VO LU M E 5 , I SS U E 1 , 2 0 0 7 PNC Directions I Do! FINANCIAL TIPS FOR NEWLYWEDS Baby Boomers Turn 60 What Comes Next? Strong Dollar, Weak Dollar — What It Means for Your Wallet PLUS A D J U S TA B L E - V S . F I X E D - R A T E M O R T G A G E S WHY NOT TO BORROW FROM RETIREMENT PLANS I T ’ S N E V E R T O O L AT E T O S TA R T M A N A G I N G F I N A N C E S Overwhelmed by Choices? We can help. Connect Turkey or ham? Mustard or mayo? White or wheat? Even the seemingly simple act of ordering lunch may seem frustrating when confronted with too many choices. That frustration can be magnified when the choices involve your finances — and the decisions could impact your future. At PNC Bank, we have designed our menu of financial services to help make banking easy. And we provide tools — such as this issue of Directions — that offer information and advice to help you make those decisions with confidence. Please stop by any PNC branch or call us at 1-888-PNC-BANK to talk about how we can help you make banking as easy as PNC. contents Volume 4, Issue 2, 2006 4 9 11 Sincerely, For Richer and for … Richer? I Do! Financial Tips for Newlyweds Strong Dollar, Weak Dollar Baby Boomers Turn 60 — What Comes Next? Departments News of Note 1 Show Us 2 Smart Shopper 3 Look for these symbols throughout the magazine to learn more about related PNC products. They’re color-coded to the PNC Products and Services section in the back. Making a Difference 3 One Customer’s Story 8 Å Personal Banking 17 Small Business Solutions Å Business Banking 25 ÅÅ Å Å Å Consumer Investments and Wealth Management 30 News of Note If happily ever after isn’t enough to get you to the altar, maybe dollar signs will help. Researchers at Ohio State University found that people who marry accumulate wealth much faster than single people do. In fact, their net worth was a stunning 93% higher. On the other hand, divorced couples experienced a 50% or greater decline in net worth, as the marriage bonus dissolved into legal fees, separate residences and other new expenses. Challenges, uncertainty and what you can do about it. Joseph C. Guyaux President, The PNC Financial Services Group $11,418 See how a conversation with PNC helped a widow get her financial life in order. 14 Life and Money 15 Products and Services 16 PNC Directions is published by Standard & Poor’s Financial Communications for The PNC Financial Services Inc. Copyright © 2006, The PNC Financial Services Group, Inc. All rights reserved. No material may be PNC Directions Group, reproduced in any form without the express written permission of PNC. This publication may provide reference to Internet sites as a convenience to our readers. While PNC endeavors to provide resources that are reputable and safe, we cannot be held responsible for the information, products or services obtained on such sites and will not be liable for any damages arising from your access to such sites. The content, accuracy, opinions expressed and links provided by these resources are not investigated, verified, monitored or endorsed by PNC. Information contained herein is believed to be accurate as of August 2006. These articles are for general information purposes only and are not intended to provide legal, accounting or financial advice. PNC urges its customers to do independent research and to consult with financial and legal professionals before making any financial decisions. The opinions and views expressed by the authors do not necessarily reflect the opinions and views of PNC or any of its subsidiaries or affiliates, nor does the inclusion of the articles in this magazine constitute endorsements by the authors or PNC of any of the products or services of others referenced herein. Certain characters represented in this publication are fictitious and are provided for discussion purposes. Any similarities to any person living or dead are purely coincidental. Vol.5 Iss.1 $3,753 The Marriage Advantage Married Couples Singles AV E R AG E S AV I N G S PER YEAR Source: SmartMoney, June 2006. Women-Owned Businesses: Small by Choice? Most College Savers Are Late Out of the Gate Think Mrs. Field’s. Mary Kay. Martha Stewart. These women are influential reminders of the female entrepreneurial spirit. Here are some of the latest trends on women and small business. Parents of college-bound teens appear to be dragging their feet when it comes to researching the best ways to pay for their kids’ education. Fifty-seven percent (57%) of adults polled recently said they started looking into college costs after their child had already entered high school, while just 11% started planning when their child was a newborn. Nearly 50% of the 10.6 million privately held companies in the United States are owned by women. The Challenge for Late Starters: Rising College Costs 58% of women who own companies larger than $1 million feel the Internet plays a significant role in business, compared to only 35% of men. Just 6.6% of businesses larger than $1 million are owned by women. Yet, many prefer to keep their businesses small in order to preserve a certain lifestyle or to retain control over the destiny of their companies. Source: Center for Women’s Business Research. 2005-2006 School Year (AVERAGE COST FOR ONE YEAR OF TUITION, ROOM AND BOARD AND FEES): $12,127 Public College Private College $29,026 Future College Costs ( FO R TO DAY ’ S N E W B O R N S , E S T I M AT E D AV E R AG E C O S T FO R O N E Y E A R O F T U I T I O N , R O O M A N D BOARD AND FEES*): Public College Private College $29,185 $69,855 *Assumes a 5% average annual inflation rate. Sources: Academic Management Services; The College Board; Standard & Poor’s. ≈ PNC Directions 1 Smart Shopper S h ow U s Making a Difference She says: I would advise Cynthia to start saving Cynthia Lamonte: Pursuing Long-Term Security Cynthia Lamonte is a 40-something single mother who’s eager to build up an emergency fund, but doesn’t really know where to start. Because she always seems to have very little free time — or free money — Cynthia was a bit intimidated about trying to start taking control of her financial life. But when she heard that interest rates on many savings accounts have recently gone up, she decided it was time to get organized and do a better job of planning for the future. Here’s how the professionals at PNC Bank could help Cynthia (and others in her situation). on a regular basis by signing up for PNC Bank’s automatic savings program, which she can set up to transfer money from her checking account into her savings account on a weekly, biweekly or monthly basis. PNC offers a variety of savings options, Clarice Womack, including a Premium Money Market Account, which Branch Manager, Pine Branch, gives you ATM access, checkwriting privileges and Erie, PA online account access, while earning a higher interest rate than a simple savings account. Once Cynthia gets her emergency fund established, I’d ask about her other priorities and encourage her to have a budget for short-term as well as long-term goals. I teach a budgeting class, and people always say to me, “I can’t afford to save.” So I give them an expense tracker, and they track their spending each day. They often find that they’re spending more money than they realize. It might be something like getting your nails done or buying lunch out. Cynthia may be in the same position. If that’s the case, I would help her take a fresh look at her expenses, suggest ways for her to spend less and put that extra money in her account each month. He says: For a single mother like Cynthia, having Tim Hunter, Branch Manager, Friendship Branch, Washington, DC a healthy financial plan is imperative. And having an emergency fund is a first step for anyone in her situation. Ideally, she should have at least enough money set aside to pay routine bills for three to six months. That way, if some sort of emergency arises, Cynthia will have resources available that she can tap into without any penalties. As Clarice mentioned, PNC has many types of accounts to help someone like Cynthia. In addition to traditional savings and money market