The document provides an overview of strategies for achieving a healthy financial life, including budgeting, investing, retirement savings, and financing a home. It discusses developing a budget and paying down high-interest debt. It also covers topics like buying vs renting a home, creating an investment portfolio based on goals and risk tolerance, saving for retirement through vehicles like 401ks and IRAs, and tips for young investors like starting to save early.

1. It’s Your Future: Strategies for a Healthy Financial Life Christina Perley, Financial Advisor Andrew Senfield, Financial Advisor Benjamin Josephson, Wealth Management Banker

2. Merrill Lynch Life Agency Inc. is a licensed insurance agency and a wholly owned subsidiary of BAC. © 2011 Bank of America Corporation. All rights reserved. The information in this presentation is intended to be a general introduction of Merrill Lynch’s approach to wealth management. It is not intended to be either a specific offer by any Merrill Lynch entity to sell or provide, or a specific invitation to apply for, any particular product or service. Merrill Lynch offers a broad range of brokerage, investment advisory (including financial planning) and other services. There are important differences between brokerage and investment advisory services, including the type of advice and assistance provided, the fees charged, and the rights and obligations of the parties. It is important to understand the differences, particularly when determining which service or services to select. Any information presented about tax considerations affecting client financial transactions or arrangements is not intended as tax advice and should not be relied upon for the purpose of avoiding any tax penalties. Neither Merrill Lynch nor its Financial Advisors provide tax, accounting or legal advice. Clients should review any planned financial transactions or arrangements that may have tax, accounting or legal implications with their personal professional advisors. While Financial Advisors may discuss healthcare costs as part of a client’s retirement plan and provide general information on social security options, Financial Advisors do not provide specific advice on healthcare coverage or social security. If you have questions regarding your particular situation, please contact your legal or tax advisor. Asset allocation, diversification and rebalancing do not assure a profit or protect against a loss in declining market. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”), a registered broker-dealer and member SIPC, and other subsidiaries of Bank of America Corporation (“BAC”). Investment products offered through MLPF&S and insurance and annuity products offered through Merrill Lynch Life Agency Inc.: 451002PM-0811 ARD0T3N4 Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value Are Not Deposits Are Not Insured by Any Federal Government Agency Are Not a Condition to Any Banking Service or Activity

3. Today’s Discussion Current Market and Economic Update Christina Perley, Financial Advisor Financial Planning- Basics for Young Investors Andrew Senfield, Financial Advisor Buy vs. Rent? Interest Rate Environment Benjamin Josephson, Wealth Management Banker IV. Wrap Up, Q&A

4. 3 rd Quarter Market Review Brutal 3 rd Quarter for Risk Assets ~ Global equities and high yield bonds suffered their greatest losses since the fourth quarter of 2008 Fears of a global recession EU debt default Policy impotence ~ Commodity prices collapsed ~ 10-year Treasury yield fell to a record low ~ Equity volatility at its highest since March ’09 ~ Investors pricing in a hard landing in China Intensifying the risk-off sentiment

5. October was a treat, but ends with a trick 3 rd best October for S&P since 1928 October was a treat, but ends with a trick With a return of 10.8% for the S&P 500, October was a treat for investors. It was the third best October and the 23rd highest monthly return for the S&P since 1928. But, renewed concerns over the lack of a solid plan to resolve the European sovereign debt crisis have turned the equity markets to a trick from a treat. The drop of 5.2% from the 28 October high in the S&P 500 has generated two 90% down days on a pick-up in volume. This bear market behavior has tricked the bullish seasonal pattern, but the risk is that Europe’s sovereign debt issues trump bullish year-end seasonals. Key levels to watch – 1200 area support The bad news is that the S&P 500 is back below the 200-day moving average near 1274 . While below this moving average, the bullish seasonal bias into year-end is called into question. The good news is that the S&P is testing support at 1230-1200, which is the breakout area of the recently completed double bottom off the 1100-1074 lows. Holding this support would keep the breakout intact with an upside pattern projection of 1350-1360 to as high as 1385. But, with the exception of projected Fibonacci support at 1184-1158, there is not much support ahead of 1100-1074 on a decisive break below 1200.

