1. LBL7172 (ADS177) @2006 Allstate Insurance Company 1 Financial Focus Accessing Your Retirement Money Not FDIC, NCUA/NCUSIF insured * Not a deposit * No bank or credit union guarantee * Not insured by any federal government agency * May lose value

2. LBL7172 (ADS177) @2006 Allstate Insurance Company 2 Today’s Agenda The challenges of retirement today Accessing and gaining control over your retirement money Investment alternatives What you can do

3. LBL7172 (ADS177) @2006 Allstate Insurance Company 3 In the early 1900’s most Americans died by age 47. Today, life expectancy at birth is 77* *Explaining Long Term Care, Ric Edelman, Investment Advisor, January 2004. P. 94

4. LBL7172 (ADS177) @2006 Allstate Insurance Company 4 The Good News You can look forward to the longest and healthiest retirement in history.

5. LBL7172 (ADS177) @2006 Allstate Insurance Company 5 The Bad News You can look forward to the longest, healthiest and most costly retirement in history.

6. LBL7172 (ADS177) @2006 Allstate Insurance Company 6 How Long Will Your Money Last Calculations assume the growth rate is applied before any withdrawals are made. Withdrawals are a fixed percent of original investment capital. This chart is an educational tool and is not intended to predict future performance of any investment. Investors must be willing to assume a higher degree of risk in exchange for seeking a higher rate of return. Taxes are not included. Consult your investment counselor for information pertinent to your particular financial circumstances.

7. LBL7172 (ADS177) @2006 Allstate Insurance Company 7 Common Concerns Inflation $8,800 would have bought you a top-of-the-line Cadillac in 1970 Today, $8,800 would not even buy you the lowest priced car And a top-of-the-line Cadillac...well that’s going for about $50,000 – a 468% Increase.* *The Week. July 23, 2004, p. 33

8. LBL7172 (ADS177) @2006 Allstate Insurance Company 8 Managing Risk Diversification: Spreads risk among many different securities Asset Allocation: Spreads risk among many different types of investments Does not assure a profit or protect against loss in a declining market. Common Concerns

9. LBL7172 (ADS177) @2006 Allstate Insurance Company 9 Accessing Your Retirement Money Choice Control Flexibility

10. LBL7172 (ADS177) @2006 Allstate Insurance Company 10 Accessing Your Retirement Money Retirement Plans That Offer A Way Out Look in the “summary plan description” for the words “in-service, nonhardship withdrawals”

11. LBL7172 (ADS177) @2006 Allstate Insurance Company 11 Accessing Your Retirement Money Lump Sum Distribution Check 1.Cash it = Big Penalties and access to $ Or 2.Roll into IRA = No Penalties and no access to $ Or 3.?

12. LBL7172 (ADS177) @2006 Allstate Insurance Company 12 Accessing Your Retirement Money 72(t) Distributions “What is a 72(t) distribution?”

13. LBL7172 (ADS177) @2006 Allstate Insurance Company 13 Accessing Your Retirement Money Avoiding Penalties Save 10%

14. LBL7172 (ADS177) @2006 Allstate Insurance Company 14 Accessing Your Retirement Money 72(t) Distribution Strategy - SEPP Money taken out in “substantially equal periodic payments” or SEPP No minimum age requirement IRS does not require any reason for withdrawals Payments must continue for five years or until age 59 1/2 - whichever is longer Payments generally cannot change during the five year period (or age 59 1/2, if later) - unless the change relates to the annual recalculation of the RMD method or due to switching from the amortization or annuity method to the RMD method. If the payment schedule is changed and no exceptions apply, a 10% penalty plus interest will be applied to all payments taken

15. LBL7172 (ADS177) @2006 Allstate Insurance Company 15 Accessing Your Retirement Money 72(t) Distribution Strategy - SEPP Generate Cash Flow

16. LBL7172 (ADS177) @2006 Allstate Insurance Company 16 Accessing Your Retirement Money 72(t) Distribution Strategy Generate Cash Flow No RolloverDirect IRA Rollover Amount of Distribution$300,000$300,000 Federal Taxes at 35%(105,000)$0 10% premature distribution penalty(30,000)$0 Amount available for Investment$165,000$300,000

17. LBL7172 (ADS177) @2006 Allstate Insurance Company 17 Accessing Your Retirement Money The SEPP Solution Maintain FlexibilityMaximize Growth IRA # 1IRA # 2 $150,000$150,000 SEPP distributionsInvest for retirement Income-generatingGrowth-oriented Investmentsinvestments

18. LBL7172 (ADS177) @2006 Allstate Insurance Company 18 Need more cash Initiate SEPP distributions from IRA # 2 Or Found a new job! No longer need the cash Divert distributions to another retirement investment vehicle such as an annuity Accessing Your Retirement Money

19. LBL7172 (ADS177) @2006 Allstate Insurance Company 19 Eligibility for SEPP If you have an IRA you are eligible If you have a qualified plan or 403(b) you generally must wait until you leave your employer Accessing Your Retirement Money

20. LBL7172 (ADS177) @2006 Allstate Insurance Company 20 How are penalty-free distributions calculated using SEPP? Required Minimum Distributions Amortization Annuitization or Mortality Accessing Your Retirement Money

21. LBL7172 (ADS177) @2006 Allstate Insurance Company 21 How are penalty-free distributions calculated? Required Minimum Distribution Accessing Your Retirement Money

22. LBL7172 (ADS177) @2006 Allstate Insurance Company 22 How are penalty-free distributions calculated? Required Minimum Distribution Amortization Accessing Your Retirement Money

