Presentation is loading. Please wait.

Presentation is loading. Please wait.

Location – Date www.ing.com Staying the Course: Reacting to the current financial climate Insurance products, annuities, and retirement plan funding issued.

Similar presentations


Presentation on theme: "Location – Date www.ing.com Staying the Course: Reacting to the current financial climate Insurance products, annuities, and retirement plan funding issued."— Presentation transcript:

1 Location – Date Staying the Course: Reacting to the current financial climate Insurance products, annuities, and retirement plan funding issued by (third party administrative services may also be provided by) ING Life Insurance and Annuity Company (Windsor, CT). Securities are distributed by ING Financial Advisers, LLC (member SIPC), Windsor, CT or through other broker-dealers with which it has selling agreements. Annuities may also be issued by ReliaStar Life Insurance Company (Minneapolis, MN) and ReliaStar Life Insurance Company of New York (Woodbury, NY). Variable annuities issued by ReliaStar Life Insurance Company are distributed by ING Financial Advisers, LLC. Variable annuities issued by ING USA Annuity and Life Insurance Company and ReliaStar Life Insurance Company of New York are distributed by Directed Services, LLC. Only ING Life Insurance Annuity Company and ReliaStar Life Insurance Company of New York are admitted and issue products in the state of New York. All companies are members of the ING family of companies. © 2008 ING North America Insurance Corporation. ELC.M.P.MS.904 C R (10/08) Not FDIC Insured \ Not NCUA/NCUSIF insured \ May Lose Value \ No Bank Guarantee \ No Credit Union Guarantee

2 Location – Date Staying the Course: Reacting to the current financial climate Insurance products, annuities, and retirement plan funding issued by (third party administrative services may also be provided by) ING Life Insurance and Annuity Company (Windsor, CT). Securities are distributed by ING Financial Advisers, LLC (member SIPC), Windsor, CT or through other broker-dealers with which it has selling agreements. Annuities may also be issued by ING USA Annuity and Life Insurance Company (Des Moines, IA). Variable annuities issued by ING USA Annuity and Life Insurance Company and are distributed by Directed Services, LLC. All companies are members of the ING family of companies. © 2008 ING North America Insurance Corporation. ELC.M.P.MS.904 C R (10/08) Not FDIC Insured \ Not NCUA/NCUSIF insured \ May Lose Value \ No Bank Guarantee \ No Credit Union Guarantee

3 Location – Date Staying the Course: Reacting to the current financial climate Securities and [financial planning] offered through ING Financial Advisers, LLC (member SIPC), One Orange Way, Windsor, CT, © 2008 ING North America Insurance Corporation. ELC.M.P.MS.904 C R (10/08) Not FDIC Insured \ Not NCUA/NCUSIF insured \ May Lose Value \ No Bank Guarantee \ No Credit Union Guarantee

4 Location – Date Staying the Course: Reacting to the current financial climate Recordkeeping and Plan administrative services provided by ING Institutional Plan Services, LLC © 2008 ING North America Insurance Corporation. ELC.M.P.MS.904 C R (10/08) Not FDIC Insured \ Not NCUA/NCUSIF insured \ May Lose Value \ No Bank Guarantee \ No Credit Union Guarantee

5 Location – Date Staying the Course: Reacting to the current financial climate Framewor(k) and (k)Choice Recordkeeping and Plan administrative services provided by ING Institutional Plan Services, LLC Mutual funds offered through ING Financial Advisers, LLC (member SIPC)© 2008 ING North America Insurance Corporation. ELC.M.P.MS.904 C R (10/08) Not FDIC Insured \ Not NCUA/NCUSIF insured \ May Lose Value \ No Bank Guarantee \ No Credit Union Guarantee

6 Important Information Variable annuities, group annuities, or funding agreements are long-term investments designed for retirement purposes. If withdrawals are taken prior to age 59½, an IRS 10% premature distribution penalty tax may apply. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you. Variable investments, of any kind, are not guaranteed and are subject to investment risk including the possible loss of principal. The investment return and principal value of the security will fluctuate so that when redeemed, it may be worth more or less than the original investment. In addition, there is no guarantee that any variable investment option will meet its stated objective. For 403(b)(1) annuities, the Internal Revenue Code (IRC) generally prohibits withdrawals of 403(b) salary reduction contributions and earnings on such contributions prior to death, disability, age 59½, severance of employment, or financial hardship. Amounts held in a 403(b)(1) annuity as of 12/31/1988 are grandfathered and are not subject to these restrictions. For 403(b)(7) custodial accounts, the IRC generally prohibits withdrawals of any contributions and attributable earnings prior to death, disability, age 59½, severance of employment, or financial hardship. For both 403(b)(1) annuities and 403(b)(7) custodial accounts, the amount available for hardship is limited to the lesser of the amount necessary to relieve the hardship, or the account value as of 12/31/1988, plus the amount of any salary reduction contributions made after 12/31/1988 (exclusive of any earnings). You should consider the investment objectives, risks, and charges and expenses of the investment options carefully before investing. Fund prospectuses contain this and other information and can be obtained by contacting your local ING representative. Please read carefully before investing.