accounts, we also offer certificates of deposit (CDs), which typically pay a higher interest rate than traditional savings accounts. Rates are currently in the 4% to 5% range and are guaranteed for a specified term. CDs can be one of the easiest ways to save if you don’t need immediate access to your money. But in addition to products, I would also point out that the advice Cynthia would receive from PNC Bank would make it easy for her to do her banking and budgeting and to take control of her financial life. Every bank has saving accounts, but here at PNC Bank, the service and professional advice is what can really make a difference. For more information: Å Personal Banking/Checking Accounts page 19 Å Personal Banking/Savings Accounts page 21 2 Volume 5, Issue 1 Adjustable- and Fixed-Rate Mortgages: Saving Today vs. Saving Tomorrow Attention current and future homeowners: One way to save may hit close to home — literally. When shopping for a home, is a fixed-rate or an adjustablerate mortgage (ARM) best for you? It depends. Answering a few questions may help you decide. Do you intend to remain in your home only for a ? few years? ● Will interest rates likely remain the same or ? ● increase in the near future? Can you afford to make higher mortgage payments ? ● if rates increase? If you answered yes to these questions, you might want to consider an ARM. The initial interest rate is typically lower than with a fixed-rate mortgage, allowing you to possibly qualify for a larger mortgage. Additionally, your initial monthly payment is also lower and remains stable for a specific period of time — often from 1 to 10 years — depending on the terms of the ARM. Once the adjustable feature of the mortgage kicks in, your mortgage payment will periodically change to reflect the current interest rate. An ARM also has a “cap,” which limits the percentage that the interest rate can increase at one time and over the life of the mortgage. A fixed mortgage rate, on the other hand, is just what it implies. The interest rate remains the same throughout the life of the loan. We can help you crunch the numbers to aid your decision. Visit pnc.com, click on Personal, then “Buying a home (right side of page), then scroll down to “Which is better: fixed or adjustable?” under Home Calculators. A Little Bit of Your Time Can Go a Long Way Americans are known for their generosity when it comes to supporting causes that are important to them and their communities. In fact, about 65 million people in the United States volunteered some of their time last year, according to a survey by the Corporation for National & Community Service. Even still, finding volunteers is an ongoing struggle for charities and non-profit organizations. If you’re looking to make a difference in your community, there are a number of ways you can pitch in. There’s a good chance your child’s school or a local senior center, or hospital or other community-based program, is in need of volunteers. Many volunteer activities are a joint effort between organizations. PNC Bank, for example, has partnered with Sesame Workshop and Family Communications, Inc., to create PNC Grow Up Great, a 10-year, $100 million program designed to help young children prepare for school. More than 4,000 PNC employees have volunteered their time to this cause. For more information, about PNC’s community involvement, visit pnccommunityinvolvement.com. For more information: Å Personal Banking/Loans and Credit page 23 PNC Directions 3 C ove r Story Tip! Talk Early — And Often Your Financial “I Do” List According to Nan Mead at the National Endowment for Financial Education (NEFE), conversations like the one the Coras had can make a big difference in the lives of newlyweds. “Because financial issues sometimes cause conflict in a relationship, many people won’t discuss them before marriage,” said Mead. “And that can lead to even greater problems afterwards, when the couple has to deal with financial issues on a daily basis. Talking, and compromise, often go a long way toward resolving such problems.” In many cases, the seeds of a married couple’s financial success are planted before the marriage even takes place. However, it’s never too late to get on the right track. The tips outlined below will help newlyweds from all walks of life make the most of their shared goals and financial well-being. ... we were so focused on the event itself that we never even I Do! thought about the role that money would play in our life Financial Tips for Newlyweds Two weeks before they got married, Greg and Sylvia Cora, both 27 from northern New Jersey, had a somewhat heated discussion about money. The Coras suddenly realized they had significantly different views about spending, saving and their future financial goals. As it turns out, that discussion may very well have been the best thing that happened to Greg and Sylvia. Today, they’re more confident than ever about the future. “Sylvia and I planned and financed our own wedding, so we had to create a wedding budget to make sure we didn’t overextend ourselves,” said Greg, a finish carpenter. “But we were so focused on the event itself that we never even thought about the role that money would play in our life after the wedding. Although we had spoken in great detail about the financial aspects of a one-day ceremony and celebration, we hadn’t even spent five minutes discussing our life-long financial priorities.” 4 Volume 5, Issue 1 Greg smiled as he recalled the exact moment when their outlook started to change. “One day while driving to see the caterer, we began talking about what we hoped to accomplish in the years ahead,” Greg said. “And we had a lot of the same goals — starting a family, buying a house, retiring together, etc. But it quickly became apparent that we both had completely different views on how to get there. Although that was a bit of a nerve-wracking revelation, it also felt great to finally start addressing our future financial needs.” after the wedding. Before the wedding: Tip! Get to Know Your Financial Personalities Mead also said that one of the biggest challenges facing newlyweds is the fact that many spouses have very different “money personalities.” “If that’s the case, then you both need to be candid in assessing your own financial behavior,” explained Mead. “Consider how willing you are to alter your money personality to make it a better fit with that of your spouse. But don’t expect miracles to occur overnight. Develop a solution both parties can live with, and ease into it over time.” That proved to be excellent advice for newlyweds Adriana and David Green, who just bought their first home in Pittsburgh. “I’m a spender. David is a saver,” said Adriana, a 33-year old hair stylist. “I’m comfortable taking financial risks when I invest; he’s more conservative. I also have a six-year old son, Jesse, which means I have additional financial responsibilities. Instead of viewing our situation as a problem, David and I used ✓ Create — and stick to — a wedding budget ● ✓ Discuss shared goals (including ● anticipated time frames) ✓ Talk about the sharing/management of ● financial responsibilities After the wedding: ✓ Review investment accounts and readjust ● if necessary ✓ Increase life insurance coverage ● ✓ Update beneficiary designations on ● financial accounts, insurance policies, etc. ✓ Schedule a meeting with a financial ● professional ✓ Begin setting aside money in an ● emergency savings or money market account ✓ Contribute as much as possible to ● workplace retirement plans and/or IRAs continued on page 6 PNC Directions 5 Successfully Single Alicia Monroe is a 31-year-old yoga instructor from Scranton, Pennsylvania, who has never been married — and who doesn’t plan on getting married anytime soon. However, Alicia is living proof that the strategies singles can use to address their financial priorities and challenges aren’t necessarily all that different from the strategies married couples can employ to plan for their future. “I’ve lived on my own since I was 19, so I’ve always been good at making ends meet,” explained Alicia. “But I also have