Financial Planning for Women Taking Charge of Your Financial Future Investing for Retirement Now

CAC.5068 (05.13)TAKE CHARGE OF YOUR FINANCIAL FUTUREA Womans Guide to Investing for Retirement

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TODAY, I set a new goal.

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TODAY, I found my inspiration.#These slides should run automatically with music.

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TODAY, I started investing in me.#These slides should run automatically with music.

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TODAY, I reached a little higher.#These slides should run automatically with music.

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TODAY, Im an examplefor her.#These slides should run automatically with music.

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TODAY, I began to paint a new picture of my future.#These slides should run automatically with music.

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TODAY, I get to make the decisions.#These slides should run automatically with music. 8

TODAY, I feel confident about tomorrow.#These slides should run automatically with music. 9

TODAY, Im building a plan thats unique to me.#These slides should run automatically with music. 10

TODAY is a new day.#These slides should run automatically with music.

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CAC.5068 (05.13)

TAKE CHARGE OF YOUR FINANCIAL FUTUREA Womans Guide to Investing for Retirement

www.protective.comwww.protective.com

- Welcome attendees for coming to the workshop. - Introduce yourself. - Provide any necessary room logistics restrooms, etc.12Taxes and investment adviceProtective Life Insurance Company, Protective Life and Annuity Insurance Company and Investment Distributors, Inc. are not registered as investment advisors and this brochure is not intended to provide investment advice. Following this presentation, contact your Financial Advisor for investment advice specific to your situation.

This presentation contains statements regarding the tax treatment of certain financial assets and transactions. You should consult your legal or tax adviser regarding your individual situations before making any tax-related decisions.

The tax information within this presentation represents only our current understanding of the law in general and are not to be relied upon by Purchasers. The tax treatment of life insurance, Individual Retirement Accounts (IRAs), Income, estate, gift, and generation skipping tax rules are subject to change at any time. Neither Protective Life nor its representatives offer legal or tax advice.

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#13AgendaWhy take charge of your financial future now?Setting your financial goalsHow will you get there?Building your portfolioHow do you get started?

#14You may think that it seems early to start thinking about retirement. Most of you have another 20 or 30 years before you retire. And because of that length of time, you probably still have plenty of time before you need to start thinking about your retirement, or putting away money for it.

Were glad youre here today. During the next 30 minutes, we will look at some facts that may change your mind about starting tomorrow and show you why starting today makes financial sense, and can mean that you need to save less than if you start later. Well also talk about setting your financial goals and the tools that can help you reach your individual goals.

As we do so, feel free to jot notes down in the workbooks weve provided. These booklets follow the presentation, but also expand the discussion so that, later on -- when you sit down with your advisor -- youll be able to work through your specifics together.

Why take charge of your financial future now?What does the future hold? Uncertainty.

EconomyPensionsMedicareSocial Security#Life can be uncertain and the future is unpredictable. We continually hear news about the countrys economic condition, pointing out the factors that are out of your control, but affect you and your family financially.

It is frustrating to be faced with uncertainties that leave us feeling unsettled about if we should invest our money, and if it will be there when we need it.

First, theres the economy. A huge national debt, uncertain interest rates, and the prospect of escalating taxes are just part of the picture.

Pension plans used to be a standard benefit for employees, but recent economic struggles have resulted in many companies no longer offering pensions as an employee benefit.

Medicare is a frequent topic in policy debates, and for good reason. Its future is uncertain, and for those you retiring several decades from now, you may not be able to depend on it.

Finally, theres the question of Social Security. Today, the ratio of workers paying into the system versus those receiving benefits is falling. Whether or not you can depend on Social Security benefits is questionable if you plan on retiring 20, 30 or 40 years from now.

15Why take charge of your financial future now?Other concerns for women:Lower earningsLongevityWidowhood

#Lets look at some other concerns that affect women specifically, and present additional challenges when it comes to retirement planning.

First, lets take a look at salary. You, as women, are born caregivers, and tend to take time out of the workplace for a variety of reasons: to raise children, care for aging parent, move with a spouse, or other reasons. When you add to that the fact that women earn less than men approximately 18 - 22% less,1 this usually means that women have less saved for retirement than men. As a result, many women rely on Social Security more than men as well. And as we just discussed, the chances of reaping the benefits of Social Security when you are ready to retire may not be as viable as it was for your parents and grandparents generations.