7 Important Information Variable annuities, group annuities, or funding agreements are long-term investments designed for retirement purposes. If withdrawals are taken prior to age 59½, an IRS 10% premature distribution penalty tax may apply. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you. Variable investments, of any kind, are not guaranteed and are subject to investment risk including the possible loss of principal. The investment return and principal value of the security will fluctuate so that when redeemed, it may be worth more or less than the original investment. In addition, there is no guarantee that any variable investment option will meet its stated objective. For 403(b)(1) annuities, the Internal Revenue Code (IRC) generally prohibits withdrawals of 403(b) salary reduction contributions and earnings on such contributions prior to death, disability, age 59½, severance of employment, or financial hardship. Amounts held in a 403(b)(1) annuity as of 12/31/1988 are grandfathered and are not subject to these restrictions. For 403(b)(7) custodial accounts, the IRC generally prohibits withdrawals of any contributions and attributable earnings prior to death, disability, age 59½, severance of employment, or financial hardship. For both 403(b)(1) annuities and 403(b)(7) custodial accounts, the amount available for hardship is limited to the lesser of the amount necessary to relieve the hardship, or the account value as of 12/31/1988, plus the amount of any salary reduction contributions made after 12/31/1988 (exclusive of any earnings). All guarantees are based on the financial strength and claims-paying ability of the issuing insurance company, who is solely responsible for all obligations under its policies. You should consider the investment objectives, risks and charges, and expenses of the variable annuity and its underlying investment options carefully before investing. The prospectuses for the variable annuity and underlying investment options contain this and other information. You may obtain free prospectuses by calling your financial professional or Please read the prospectuses carefully before investing.

8 Important Information You should consider the investment objectives, risks, and charges and expenses of the investment options carefully before investing. Fund prospectuses contain this and other information and can be obtained by contacting your local ING representative. Please read carefully before investing.

9 What Well Cover Financial Rollercoaster Financial Rollercoaster Whats happening? Tips for Staying focused Tips for Staying focused Dollar-Cost Averaging Asset Allocation Diversification Where Do I Go From Here? Top Retirement Bloopers Top Retirement Bloopers Dont make these mistakes!

10 Financial Roller Coaster Is this cause for concern? A realization that market volatility is a way of life? Most likely, a bit of both. Recent volatility of the stock market:

11 How Did We Get Here? Where within your portfolio did you incur the losses? Was your account properly diversified? Were you focusing on certain asset classes and overlooking others? Were your stock holdings broadly diversified by: Size (small-, mid and large-cap stocks) Style (value and growth) Sector (retail, energy, utilities, etc.) Gaining insight into whats going on in the marketplace. Questions to ponder...

12 Have a destination; set your goal Specify your time frame Prioritize objectives Make periodic direction checks 4 Staying Focused

13 The ups and downs of the market cycle This chart depicts a rising and falling market period. There are risks in buying high and selling low. Those who only try to invest at the perfect time can never truly predict the way things will go.

14 Investing Through Dollar Cost Averaging Share Price $5 $8 $6 $ January $ March $ April $ May $ June $ February $ Month: Investment: Shares: Total Investment: $600 Total Shares Purchased: 88.2 Average Cost per Share: $6.80 Average Market Price per Share: $7.16 (From previous example) Dollar cost averaging/Systematic Investment plan does not ensure a profit nor guarantee against loss. Investors should consider their financial ability to continue their purchases through periods of low price levels. The hypothetical investment results are for illustrative purposes only and should not be deemed a representation of past or future results. This example does not represent any specific product, nor does it reflect sales charges or other expenses that may be required for some investments.

15 Making a One-time Investment $10 $6 Share Price 5 10 January $ March $0 0 April $0 0 May $0 0 June $0 0 February $0 0 Month: Investment: Shares: Total Investment: $600 Total Shares Purchased: 60 Average Cost per Share: $10.00 Average Market Price per Share: $7.16 (From previous example) Dollar cost averaging/Systematic Investment plan does not ensure a profit nor guarantee against loss. Investors should consider their financial ability to continue their purchases through periods of low price levels. The hypothetical investment results are for illustrative purposes only and should not be deemed a representation of past or future results. This example does not represent any specific product, nor does it reflect sales charges or other expenses that may be required for some investments. A lump sum investment fluctuates with market conditions and does not ensure future returns.

