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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 that plan.”
– TOM LANDRYDallas Cowboys coach, 1960–1988
[ 1.1 ]
106748NLB 10/04/10
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2
Primary Concerns
Source: AgeWave/Harris Interactive Survey, 2010
[ 2.1 ]
45%38%
17%
Medical expenses
not covered by
insurance
Outliving savings,
lack of social
security and pension
Lack of personal
savings
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?
People are living longer
Average life expectancies continue to improve
Source: Population Reference Bureau, 2009 World Population Data Sheet, 2009.
[ 2.2 ]
years
2233
47
6878
Roman Empire Middle Ages 1900 1950 2009 (U.S.)
Years
What are my chances of living a long life?
Source: Genworth Financial data for healthy individuals, assuming 80% of A2000 Basic ANB mortality.
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106748NLB 10/04/10
[ 4 ]
Extended healthcare is a reality
1 Source: U.S. Department of Health and Human Services National Clearinghouse for Long Term Care Information website, May 2010
2 Source: Genworth Financial Claims Data, December 2009
3 Source: National Institute on Aging, National Institute of Health, 2/09
3.8years 2
Average length of
majority of long
term care claims
4-7years 3
Average life
expectancy after
Alzheimer's diagnosis
after age 70
2 3people 1
out
of
People over 65
who will require
long term care
[ 4.1 ]
Extended healthcare is expensive today…
In-home care:
Source: Genworth 2010 Cost of Care Survey, conducted by CareScout ®, April 2010. 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)
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$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
$75,190Source: Genworth 2010 Cost of Care Survey, conducted by CareScout ®, April 2010. Based on national median costs.* Estimates how much care might cost based on 5% annual inflation.
(private room)
Extended healthcare is expensive today…
[ 4.2 ]
Your options
AvoidRisk 2 3
people
out
of
People over 65
who will require
long term care
[ 4.4 ]
AVOID ASSUME TRANSFER
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Your options
Property Managed
Money
Money
Market
Stocks
Bonds
AssumeRisk
[ 4.5 ]
AVOID ASSUME TRANSFER
Can your portfolio sustain unexpected expenses?
[ 4.6 ]
AVOID ASSUME TRANSFER
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 2009 - 1979
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
$0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
$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%
$3,000,000
$2,000,000
$1,000,000
$0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Retire with
a $2 million
portfolio
Can your portfolio sustain unexpected expenses?
[ 4.7 ]
AVOID ASSUME TRANSFER
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 2009 - 1979
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 $90,375Year 2: 88 hours/week of home care $189,788Year 3: 24-hour/day home care $380,438Year 4: Private room in nursing home: $180,954For 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
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Your options
Traditional Long Term Care Insurance
A percentage of your
portfolio can pay premium
Business owners can
deduct premiums
TransferRisk
[ 4.8 ]
AVOID ASSUME TRANSFER
Planning now can help you win in the second half
What’s your written strategy?
How will the costs of extended care impact your portfolio and your family?
Have the conversation
1
2
[ 4.9 ]
Talk with your financial professional about strategies for long term care
[ 5.10 ]
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Insurance underwritten by Genworth Life Insurance Company, and in New York, Genworth Life Insurance Company of New York. Administrative offices: Richmond VA
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