long-term goals that are important to me, such as buying a home, opening my own yoga studio and retiring early.” With clear goals in sight, Alicia knows that she needs to do more than just make her income last until the next payday. She also recognizes that she needs to set aside money on a regular basis for each of those goals. “That’s why I’m saving for a down payment on a house and contributing the maximum amount allowed to my IRA every year.” Another important part of Alicia’s strategy is what she refers to as her “financial contingency plan.” continued from page 5 it as an opportunity to learn more about ourselves, each other and the financial strategies we’ll use to prepare for the future.” Tip! Move from Talk to Action Here’s a Good Way To Get on the Same Page Want to make sure that you and your fiancée or new spouse see eye-to-eye in terms of managing your finances and setting financial priorities? Go to www.pnc.com and download a copy of our His and Her Financial Questionnaire. Print out two copies and then have both you and your spouse-to-be fill them out separately. Once you’re done, get together, compare your answers and then have a heart-to-heart talk about how to resolve any differences. You’ll find that this exercise will more than likely be time well spent! 6 Volume 5, Issue 1 The Greens have done more than simply talk about money. Just days after returning from their honeymoon, they made an appointment at their local PNC branch to begin implementing forwardlooking financial strategies, such as automating their finances whenever possible. “With help from the people at PNC, we set up accounts that let us save money and pay routine bills automatically each month,” Adriana said. “And acting on advice from PNC, David and I also sat down together to create a household budget, which was quite an interesting experience. Having a budget let us compare how we should be spending our money with how we were actually spending it. Within a month, it became clear that we weren’t being as careful as we thought. So we cut back on unnecessary expenses and that, in turn, let us start setting aside even more money every month. That also allowed us to be able to set up an education savings fund for Jesse’s future.” For Alicia Monroe, savings is no longer a stretch. “Because I don’t have family supporting me or a spouse providing extra income, I worry about what would happen if I lost my job or experienced a major health problem.” That’s why Alicia has become such a disciplined saver, setting aside enough emergency savings in a PNC money market account to cover her routine expenses for several months. As an added layer of protection, she also purchased disability insurance so that she would be “okay” financially should something really go wrong with her health and knock her out of work for an extended period of time. “Hope for the best but plan for anything — that’s my motto,” said Alicia. So far, Alicia’s motto has served her well. As a result, her enthusiasm for the future knows no bounds. Tip! Refocus on Retirement Next on the Greens’ agenda was a formal review of their retirement savings strategies to determine whether the investment choices each had made before marriage were still appropriate. “Right away we noticed that we held some of the same investments in our respective workplace retirement accounts, so we decided to view the two as one big portfolio and diversify accordingly,” explained David, a 39-year-old computer support supervisor for a telecommunications company. “We also calculated our retirement savings goal together for the first time and concluded that we should set aside more money each month to pursue that goal. Because we’ve been good about sticking to our budget, that was easier to do.” Needless to say, though, talking about money and planning your financial strategies together is sometimes easier said than done. But NEFE’s Nan Mead pointed out that working with an impartial expert might be the best way to resolve differences and begin moving forward in unison. Having a budget let us compare how we should be spending our money with how we were actually spending it. “That can be an excellent step for couples whose emotions, reluctance to admit to moneymanagement mistakes, or unwillingness to change have prevented productive discussions,” Mead said. “Having a third party serve as an intermediary will often result in a clarification of the issues that the couple has either been overlooking or avoiding.” If you’re a soon to be newlywed or are recently married, PNC can help you put financial strategies in place that take into account your shared goals and vision for the future. Stop by your local PNC branch today for more information! ■ For more information: Å Personal Banking/Checking Accounts page 19 Å Personal Banking/Savings Accounts page 21 Å Personal Banking/Loans and Credit page 23 Å Investments/Investment Account Options page 30 PNC Directions 7 One Customer’s Story Strong Dollar, Weak Dollar — What It All Means for Your Wallet After her husband’s passing, PNC helped Margaret Billings get organized. It’s Never too Late to Start Managing Finances Margaret Billings will never forget that day nine months ago when she stepped into the PNC Bank near her home in State College, Pennsylvania. Her husband, Ralph, had recently died and her son, Charlie, suggested they visit their local PNC branch to gain a better understanding of her finances. Looking back, it was a sound financial decision. employee because the bank always puts customers first. “When I first met Margaret, I could tell she was a little apprehensive, so I just listened. I understood that she wanted to take control of her financial life without spending a lot of time doing so. After we reviewed her accounts, I made a few suggestions to help her do just that.” A Worthwhile Visit Financial Tune-Up “As soon as Charlie and I stepped into the bank, we were greeted with big smiles from the staff, which immediately made me feel more comfortable,” said Margaret. “Branch manager Dennie Fetzer sat down with us, answered all of my questions and then asked a few of his own. I still can’t believe how patient he was!” Margaret took advantage of PNC’s new Performance Checking account. That gave her free ATM access everywhere in the world, which is great for Margaret because she plans to travel more in the years ahead. This type of account also earns interest, giving her even more reasons to smile. For his part, Dennie noted that he’s proud to be a PNC Bank For more information: 8 Volume 5, Issue 1 You may have heard news reports about the decline of the U.S. dollar. Your reaction? Likely a yawn. But the truth is that the value of the greenback has ripple effects throughout our economy, ultimately affecting your personal finances. Making Sense of the Exchange Rate “I felt pretty overwhelmed after Ralph passed on, and I had always relied on him to keep track of our bank accounts and investments,” admitted the 65-year-old retired postal clerk and grandmother of four. “But because I didn’t want my children to take on that burden, I decided it was high time for me to at least find out what was involved.” Other changes she decided to implement to save time and simplify her financial life: E ye o n t h e E co n o m y • Sign up for direct deposit for her Social Security check • Sign up for free online banking so she could transfer money between accounts and have access to budgeting and financial planning information, which will be helpful when visiting family or traveling • Meet with a PNC Investments Financial Consultant to integrate her investments under one umbrella and update her estate plan First, the basics. What does it mean when the U.S. dollar has declined or increased in value? In plain English, it refers to the amount of money you get when you exchange a dollar for another country’s currency. When the dollar rises, you’ll get more bang for your buck. When it declines, the opposite occurs. If you’ve traveled abroad, you’ve experienced the effect firsthand. If the dollar declines, it costs you more when visiting another country because you