This presentation is to communicate ideas and information that will help you build financial security. We define financial security as a feeling of confidence that you will achieve your financial goals through the actions you are taking today.
2. • Worries
• Delays
• Regrets
• Confidence
• Actions
• Goals
Why is money a problem
for some people?
Financial Security - What Is It?
Financial security means different things to different people.
And a problem-solver
for others?
3. A feeling of confidence that
you will achieve your
financial goals through
the actions you are
taking today.
Financial Security - Defined
Risk Management
Wealth
Accumulation
Wealth
Preservation
& Distribution
Knowledge and actions work together to build financial security.
4. • Health care
• Real estate
• Taxes
• Investments
• Job security
• Savings
• Disability
• Social Security
• Insurance
• Inflation
• College costs
Do You Have Financial Confidence Now?
Discussing your concerns can help build financial confidence.
5. A Structure for Lifetime
Financial Security
Risk Management
Wealth
Accumulation
Wealth
Preservation
& Distribution
Financial security can be achieved across all life stages.
6. A financial pyramid
is only as strong
as its foundation.
• Life insurance
• Disability income
insurance
• Long-term care
insurance
• Health insurance
• Auto and home
owner’s insurance
Risk Management: A Strong Foundation
Lifetime financial security is built on a foundation of risk management.
Risk Management
Northwestern Mutual and its subsidiaries does not sell auto or home owner's insurance.
7. Age $50K Income $100K Income $200K Income
30 $1,750,000 $3,500,000 $7,000,000
40 $1,250,000 $2,500,000 $5,000,000
50 $ 750,000 $1,500,000 $3,000,000
Potential Income to Age 65
Protect Your Most Valuable Asset
Your ability to earn an income is your most valuable asset.
8. His HersObjective
Income Replacement
Pay Off Mortgage
Education Funds
Emergency Fund
TOTAL
?
How Much Life Insurance?
The answer depends on what you want and need to accomplish.
9. Probability of Becoming Disabled
Prior to Age 65
Probability in %
DI insurance can replace a portion of your salary if you can't work.
One Person
25 4530 35 40 50 55
Age
Three People Five People
70
60
50
40
30
20
10
0
Source: 1985 Commissioner’s Disability Table (a) Disability lasting at least 90 days. Best occupation classes. Sex-neutral statistics.
10. National Annual Projected Cost of
Long-Term Care Services (2005-2035)
S & P
500
Treasury Bills$50,000$25,000 $100,000
Annual Pre-Disability Income
Annual Lost Income
Annual SSDI Benefits
LTC insurance can provide reassurance about your care later.
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
0
Note: These figures provide national averages. See your financial representative (a licensed insurance agent) for the average cost of
care in your area. Long-term care insurance is offered through Northwestern Long-Term Care Insurance Company.
Home Health Aide
($115/8-hour day)
Assuming a 5.8 percent annual increase in costs
Nursing Home Facility
($177/day semi-private room)
$42,000
$350,600
$64,600
$227,800
Source: Dykes, J.S., “The Outlook for Long-Term Care Insurance,” Kiplinger’s Retirement Report, April 2004. “Basic Statistics about Home Care,”
National Association for Home Care, 2004. ($109/day for 2004). “Nursing home costs average $57,700/year survey,” Daily Articles from
Reuters Health, August 4, 2003, ($158/day semi-private room for 2003).
11. Addressing Life’s Financial Risks
• Premature death
• Disability, defined as sick,
hurt and inability to work
• Cost of care associated
with injury, illness or
declining health
Risk Management Summary
Proper risk management is essential to financial security.
Risk Management
13. Four-Year Public $26,741
Four-Year Private $35,696
Source: College Board www.collegeboard.com, Trends in Higher Education Series, "2009 Trends in College Pricing"
Begin by Defining Each Goal
and its Cost
Define expected costs before making specific investment decisions.
15. Personal Investor Profile
• Investment time frame
• Withdrawal time frame
• Personal liquidity
• Income stability
• Risk tolerance
What's Your Tolerance for Risk
A profile will increase your confidence when evaluating investments.
18. 70 82.6% 88.6%
80 51.4 64.9
90 14.5 26.3
Among 60-year olds
in the U.S., the percentage
of those who will live to age…
Purchasing power
of $100,000 at age…
(Assumes a 4% annual rate of inflation)
Source: Social Security Period Life Table updated 2006.
