Ameriprise New Perspectives Seminar [AFTER VIDEO HAS ENDED] Welcome and thank you for taking the time to attend today’s program. My name is [INSERT NAME] and I’m a [INSERT PRIMARY TITLE] with Ameriprise Financial. [SLIDE 1] Today we’re going to talk about ways to get a firmer grasp on your current financial situation – so you can start to plan for a more secure future.
Ameriprise New Perspectives Seminar [AFTER VIDEO HAS ENDED] Welcome and thank you for taking the time to attend today’s program. My name is [INSERT NAME] and I’m a [INSERT PRIMARY TITLE] with Ameriprise Financial. [SLIDE 1] Today we’re going to talk about ways to get a firmer grasp on your current financial situation – so you can start to plan for a more secure future.
Ameriprise New Perspectives Seminar Let’s start by talking about change, because it’s important to understand the big picture before we get into the details. You’ve probably heard the old saying, “the only constant is change.” Well here at Ameriprise, we really believe that’s true. The point here is that when you’re planning for the future you never know what’s up ahead. The economic ups and downs of recent years have reminded us all of that fact. So you have to focus on taking charge of the things you can control. This means creating a plan for the future and acting on it. Your future security is, indeed, in your own hands and you’re taking a positive step toward achieving that security by coming here today. Takeaway: Change is constant – you’ll need to accept that fact and control as many factors as possible.
Ameriprise New Perspectives Seminar What does Ameriprise do? We help people clarify their dreams and goals, then take positive steps toward achieving them. Ameriprise isn’t a company that “starts with a solution” or product, then tries to sell it. We start with the individual. We learn about what they want to do with their lives – whether it’s sending kids to college, saving for a home, or preparing for a secure retirement. We look at their entire financial situation, not just one part of it. Then we tailor our advice in ways that make sense. We take an approach that starts by defining our client’s dreams. Then we help them develop a plan. And of course, we stick by them and track their progress along the way. Takeaway: At Ameriprise, we take an approach that boils down retirement planning to three steps: Dream > Plan > Track.
Ameriprise New Perspectives Seminar With these goals and obstacles in mind, we can move forward and think about several areas that can help – or hinder – you as you plan for the future. At Ameriprise, we focus on the four cornerstones of financial planning to help clients take a fresh look at their financial lives – not just investments. By focusing on your entire financial life, we can create a solid understanding to help you gain control of your financial situation today, stay on track toward reaching your goals tomorrow, protect yourself from setbacks along the way, and maybe even find opportunities to jumpstart your saving and investing program. The Four Cornerstones are the key to understanding today’s realities and tomorrow’s possibilities: Cash and Liabilities, Protection, Investments, and Taxes. Takeaway: Take these goals and align them with a proven framework that will give you a new perspective on your financial realities and how to improve upon them.
Ameriprise New Perspectives Seminar Now that you have some background on the help the company provides, I’d like to take a minute to tell you a bit about me. [Give name, title, credentials, years of experience, etc.] One of the reasons I do what I do is because I feel I can make a real difference in the lives of my clients, especially during challenging times. No matter how the markets change, my clients’ goals and dreams don’t go away. I enjoy listening to my clients, understanding their feelings, needs, dreams and concerns, and helping them plan for their goals. I believe that having a clear picture of where you want to go – and an understanding of what it will take to get there – makes getting there much more possible. So let’s begin… Takeaway: Provide professional and personal information so audience knows and understands your commitment to your work.
Ameriprise New Perspectives Seminar By taking a closer look at each of the Four Cornerstones of your financial plan. We’ll start with cash and liabilities.
Ameriprise New Perspectives Seminar These consist of your everyday finances – essentially the money coming in and the bills you must pay. Cash consists of the flow of money into your household, for example from a paycheck. Liabilities include regular, predictable expenses such as your mortgage, home equity loans, and credit cards. The ability to access cash quickly is called your liquidity. Liquidity is key because it preserves your ability to react to short-term needs for cash without undermining your long-term financial goals. Takeaway: You need to understand the basics of personal finance, your access to cash, and the routine (and surprising) liabilities that must be addressed.