won’t receive as much of the foreign currency when you exchange your dollars. Beyond foreign travel, there’s also an investment component. “Changes in the exchange rate, if large, could affect the amount of money that flows into U.S. companies, in the form of stock investments, and into financing our government debt, through Treasury bonds,” said Stuart Hoffman, PNC Financial Services Group’s Senior Vice President and Chief Economist. “If the dollar were to suddenly nosedive, it would scare away foreign investors,” Hoffman explained. “Why would they want to continue investing in our country if the value of their investment drops sharply?” The value of the dollar affects you both in the interest rate you are charged for loans and in everyday purchases. And because we’re talking big bucks here — this summer, more than 50% of U.S. bonds and 13% of U.S. stocks were held by foreigners — a broad sell-off by foreign investors could put a drag on our economy.1 The Global Connection Interesting information, but why should you really care about the value of the dollar? Because ultimately it affects the American consumer both in the interest rate you’re charged for loans and in everyday purchases. Source: The New York Times, June 11, 2006. 1 continued on page 10 “Ralph enjoyed spending hours researching stocks and watching the business news,” noted Margaret. “Me? I want to make informed financial decisions but prefer to spend time with my grandkids and do the volunteer work that I so enjoy.” ■ Å Personal Banking/Checking Accounts page 19 Å Investments/Investment Account Options page 30 PNC Directions 9 E ye o n t h e E co n o m y continued from page 9 Think about the car you drive, the clothes you wear, your cell phone or your computer. Chances are many of these items are produced and imported from abroad. So the price you pay for these goods is going to depend on the value of the dollar. “If the value of the dollar is stable or rising,” said Hoffman, “our greenback will have more purchasing power, and if it declines over a long period of time, we’re eventually going to pay more for these imported products.” Higher consumer prices contribute to the dreaded “I” word — inflation — which also could lead to higher interest rates, affecting the rate you’ll be charged for a mortgage or car loan. So the next time you hear a news story about the value of a dollar, listen up. It may hit closer to home than you think! ■ H OW I T A L L A F F E CT S YO U When the dollar is strong When the dollar is weak At home Abroad Prices of consumer goods don’t increase as much Your dollars go further Prices may increase; interest rates may go up Goods and services are more expensive relative to the dollar Foreign Affairs: In Your Best Interest? How does the value of the dollar influence interest rates? Well, it has to do with another term that’s likely floated in one ear and out the other — the trade deficit. This refers to the difference between all the money that Americans spend to buy products made abroad versus the total amount of money that foreigners spend to purchase goods or services made in the good old U.S.A. We import more foreign goods than we export to other countries — to the tune of about $800 billion this year alone, according to Hoffman. In fact, the trade deficit is on course to set an all-time high: In June it was already running 6.4% higher than the previous record set in 2005.2 If the dollar declines in value, Americans need more dollars to buy the same goods from foreign countries. If we continue to buy more products from other countries than we sell to them, over time, it gets harder and harder to make up the difference. That brings us back to that dreaded “I” word again — inflation. 2 Source: The Wall Street Journal, June 9, 2006. 10 Volume 5, Issue 1 Baby Boomers Turn 60 Fe a t u re Story What Comes Next? This past January, the first of the 76-million-plus Americans known as the Baby Boom generation started turning 60. Within the next five years, Boomers will begin to retire — or will they? In their sheer numbers, the Baby Boomers have reshaped our society, our economy and our vision as a nation. Expectations are running high, as survey after survey documents how Baby Boomers reject the notion of retirement as idle leisure. “This generation will not retire in the traditional sense,” said Elyse Pellman, Executive Vice President of Age Wave, a strategic research and consulting group focused on Baby Boomers and the mature market. “Some will start new businesses. Some will go back to school. We see Boomers cycling between work and leisure and treating retirement in a whole new way.” This may sound like what one would expect from the Boomer generation — known for their idealistic, “glass is half full” way of thinking. However, if you’re a Baby Boomer, listen up. Retirement may be a bigger challenge than you think … or have planned for. The Boomerang Effect The demographic heft that has given Baby Boomers their influence is about to swing the other way, creating what could be the biggest financial challenge of their lives — ensuring a comfortable retirement. Consider the following: • Lengthening life spans. Boomers are expected to live longer than any previous generation. Of the 3.4 million born in 1946, 2.8 million are still alive. The men can expect to live another 22 years, the women another 25.1 Living longer, hopefully, healthier lives is certainly a reason to celebrate. The potential downside of a longer life, however, is the chance that you’ll outlive your assets. • Dwindling support from Social Security. One of the dangers of an aging society is the added burden placed on government programs, such as Social Security. Today there are roughly 3.5 workers paying taxes to support each beneficiary. Over the next 30 years, that ratio is expected to drop to 2 to 1, while the retiree population swells. The upshot? The government’s ability to provide retirement support will be diminished as demand grows. Source: WebMd.com, Jan. 9, 2006. 1 continued on page 12 44% of the people who retire and then return to work in their 70s are still paying off their mortgages. — Minneapolis Star Tribune, Jan. 8, 2006. PNC Directions 11 LEILA VARGAS Old Is as Old Does A recent survey of 1,400 adults aged 50+ found a major gap between what they say is important to staying healthy and what they actually do to achieve health. To stay healthy … Very important to do Exercise 67% Eat a balanced diet 67% Drink plenty of water 65% Watch weight 64% Get routine health care 63% Get enough sleep 63% Watch what I eat 61% Take vitamins 45% Limit calories 44% Do all the time 21% 28% 44% 27% 49% 29% 28% 50% 16% Source: Southeastern Institute of Research/Boomer Project, Boomer Trend Report, December 2005. continued from page 11 • Shrinking pension coverage. The number of private companies offering pension plans has been shrinking dramatically since the 1980s. Companies are either phasing out pensions entirely or replacing them with defined contribution retirement plans, such as 401(k)s, which put the burden to save on individual workers. • Spiraling health care/elder care costs. Longer life spans could be a burden physically, emotionally and financially if additional years are spent in frail JAMES MCGUIRE Age: 50 Occupation: Mechanical Engineer James is married with two kids, Keisha, who started college last fall, and Ben, a high school junior. James and his wife, Sarah, have a $100,000 home equity line of credit, a third of which has paid for Keisha’s first year of college. The remainder has gone into an extensive home expansion/ remodeling project. “I save enough in my 401(k) to get the company match, but that’s it for retirement for now. Basically, I’m counting on making a nice profit on my house at some point and using that to fund retirement.” 