1. PERSONAL INVESTING OPTIONS Team Members: Mauricio Coto - Organizer Michael Thompson - Summarizer Saurabh Desai - Techie Farouq Mahadin - Techie

2. PERSONAL INVESTING OPTIONS ROTH IRA ROTH IRA ANNUITIES ANNUITIES 401K 401K

3. ROTH IRA Individual Retirement Account Individual Retirement Account Uses after-tax contributions Uses after-tax contributions Grows tax free Grows tax free $3,000 limit in 2003 $3,000 limit in 2003

4. Annuities Insurance agrees to make periodic payments after the person retires Insurance agrees to make periodic payments after the person retires Uses after-tax contributions Uses after-tax contributions Tax deferred until withdrawal Tax deferred until withdrawal Taxes paid on benefits only Taxes paid on benefits only Unlimited Contributions Unlimited Contributions

5. 401K Retirement savings plan funded by employee contributions Retirement savings plan funded by employee contributions Often employee matched Often employee matched Tax deductible Tax deductible Tax deferred until withdrawal Tax deferred until withdrawal $13,000 limit in 2003 $13,000 limit in 2003

6. CHOICES Roth IRAAnnuities401K Tax Deductible  Tax Deferred  Taxed at Withdrawal  What is Taxed$0Profit onlyWhole sum Contribution Limits $3000Unlimited$13,000

7. GOAL What is the Best Choice? What is the Best Choice? Taxes NOW or taxes LATER? Taxes NOW or taxes LATER?

8. Study Case 25 yr. Old single male 25 yr. Old single male 35 years till retirement (retire at 60) 35 years till retirement (retire at 60) 54K beginning salary + 2% per year 54K beginning salary + 2% per year Marries at 30 Marries at 30 ROR decreases closer to retirement ROR decreases closer to retirement 3% Inflation 3% Inflation

9. TAXES NOW OR TAXES LATER VS.

10. CALCULATION END RESULTS

11. INVESTMENT & TAXATION

12. SENSITIVITY ANALYSIS

13. INCREMENTAL INVESTMENT

14. CONSTANT INVESTMENTS

15. NUMBER OF YEARS INVESTING (1)

16. NUMBER OF YEARS INVESTING (2)

17. VARYING AGI

18. CONSTANT ROR

19. OVERALL TAXES PAID

20. VARIABLE ROR

21. OVERALL TAXES PAID (VARIABLE ROR)

22. WHERE TO INVEST??? ROTH IRA ANNUITIES 401K

23. QUESTIONS ???