Ameriprise New Perspectives Seminar How can you get the most out of your money? How can you optimize your cash and better manage your debt? First of all, when you get your paycheck, make sure you have enough to pay for your everyday expenses. Once you’ve reached that target…
Ameriprise New Perspectives Seminar … you should set a little aside in a short-term cash reserve before you pay other bills. Use this cash to pay for minor emergencies, such as an unexpected car repair.
Ameriprise New Perspectives Seminar Ideally, you also should have enough cash in a long-term reserve to cover 3 to 6 months of expenses in case you lose your job. Most people don’t have this cushion, by the way.
Ameriprise New Perspectives Seminar What about managing money that is going out to pay debts? Start by paying high-interest debt first, like credit card bills,
Ameriprise New Perspectives Seminar then lower-interest debt.
Ameriprise New Perspectives Seminar Finally direct your money toward debts that are accruing no interest. Also, think about consolidating your debt. Get a loan with a low interest rate and use it to pay off credit card debt, and then pay off the new balance through a monthly payment. Getting better at managing debt and focusing payments in the right areas is a great step toward taking greater control of and optimizing other aspects of your financial life. Takeaway: It’s important to optimize your money so you have a greater cushion of cash and so you don’t pay more than you need to as you deal with debt.
Ameriprise New Perspectives Seminar Getting a handle on cash and liabilities is very important, but protection is a factor that deserves equal attention. If something bad and unexpected were to happen, what would it do to your goals? To your family? Protection is a critical way to help keep your financial plans on track. Takeaway: Something we don’t often think about, but protection from the unexpected is critical to keeping your financial plans on track.
Ameriprise New Perspectives Seminar You probably don’t often think about protection or insurance, but unwelcome surprises have the greatest chance of derailing your dreams. Did you know that 70% of people over the age of 65 are going to need long-term care? That can really deplete your retirement savings.
Ameriprise New Perspectives Seminar How might a fire or flood,
Ameriprise New Perspectives Seminar or a car accident affect your finances if you’re not insured?
Ameriprise New Perspectives Seminar What happens if you have an accident and suddenly you can’t earn a paycheck? Sound farfetched? The fact is that more than 30% of Americans between the ages of 30 and 64 will become disabled at some point in their lives. (Source: America’s Health Insurance Plans Study, April 2007)
Ameriprise New Perspectives Seminar Similarly, an unexpected illness,
Ameriprise New Perspectives Seminar a lawsuit,
Ameriprise New Perspectives Seminar or a death in the family – whether it’s the breadwinner or the person running the household – can set families on the brink of poverty. All of these potential risks have a solution in the form of insurance contracts. Takeaway: Insurance is necessary to protect you and your loved ones from some unexpected, and some inevitable, events.
Ameriprise New Perspectives Seminar If you sat down to assess your current protection, what do you think you’d find out? One way to prepare yourself is through a Comprehensive Protection Review, a tool we use at Ameriprise to look at your risks and identify gaps in your coverage so you can take action. I’m going to hand out our Comprehensive Protection Review worksheet, and let’s think about some questions regarding your personal protection plan: [PAUSE] Now, as you look at what you’ve written, you might have noticed some gaps. It’s important to fill those gaps sooner rather than later. Think of insurance as the way you defend your financial goals from the negative forces. You guard against the factors that can ruin your plans. A first step to fill insurance gaps is to look at employer-sponsored insurance benefits and see if you’re taking full advantage of them. This should include life and disability coverage, which are often overlooked, but are essential to financial security. This is another case where a financial advisor can help because insurance should be viewed as part of your whole financial plan, not as a separate entity. Takeaway: Having adequate protection will help to give you peace of mind you need to focus on your goals and achieving financial security.