12 Volume 5, Issue 1 health or battling chronic illness. The percentage of private employers cutting back or eliminating retiree health benefits continues to climb, as does the cost of long-term care. It is the unpredictability of these costs — and their ability to pay for them — that Boomers fear above all else. Getting There — Planning Your Future One Day at a Time There’s no denying challenges lie ahead for the Boomer generation. “But there are things you can begin doing at age 45 knowing that you are likely to live for a long time,” Pellman suggested. Take care of yourself. Of course there is no guarantee of good health, but people can help reduce the chances of developing a major illness by following a healthy lifestyle. Prepare your way to financial freedom. “It’s the Boomers in average jobs with average incomes who are most eager to retire. Unfortunately, they are also the least prepared financially,” Pellman observed. Boomers who plan to retire at age 65 need to have enough money to support themselves for 20 to 25 years. That means you should: • Maximize tax-deferred plans. Take full advantage of the planning tools available to you — 401(k)s, IRAs and other tax-deferred retirement accounts. • Keep stocks in your investment mix. Over the long term, stocks have done a better job of staying ahead of inflation than any other type of investment. (Past performance does not guarantee future results.) • Consider long-term care insurance. LTC insurance can protect your family’s assets from the rising costs of supporting someone who needs fulltime care. Consider buying it at a younger age, when it is more affordable and accessible. • Pay off your mortgage. You’ll drastically reduce your future housing costs, which may allow you to live on less in retirement. Tap your nest egg gently. When figuring how much of your retirement nest egg you can spend each year, be realistic: The amount you’ve saved and the length of your retirement will determine your annual withdrawal amount. In general, financial planners recommend that retirees withdraw no more than 4% to 5% of their portfolio’s value annually to avoid the possibility of outliving their money. ■ Age: 60 Occupation: Physician’s Secretary Leila was a stay-at-home mom until divorce sent her to work and into debt 10 years ago. She recently made her son’s last student loan payment and intends to put that extra monthly cash into her office’s retirement program. “I increased my contribution rate to 20% of my salary this year. I can’t afford to make the extra $5,000 “catch-up” contribution I’m eligible for, but I’ve decided to save every raise and bonus I get from now on. I know I’m in catch-up mode, so every little bit helps.” Workers aged 50 and older report having an average 401(k) balance of $112,000. — Employee Benefit News, Jan. 26, 2006. How Will the Retirement Boom Affect the Job Market? The Bureau of Labor Statistics predicts that between 2003 and 2008, there will be a workforce shortage caused by retiring Boomers that will be greatest for occupations and industries that are less reliant on technology-driven productivity, such as education and health services. Retiring Boomers Will Create Job Opportunities Employees needed to replace Occupation retirees (2003 to 2008) Elementary school teachers 237,000 Registered Nurses 188,000 Administrators (education, related fields) 101,000 Public officials 81,000 Financial managers 58,000 Lawyers 57,000 54,000 Social workers 52,000 Teachers’ aides Plumbers, pipefitters and steamfitters 36,000 Postal workers (except mail carriers) 30,000 894,000 Total Source: Bureau of Labor Statistics, “Gauging the Labor Force Effects of Retiring Baby Boomers,” Monthly Labor Review, July 2000. For more information: Å Personal Banking/Loans and Credit page 23 Å Investments/Investment Account Options page 30 PNC Directions 13 Four Good Reasons Small Business Solutions Not to Borrow From Your Retirement Plan Jumping Ship — What You Can Do to Keep Your Best Employees The way Jim Baylor sees it, it’s tough enough finding skilled workers in his industry, so once an employee proves to be a valued asset, he does all he can to keep him or her happy. “We try to make the experience of working here a positive one,” said Baylor. “That involves paying above-average wages, offering time off with pay, and offering a variety of employee benefits that can make a real difference in people’s personal financial lives. I believe in treating people fairly and keeping the lines of communication open. I try to get people involved in decision-making so that everyone is on-board with attaining the company goals.” Jim’s approach, according to retired executive and SCORE volunteer Robin Noah, is right on target with what small business owners need to be doing to retain talented employees. “There is a realization out there among employers that in order to compete for a limited talent pool in a strong job market, they need to offer more than just a paycheck,” Noah observed. Competitive pay and paid vacation time had been the longstanding rule for the tile and stone fabricating business since Baylor’s father started it in 1977. But when Baylor took over for his father nearly eight years ago at the age of 35, he realized that in order to keep his employees, he would need to offer some additional benefits. “When I was learning Dad’s business, I essentially grew up with many of our employees. And when I took over, I knew that we shared many of the same responsibilities outside of work, like providing for a young family or saving for the future,” reflected Baylor. “Without some basic benefits to address these issues, I knew I’d start losing good people.” 14 Volume 5, Issue 1 Happy workers — (left to right): Joe Driscoll, Mac Terrell and Bobby Sandau are veteran employees of Baylor Tile & Marble, and don’t plan on leaving. Business: Baylor Tile & Marble Company Location: Louisville, KY Number of Employees: 18 In the eyes of many workers, borrowing money from an employer-sponsored retirement plan, such as a 401(k), may seem like an effective solution to a pressing financial need. But gaining access to your retirement investments in order to enhance your short-term cash flow isn’t necessarily the best long-term strategy. In fact, it could make it harder to achieve financial security later in life. D R AW B AC K # 1 : No Tax Benefits So, the first thing Baylor did was offer his employees a low-cost health insurance plan. He then put in place a 401(k) plan with the help of PNC Bank. “My employees were — and still are — extremely grateful,” explained Baylor. While those benefits are important, there are other ways Baylor is helping employees. Case in point: In a recent meeting with PNC, Baylor discovered PNC’s Workplace Banking, a comprehensive financial management program that offers direct deposit of payroll checks plus an array of money management tools, information and educational seminars. “The program costs me almost nothing,” said Baylor, “and my staff loves the convenience of direct deposit and 24/7 account access either by phone, fax, ATM, Internet or regular mail.” There are all types of employee benefits for all types of budgets. The important thing, concluded Noah, “is that employers recognize the need for some type of intervention. Employees need to see that their contributions are meaningful to the company. This encourages them to take a partnership role in the company and makes them less likely to leave.” ■ For more information: While plan loans may offer competitive interest rates, the interest you pay is not tax deductible. For that reason, it may make sense to consider other types of borrowing, such as a home equity loan, that may allow you to deduct the interest. Consult your tax advisor. D R AW B AC K # 2 : Fees and Other Potential Costs Retirement plan loans may require borrowers to pay administrative fees in addition to interest. Furthermore, if you leave your employer before you fully repay the money, you may be required to repay the balance immediately. Failure to do so may be viewed as a withdrawal, which would then require you to pay federal income taxes on the outstanding loan amount. You could also be subject to a 10% early withdrawal penalty by the IRS if you are younger than age 591⁄2. DRAWBACK #3: Missed Opportunities Be aware of the potential “opportunity cost” of borrowing from your retirement plan — the cost of any potential return you’ll miss