Retire in a DayRetirement Rescue Plan

Steve Stanganelli, CFP ®, CRPC ®978-388-0020 / 978-621-8268

An Independent Fee-for-Service Registered Investment Advisor

What DoesRetirementMean to You?

Baby Boomers don’tplan to retire in thetraditional sense.

Many will shift tomore fulfilling careers.

Can this be donewithout putting yourretirement plans atrisk?

YES

• Driver: 108

• Helicopter Pilot: 82

• Airplane Passenger: 95

• Sky Diver: 92

• Marathon Finisher: 90

• Man and Woman to Marry: 96 & 94

• Actress: 114

• Tuba Player: 101

• Racing Driver: 75

• Current Living Person: 115

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Source: Guinness Book of World Records, 2005

Money is just a toolthat helps you getwhat you want!

RETIREMENTSUCCESS PRINCIPLE:

With some thought,creativity and action,you can keep yourfinancial house inorder.

You Can Retire Today!

• Have a Plan

• Understand the Impact ofInflation on Your Way of Life

• Manage Your Finances toMinimize the Tax Bite

• Embrace the Power ofDiversification

• Don’t Panic Over the Press

• Control What You Can

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Life ByDesign

Before we get to“THE NUMBER,”let’s understandwhere it is that youwant to go.

1. If money and health wereno issue, how would youspend your time?

2. What things in life do youfeel are important now?

3. What types of activitieswould you like toparticipate in that you’renot now and with whom?

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Retirement Facts

•• Americans are livingAmericans are livinglonger,longer,healthier liveshealthier lives

•• Today’s retirees have theToday’s retirees have themost healthy and activemost healthy and activeretirement of anyretirement of anygenerationgeneration

•• Retirees face formidableRetirees face formidablefinancial challengesfinancial challenges

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Retiree Common Concerns

•• IncomeIncome

•• Health related mattersHealth related matters

•• Outliving their moneyOutliving their money

1964 1984 2007

Gallon of Milk $1.06 $1.94 $3.06

Loaf of Bread $0.21 $0.71 $1.97

New Car $2,350 $6,294 $23,000

New Home $30,000 $110,610 $221,000

Average Income $6,080 $12,866 $34,335

Source: SpectrumUnlimited, LLC

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Fundamental #1: Have a Plan

Investors with financialplans have twice asmuch in savings andinvestments asinvestors withoutplans.

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Fundamental #2:Practice 5 Fiscal Fitness Principles

1.Pay Yourself First: Always Save 10% of AnnualIncome

2.Cash is King – Stay Liquid

3.Fully Fund Qualified Plans

4.Buy the Right House for Your Budget

5.Lighten Your Load – Reduce Credit Cards andConsumer Debt

8Steve Stanganelli CFP (R) / Clear View Wealth Advisors, LLC 978-

388-0020

Recommendation: Build a Cash Cushion

• 30% of your projected retirement incometo pay bills and cover variable short-termexpenses

• 60% of your projected retirement incometo supplement withdrawals and to cover 2years of fixed expenses (like a mortgage)

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Pay Yourself First

Most People Financially Independent

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Real Estate – Buy the Right Size House

Home Size Ratio:The Fair Market Value (FMV) Target for a home purchase is 3x – 3.5xyour income in high cost states

Investable Asset Targets:There are 3 major asset classes

Asset Type Benefit Target

Real Estate Inflation Hedge &Personal Enjoyment

1/3rd

Interest Earning Safety & DeflationProtection

1/3rd

Equities Growth Potential –Build Wealth &Inflation Hedge

1/3rd

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Lighten Your Load: Pay Off Credit Cardsand Consumer Debt

• Stop borrowing from your future to pay for your now.

• Use debt wisely

• There’s a difference between “good” debt and “bad” debt

• The Key to Retirement is managing spending because you arenow living on a fixed income

Don’t Turn Down Free Money

• Maximize contributions to employer-sponsored plans andIRAs• Get your company match• By maximizing your pre-tax contribution you get governement“free money” because of lower taxes on income and interestearned on the money set aside

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RETIREMENT MYTH VS. REALITY

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RETIREMENT MYTH #1: You Need 70% to 80% of Pre-Retirement Income

REALITY CHECK: It all depends on your goals and lifestyle.

Actual Expenses – Post-Retirement28% - about the same27% - somewhat higher25% - somewhat lower12% - significantly higher8% - significantly lower

Source: Fidelity Research Institute 2007 Retirement Index

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RETIREMENT MYTH #2: You Need to Make Your InvestmentPortfolio More Defensive When You Retire

REALITY CHECK:

What 3% Inflation Can DoWhat 3% Inflation Can Doto a $30,000 Per Year Standard of Livingto a $30,000 Per Year Standard of Living

5 Years5 Years $34,778$34,778

10 Years10 Years $40,317$40,317

15 Years15 Years $46,739$46,739

20 Years20 Years $54,183$54,183

25 Years25 Years $62,813$62,813

Be prepared to double your moneyif you’re retired for 25 years!!