There is some good news in all of this women tend to have longer lives than men. But what that means is that while making less money and investing less money for retirement, women will ultimate need more retirement money than men.

According to the Social Security Administration, the average life expectancy of a 65 year-old woman is another 20 years. So for those of you who plan to retire at 65, you will need to plan to have your retirement funds last at least 20 years or longer in addition to covering what Social Security and Medicare cover today.

And finally, widowhood. While its a subject that nobody wants to think about, the reality is that the average age of widowhood for women in the United States is only 56.6 years old2. The probability that you will outlive your spouse is high, so its wise to be prepared for a time when you may be solely responsible for your financial situation.

For all of these reasons, starting to take charge of your financial future today is crucial. Although many factors are out of your control, you can control your financial situation and be prepared for your retirement by beginning a plan now for investing for retirement.

1 BusinessWeek, Shortchanged: Why Women Get Paid Less than Men, June 21, 2012. http://www.businessweek.com/articles/2012-06-21/equal-pay-plaintiffs-burden-of-proof2Jeannette Bajalia, Wi$e Up, Women! A Guide to Total Fiscal and Physical Well-Being, Advantage Media Group, 201216

TODAY, I set goals that I know I can reach.#The first step in taking charge of your financial future is understanding what you want your future, and your retirement, to look like. It is helpful to begin thinking about what your future years will look like and what your goals will be, which will help you formulate how much you need to begin to invest for your retirement.

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What do you want to achieve?

#Most of us say we want to have a comfortable retirement, but what does that really mean to you?

Is it important for you to save a specific amount of money by that time? Or do you want to travel, live at the beach, or be debt-free? Or something else? Keep these visions of you enjoying a retirement filled with your dreams to help encourage you to invest now for your retirement.

Take a minute to think about what your goals are and write them in your workbook. Weve provided a space for you to write this on page XX.

18Setting your financial goalsKeep a picture of your goal in mind to help you focus on reaching it.Quantify your goal to make it easier to plan.Create your plan to begin investing for retirement. #Now that you have selected your goals, focusing on what you want to work toward will help grow your commitment in reaching it. Keep a picture in your mind, or even a picture on your refrigerator of what you want to stay focused.

Next, try to quantify your goals as much as possible: - If you chose to have invested a certain amount by the time you retire, do the math to understand how much to begin to put away regularly to reach your goal. - If you want to become debt-free in the next five or ten years, begin to calculate how much you need to pay off every month to reach this goal. Quantifying your goal will make it easier for you to know how much you need to put aside to invest.

Now that you have your goals established and quantified, lets talk about some tools to help you start reaching those goals.

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How will you get there?Finding moneyAsset growth

#If you have clarified your goals, you have taken a big step forward. But the next big challenge comes with your quest to achieve those goals. How will you reach a certain level of savings, or a benchmark in your retirement account? Lets take some time to discuss some easy steps you can put into place as you start investing for your retirement.

First, well talk about finding money to save and invest, then, look at an example of how your assets can grow over time..

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THE LATTE FACTOR: Sacrifice small, daily purchases to find money to invest.#First lets talk about finding money to invest. Im not talking about picking up a 10 dollar bill on the street. But finding money in your daily budget that can be repurposed for retirement savings.

Many people are concerned that they dont have the money to invest, but theyre spending money on daily luxury items, or small purchases that they could go without. As a way to find money to invest, take a look at your daily spending habits as a place to start. Some people call this the latte factor.

How many of you stop every morning on your way to work and buy a coffee and something to eat? Then in the afternoon, you buy a Diet Coke (or two), or maybe a snack, or splurge on lunch instead of bringing something from home? This is a good way to find some money to get you started on investing or to add to your current investments.

Lets take a look at how sacrificing a daily luxury, like a latte, could turn into a large sum in your retirement account

21How will you get there?The Latte Factor$6 day7 days a week52 weeks a year= $2,184 a yearSavedInvestedInterestFinal balance$2184/year$2,184/year for 20 years

$43,776 TOTAL5%$74,972#Lets say you regularly spend $6 a day on a triple shot skim latte. If you decided to start brewing your coffee at home, or even drinking the office coffee, you could instead put that $6 a day aside to invest for retirement.

Lets take a look at what that adds up to over the course of a year, and then 20 years into your future: - Saving $6/day for a year will allow you to have $2,184/year to invest. -If you invested this $2,184/year for 20 years (a $43,776 investment) at a 5% annual interest rate, at the end of 20 years, you would have more than $74,972.