out on if the interest rate on the loan is lower than the rate of return generated by the investments in your account. For example, if you borrow money from an account earning 10% and you pay 7% interest on the loan, you miss out on a potential 3% return over the life of the loan (see table below). L i fe a n d M o n ey D R AW B AC K # 4 : It’s Your Retirement We’re Talking About! Borrowing money from your workplace retirement plan is essentially like borrowing from your future. Even if you eventually pay it back, you could end up with less money for retirement than if you never borrowed the money (see table below). With life expectancies continually on the increase and a growing number of questions surrounding the future of Social Security and corporate pension plans, your financial success during retirement will likely be up to you … and you only. If you’re considering borrowing money from your retirement plan, please be sure to first speak with your local PNC Bank branch manager for more information on alternative lending solutions. ■ Other Borrowing Alternatives May Make More Sense Thinking of borrowing from your employer-sponsored retirement plan? As a rule of thumb, you should not borrow from your retirement plan if the interest rate on your plan loan is less than the return you’re receiving on the investments in the plan. The example below takes a look at the potential impact of borrowing $20,000 from your plan versus taking out a personal loan for the same amount. It assumes your investments in your retirement plan are earning 10% and the interest rate on your loan is 7%. Pre-Loan 401(k) Balance 401(k) Loan Amount Personal Loan Amount Monthly Payment Borrow from Plan $50,000 $20,000 $0 $396.02 401(k) Balance After 5 yrs $80,281 Difference -$1,984 Personal Loan $50,000 $0 $20,000 $396.02 $82,265 Å Business Banking page 25 PNC Directions 15 Å Products and Services Business Banking Cash Flow Page 25 • Keeping Liquid • Making and Collecting Payments • Online Information and Reporting • Specialty Checking Personal Finance Personal Banking User’s Guide Fast Find Page 27 • Personal Banking • Investments Financing Personal Banking User’s Guide Å Page 17 Value-Added Solutions • Free Global ATM Usage • Online Banking and Bill Pay • Telephone Banking • PNC Bank Visa® Check Card • Visa Extras Rewards Program • Branch Offices Checking Accounts Investments Page 19 Page 21 Page 23 • Home Equity Loans and Lines of Credit • Personal Loans • Education Loans • PNC Bank Credit Card • Payment Protection deposit products provided by PNC Bank, National ◊ *Bank Association and PNC Bank, Delaware. Members FDIC. All loan products are subject to credit approval. Å Investment Account Options Page 30 • Savings Account • Premium Money Market Account • Certificates of Deposit • Individual Retirement Accounts (IRAs) Loans and Credit Page 29 Å Around the corner. Around the world. Around the clock. Accessing your accounts has never been easier or more convenient. With 24-hour online and automated phone access, a network of more than 3,600 PNC Bank ATMs and over 850 branch offices, we make it easy for you to stay connected to your finances. Free Global ATM Usage • Free Checking • Performance Checking • Performance Select Checking • Foundation Checking Savings Accounts Page 27 • Managing Cash Flow • Growing Your Business • Conducting Everyday Business Å • Investor’s Preferred Account • Individual Retirement Accounts (IRAs) • Capital Directions® • 529 Plans • Coverdell Education Savings Account • Retirement — Small Business • Mutual Funds • Municipal Bonds • Fixed Annuities • Variable Annuities • Wealth Transfer Solutions • Long-Term Care • Online Account Access Wealth Management Page 32 With select PNC Bank checking accounts, you can use any ATM — anywhere around the world — at no cost to you. Of course, there is never a fee from PNC to access your funds at one of our own ATMs. But now, if you’re a Performance Checking or Performance Select Checking customer, or a Free Checking customer who maintains an average monthly balance of $2,000 or more, PNC Bank will automatically reimburse you for any fees charged by other ATM owners. So go ahead and pull out your card whenever and wherever you want. Online Banking and Bill Pay You can bank and pay bills securely whenever and wherever it’s most convenient for you with this free service1. With PNC Bank Online Banking and Bill Pay — just two of PNC Bank’s many ComesWith ServicesSM — your identity and account information are protected with PNC Security Assurance (see page 18 for more information). Check your PNC account balances, transfer funds, view and print images of your checks up to 90 days, view, print or download online statements, and pay your bills quickly and securely online. You can also reorder checks, change your mailing or email address, make payments on PNC loans, and move money within PNC accounts or between your PNC accounts and accounts you hold at Checking Accounts Savings Accounts Money Markets CDs IRAs Loans and Credit 19 21 21 21 21 23 Para servicios en español, 1.866.HOLA.PNC other financial institutions. You can even set up recurring payments so that, for example, your mortgage or car payment is automatically made each month on the date you specify - and you don’t have to think about it. What’s more, you’re covered - 100% - for any verified, unauthorized online transactions or failure on our part to meet a payment deadline.2 Telephone Banking If you don’t have access to a computer, simply call us, 24 hours a day, to: Access up-to-the-minute account balances and recent transactions; transfer funds between accounts; get rate information; find the nearest branch and more. Free PNC Bank Visa® Check Card Why bother with cash, when all PNC Bank checking accounts come with free PNC Bank Visa Check Card? Your check card enables you to make purchases at millions of locations around the world where Visa Debit is accepted. It also allows you to access your PNC accounts at more than 3,600 PNC Bank ATMs at no charge — with free global ATM usage for many customers (see above). There may be a fee for certain services within Online Banking. Please see our Consumer Schedule of Service Charges and Fees – Images and Copies. 2 Subject to guidelines set forth in the PNC Bank Online Banking and Bill Pay Service Agreement. 1 Are You a Quicken® User? PNC also offers free online banking and bill pay via your personal Quicken software. To find out more, visit the Online Banking Center at pnc.com. Quicken® is a registered trademark of Intuit®, Inc. 16 Volume 5, Issue 1 1.888.PNC.BANK pnc.com PNC Directions 17 Additional Comes-With Services∑ Every PNC Bank checking account comes with a wealth of features designed to make your life easier and your banking more convenient. PNC Security Assurance — Enjoy peace of mind for all the ways you bank today. Security Assurance is an array of products, services and account features designed to help prevent, detect and resolve fraud and identity theft. 1 Direct Deposit — Get your money the same day you’re paid — with complete convenience and security. With Direct Deposit, your paycheck, dividend, pension or Social Security check can be automatically deposited into your PNC checking account. and view, print and download online statements for recordkeeping. AutoAlerts® — When you sign up for this free service, you’ll be notified by email whenever your account balance falls below or exceeds an amount you specify, when your account is overdrawn or when a direct deposit is made to your account. Automatic Transfers — With this free service, you can set up automatic transfers from your PNC Bank checking account to make regular contributions to your savings, money market or IRA Money Market account — and you can specify the transfer amount and schedule that works for you. Overdraft Protection — You can protect your credit record and stop worrying about costly and embarrassing bounced checks by enrolling in Overdraft Protection, which links your checking account to a PNC credit card, another PNC Bank checking or savings account or line of credit. Automatic Payments — Take the hassle out of paying your bills with this free service. You can set up bills for Automatic Payments, and they’ll be automatically deducted from your PNC Bank checking account as often as you specify. Online Statements — This free service enables you to access statements for all of your PNC Bank accounts securely through PNC Bank Online Banking, view images of your checks and deposit tickets for up to 18 months, review past statements Automatic Check Reorder — Never worry about running out of checks again when you sign up for this free service. A reorder of your selected check design will be placed automatically when you near the end of your current order. 