This presentation is part of the Transition Assistance Plan workshop series offered through Salem Works. While many things in life are uncertain, we can control how we make better decisions. This presentation highlights the fundamental approach needed for short-term fixes and getting back on track long-term.

1. Reinventing Your Retirement PA0000.029.0405 New Reality, New Challenges Transition Assistance Plan TIPS for Salem Works May 18, 2009 Steve Stanganelli, CRPC®, CFP® Member, Financial Planning Association Rated Advisor, Paladin Registry [email_address] www.moneylinkpro.wordpress.com Direct: 978-388-0020 Cell: 978-621-8268

8. Understand the effects of taxes This is a hypothetical illustration and does not represent the performance of a specific investment option. Taxable distributions (and certain deemed distributions) are subject to ordinary income tax and, if taken prior to age 59½, may also be subject to a 10% federal income tax penalty. Early surrender charges may apply. 1 Based on an assumed federal tax rate of 33% and assume no distributions. This chart is intended to illustrate the advantage of tax deferral. It does not project the actual performance of a specific product or its underlying funds. 2 Tax-deferred results do not reflect Total Insurance Charge or surrender charges, or the $30 annual maintenance fee, which is waived for contract anniversary values of $50,000 or more and no Contingent Deferred Sales Charge. Please note that no federal income taxes have been paid on the results. Taxable Illustration 1 Tax-Deferred Illustration 2 $100,000 9% 33% 33% Starting investments Rate of return Tax rate Tax rate on 9% = 6% net $100,000 9% 33% 0% Starting investments Rate of return Tax rate Tax rate on 9% = 9% net It will take 12 years to double your investment. 72 ÷ 6% = 12 years It will take 8 years to double your investment. 72 ÷ 9% = 8 years $100,000 Start $100,000 Start $200,000 12 years $200,000 8 years $400,000 24 years $400,000 16 years $800,000 24 years

9. Inflation Matters What Will It Cost to Maintain Your Lifestyle? Be prepared to double your money if you’re retired for 25 years!! PA0000.029.0405 Steve Stanganelli, CRPC®, CFP® What 3% Inflation Can Do to a $30,000 Per Year Standard of Living 5 Years $34,778 10 Years $40,317 15 Years $46,739 20 Years $54,183 25 Years $62,813

10. Auto 340% College Tuition (not including boarding and books) Home 1978: $6,379 2004: $28,050 1978: $37,229 116% 2004: $80,328 1978: $62,500 2004: $225,000 260% Understand the effects of inflation Source: NADA Industry Analysis Division, May, 2005 Source: The College Board, 2005 Source: US Census Bureau, 2005

11. The Investment Pyramid PA0000.029.0405 Steve Stanganelli, CRPC®, CFP® Growth Current Income Cash Equivalent Savings Higher Risk/Higher Reward Potential Lower Risk/Lower Reward Potential

12. Stocks were up 71% of the time—57 up periods, 23 down Stocks were up 99% of the time—70 up periods, 1 down Potential Return Stocks were up 87% of the time—66 up periods, 10 down Dec. 31, 1925–Dec. 31, 2005 Potential Return Potential Return Dec. 31, 1925–Dec. 31, 2005 Dec. 31, 1925–Dec. 31, 2005 One-year Holding periods Five-year Holding periods Ten-year Holding periods The Advantages of Diversification and Equities INDEX PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS This illustration is for illustrative purposes only, and does not represent the performance of The Hartford Mutual Funds, The Hartford variable annuities, or any particular investment. The S&P 500 Index is unmanaged. You cannot invest directly in the S&P 500 Index. Assumes reinvestment of income and no transaction cost. Data source: Wiesenberger, 1/06

13. Wall Street: The Rise in Red Ink – Newsweek How Many Lean Years? – Newsweek The Economy: Blood, Sweat and Tears – Newsweek The Death of Equities – Business Week Staring into the Abyss…crash is a shocking warning that the economy is living on borrowed time – U.S. News & World Report After an Economic Heart Attack: The crisis calls for emergency treatment to calm the markets –and a long-term plan to restore the nations fiscal health – Newsweek How the Bull Crashed Into Reality – Business Week “… the flight of individual investors and the breakdown of the markets foreshadow the end of the capitalistic system as we have known it.” – Business Week Don’t panic over the Press

14. Wall Street: The Rise in Red Ink – April 16, 1973 How Many Lean Years? – August 5, 1974 The Economy: Blood, Sweat and Tears – August 12, 1974 The Death of Equities – August 13,1979 Staring into the Abyss…crash is a shocking warning that the economy is living on borrowed time – November 2, 1987 After an Economic Heart Attack: The crisis calls for emergency treatment to calm the markets –and a long-term plan to restore the nations fiscal health – November 2, 1987 How the Bull Crashed Into Reality – November 2, 1987 “… the flight of individual investors and the breakdown of the markets foreshadow the end of the capitalistic system as we have known it.” – September 14, 1974 Don’t panic over the Press … History Does Repeat and So Do the Headlines

15. Don’t panic over the Press INDEX PAST PERFORMANCE IS NO INDICATION OF FUTURE RESULTS The S&P 500 Index is unmanaged and does not represent the performance of any particular investments. You can not invest directly into the S&P 500 Index. Assumes reinvestment of income and no transaction cost. Source: Compilation of both the Bloomberg and Wiesenberger, 1/06. Looking past the current crisis There will always be reasons not to invest. However, in the long-run, even investments made on the worst days of the century, ones with the most upheaval and instability, have historically done well. For example, if you invested $100 S&P 500 Index on December 31, 1936, and added $100 on some of the worst days of the century (instability that was reflected in the market’s performance), what would the outcome be? By December 2005, despite those declines, an investment would have accumulated $407,721. The parenthesis notes the date of the addition.

16. Four Numbers You Need to Know Comparing Returns: Average Annual Returns From Stocks, Bonds and Treasury Bills Over the Last 54 Years (12/31/54–12/31/08) PA0000.029.0405 Steve Stanganelli, CRPC®, CFP®

21. 3.) Understand Your Self PA0000.029.0405 Steve Stanganelli, CRPC®, CFP® “ People don’t change their behavior unless it makes a difference for them to do so.” – Fran Tarkenton American Football player, Businessman, Author, Corporate Consultant Traditional Finance Theory versus Actual Reality

33. Reinventing Your Retirement PA0000.029.0405 Steve Stanganelli, CRPC®, CFP® 978-388-0020 A Q &