Now its your turn. Lets take a minute and look at your workbook on page XX and see if you can find $2,000/year for you to invest. Write down a small expense or two that you spend every day or every week. See if you can identify something that you spend $5 or $6 a day, which is a splurge for you a few lattes or coffees rather than getting it at home or the office; going out for lunch a few times a week rather than packing your lunch; or going out for nice dinner one night a week rather than eating at home.

In your workbook, write down the areas where you could save money. Now lets complete the worksheet. If your have identified a daily amount to save, multiply that times the number of days. Then take that number and multiply it times the number of weeks in a year.

How much has each of you identified to save? Did anyone have a unique savings idea youd like to share?

Congratulations! You just took your first step to building your investment portfolio.

22How will you get there?How long will it take me to double my money? Use the Rule of 72.

72 interest rate = number of years

#Now that youve pinpointed some places where you can start saving, many of you might be interested in knowing how long it will take you to grow your money. There is a rule of thumb, called the Rule of 72, a shortcut to help you find the number of years required to double your money at a given interest rate.

To calculate the length of time it will take you to double the money you invest, take the number 72 and divide it by your interest rate and you will have the number of years. For example, if you want to invest at a 10% interest rate, your money will grow to in 7.2 years.

In your workbook on page XX, lets work through an example together. Write down the interest rate you expect you can get for your investment. Take the number 72 and divide it by the interest rate to find the number of years it will take for you to double your money.

23How will you get there?CompoundingTime is moneyThe sooner you start to invest, the less you will need to invest in total.

#Youve heard it before: time is money. And beginning to invest early really does work in your favor. So lets say youve kicked your latte habit. Youve become a barista, and drink your home brew every morning, and you have that extra cash each year.

Once you start investing that money into an interest earning account, you are putting your money to work for you as you start to earn interest. The second month that you are invested (or whatever time period is designated by the account), you start earning interest on your investment, and you receive interest on the sum you put away, PLUS the interest that you earned the first month.

As long as you keep that money there, this process goes on and onand your assets grow. This is called compounding. This is a very important concept to learn because the earlier you begin to invest your money, the more it will grow helping you reach your investment goals more quickly.

24How will you get there?Investments at ages 22 42 (20 years)Investments at ages 43-67(25 years)InterestFinal balanceJennifer$2,000/year for 20 years$40,000 total$07%$476,150Ann$0$2,000/year for 25 years$50,000 TOTAL7%$135,352CompoundingTwo different approaches: Jennifer and Ann#Lets look at an example of how timing makes a difference. Jennifer and Anne are the same age, and began working at age 22 and plan to retire when they reach age 67. But they are approaching retirement savings in different ways, at different points in their careers.

Jennifer chooses start investing as soon as she gets her first job at age 22. She puts away $2,000/year for 20 years, at a 7% annual interest rate, for a total investment of $40,000. Then she stops investing for the next 25 years, but she continues to earn a compound interest on that investment during that time. At the end of 45 years, she had a balance of more than $475,000.

Ann did not choose to invest for the first 20 years of her career, and doesnt save at all. But she began saving $2,000/year at a 7% interest rate once she hit age 43, and continues at that pace for the next 25 years for a total investment of $50,000. Because Ann started investing later and didnt have the advantage of compound interest for the first 20 years, Anns investment was worth just over $135,000 for the same period of time even though she invested $10,000 more than Jennifer.

What made the difference? The power of time and compound interest. This is a powerful tool combination that can work for you, especially when you start to invest early.

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TODAY, I figured out the tools that could get me from here to there.#Now that we have talked about your goals, and shared some tips to help you find the money for you to invest for retirement, lets talk about some of the investment tools you may want to use.

26Building your portfolioTax-deferred savings: more money to youInvestment vehicles:401(k) and 403(b) plansIRAsAnnuitiesLife insuranceStocks, bonds, mutual funds

#As we discussed earlier, investing your money on a tax-deferred basis allows you to put away less money to reach your goal. What types of vehicles are tax deferred? You should consider two of the main investment tools: a 401(k) or a 403(b). To invest in either of these, you can only do this through your employer.

Another tax-deferred tool you can use to invest for your retirement is an IRA, or an Individual Retirement Account. Unlike the 401(k) or 403(b), to invest in an IRA, you set this up as an individual. Last, some annuities and life insurance offer a tax-deferred investment option.

You also have investment options with stocks, bonds and mutual funds. Well talk more about each of these.