Be prepared to double your moneyif you’re retired for 25 years!! 15

Steve Stanganelli CFP (R) / Clear ViewWealth Advisors, LLC 978-388-0020

RETIREMENT MYTH #3: Your Investment Portfolio Has to Beat the S&P 500

REALITY CHECK: Why does it matter? Is it more important to beat the“market” or make progress toward your personal goals?

Benchmark your progress toward the accomplishment of your goals.

Primary goal: Prevent yourself from running out of money to maintain thelifestyle you desire.

RETIREMENT MYTH #4: You can rely on the equity in your home to retiresecurely.

REALITY CHECK: Really?

RETIREMENT MYTH #5: You’ll continue working into your 60’s or early 70’s.

REALITY CHECK: See #4. And while possible, more than 40% of us will beforced out of the workforce. And do you really want to work that longanyway?

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RETIREMENT MYTH #6: You don’t need to save. You’ll receive a largeinheritance.

REALITY CHECK: Don’t count on it. Yes, Baby Boomers are in line toreceive the largest transfer of wealth in history. Their in line right behind thedoctors, prescription drug companies and nursing homes that their parentswill use as people live longer and medical costs increase.

So there’s not much left over to pass along … without proper planning.

RETIREMENT MYTH #7: You can live on Social Security.

REALITY CHECK: Social Security was meant to be a safety net … one ofthe legs of the three-legged stool that included private savings andcompany pensions. You’ll need to consider working longer, saving more orreducing your standard of living. Your choice.

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ASSET ALLOCATION –THE SCIENCE OF SUCCESSFULINVESTING

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Retirement SuccessPrinciple

• Hierarchy of InvestingDecision Process

Asset allocation is moreimportant than theinvestments that you own.

How long your money lastsand how soon you can retireare all impacted by thisdecision

MostImportant

• Time Horizon

• Asset Classes

• Risk Capacity

Important

• Mix Among Asset Classes

• Sub-Asset Classes Considered

LeastImportant

• Managers/Funds Used

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Over 91% of portfolioperformance is explainedby the Asset Allocation(AA) decision.

But most investors givemore attention to:

1. Is now a good time toinvest (i.e. MarketTiming)?

2. What’s the bestfund/stock/manager tobuy now (i.e. SecuritySelection)?

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•Stocks – S&P 500 Index Bonds – U.S. Intermediate Term Government Bonds Cash – U.S. 30 Day Treasury Bill Inflation – Consumer Price Index Source – Ibbotson Associates

•*Average Loss: the average loss when there is a negative return. **Average Gain: the average gain when there is a positive return.

•Mutual Funds: • Are not insured by the FDIC or any other agency • Are not obligations of any financial institution • Involve investment risks, may lose value

•The information presented is past performance. Past performance is no guarantee of future return. Investment return and principal value of a mutual fund investment will fluctuate so that aninvestor’s shares on redemption may be worth more or less than the original cost.

•In addition to the normal risks associated with equity investing, narrowly focused investments and investments in smaller companies typically exhibit higher volatility. International investmentsmay involve risk of capital loss from unfavorable fluctuations in currency values, from differences in generally accepted accounting principles or from economic or political instability in othernations.

•The indices illustrated herein are unmanaged indices. You cannot invest in an index. Index returns do not reflect the impact of any management fees, transaction costs or expenses. The indexinformation seen here is for illustrative purposes only. For more information, please contact your financial advisor. This piece is provided by SEI Investments Management Corporation.

•This is not indicative of any specific investment. It is an illustration of how a certain profile may have performed using the past performance of the indices listed. SEI-M-215 (2/07)

•Annual Returns (1926–2006)Average Annual Inflation: 3.11%•Asset Allocation Risk/Reward

•-38.90% •-34.80% •-30. 70% •-2 6. 59% •-22 .49% •-18.3 9% •-14.2 9% •-10.19% •-6.08%

•-9.60% •-9.05% •-7.13% •-5.59% •-4.26% •-3.93% •-3.00% •-2.69%•-10. 98%

•10.79%

•10.10%

•9.41% •8.72% •8.03% •7.34% •6.64% •5.95%•11.49%

•43.41% •38.19% •32.97% •27.76%

•24.17%

•24.94% •25 .71%

•26.48%•48.62%

•18.40% •15.97% •14.48% •12 .81%

•11.05% •9.11% •7.70% •6.52%•20.39%

•72.84% •76.54% •76.54% •77.78% •80.25% •86.42% •90.12% •93.83%•7 1.60%

•27.16%

•23.46%

•23.46% •22.22% •19.75%

•13.58%

•9.88% •6.17%•28.40%

•67.90% •70.37%

•70 .37%

•70.37% •69.14%

•66.67%

•70 .37%

•72.84%

•70.37%

•Largest Loss

Average Loss*

Average Return

Largest Gain

Average Gain**

•Percentage of

Yrs. Greater

than Inflation

•PercentagePositive Yrs.

•Percentage

Negative Yrs.