Men Women
Prepare for a Long Retirement
Plus Inflation
60 $100,000
70 67,556
80 45,639
90 30,832
Strategies should account for inflation to maintain purchase power.
20. Wealth Management needs include:
• Savings and investment
for retirement
• Asset allocation
investment strategy
based on Personal
Investor Profile
• College funding
vehicles
Wealth Accumulation Summary
Basic investment principles and expert guidance can help you.
Wealth
Accumulation
21. Retirement income
Estate coordination
Lifetime gifts
Charitable gifts
Wills and trusts
Life insurance
Wealth
Preservation
& Distribution
Wealth Preservation and Distribution
Making the most of the assets you worked so hard to accumulate.
22. Quality
• Predictability
• Flexibility
• Liquidity
• Inflation-hedge potential
• Longevity protection
So you can…
• Count on it
• Change it, if you wish
• Access cash for special needs
• Protect your purchasing power
• Be confident you won’t outlive it
What qualities are important
in your retirement income?
Designing a Retirement Income
Not all types of retirement income are equal.
23. • How much do you want to leave to heirs?
• When do you want your heirs to receive the money?
• What values would you like to pass on to your
children and heirs?
• Have you considered making any gifts to charity?
• When was the last time you updated your will
and trust?
Estate Preservation and Distribution
Taking the initiative now can avoid complications later.
24. Wealth Preservation and Distribution
needs may include:
• “Self-sufficient” retirement income
as long as either lives
• Wills and trusts that clarify
estate distribution wishes
• Lifetime gifts to grandchildren
for college needs
• Life Insurance
Wealth Preservation and Distribution
Summary
Wealth
Preservation
& Distribution
Maybe not pressing issues now but forethought can help in the future.
25. Protecting
your income
Plans to pay for
college costs
Appropriate
investment risk
Retirement
confidence
Savings
discipline
Estate analysis and
minimization of taxes
Sufficient
retirement income
Protecting
your assets
Wealth
Preservation
& Distribution
Wealth Accumulation
Risk Management
Financial Confidence = Identifying Your
Needs and Providing Solutions
Identifying your needs can increase your financial security.
26. About Northwestern Mutual
• Received the best possible
insurance financial strength
ratings from the four major
rating agencies.
• Northwestern Mutual is the
only company to lead its
industry in America's Most
Admired Companies® for
25 years - FORTUNE®
magazine
Who we are…a company with over a 150-year tradition
Ratings: Moody's 04/09, S&P 07/09, Fitch 06/09, A.M. Best 06/09. Third party ratings are subject to
change.
For further information, see Northwestern Mutual's Annual Report on our web site
www.northwesternmutual.com. Dividends are not guaranteed, reviewed annually, and subject to change.
27. Personal Needs Analysis…
Step 1: Understand and analyze your specific needs
Step 2: Discuss customized solutions
Step 3: Annually review and adjust as needed
Survivor/Disability Income Insurance/Long-Term Care
Education/RetirementAsset Allocation Estate Analysis
The Next Step
A personal needs analysis is offered at no expense or obligation.
29. The Northwestern Mutual Financial NetworkTM is a marketing name for the sales and distribution
arm of The Northwestern Mutual Life Insurance Company, its affiliates and subsidiaries. The products
and services referenced are offered and sold only by appropriately appointed and licensed entities and
Financial Representatives. Each Financial Representative is a licensed insurance agent and represents
one or more, but not necessarily all, of the entities shown.
The Northwestern Mutual Life Insurance Company (Northwestern Mutual), Milwaukee, WI (life insurance,
disability insurance and annuities) is neither a registered investment advisor nor a registered broker-
dealer.
Strategic Employee Benefit Services is a nationwide marketing program providing employee benefit
services exclusively through the Northwestern Mutual Financial Network.
Securities are offered through Northwestern Mutual Investment Services, LLC, member FINRA and SIPC.
Northwestern Mutual Wealth Management Company, Milwaukee, WI, a wholly-owned company of The
Northwestern Mutual Life Insurance Company, is a limited purpose federal savings bank.
Long-term care insurance is offered through Northwestern Long Term Care Insurance Company, a
subsidiary of The Northwestern Mutual Life Insurance Company, Milwaukee, WI. This policy is intended to
be a tax-qualified long-term care contract. This material is produced for the marketing and solicitation of
insurance.
Disclosures