1 Availability varies depending upon the type of account you hold and whether you are a consumer or business customer. Free Visa Extras Rewards Program When you sign up for Visa Extras, your PNC Bank Visa Check Card enables you to turn everyday purchases into valuable rewards. Every time you use your PNC Bank Visa Check Card to make qualifying purchases, you earn points toward exciting rewards like free air travel, unique dining experiences, vacation getaways and tickets to sporting events. You also can earn points when you take advantage of Comes-With ServicesSM like Direct Deposit or Online Bill Pay. Enroll at pnc.com/extras. Branch Offices We have more than 850 locations in New Jersey; Delaware; Pennsylvania; Ohio; Kentucky; Indiana; Washington, D.C.; Maryland; and Virginia, including many locations inside supermarkets where you can bank late on weekdays, on weekends and even on Sundays. 18 Volume 5, Issue 1 Checking Accounts The PNC Bank Visa Gift Card. The Perfect Gift. This prepaid Visa Gift Card can be used anywhere that Visa Debit is accepted. It’s the perfect gift for every occasion. Available only to PNC customers, it comes in denominations of $25 to $500 and can be purchased at any PNC Bank branch or via pnc.com. Each time the card is used, the amount of the purchase is automatically deducted from the value loaded onto the card. Unlike cash, the PNC Gift Card can be replaced if it is lost or stolen, and it has the same protection and security features as the PNC Bank Visa Check Card. Graduations, birthdays, weddings, showers, you name the occasion — the PNC Visa Gift Card will always be the perfect fit. Personal checking accounts at PNC Bank provide you with a higher level of performance than other checking accounts — and they all come packed with valuable features that save you time and money. All of our checking accounts give you the ability to write checks, access ATMs and make purchases with your PNC Bank Visa Check Card. How you wish to use the account, the monthly balances that you keep and the added benefits of each should guide your selection of the account that’s right for you. earn bonus rates on select PNC Bank CDs and IRA CDs; and you’ll receive free Identity Theft Reimbursement Insurance — up to $5,000. Don’t forget about all the free Comes-With ServicesSM you can sign up for as well. Free Checking For customers who have sophisticated banking needs, we have taken the class-leading benefits and features of PNC Performance Checking and made them better in PNC Performance Select Checking. Avoid the monthly service charge with average monthly balances of $10,000 or more. You won’t pay an ATM fee at non-PNC Bank ATMs anywhere in the world, and we will rebate any non-PNC ATM fees. PNC Performance Select Checking gives you the option of having up to nine free additional checking accounts where the monthly balances count toward the $10,000 average monthly balance requirement for the primary account. Plus, along with all of our Comes-With ServicesSM, you get even more benefits, such as free domestic wire transfers; increased daily spending limits on your PNC Bank Visa Check Card to accommodate large purchases; and free overdraft protection set-up and transfers. If you like to keep things simple and prefer the basics that never go out of style, then PNC Free Checking is the account for you. With Free Checking there’s no minimum balance requirement and no monthly service charge. In addition to free access at PNC Bank’s more than 3,600 ATMs, you’ll also enjoy reimbursement of fees charged at non-PNC ATMs during any month when your average monthly balance is $2,000 or more. And, like all checking customers, you also benefit from rate discounts on PNC Bank loans and lines of credit with direct debit of your monthly payment from your PNC Free Checking account, as well as access to all of our Comes-With ServicesSM. Performance Checking You work hard for your money, and PNC Performance Checking keeps your money working hard for you. Avoid the monthly service charge when you keep an average monthly balance of $2,500 or more, and you’ll also earn tiered interest. Best of all you won't pay an ATM fee at non-PNC Bank ATMs, anywhere in the world and we will rebate any nonPNC ATM fees. And you’ll have other benefits such as interest rate discounts on PNC Bank loans and lines of credit with direct debit of your monthly payment from a PNC checking account; the annual fee is waived on PNC Bank lines of credit1; you’ll 1.888.PNC.BANK pnc.com Performance Select Checking Foundation Checking Account Managing your money is a key part of managing your life, and moving forward to accomplish your goals. But as with anything, you need to have the right tools to be successful. PNC’s Foundation Checking Account and Money Management Class are tools that can help you get where you want to be, even if you’ve had problems with a bank account in the past: A free checking account with added benefits, and a class that teaches you how to manage your account and develop and manage a household budget. PNC Directions 19 Checking Account Comparison Guide Use this side-by-side guide to compare the features offered by our various checking accounts and select the PNC Bank checking account that’s right for you. ACCOUNT FEATURES FREE CHECKING PERFORMANCE CHECKING Average Monthly Balance to Avoid Monthly Service Charge $2,500 PERFORMANCE SELECT CHECKING $10,000, including balances of up to nine additional PNC checking accounts Monthly Service Charge $15 $25 Balance Earns Interest On balances of $2,000+ On balances of $2,000+ l l Free Global ATM Usage (PNC and non-PNC ATMs) Free Visa Extras Rewards Program Bonus Points for Enrollment Points for Qualifying Check Card Purchases Monthly Bonus Points for: Direct Deposit (DD) and Online Bill Pay (BP) When Minimum Average Monthly Balance is $2,000 or More l l l 1,000 5,000 5,000 1 Point/$1 2 Points/$1 2 Points/$1 DD-100 BP-100 DD-150 BP-150 DD-200 BP-200 l l Bonus Rates on Select CDs and IRA CDs Discounts on Loans and Lines of Credit with Direct Debit of Payment from Any PNC Checking Account l l l Free Additional Checking Accounts Up to Nine Free Money Market or Savings Accounts Up to Five Courtesy Overdraft Fee Waiver on First OD/NSF Event Occurring in First Year After Account Opening Free Identity Theft Reimbursement Insurance Free Select Design Checks Discount on Safe Deposit Box l l l Up to $5,000 Up to $10,000 l l $10 Annual Discount $100 Annual Discount Free Standard American Express® Traveler’s Cheques l l Free American Express® Traveler’s Cheques for Two l l l l Annual Fee Waived for Lines of Credit1 Free Cashier’s Checks Free Stop Payment Orders Free Domestic Wire Transfers l l Savings Accounts l l l See the Consumer Schedule of Service Charges and Fees and the Consumer Account Agreement for more information and complete details. 