•Stocks

Bonds

Cash

•90% Stocks

0% Bonds

10% Cash

•80% Stocks

10% Bonds

10% Cash

•70% Stocks

20% Bonds

10% Cash

•60% Stocks

30% Bonds

10% Cash

•50% Stocks

40% Bonds

10% Cash

•40% Stocks

50% Bonds

10% Cash

•30% Stocks

60% Bonds

10% Cash

•20% Stocks

70% Bonds

10% Cash

•10% Stocks

80% Bonds

10% Cash

•0% Stocks

90% Bonds

10% Cash

•-

4.24% -

1.12%

5.26%

27.24%

5.96%

90. 12%

9.88%

6 1.73%

CREATING INCOME FOR LIFE

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“I’ve got all the money I’llever need, if I die by fouro’clock” --Henny Youngman

Retirement AccumulationCalculator – An Illustration

Desired Retirement Income (Today’s Dollars) $40,000 (1)

Years Until Retirement: ___4___

Estimated Inflation Rate: ___3__ %

Inflation Factor from Table ___1.13___ (2)

Est. Annual Retirement Income Need – Yr 1 $ 45,200 (3)

(1) x (2)

Factor ‘B’ from Personal Calculator Table (#1) __2.36_(4)

Est. Annual Retirement Income Need – Yr 30 $_106,672

(3) x (4)

Factor ‘C’ from Personal Calculator Table (#1) 19.65 (5)

Retirement Accumulation Needed $ 888,180 (6)

Factor ‘D’ from Personal Calculator Table (#1): 0.767 (7)

Investment Value in 30 Years in Yr 1 Dollars $681,234 (6x7)

Factor ‘E’ from Personal Calculator Table (#1) 1.861 (8)

Investment Value in 30 Yrs in Future Dollars: $ 1,652,903

(6) x (8)

Figure out what kind oflifestyle you want inretirement.

Family? More Travel?Hobbies? New Business?

Sample Calculators atwww.ClearViewWealthAdvisors.com

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Will You Outlive Your Money?

How Long Does Your Money Need to Last?

• Family Longevity?• Health?• Lifestyle?

• Actuarial tables from insurance companies• Specialized services like 21st Services Longevity PlanningReport ©

Income

Predictable Income

• Pension

• Social Security

• Rental Income

• Arrange for ScheduledWithdrawals fromInvestments– In most cases it’s usually

better to take money out ofnon-retirement accounts first

Sustainable Income

A. 4% Investment Withdrawal

B. Spending Ratio vsDownside Exposure(SORDEX)

C. Asset Allocation to EquitiesBased on 128 – AttainedAge or at least 33% to 40%

D. “Safe-Money Benchmark”

Steve Stanganelli CFP (R) / Clear View Wealth Advisors, LLC978-388-0020

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“Safe-Money” Benchmark Strategy

Before Retirement

• Determine Expenses

• Accumulate Savings Equalto 1 to 5 Years ofWithdrawals

• Amount Will Depend onRisk Tolerance and Capacity

• Harvest Money fromInvestment Accounts toPlace into “Safe Money”Resource (i.e. CD, M/M)

Steve Stanganelli CFP (R) / Clear View Wealth Advisors, LLC978-388-0020

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Safety Net: Laddered US Treasuries

Steve Stanganelli CFP (R) / Clear View Wealth Advisors, LLC978-388-0020

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• Super-Safe Government Bonds

• “Stripped” Securities Pay No Interest

• Target 50% of Projected Cash Flow Needs

• Can Start Strategy in Year of Retirement

• Treasuries are “non-callable”

• Use This Strategy in a Qualified Plan or IRA

An Option to Help Investors Sleep Well at Night

Creating Increasing Income in aWorld of Inflation or Recession

5 Inflation-Beating Bond Picks– TIPS or other inflation-linked corporate bonds

– Go Short: Keep the average maturity down (When the 7-Year US Treasury yield is trending higher than it was 6-monthsprior than stay short; if trending lower then consider moreintermediate bond maturities)

– Consider Floating Rate Notes

– Look at adding Convertible Bonds

– High Yield or “junk” bonds still offer opportunities

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Income-ProducingRecommendations

• Dividend-Paying Stocks: Those with a historyof continuing and increasing dividends

• Dividend-Payors act as an inflation hedge

• A $1,000 investment started in January 1,1957 thru December, 2009 in the top 100highest-dividend yielding stocks would haveaccumulated more than $450,000 (assumingdividends reinvested) or a 12.5% annualreturn beating the S&P 500 by 2.5%

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Other Income Resources

• Real Estate Investment Trusts (REITS)

• Master Limited Partnerships (MLPs)

Other Options:

• Reverse Mortgages

• Fixed Annuities as CD Replacement

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1. Overconfidence

2. Following the Herd: Euphoria & Pessimism AreContagious and Usually Wrong

3. Timing the Market

4. Assuming You Control More than You Have

5. Paying Too Much in Fees

6. Trusting Stockbrokers

6 Deadly Investing Sins