Better Investment Strategies
for Today’s Retirees
Enhancing Your Income Potential in Retirement

INTRODUCTION
INVESTING IN RETIREMENT
You’ve saved and sacrificed to build your portfolio; now it’s THE
time your portfolio worked for you. These days, however, QUI Z
investing for retirement isn’t as simple as stashing your life
savings in a single investment and happily living off the Throughout this booklet you will be
able to test your knowledge about
interest. Longer life expectancies and relatively low interest investing in retirement. “The Quiz”
rates mean your income will need to grow to support you is designed to help show you that
investing in retirement is just as
throughout your retirement. This booklet will show you important as investing for retirement.
You will be provided the answers
ways to create an investment portfolio that provides both
during this workshop.
increased income potential and growth opportunities to Today retirement is not as simple
help you reach your retirement goals. as living off your interest and
dividend payments. Longer life
expectancies and earlier retirements
What Are You Concerned About?
mean your income may have to last
During retirement your investment and financial concerns are very 30 years — or longer!
different than they were when you were climbing the career ladder,
earning a paycheck and raising a family.
In this book we’ll address three common concerns listed below and show
you strategies to help you overcome them.
1. Not having enough money to last through your retirement years
2. Experiencing a declining standard of living as costs rise
3. Facing the possibility of catastrophic medical or nursing home expenses
You worked hard to build your assets;
now it’s time your portfolio worked for you.
1

RETIREE CONCERN 1
NOT HAVING ENOUGH MONEY TO LAST THROUGH
YOUR RETIREMENT YEARS
THE Like many retirees, one of your primary financial concerns may be outliv-
ing your nest egg. So you vow never to touch your investment principal
QUIZ and live only off interest and dividend payments, right? Not so fast.
DETERMINE YOUR PRIORITIES Are You Waiting for Interest Rates to Climb Back Up?
Rank the following financial priorities One reason many retirees find it difficult to live on interest payments
for your retirement: alone is because interest rates are not hyperinflated as they were in the
Never running out of money 1970s and 1980s. The blue line in the chart below shows that today’s
Leaving a legacy for your children interest rates, while relatively low, are closer to normal than the double-
digit yields realized briefly during certain periods in the 1970s and 1980s.
Living off the interest of your
investments and never touching In the modern era, rates have generally fluctuated in a rather modest range.
the principal
The black line provides valuable insight into those days of double-digit
Having money set aside for
interest rates. When adjusted for the high inflation rates experienced
potential long-term care needs
during that period, the real rate on a 10-year Treasury bond was not as
Maintaining your standard of living
attractive as you might think.
You will probably rank your financial
priorities differently than your Instead of waiting for interest rates to climb, perhaps you should adjust your
neighbor or best friend would. expectations of what interest rates alone can achieve for your retirement.
However, after reviewing this list,
many retirees rank “never touching
their principal” fairly low, especially
if this strict guideline lowers their
10-YEAR TREASURY BOND YIELD VERSUS REAL RATES
standard of living or keeps them from Since 1953
enjoying the freedom of retirement.
18.00
15.00
12.00
9.00
Yield (%)
6.00
3.00
0.00
-3.00
-6.00
1/50 1/55 1/60 1/65 1/70 1/75 1/80 1/85 1/90 1/95 1/00 1/05
Yield Real Rate (adjusted for inflation)
Data Sources: Federal Reserve, Haver Analytics, Bureau of Labor Statistics.
Note: Data updated Dec. 31, 2007. The real rate is calculated by subtracting the Bureau of Labor
Statistics year-to-year change in the consumer price index from the nominal yield. For illustrative
purposes only. Past performance is not necessarily a guide to future performance.
2