Ameriprise New Perspectives Seminar In the same way that a lack of insurance can deplete your retirement savings, the risk of market volatility can also have significant impact on your nest egg. That’s why it may be a good idea to incorporate guaranteed income into your asset mix—not only does it ensure a portion of your savings is unaffected by market performance, it also gives you the peace of mind to know your essential expenses can be covered no matter what. Some people choose to create a steady, predictable stream of income by buying what’s called an immediate annuity. With these annuities, you pay one lump sum of money in exchange for a company’s guarantee that it will pay you monthly income for life or for a defined period. With this income guaranteed, you know that your basic expenses are covered, and you can focus on having those short- and long-term cash reserves for unexpected events. This guarantee can give you a bit more freedom in terms of investing other money you’ve saved for retirement. Specifically, you might be able to invest more aggressively and potentially boost long-term returns. But remember, all guarantees are based on the continued claims-paying ability of the issuing company and, on variable annuities, do not apply to the performance of the variable subaccounts which will vary with market conditions. Another option is to buy CDs with different maturity dates – say, 1-, 2-, 3-year, etc. – and continually reinvest the money when they mature. This is called “laddering” your CDs. Using this technique you always have some degree of liquidity, so you can take income if you need it. Or just keep on buying CDs in this laddering fashion to keep your money at work. New guaranteed income products—and variations to existing ones—are coming on the market every day, and no matter which you may be considering, it’s complicated and not appropriate for everyone. Be sure to talk to a financial advisor to find out whether guaranteed income of any kind makes sense for you and, if so, which is the best solution for your goals. Takeaway: Annuities offer one option for guaranteeing a certain level of income so you can keep your other investments working more aggressively for you.
Ameriprise New Perspectives Seminar Now that we’ve got a better handle on current financial matters, let’s focus on investing for the future. Investments are key to financial success and they’re also one of the most complex and difficult areas to master. Takeaway: Taxes are an important cornerstone in your plan, and should be accounted for as much as possible in advance.
Ameriprise New Perspectives Seminar Having a well-thought-out strategy for investing is critical, but equally important is sticking to that strategy over time when the markets are in flux and creating emotional mayhem. Investing is always a tug-of-war between the head and the heart and sometimes, that can lead you down the wrong path. Have you or anyone you know ever made decisions to get in or pull out of the market based on emotion or very little real information? [PAUSE FOR RESPONSE] When the market is up, we feel euphoria. And when the market turns, as it inevitably does, we experience various emotions as it drops. Near the bottom, it feels like everybody is selling and the price just sinks lower. Being reactive is not always the best way to invest. So the message is this: Be disciplined and stay on track! We know that it’s easy to get caught up in the short-term trends of the market. That’s why it’s a good idea to have a financial advisor at your side when you’re making important investment decisions. We add value because we can look at these investment decisions with objectivity and help you stay on track to your financial goals. Now, let’s look at some alternative approaches to investing. Takeaway: Emotions play a big role in investing and it can be hard to stay on track. You have to realize this and seek approaches that have more rigor and objectivity.
Ameriprise New Perspectives Seminar Trying to time the market is difficult. Instead of just jumping in, there is a strategy that puts some of your money back to work in the market while simultaneously managing risk. It’s called dollar-cost averaging. Here is an example of how it works. In this hypothetical example, you want to invest in a particular company’s stock, but you don’t know what the stock price will be at any given time. When the stock price goes up, your $100 will buy fewer shares than when the stock price is down. So by buying the same stock at regular intervals, your dollars might buy more shares at some points, and fewer shares at other times. What if you had invested a lump sum of money all at one time? You might have bought at a time when the stock price is high, leaving you with fewer shares and therefore, less profits. Can you see that, by dollar-cost averaging, you don’t have to worry as much about the risk of market fluctuation and the chance that you’re investing at just the wrong time. The idea here is that you don’t need to go for the home run when you invest. A steady stream of singles and doubles, over time, is more likely to make you a winner. Takeaway: Smaller investments made over time can help you achieve your goals.
Ameriprise New Perspectives Seminar Another important factor in investing is diversification. Diversification is a strategy that helps you spread risk throughout your portfolio, so investments that do poorly may be balanced by others that do relatively better. Diversification does not assure a profit and does not protect against loss in declining markets. But, in essence, diversification means spreading your investments across a range of different types of asset classes. Some asset classes, like international stocks, for example, are associated with higher risk and higher returns. Others, like bonds, are often associated with lower risk and lower returns. Of course, these are not hard and fast rules. As we have discussed, there is no telling what the markets will do. Still, if we look at market performance in recent years, it demonstrates a strong case for maintaining a diversified portfolio. Here’s a quick glance at how three of ten asset classes – international stocks, mid cap stocks, and bonds – ranked in selected years over the past decade, based on how well they performed. As you can see, their rankings go up and down based on the year. Now, let’s look at the diversified portfolio.