Each investment has different advantages and qualifications, and you should speak to your financial advisor to understand which ones are best suited for you and your situation.

27Building My PortfolioTake advantage of your workplace savings plan:401(k)/403(b) Tax-deferred contributionsEmployer match

#The first place to look is at the office. For those of you who are employed, look at your employers workplace savings plan and use the tools that they provide to you. These might include a 401(k) plan, or if you work for a nonprofit, a 403(b) plan. Putting money into these plans with every paycheck offers you an easy way to start investing for your retirement.

When you invest in a 401(k) or a 403(b) plan, your money is deducted from your paycheck on a tax-deferred basis. This means that you don't have to pay income tax on the part of your earnings that you contribute to your retirement plan until you begin to withdrawal money. If you wait until retirement age to withdrawal you money, you may be in a lower tax bracket than you are now. What does this mean to you? Your current income tax bill may be lower, and you may delay paying income taxes on your contributions and any earnings until you withdraw them from the plan. This leaves more money in your paycheck that you can use to put toward your goals: paying off debt, investing toward that nest egg, or whatever goals you had identified.

Take one more step on this investment: research your benefits package to see if the company or organization you work for offers an employer match, where they match a percentage or all of the money you are investing in your account. An employer match is almost like free money to you its an employee benefit that you only receive if you invest in the retirement plan. Many companies will offer a $1 for $1 match, which means that for every dollar you put into your 401(k) plan, the company will put $1 into your account, usually up to a certain amount. Other companies may match 50 cents for every dollar you invest, again, up to a certain amount. If you are already investing in your 401(k), this is a easy way to invest more money and grow your investment balance.

28Building your portfolio401(k) and 403(b) plansWhoTax advantagesContributionsWithdrawals401(k)Company-sponsoredBefore tax dollarsUp to $17,500(an addtl $5,500 if over 50)Taxable403(b)Nonprofit, education- sponsoredBefore tax dollarsUp to $17,500(an addtl $5,500 if over 50)Taxable#How much can you contribute to your 401(k) or 403(b) plan? This amount changes every year. In 2013, employees can contribute up to $17,500/year. If you are over 50, you are able to catch-up on contributions by adding an additional $5,500/year to your plan.

29Building your portfolioIRA Basics

Who can participate?Tax advantagesContribution limitsWithdrawalsTraditional IRAAnyone under age 70Before tax dollarsUp to $5,500(up to $6,500 if over 50)Taxable

Required after 70Roth IRAAnyoneAfter-tax dollarsUp to $5,500(up to $6,500 if over 50)Tax-free

No required age#Next, lets look at what options you have if you want to contribute more toward your retirement now than you can deposit in your 401(k) or 403(b) plan.

The first options are Individual Retirement Accounts, or IRAs. The basic IRA types are Traditional IRAs and Roth IRAs. The amount you can contribute in these are the same for both: in 2013, you can contribute up to $5,500, and you can contribute an extra $1,000 if you are over 50. The biggest difference between these two types of IRAs is how the taxes are handled.

Traditional IRAs allow you to deposit money pre-tax, but when you make withdrawals and take money from the account, your money is taxed. Again, if you are withdrawing when you are retired, this is at a lower tax rate than when you deposited it into the account.

On the other hand, when you make a deposit into a Roth IRA, the money is taxed, but you are able to withdrawal the money tax-free.

There are other types of IRAs as well, including SEP and SIMPLE IRAs, which small business owners can establish. We wont go into more detail on these today, but you should contact your financial advisor if you have questions or are interested in knowing more about any of these IRAs.

30Building My PortfolioStocks, bonds and mutual funds: Accumulation with varying levels of riskBonds: fixed-income security, low riskStocks: higher potential for returns, higher riskMutual funds: invest in stocks, bonds, and other assets; professionally managed

#In addition workplace savings, IRAs, there are still more ways to invest your money and watch it grow.Stocks, bonds and mutual funds are all accumulation vehicles with varying levels of risk and returns.A bond is a fixed-income security that you purchase, usually though the government. In exchange for your purchase, the company or government bond offers interest, but usually at a low rate. Bonds offer low potential on return, but are also low risk.

When you purchase a stock, or equity, you are buying part of a company. By owning part of a company, you may profit from that companys prosperity in the form of either dividends paid back to you as a stock owner, or from your stock increasing in value. On the flip side, you may lose value in your purchase if the company experiences low earnings.