RETIREE CONCERN 2
KEEPING UP WITH THE COST OF LIVING
Another common concern for retirees is being able to keep up with the THE
cost of living. Although you’ve probably always understood and recognized
inflation, let’s be honest: Did you really worry that much about it during QUIZ
the days when you had a paycheck coming in? With a fixed income,
however, you face the ever-present threat of inflation lowering your If prices rise at a rate of 3% each year,
standard of living in retirement. the cost of living would double in:
a. 13 years
b. 24 years
A Word to Women c. 32 years
A woman’s longer life expectancy makes it a real possibility that she’ll be At 5% each year, it would take:
taking sole control of the finances at some point in her life. Make sure a. 7 years
both spouses know about the household’s finances and understand common b. 14 years
c. 21 years
investment concepts. In addition, each spouse should know the family’s
Inflation measured by the consumer
financial professionals and feel comfortable working with them. price index (CPI)
PURCHASING POWER OF $50,000 Today a 55-year-old man will live
Assuming 3% Inflation an average of:
a. 6 more years
$50,000
b. 12 more years
c. 26 more years
40,000
A 65-year-old woman will live an
average of:
30,000 a. 10 more years
b. 16 more years
20,000 c. 18 more years
Source: U.S. Center for Health Statistics;
base year is 2002
10,000
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Years
This graph shows inflation’s effects in dollars and cents. You see how a 3%
inflation rate shrinks a $50,000 annual income to only $25,000 in approximately
20 years. If you’re 65 now, do you want to be living off half your income when
you’re 85? It could happen if your income doesn’t have an opportunity to grow.
The historical average of inflation is 3.3%.
Source: Consumer price index (CPI) for all urban consumers since 1930, not seasonally adjusted.
3

RETIREE CONCERN 3
MEDICAL AND NURSING HOME EXPENSES
COULD WIPE OUT YOUR NEST EGG
THE Many retirees are extremely fearful of the possibility that nursing home
or medical expenses will wipe out their life savings. This is often one
QUIZ reason they are afraid to tap into their principal during retirement.
A 65-year-old man has Avoid Depleting Your Assets
approximately a(n):
If this is a concern for you, discuss it with your Financial Advisor. Long-
a. 30% chance of entering
a nursing home term care insurance can help you avoid spending your assets. By taking
b. 50% chance of entering measures early, you can increase your chances of avoiding government
a nursing home assistance, which can be difficult to obtain and may provide unreliable
c. 80% chance of entering
coverage. Realize that you may not have to sacrifice your retirement
a nursing home
comfort today to prepare for what may or may not happen tomorrow.
Source: Life Insurance Marketing
Research Association
The amount of coverage you may need will depend on your specific
situation. For example, if you have accumulated sufficient assets, you
may only need enough coverage to pay a portion of your long-term
care expenses; the remainder could be paid from your other assets.
A Wachovia Securities Financial Advisor can help determine how much
protection is right for you.
The national average daily rate for a private room in a skilled-care
nursing home is $206, or $75,190 annually.
Source: MetLife Mature Market Institute® in conjunction with Life Plans, Inc., 2006.
4

BALANCING ACT
USING A TOTAL PORTFOLIO APPROACH TO HELP
REDUCE RISK AND INCREASE INCOME POTENTIAL
At Wachovia Securities, we take a total portfolio approach to your retirement THE
investments. That means we help you develop a mix of investments suited
to your current and long-term retirement needs. This mix will potentially
QUIZ
help your assets grow to meet your income needs now and in the future
while keeping your risk tolerance in mind. Finding the right balance is a The percentage of your assets that
should be invested in stocks is:
difficult task, but being familiar with the roles that certain investments —
a. 10%
namely stocks and bonds — play in your retirement portfolio can help you b. 30%
achieve your goals. c. 50%
d. 70%
Growth and Cash e. Other
5%
Income Model The percentage of your assets that
Investment Mix should be invested in bonds is:
a. 10%
Bonds
b. 30%
30% c. 50%
d. 70%
e. Other
Stocks
60% Real
Estate
5%
Income With Cash
Growth Model 5%
Investment Mix
Stocks Bonds
45% 45%
Real Estate
5%
5

What Is Asset Allocation?
This is the percentage of your retirement portfolio invested in different
asset classes — equities (stocks, defined portfolios and stock mutual funds),
fixed income (bonds and bond mutual funds) and cash investments (CDs,
savings accounts and money market funds). Your asset allocation should
be based on your time horizon, objectives, assets and risk tolerance.
The Benefits of a Diversified Retirement Portfolio
One way to get your retirement portfolio working for you is to diversify
your assets among different categories, including stocks, bonds and
cash investments. A diversified retirement portfolio has the opportunity
to benefit from a variety of market returns. Of course, whenever your
return potential increases, your risks increase and your investments
are not guaranteed or insured and will likely fluctuate in market value.
This is why it’s important to carefully consider the investments in your
retirement portfolio. Keep in mind diversification does not ensure profit
or protect against market loss.
Although no two retirement portfolios are alike, model portfolios based
on broad investment goals, such as the two shown on page 5, can help you
diversify your retirement portfolio. Note that even though “Growth and
Income” and “Income With Growth” sound as if they have the same
objectives, you can see that these portfolios have very different investment
mixes and risk/return potential. This is why it’s critical that you know what
your priorities are in retirement and how you would rank them.
One way to get your retirement portfolio working for you
is to diversify your assets among different categories,
including stocks, bonds and cash investments.
6

