns from This graph is hypothetical for illustrative purposes only and does not represent past or future performance of any investment. This example does not include investment expenses or taxes on money received, which would reduce the amount of money received each year. Withdrawals may be subject to taxes and/or penalty fees imposed by certain investments. $2M retirement account, with hypothetical market performance over a 30 year span, $100k withdrawn annually Year 1: 44 hours/week of home care $90,375 Year 2: 88 hours/week of home care $189,788 Year 3: 24-hour/day home care $380,438 Year 4: Private room in nursing home: $180,954 For a total cost of $841,000 Major illness in Year 15 requires 4 years of extended care Retirement account is unable to recover from extended care costs and is depleted

16 Your options Traditional Long Term Care Insurance A percentage of your portfolio can pay premium Business owners can deduct premiums Transfer Risk [ 4.8 ] AVOID ASSUMETRANSFER

17 Planning now can help you win in the second half Whats your written strategy? How will the costs of extended care impact your portfolio and your family? Have the conversation 1 2 [ 4.9 ]

18 Talk with your financial professional about strategies for long term care [ 5.10 ]

19 Insurance underwritten by Genworth Life Insurance Company, and in New York, Genworth Life Insurance Company of New York. Administrative offices: Richmond VA Genworth Financial, its affiliates and representatives, do not provide tax advice. You should consult a legal and/or tax professional for information relating to your particular situation Genworth, Genworth Financial and the Genworth logo are registered service marks of Genworth Financial Inc. All guarantees are based on the claims-paying ability of the issuing insurance company. © 2010 Genworth Financial, Inc. All rights reserved


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