16 What a Difference a Year Can Make! Timing of Returns Can Be More Important than Average Returns Ed, who retired at the end of 1972 immediately faced two years of heavy market declines, which were compounded by his annual withdrawals of an inflation adjusted amount of $12,500 per year or 5% of his original $250k portfolio. As a result, it took only 17 years – until 1989 – for Ed to deplete his portfolio. Dan, who retired one year later, at the end of 1973, and maintained the same investment and annual withdrawal plan as Ed, had a completely different experience. Although he was spared the stock markets 1973 decline, he otherwise experienced the same conditions as Ed. As insignificant as this one year may seem, it made all the difference to these hypothetical retirees. Unlike Ed, Dan has watched his portfolio grow. This illustration is used with permission from Van Kampen. Stocks are represented by the Standard and Poors 500© Index (S&P 500). The Standard and Poors 500© Index (S&P 500) is a broad-based index, the performance of which is based on the performance of 500 widely-held common stocks chosen for market size, liquidity, and industry group representation. The index does not include product expenses, fees or sales charges, which would lower performance. The index is unmanaged and should not be considered an investment. It is not possible to invest directly in an index. Withdrawals are adjusted for inflation so that the current real value of the money withdrawn each year is $12,500. Withdrawals are made at the beginning of each year and are hypothetical examples. All results are shown gross of taxes on capital gains and ordinary income. If taxes were included, returns would be lower. This illustration is not intended to predict the performance of any specific investment. Past performance does not guarantee future results.

17 Smart Investors Know How Much Risk Theyre Willing to Take. Lower Risk Higher Potential Reward MODERATE The lower the risk potential, the less long-term reward potential CONSERVATIVE The higher the risk potential, the higher long-term reward potential AGGRESSIVE Higher Using diversification as part of an investment strategy neither assures nor guarantees better performance and cannot protect against loss in declining markets.

18 Smart Investors Know How Much Risk Theyre Willing to Take.

19 Relative Return/Risk Continuum for Sample Asset Classes Potential risk/reward balance of asset classes Global/International Small/Mid/Specialty Large Cap Growth Large Cap Value Stability of Principal Bonds Balanced Lower RISK Higher POTENTIAL REWARD Higher Using diversification as part of an investment strategy neither assures nor guarantees better performance and cannot protect against loss in declining markets.

20 Relative Return/Risk Continuum for Sample Asset Classes Bond Risk Comparison Disclosure The value of debt securities may fall when interest rates rise. Debt securities with longer maturities tend to be more sensitive to changes in interest rates, usually making them more volatile than debt securities with shorter maturities. For all bonds there is a risk that the issuer will default. High-yield bonds generally are more susceptible to the risk of default than higher rated bonds. Government Bonds (Generally 10 to 30 years in duration) Long term Government Bonds are measured using a one-bond portfolio with a maturity near 20 years. They are guaranteed by the U. S. Government and, if held to maturity, offer a fixed rate of return and fixed principal value. Growth Growth-oriented stocks typically sell at relatively high valuations as compared to other types of stocks. Historically, growth- oriented stocks have been more volatile than value-oriented stocks. High Yield Investments in high yield bonds are high risk investments. High yielding fixed-income securities generally are subject to greater market fluctuations and risk of loss of income and principal than are investments in lower yielding fixed-income securities. International International investing involves special risks such as currency fluctuation, lower liquidity, political and economic uncertainties, and differences in accounting standards. [Risks of foreign investing are generally intensified for investments in emerging markets.] Mid Sized Company Stocks In exchange for higher growth potential, investing in stocks of small- and mid-sized companies may entail greater price volatility and less liquidity than investing in stocks of larger companies. Mid-Cap Securities of mid-sized companies may be more susceptible to price swings and are less liquid than investments in larger companies. Using diversification/asset allocation as part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss in declining markets.

21 Relative Return/Risk Continuum for Sample Asset Classes

22 Diversify Between Asset Classes An asset class is a category of funds with similar investment objectives and risk profiles. Asset class diversification attempts to reduce risk and/ or improve overall return. Over time, the variance of returns within an investors portfolio primarily depend on the invested asset classes vs. individual fund selection Source: A landmark study, Determinants of Portfolio Performance, by Brinson, Hood and Beebower, presented in Financial Analysts Journal (May –June, 1992), and its update in 1996, showed that asset allocation decisions, far more than any other factor, affected the long-term performance of an investment portfolio.