STOCKS
THE IMPORTANCE OF GROWTH
How Stocks Play a Role in Your Income Strategy
Stocks play an important part in the retirement portfolios of income
investors. That’s right — income investors. As we discussed earlier, longer
life expectancies and inflation make growth a necessity in most retirement
portfolios. And that typically brings us to consider stocks.
Income Model Cash
Investment Mix 5%
Stocks
20%
Real
Estate
5%
Bonds
70%
Stocks Play a Role in Almost Every Retirement Portfolio
You can see that even in an income model portfolio, 20% of the
investments are allocated to stocks.
7

Don’t Let Volatile Markets Chase You Away From Stock Investing
The stock market has hit new highs and retreated — time after time.
Don’t turn away from the volatility of stocks without serious consideration.
Historically, stocks have provided the best returns of any asset class, but
those returns come with a price — volatility, as evidenced by stock prices’
sharp increases in the late 1990s, subsequent declines and then recovery.
However, in spite of this volatility, many retirees need stocks’ growth potential
to battle inflation’s erosive effect on their retirement incomes. Should you
be invested entirely in stocks? Probably not. But you should consider
allocating a portion of your retirement portfolio to stocks. Keep in mind
that past performance is no guarantee of future results.
AVERAGE RETURNS
(1930–2007)
20%
19.5%
18
16
14
12
10 9.8%
8.9%
8
6 5.8%
4.2%
4 3.8% 3.2% 3.3%
2
0 Large-Cap Long-Term Bonds Treasury Bills Inflation
Stocks (Govt./Corp.) (90-Day) (CPI)
Return Standard Deviation
Source: Frank Russell Company, Capital Market History and Asset Allocation. Used
with permission. All rights reserved.
Chart is for illustrative purposes only. Past performance is no guarantee of future
results. Figures do not reflect the effects of taxes or transaction costs.
Large-cap stocks are represented by the Standard & Poor’s 500 Stock Composite
Index. Long-term bonds are interest-bearing or discounted government or corporate
securities. Treasury bills are measured using an average of the 90-day Treasury bill.
Inflation is measured by the consumer price index for all urban consumers,
not seasonally adjusted.
Treasury bills and government bonds are guaranteed by the U.S. government and,
if held to maturity, offer a fixed rate of return and fixed principal value. Yield and
market value of bonds will fluctuate if sold prior to maturity.
The return and principal value of an investment in stocks fluctuate with changes in
market conditions. Standard deviation indicates the volatility of an index. In general,
the higher the standard deviation, the greater the volatility.
8

Wachovia Securities’ Diversified Stock Income Plan
The Plan
The Diversified Stock Income Plan is a list of quality stocks with
attractive yields and representation across several industry segments.
The stocks are carefully chosen with the expectation that the companies
will consistently raise dividends.
What It Means for You
• Disciplined way to select stocks. These stocks must meet strict criteria
for inclusion on this list.
• Diversified approach to selecting quality stocks while attempting to
reduce risk.
• Defensive strategy because dividends may help reduce volatility.
A Reminder
Companies have the right to decrease or eliminate dividends at
their discretion.
Objectives
To provide a higher income stream over the years and reduce risk through
diversification. There are no guarantees that this objective will be met.
Good News, Bad News
Dividends, like corporate earnings, often influence stock prices. When
dividends are increased, the message is that the company is prospering.
That may stimulate added interest in the stock.
When dividends are cut, however, the opposite message is sent. Because
an expected dividend cut is often reported in advance by the financial
press, falling stock prices may result.
Get more details on Wachovia Securities’ Diversified
Stock Income Plan in our free informational report.
9