23. LBL7172 (ADS177) @2006 Allstate Insurance Company 23 How are penalty-free distributions calculated? Required Minimum Distribution Amortization Annuitization Accessing Your Retirement Money

24. LBL7172 (ADS177) @2006 Allstate Insurance Company 24 72(t) Distribution - SEPP Customize a plan to take out the money you need while keeping the balance invested on a tax-deferred basis Accessing Your Retirement Money

25. LBL7172 (ADS177) @2006 Allstate Insurance Company 25 Beneficiary IRAs Prolong the tax benefits of a traditional IRA across multiple generations Accessing Your Retirement Money

26. LBL7172 (ADS177) @2006 Allstate Insurance Company 26 What are the benefits of a beneficiary IRA? Provides tax-efficient wealth transfer Accessing Your Retirement Money

27. LBL7172 (ADS177) @2006 Allstate Insurance Company 27 What are the benefits of a beneficiary IRA? Provides income tax-efficient wealth transfer Helps you maintain control over your IRA Accessing Your Retirement Money

28. LBL7172 (ADS177) @2006 Allstate Insurance Company 28 Investment Alternatives Have contributed to: Your 401(k) or company retirement programs? or IRAs What’s Next?

29. LBL7172 (ADS177) @2006 Allstate Insurance Company 29 Annuities have two stages in their life cycle Accumulation stage: money is fully invested and earnings potentially grow and accumulate on a tax- deferred basis Accessing Your Retirement Money

30. LBL7172 (ADS177) @2006 Allstate Insurance Company 30 Annuitization The investment is converted into payments determined by account value, life expectancy and selected plan payment A portion of each payment will be considered taxable and the remaining portion will be a non-taxable return of your investment in the contract, which is also called the “basis”. Once the investment in the contract is depleted, all remaining payments will be fully taxable. If the contract is tax-qualified, generally, all payments will be fully taxable. Payments taken prior to age 59 1/2, may be subject to an additional 10% federal tax penalty. Accessing Your Retirement Money

31. LBL7172 (ADS177) @2006 Allstate Insurance Company 31 Annuitization payment-plan options Life Joint Survivor Period Certain Period Certain with Life Accessing Your Retirement Money

32. LBL7172 (ADS177) @2006 Allstate Insurance Company 32 Investment Alternatives Fixed Annuities Earn a fixed interest-rate return Principal guaranteed by issuing insurance company Based on the claims-paying ability of the issuing insurance company. Tax-deferred growth of earnings Additional fees may apply

33. LBL7172 (ADS177) @2006 Allstate Insurance Company 33 Investment Alternatives Fixed Annuities Surrender charges and tax penalties for early withdrawal may apply Distributions taken prior to annuitization are generally considered to come from the gain in the contract first. If the contract is tax-qualified, generally all withdrawals are treated as distributions of gain. Withdrawals of gain are taxed as ordinary income and, if taken prior to age 59 1/2, may be subject to an additional 10% federal tax penalty.

34. LBL7172 (ADS177) @2006 Allstate Insurance Company 34 Investment Alternatives Variable Annuities Earn variable rates of return Variable investment options May offer additional inflation protection Growth potential Guarantee features vary – Additional cost may apply. Guarantees are based on the claims-paying ability of the issuing insurance company.

35. LBL7172 (ADS177) @2006 Allstate Insurance Company 35 Investment Alternatives Variable Annuities Tax-deferred growth of earnings Additional fees may apply Surrender charges and tax penalties for early withdrawal may apply Distributions taken prior to annuitization are generally considered to come from the gain in the contract first. If the contract is tax-qualified, generally all withdrawals are treated as distributions of gain. Withdrawals of gain are taxed as ordinary income and, if taken prior to age 59 1/2, may be subject to an additional 10% federal tax penalty.

36. LBL7172 (ADS177) @2006 Allstate Insurance Company 36 Investment Alternatives Variable Annuities Variable annuities are long-term investments designed for retirement purposes. You should carefully consider the investment objectives, risks, charges and expenses of the investment alternatives before purchasing a contract or investing money. These contracts have limitations and are sold by prospectus only. The prospectus contains details on the investment alternatives, contract features, the underlying portfolios, fees, charges, expenses and other pertinent information. Please read the prospectuses carefully before purchasing a contract or sending money.

37. LBL7172 (ADS177) @2006 Allstate Insurance Company 37 Investment Alternatives Guarantees What are my back-up choices? Guarantees are based on the claims-paying ability of the issuing insurance company. Additional fees may apply. Allstate Advisor variable annuities are flexible-premium deferred annuities issued by Allstate Life Insurance Company; underwritten by Allstate Distributors, L.L.C., both of Northbrook, IL.

38. LBL7172 (ADS177) @2006 Allstate Insurance Company 38 Summing Up The Options In-service, nonhardship withdrawals 72(t) distribution - SEPP Beneficiary IRAs Annuitization

39. LBL7172 (ADS177) @2006 Allstate Insurance Company 39 Your Retirement Strategy Checklist How a Financial Professional can help you:  Prepare for the financial challenges in retirement.  Organize and actively manage my 401(k)s, IRAs and other retirement assets.  Determine what options are best for meeting my retirement goals. X X X

40. LBL7172 (ADS177) @2006 Allstate Insurance Company 40 Your Next Steps Meet with your Financial Advisor because...

41. LBL7172 (ADS177) @2006 Allstate Insurance Company 41...YOUR FUTURE IS TOO VALUABLE TO RISK! Thank you for attending