6. What to expect moving forward Our Research Investment Committee’s base case: ~ Over the medium term: Low growth, Low interest rates, and High liquidity (portfolios tilted toward assets that generate high growth, high yields and high quality) ~ In the short term, tail risks exist (low probability): Disorderly Greek debt default A hard landing in China Slump in global earnings growth ~ If the global economy avoids a recession: Policy stimulus gains traction Yields attract buyers Possible reversal of fortune for risk assets in 4Q11

7. 20-Yr annualized returns by asset class (1990-2009) (1) Barclays Capital US Aggregate Bond Index. (2) Calculated using Dalbar Funds Flow information. Source: JPMorgan (1) (2)

8. Budgeting Investing Retirement Savings During today’s seminar we will help you explore: It’s Your Future What We’ll Discuss Today

9. Build a solid spending and savings foundation Develop a relationship with a financial provider Include your spouse or life partner in managing your finances Balance your priorities and make tradeoffs Invest for growth potential while managing risk Safeguard your health and well-being Protect your earnings potential Focus on family and intergenerational topics Expand your life experiences Give Back Take the long view and invest in yourself Create the Future You Want

10. Sources: 1 http://projectonstudentdebt.org/files/pub/classof2009.pdf 2 https://www1.salliemae.com/about/news_info/newsreleases/041309.htm The average senior who graduated in 2009 had: $24k in student loans 1 $4.1k in credit card debt 2 1 in 5 had over $7k in credit card debt Prioritize what’s important to you Recognize financial realities Live within your means Save as much as you can Pay yourself first Manage liabilities as well as assets The Solution Young and in Debt The Challenges Newly Graduated/Newly in Debt

11. 1 http://www.1960sflashback.com/1960/Economy.asp 2 Assumed 2.5% Inflation Rate from 2010 through 2050 Inflation A Necessary Planning Factor $.31 $.49 $.04 $.57 1960 1 2010 $2.73 $3.67 $.44 $1.37 2050 2 $7.33 $9.85 $1.18 $3.68

12. Budgeting

13. Become more aware of day-to-day cash flow and expenses Pay down debt, especially high-interest debt Consider health care and insurance options Set up an emergency fund Hypothetical example for illustrative purposes only. Assumed minimum payment is calculated by using 2.5% of the balance Budgeting Develop a Budget and Stick to It Create a budget to help plan for the long term High Interest Debt can be crippling Paying the minimum balance on a $1,000 balance credit card with an 18% APR will take 153 months to pay off and you would have paid $1,115.41 in interest!

14. http://www.smartmoney.com/personal-finance/real-estate/to-rent-or-to-buy-9687/ Flexibility (can relocate easily) Can invest money elsewhere (stock market) No upkeep fees (drippy faucets, broken dishwashers, etc.) No Equity Annual rent increase could outpace inflation Budgeting Buy or Rent? Renting Pros Cons Tax-break: deduct mortgage interest and property taxes Potential tax-free capital gain Emotional satisfaction Property tax and upkeep Mortgage costs Less flexibility should you want to move; in very bad housing markets, you could lose principal Buying

15. The interest rate of this loan is locked in at origination and remains the same throughout the term of the loan These loans have an interest rate that is tied to an index, changing with prevailing market rates Adjustable Rate Mortgage Fixed Rate Mortgage Budgeting Financing a Home The FHA loan is a fixed rate mortgage that is designed especially for the first time home buyer of moderate or low income. A VA loan, is designed for men and women with a history of active military service or he/she is the surviving spouse of an active service member. Government Guaranteed Loans

16. Investing

17. Learn about investing Identify your financial goals Work with a Financial Advisor Monitor your portfolio Taking Control Investors can take greater control of their financial situation.

18. Your goals, timetable and tolerance for risk A balance of stocks, bonds and cash Monitoring and rebalancing your portfolio The more time you have, the more aggressive you can be! A Strategy Defined By Your Goals Your overall investment strategy depends on: ? ? ? STOCKS BONDS CASH

19. Conservative Moderately Conservative Moderate Moderately Aggressive Aggressive Source: Bank of America Merrill Lynch Research Investment Committee (RIC) Report, March, 2011. Models are for illustrative purposes only. Merrill Lynch has changed the allocations for each model in the past and may change the allocations in the future, depending upon research and investment strategy recommendations. Determining An Appropriate Asset Allocation Merrill Lynch Asset Allocation Models 20% 55% 25% 40% 50% 10% 60% 35% 5% 70% 25% 5% 80% 15% 5% Stocks Bonds Cash