BONDS
THE VALUE OF HAVING A RETIREMENT STRATEGY
Use a Strategic Approach to Build Your Bond Portfolio
Constructing a bond portfolio is like building a stock portfolio — you
need a strategy. There are many ways to design a bond portfolio, but one
of the most popular is to build a bond ladder, which is a bond portfolio
with bonds evenly distributed across a number of maturities ranging from
short term to long term. As the short-term bonds of the ladder mature,
you use the proceeds to purchase new bonds for the longest maturity.
Using this approach helps smooth out the effects of changing interest rates.
Bond Ladder
A typical bond ladder looks like this. When the bonds at the top mature
in 2008, you would use the proceeds to purchase new bonds maturing in
2013. This bond strategy helps you avoid trying to time the bond market,
which can be just as risky as attempting to time the stock market.
When interest rates are rising, you benefit from a bond ladder by
reinvesting maturing bonds at more attractive rates. When rates are
falling, you retain some bonds at rates obtained in earlier, potentially
more attractive rate environments.
Maturity Y ield to
Issuer Coupon Maturity Price Cost
Value Maturity
$ 20,000 Bond A 3.40% Aug-08 100.00 3.40% $ 20,000
20,000 Bond B 3.60 Aug-09 100.00 3.60 20,000
20,000 Bond C 3.65 Mar-10 100.00 3.65 20,000
20,000 Bond D 3.70 Mar-11 100.00 3.70 20,000
20,000 Bond E 3.75 Mar-12 100.00 3.75 20,000
100,000 Average Yield to Maturity: 3.62% 100,000
Note: This example is for illustrative purposes only and does not reflect actual investment
performance. Totals do not reflect accrued interest or the postage and handling fee, which
would apply to each bond in the portfolio. Accrued interest is not included in total cost.
YTM is calculated using 3/5/08 settlement.
For more information on bond ladders, ask your Financial Advisor for the
informational report titled “Laddered Maturities Portfolios.”
There are many ways to design a bond portfolio,
but one of the most popular is to build a bond ladder,
which is a bond portfolio with maturities spread across
a number of years.
10

F O R YO U R C O N S I D E R AT I O N
MORE IDEAS FOR RETIREES
Here are a few final ideas to consider for your retirement investing plan.
Cash
Keep funds to cover about six months’ to a year’s worth of your household
expenses in a cash account. That way, in case of emergency, you’ll have
enough liquid funds at your disposal, so you won’t be forced to sell
investments at a potentially inopportune time to pay current expenses.
Consolidate
For bookkeeping simplification, consider consolidating your assets
under one roof in an asset management account. This is different from
“putting all of your eggs in one basket” with individual securities. An asset
management account lets you hold all of your securities and cash in one
easily accessible brokerage account. With one statement showing your
entire retirement portfolio, you’ll get the “big picture” of your finances
on a regular basis. You also have easy access to your cash through checks,
debit card and online bill pay service.
Organize
Make sure your spouse and heirs know where you keep all of the
information about your finances. If you need help with this effort, ask your
Wachovia Securities Financial Advisor for our “Estate Planning Organizer.”
Review
Finally, you’ll need to review your retirement goals with your Financial
Advisor at least once a year or when there is a death, divorce, new tax law
or major change in the market.
11

OUR COMMITMENT TO YOU
We will honor our relationship with you. When you work with a Wachovia
Securities Financial Advisor, you have someone who takes the time to listen,
to understand your needs and to help you clarify your goals.
We will be fully invested in your success. Your Financial Advisor will help
you stay on track to meet your goals through intelligent financial solutions,
in-depth analysis of your investments and regular feedback on your progress.
We will be with you every step of the way. Your needs and goals will change
over time. That’s why your Financial Advisor will be there to provide
ongoing guidance — along with the exceptional service you deserve.
Our commitment to you will not change. This is what it means to be with
Wachovia Securities.
12

NOTES
13

NOTES
14

NOTES
15

NOTES
16

Securities and Insurance Products: NOT INSURED BY FDIC OR ANY FEDERAL GOVERNMENT AGENCY • MAY LOSE VALUE • NOT A DEPOSIT OF OR GUARANTEED BY A BANK OR ANY BANK AFFILIATE
Wachovia Securities is the trade name used by two separate, registered broker-dealers and nonbank affiliates of Wachovia Corporation providing certain retail securities brokerage services:
Wachovia Securities, LLC, Member SIPC, and Wachovia Securities Financial Network, LLC, Member SIPC.
16944-v11-0308
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