Ameriprise New Perspectives Seminar This category represents a balanced mix of those three classes of investments as well as seven others, including other stocks, cash, and real estate. You can see that the category rankings change from year to year, and while the diversified portfolio doesn’t get the adrenaline pumping, it tends to be a steady performer regardless of where any other investment class winds up. And you can also see that, over time, being diversified lets you reduce the amount of risk you take on, yet the rewards in the end can be the same or even better than a higher risk strategy might deliver. Also remember that diversification within particular asset classes is important, too. You don't want to only hold one stock, be weighted in one sector, or pursue one type of strategy... it puts you at significant risk if something should negatively impact that one thing. Within each asset class, you should have a mix of products – for example, your equity portfolio might include individual stocks, mutual funds, and ETFs across a range of sectors and market capitalizations, including both domestic and international markets. We're not getting into specifics here, obviously, but the point is that diversification should be reflected across both the breadth and depth of your portfolio. Takeaway: No one can predict what investments will do, but diversification can be effective in mitigating risk.
Ameriprise New Perspectives Seminar Now we get to talk about another heart-warming area of interest to all of us and the final aspect of your financial plan: taxes! Tax planning requires that we answer a number of important questions: How will taxes affect you in retirement? Will your taxes be higher or lower than they are now? If you expect your tax bracket to be lower in retirement, pre-tax contributions today may make sense, like a “ traditional ” 401(k). If you expect your tax bracket to be higher, a Roth IRA might make sense. I ’ ll talk about that in a minute. Takeaway: It’s important to consider the impact of taxes on your plans for financial success.
Ameriprise New Perspectives Seminar Part of a sound financial plan is ensuring that as much of the wealth that you worked so hard to build over your lifetime passes on to your family. As the expression goes, the only two things in life that are inevitable are death and taxes. And unfortunately, the two go hand in hand when it comes to estate planning. One idea in order to ensure that your heirs receive the most from your estate is to look for ways to reduce certain income taxes on other assets, especially appreciated property, and expenses as much as possible. These include estate taxes, income tax on retirement plan or annuity income, and probate expenses, court costs, etc. If you’re married, another idea is to make your spouse the beneficiary of an IRA, rather than your estate. By doing so, you can increase the final amount your spouse will get… by lessening their tax bite. You might know that before 2001, there was a maximum 55% estate tax on all taxable assets over $675,000. Up until last year, the tax cuts of the early 2000s gradually raised the exemption level to $3.5 million while the tax rate moved lower, down to 45%. Good news for big estates. However, if Congress doesn’t act this year to make the tax cuts permanent or amend the law, in 2011 the maximum estate tax rate will rise and the exemption level will drop – both back to levels established before 2001. Bad news for big estates. So, this is something you should focus on now. There are a number of methods for enhancing your legacy. Proper estate planning requires the support of a team of professionals—your attorney, tax advisor, and financial planner all are critical to success. In addition to protecting your estate from future taxation, you’ll also need to protect your finances in retirement. So let’s spend a minute looking at the tax implications of various investments, as it can make a big difference in the actual dollars you’ll have to spend in retirement. Takeaway: Taxes are inevitable, but you can preserve the value of your legacy with proper planning.
Ameriprise New Perspectives Seminar Retirement savings fall into three tax categories. Ideally, you should work with your tax advisor to see how these categories create opportunities or risks for your future income. Taxable investments include mutual funds, stocks, bonds, and CDs not held in a tax-advantaged account. Generally, income falls in this category. These are taxed right away, when you receive dividends or interest from them.
Ameriprise New Perspectives Seminar The tax-deferred category includes workplace retirement plans, traditional IRAs, and deferred annuities.