21. 16.5 to 1 3.3 to 1 2.3 to 1 "The 2009 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds," May 12, 2009. Not-so-good News: Social Security Is Threatened by an Aging Population Ratio of Workers to Beneficiaries 2010 2025 1950

22. Private Pension Plans, Participation, and Assets: Update (Data from tabulations of the U.S. Department of Labor's Form 5500) Number of Defined Contribution Plans Number of Defined Benefit Plans Not Your Parent’s Retirement Plan

23. There Is Hope “The Rule of 72” "Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it." - Attributed to Albert Einstein The “Rule of 72” is a simple way to determine how long an investment could take to double, given a fixed annual rate of interest. You divide 72 by the annual rate of return, to get an estimate of how many years it could take for the initial investment to double. Hypothetical example for illustrative purposes only. Results are not meant to represent the past or future performance of any specific investment vehicle. Actual rates of return cannot be predicted and will fluctuate. Your results may be more or less. Example $100 invested at 10% would take approximately 7.2 years to turn into $200.

24. Start Saving As Soon As You Can The sooner you start, the more money you could potentially have in retirement This hypothetical illustration assumes an annual $5000 IRA contribution made at the beginning of each year for 35 years, a 7% annual rate of return, and no taxes on any earnings within the IRA. Hypothetical results are for illustrative purposes only and are not meant to represent the past or future performance of any specific investment vehicle. Investment return and principal value will fluctuate and when redeemed the investments may be worth more or less than their original cost. (35 Years later) At Retirement $5,000 $739,567

25. Save for Retirement Every Year Even one year can potentially make a difference in your nest egg This hypothetical illustration assumes annual $5000 IRA contribution made at the beginning of each year and beginning one year apart for various ages, a 7% annual rate of return, and no taxes on any earnings within the IRA until the age of 71. Hypothetical results are for illustrative purposes only and are not meant to represent the past or future performance of any specific investment vehicle. Investment return and principal value will fluctuate and when redeemed the investments may be worth more or less than their original cost.

26. Roth IRA Traditional IRA Choose the IRA That’s Right for You Contributions may be tax-deductible Withdrawals taxed as ordinary income Contributions are not tax-deductible Withdrawals are taken tax-free Must be under 70½ to open and contribute Anyone with earned income can contribute No age limit Contribution eligibility is based on income Required Minimum Distributions Distributions prior to age 59½ may incur a 10% additional federal tax No Required Minimum Distributions 10% additional federal tax on early withdrawals applies to earnings only

27. Many companies offer to match a percentage of employees’ 401(k) contributions Investors should consider contributing at least as much as the company is willing to match Don’t leave “free money” on the table by failing to contribute to your company’s 401(k) Meet Your Company Match In 401(k) Plans ¹ http://www.bls.gov/news.release/pdf/nlsoy.pdf , September 2010 The average person born in the latter years of the baby boom held 11 jobs from age 18 to age 44 1

28. Reasons to Invest Early Impacts on Your Paycheck A pre-tax contribution to your retirement account reduces your take home pay less than the amount of your contribution. Example Mary is 35 and her annual salary is $50,000. She wants to contribute 5% of her salary to her 401(k) to take advantage of her company’s matching contributions and retire in 30 years. Results Mary’s monthly take-home pay would be reduced by: $156 Her annual income tax bill would decrease by: $625 With an employer match, at age 65 her account would grow to: $395,291 This hypothetical illustration assumes a 5% contribution rate at the beginning of each year, a 6% annual rate of return, and a 25% federal tax bracket (state and local taxes are not included). It also assumes a company match of 100% for every dollar contributed up to 5% of eligible compensation. Hypothetical results are for illustrative purposes only and are not meant to represent the past or future performance of any specific investment vehicle. Investment return and principal value will fluctuate and when redeemed the investments may be worth more or less than their original cost. Taxes are due upon withdrawal. If you take a withdrawal prior to age 59½, you may also be subject to a 10% additional federal tax.

29. Best Practices to Help You Plan for your Future Save Every Year Pay Down Debt Monitor and Adjust Your Portfolio Start Saving As Soon As You Can Meet Your Company’s 401(k) Match Create A Budget

30. Questions?