A much more volatile and risky investment, stocks fluctuate in value on a daily basis. While your earnings are not guaranteed, there is a much higher potential for earnings.

Mutual funds invest in stocks, bonds and other assets. A mutual fund is an investment vehicle that is made of a pool of funds collected from many investors, and then professionally managed by money managers who select the stocks, bonds and other assets within the fund. A mutual fund offers some of the risk and potential of stocks, along with the safety and stability of bond purchases.

31Building your portfolioAnother investment option: AnnuitiesContract with an insurance companyRegular paymentsProtect a portion of your retirement from volatility riskOffer opportunities for tax-deferred growthDraw from your retirement incomeProvide payments for life#Now lets talk about annuities.

Variable Annuities have an interest rate and payments that may fluctuate. They may provide payments for a longer period of time, but to have this flexibility, the contract holder you assumes the volatility risk. These offer opportunities for tax-deferred growth.

Fixed Annuities offer safe, competitive interest rates for growth and/or income and you pay NO income taxes on your gains until you takewithdrawals.

There are different types of annuities with different characteristics. Talk to your advisor about the investment options that would work best for you and your personal situation.

32Building your portfolioA nontraditional investment choice: Life InsuranceBuild cash valueLong-term investmentTax advantagesDual protection#There are other options for investments as well. Life insurance may not be something that you traditionally think about as an investment for retirement, but there are many advantages to having life insurance that you should consider.

One example, Variable Universal Life is designed to be a long-term investment. It has a cash value, which can be invested. Variable Universal Life has investment possibilities, offering lifetime coverage with long-term investment potential.

Capitalizing on life's opportunities can be just as important as preparing for life's uncertainties. Variable Universal Life Insurance has flexible terms that allow you to change, within limits, the death benefit and the timing and amount of your premiums. It also lets you invest your cash value in professionally-managed funding options that reflect the performance of underlying investments such as stocks and bonds.

Additionally, when you purchase life insurance, youre not only protecting your assets, but your protecting your family or loved ones should you die unexpectedly. This dual purpose investment could be right for your situation. Talk to your advisor about if life insurance options are right for you.

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TODAY, I thought about my retirement, with confidence.#Weve walked through a lot of information today, and Im sure you are excited to start moving forward. So, where do you start?

34Where do you start?

Review your notes and booklet. Establish your goals.Determine how you will start building your money to invest.What is your latte factor?Meet with your advisor to help you determine your next steps.#Id suggest that you review the booklet we discussed and the notes you took today. This is a great way to review and reaffirm your goals. Start putting ideas in place to build your money to invest.

Whats your latte factor? Taking a look at your daily habits, your shoe budget, or your guilty pleasures may provide an aha moment when youre looking for places to save then start doing it.

Next, set up time with your financial advisor to review your status and get an understanding of what your options are, and what would work best for you. Weve only hit the high points, so it will help you to sit down with an advisor, such as , who can help you with decisions that can influence your total retirement plan.

35Where do you start?When meeting with your advisor, bring along:Your goalsImportant documentsRecent statements

#If you have never met with a financial advisor, you may be curious what to bring with you. Some things to consider: - Spend some time thinking about your retirement goals and fears. Your advisor can help you craft a plan thats suited to your aspirations. - Bring along any important documents you have already prepared. If youre missing some of these central planning components, your advisor can help you set priorities for getting them in place. - If you have recent statements from Social Security, your investments, or your pension plan, bring them along.

36Important InformationProtective and Protective Life refer to Protective Life Insurance Company (PLICO) and its affiliates, including Protective Life & Annuity Insurance Company (PLAICO). Insurance products issued by PLICO in all states, except New York, and in New York by PLAICO. Securities offered by Investment Distributors, Inc. (IDI). IDI is the principal underwriter for registered products issued by PLICO and PLAICO. All three companies are located in Birmingham, AL. Product availability and features may vary by state. Each company is solely responsible for the financial obligations accruing under the policies it issues.Variable annuities are long-term investments intended for retirement planning and involve market risk and the possible loss of principal. Investments in variable annuities are subject to fees and charges from the insurance company and the investment managers.Investors should carefully consider the investment objectives, risks, charges and expenses of a variable annuity before investing. This information is contained in the prospectus for a variable annuity and its underlying investment options. Prospectuses may be obtained by calling Protective Life at 800.456.6330.

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37Questions and Answers

#Thank you for having me, today. Now, lets open up this meeting for questions.

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