23 Asset Class Winners and Losers Historical Performance HIGHEST RETURN LOWEST RETURN Large Stocks Large Stocks Large Stocks Large Stocks Large Stocks Large Stocks Small Stocks Small Stocks Small Stocks Small Stocks Small Stocks Small Stocks Intl Stocks Intl Stocks Intl Stocks Intl Stocks Intl Stocks Intl Stocks LT Govt Bonds LT Govt Bonds LT Govt Bonds LT Govt Bonds LT Govt Bonds LT Govt Bonds Large Stocks 30 Day T-Bills 30 Day T-Bills 30 Day T-Bills 30 Day T-Bills LT Govt Bonds Small Stocks Source: Thomson Financial Company These unmanaged indexes are not intended to represent specific mutual funds. Investors cannot invest directly in an index. Individual results may vary to management fees, transaction costs and taxes. Performance figures do not take into account the fees and expenses of investing in mutual funds or variable products. Past performance is no guarantee of future results.

24 Potential Benefits to Diversification

25 Charting the Growth of $1 Source: Commodity Systems, Inc. (CSI) via Yahoo Finance, September This chart is for illustration purposes only and represents a hypothetical investment in the S&P 500 Index. This illustration only includes market growth and does not take inflation into account. Such an illustration does not represent the performance of any ING Product. Index performance assumes reinvestment of all income. The S&P 500 is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance on the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. An investor cannot directly invest in an index. However, this index accurately reflects the historical performance of the represented assets. Investing involves risks of fluctuating prices and the uncertainties of rates of return and yield inherent in investment. Current performance may be lower or higher than the performance data shown.

26 Staying Focused Avoid stops & starts: Dont lose sight of your long-term objectives: Overall investment strategy Investment horizon timeline (years until retirement) Diversification through asset allocation Disciplined investing through dollar-cost averaging

27 Source: Dalbar, 2008 and Thomson Financial Company. Returns as of 12/31/07. Average Equity Investor returns were calculated by applying the retention rates of investors of mutual funds to the returns of the S&P 500. The S&P 500 is an unmanaged index and is not intended to represent specific mutual funds. Investors cannot invest directly in an index. Individual results may vary to management fees, transaction costs and taxes. Performance figures do not take into account the fees and expenses of investing in mutual funds or variable products. Past performance is no guarantee of future results. While the S&P 500 Index returned an average of 11.90% per year from January 1986 through December 2005, the typical equity investor earned only 3.90% per year for the same period. Average equity investor returns were calculated by measuring the average amount of time investors held onto their investments. The simple truth: From 1986 through 2005, the average equity investor, invested in S&P 500 funds, consistently pulled out of their investments and adopted more of a short-term investment strategy. This reason alone, may have significantly contributed to their smaller overall returns for this period when compared to the S&P 500 Index. Investment Returns Dont Get Caught Chasing Returns A Lesson in Patience

28 Smart Investors Recognize the Mile Markers Towards Success. Have a Destination Keep Perspective Dont Chase Returns Be Patient

29 Top Retirement Bloopers 1. You arent saving at all for retirement Will Social Security subsidize your retirement needs ? 2. You dont know the first thing about planning for retirement Do you know there are a world of options to help you save for retirement? 3. You arent taking full advantage of your options. Will you forgo the potential tax-deferred growth? 4. You arent diversified Have you checked the Top 10 holdings of your investment options?

30 Top Retirement Bloopers (continued) 5. You assume youll need less income in retirement Upon reaching retirement, will your lifestyle change? 6. Youre not taking advantage of higher savings limits Do you know what options you have to save more? 7. You borrowed from your retirement plan when it wasnt really an emergency Do you know youre missing out on potential market growth while paying yourself back? 8. You cashed out your retirement plan Did you pay over 35% in taxes including a 10% penalty? 9. You dont have a retirement income distribution strategy Will you take a lump sum or opt for a systematic payout?

31 Where Do I Go From Here? Determine your true risk tolerance. Analyze and rebalance your long-term investment strategy. Consider increasing your contributions. Remember, rash reactions to losses could lead to decisions that are later regretted. Define and reevaluate long-term investment objectives. Devise strategies to help achieve your objectives.

32 Time to Take Action Learn more at [ingretirementplans.com] [ing.com/us] about Asset Allocation See your ING [Plan] representative. Check the Internet. Contact me today at (XXX) XXX-XXXX

33 22 Whats next? Questions?


Download ppt "Location – Date www.ing.com Staying the Course: Reacting to the current financial climate Insurance products, annuities, and retirement plan funding issued."

Similar presentations


Ads by Google