Ameriprise New Perspectives Seminar Finally, tax-free investments are those funded with “after-tax” dollars. Then, if you qualify, the earnings from that investment – 20 or 30 years later – are not taxed when you withdraw them. One version of this investment is a Roth IRA. Another example is proceeds from a life insurance contract. It may be helpful to have diversity in how your investments fall in these taxation categories. It’s a tricky area, though. And as I said, I can’t give you tax advice, but I often work with my clients’ tax advisors as I help clients create action plans for their financial futures. Takeaway: It’s important to know how your assets will be taxed. Tax diversity can make a big difference in terms of the ultimate value of these assets.
Ameriprise New Perspectives Seminar [THIS SLIDE IS OPTIONAL] I realize that you might not be entirely familiar with Roth IRAs, so here’s a quick snapshot:
Ameriprise New Perspectives Seminar A Roth is always bought with after-tax dollars. You have to fund it with money that has already been taxed . But, here’s the payoff:
Ameriprise New Perspectives Seminar Later on, assuming certain holding period requirements have been met, you can withdraw that money and any accumulated value tax-free .
Ameriprise New Perspectives Seminar There are certain income limits that prevent some people and couples from contributing money to a Roth. This means that, on any given year, if your income is too high, you can’t make additional contributions to your Roth IRA. Finally, the government lets you roll over other workplace retirement plans or IRAs, into a Roth IRA. This is called a Roth Conversion. The reason the Roth is in the news so much this year is because until 2010, only people with adjusted incomes below $100,000 were allowed to convert to a Roth. But this year,
Ameriprise New Perspectives Seminar Those income limits are gone. So now, anyone can convert to a Roth. As we said before, the Roth has to be funded with after-tax dollars, so you generally have to pay taxes on the money you convert. It’s never easy to pay extra taxes, but 2010 might be the best year to convert some or all of your retirement plan. One advantage to converting in 2010 is that you get to delay paying the taxes on the income from the conversion. Thus, that income may be spread equally over tax years 2011 and 2012, potentially allowing you to avoid moving into a higher tax bracket. A second reason is that the tax cuts of the early 2000s are scheduled to expire at the end of 2010. After that, it’s likely that the top tax rates could move higher. So, you might benefit from converting while the existing tax rates are still in effect and it could make sense to opt out of the two-year tax treatment. As you can see, a Roth IRA may be a great investing tool, but it’s wise to talk to a financial advisor about whether it’s a good opportunity for you and your financial situation. Takeaway: Roths have many attractive features and in 2010, they are becoming available to more people than ever.
Ameriprise New Perspectives Seminar I hope that today’s workshop has provided actionable ideas to get from where you are today to where you want to be tomorrow. I said earlier that we can’t know the future, so we have to focus on taking charge of the things we can control. This starts with a plan. And you can see that – even in the short time we’ve spent together – you can make a difference by thinking about your future, facing the questions about your financial life, and investing to achieve your goals. Your future financial security is in your own hands. And your decision to come here today is already moving you toward that security and the dreams it makes possible. Takeaway: Hope you’ve learned something today. Would like to help you to continue your exploration of your financial options and help you get on the path to achieving your dreams.
Ameriprise New Perspectives Seminar I hope you enjoyed our session today and that it helped you get a better understanding of the dynamics of the financial world and how you might achieve your goals through creating good plans and then acting on them. Ameriprise Financial is a strong, responsible company that’s spent more than a century providing financial solutions for people like you. It’s been my pleasure to meet with you today. I hope that, if you need help formulating an action plan for your financial future, you’ll reach out to me. Working together, we can help you build a financial plan designed to bring your dreams within reach. With that in mind, I’d like to invite you to meet with me to discuss a Four Cornerstones review. Or, if you’d like to attend another seminar, I’ll hand out a schedule of future workshops. [If applicable, pass around schedule for additional workshops along with comment card] Also, I am going to hand out a comment card that I hope you’ll fill out. This will give me a better sense of whether I’m providing the information you need to make smart financial decisions. If you leave here with no other message today it’s this: take action now. Don’t wait. It’s very easy to gather information about various financial options, but it’s much harder to decide on a plan, make decisions, and move ahead. This may seem like a daunting task but I can tell you that with the help of an Ameriprise financial advisor like me, you can explore options to help you feel more confident about your financial future. Thank you for coming! Takeaway: We hope you’ll choose to build a relationship with Ameriprise, who takes a client-focused approach to help you achieve your goals in retirement.