1Important Information for Home Equity Lines of Credit Initial Annual Percentage Rates (APR) currently range from 7.24% APR to 8.99% APR for loan to value (LTV) up to 90% and were accurate as of 01/02/2007. Your actual initial APR will be based on a review of your credit application, LTV and the credit line amount. APR may vary thereafter. Maximum APR is 18%.This Account includes a Fixed Rate option. Current Fixed Rate Part APRs range from 6.61% to 9.20%. This rate may vary, but once rate is established for a new Fixed Rate Part, it will not vary thereafter. $100 balance transfer fee applies each time you establish a Fixed Rate Part. $5,000 minimum balance transfer and an automatic payment from a PNC Bank Checking account required for these Fixed Rate Part APRs. An early account closure fee of $350 applies to all credit lines in excess of $50,000 that close within 36 months of account opening. For properties in MD and VA, you will be required to repay the mortgage recording tax if you close your line within the first 36 months after the date it is opened. No closing cost only applies to single-family owner occupied properties with lines up to $250,000. Lines above $250,000, customer may be required to pay title insurance. For properties in NY, customer is responsible to pay mortgage recording tax regardless of line size. In markets other than Greater Washington, there is an annual fee of $30. The annual fee is waived for Performance and Performance Select customers in all markets. Property insurance required. Subject to credit approval. Offers may be modified or discontinued at any time and may vary by market. Most financial experts agree that any good savings and investment strategy includes keeping a portion of your savings in FDIC-insured accounts like savings, money markets and CDs. Bank accounts such as these are easy to access and offer predictable interest rates. For your convenience, these accounts can be opened on pnc.com, by phone or in a branch office. Savings Account Individual Retirement Accounts (IRAs) Want an easy way to get started on saving? Or to save for a new goal like a down payment on a house or a vacation? Try our traditional Savings Account. You can open your account with as little as $25 and begin earning interest right away. It’s never too early to start planning for your retirement. PNC offers a variety of ways to start — and stick to — a retirement savings plan. Savings Accounts are a great way to teach children about money. In fact, at PNC, Savings Accounts for children under age 18 are always free — with no minimum balance requirement. Premium Money Market Account For the money market that offers more, choose our Premium Money Market Account. It rewards higher balances with higher interest rates. Certificates of Deposit If you don’t need immediate access to your money, you’ll want to take advantage of the higher interest rates that CDs typically offer. PNC offers a variety of rates and terms. And if you’re a Performance or Performance Select Checking customer, you’ll receive a bonus rate on select CDs. Looking for low risk and fixed rates? Ask about PNC Bank IRA CDs and IRA Money Market accounts. They feature the security of FDIC insurance, so your principal is protected to the maximum permitted by law. You can choose between either a Traditional IRA or Roth IRA. Call 1-888-PNC-IRAS (762-4727) for more details. Looking for more options? PNC Investments can provide a wide range of non-FDIC-insured mutual funds, stocks, bonds and annuities.1 For more information, call 1-800-PNC-6111. And if you’ve changed jobs, make sure you talk to us about your 401(k) assets. With our Rollover IRAs, we can help you roll over your pension or 401(k) funds when you change employers — to avoid tax consequences and to keep your money growing. 1 See pages 30 and 31 for information on non-FDIC-insured products offered by PNC Investments, PNC Wealth Management and PNC Insurance. How Much Can I Contribute to an IRA Each Year? For 2007, you can generally contribute up to $4,000 to your IRA. You have until April 15 of the following year to make your contribution. If you are 50 or older, you may be eligible to make an additional “catch-up” contribution of up to $1,000. Ask us for details. 20 Volume 5, Issue 1 1.888.PNC.BANK pnc.com PNC Directions 21 Savings Account Features AC C O U N T T Y P E MINIMUM TO O P E N Savings Account $25 Premium Money Market Account Certificates of Deposit Individual Retirement Accounts (IRAs) $100 varies AC C O U N T F E AT U R E S M O N T H LY SERVICE CHARGE • Balance earns interest at $25 and over. • Unlimited deposits, including transfers into the account. • Three free withdrawals per month (including transfers out of the account); then $3 for each additional withdrawal.* • Average balance to avoid withdrawal fees is $1,500. If average monthly balance falls below $400. • Balance earns interest at $1,000+ based on tiered rates. • Unlimited deposits (including transfers into the account). • Easy access with checks and through ATMs.* • Free and unlimited use of Online Banking and Telephone Banking. If average monthly balance falls below $1,000. • Interest rate for the term specified on fixed-rate CDs. • Competitive interest rates. • Variety of terms available. • Automatic renewal. • FDIC insured to the maximum permitted by law. No monthly service charge. Penalty for early withdrawal on most terms. $25 for money market • Low minimum opening balance. • Deposits can be made at any time to money market. • Tax advantages. $250 for CD • Maximum annual contribution limits apply. No monthly service charge. Penalty for early withdrawal if under age 591⁄2 for IRA CDs. Other fees may apply in certain situations. *Federal regulations prohibit you from making more than a total of six transfers each month to other accounts from a savings or money market account (including transfers to another account for overdraft protection) or to third parties each month by pre-authorized or automatic agreements, telephone or electronic and online transfers; and no more than three of the six may be made by check (if applicable), through point of sale purchase transactions with a banking card or through similar payments to a third party. See your account agreement for more information. Other limits may apply to your account. PNC Bank charges may apply for use of another financial institution’s ATMs. Additionally, other financial institutions may charge for using their ATMs. Get into the Savings Habit The way to make your savings grow is to add to it regularly. We make it easy. With Automatic Transfer, you can have a specific amount automatically transferred from your PNC checking account into your savings account on one or more designated days each month. There is no fee for this service, and it only takes a few minutes to set up. 22 Volume 5, Issue 1 Loans and Credit Whether you need a loan to buy or remodel a home, to pay for college expenses, to finance a car, to take that dream vacation or even to refinance past loans, PNC has competitive rates that can help you achieve your financial goals. Home Equity Loans and Lines of Credit* Low rates. A variety of terms. Potential tax deductions. With features like these, no wonder the most popular loan for homeowners is a home equity loan. These loans let you take advantage of the equity you’ve built up in your home. And often, the interest may even be tax deductible (consult your tax advisor, though, to be sure). Home Equity Installment Loan — Looking for a loan where your payment and interest rate stay the same every month? Then a Home Equity Installment Loan is the right choice for you. A variety of repayment terms are available. Choice Home Equity Line of Credit — With a line of credit, you can write yourself a loan anytime you need one. Here’s how. A line of credit gives you approval to draw credit up to a specified amount. You can use that credit anytime you need to — as easily as writing a check (or if you prefer, by transferring funds from your credit line to your checking account with Online Banking). Best of all, you pay interest only on the amount of credit you’ve actually used. And you have the option of fixing the interest rate on up to three portions of your credit line, while continuing to use the available balance. Personal Loans You don’t have to own a home to get a loan from PNC Bank. Our loan professionals can help you with Information, Calculators and Tools at pnc.com Discover a part of PNC Bank that’s open 24 hours a day and accessible from your home, your office or anywhere there’s a PC. It’s pnc.com. 1.888.PNC.BANK pnc.com personal loans for a wide variety of needs — debt consolidation, a new or used car, a recreational vehicle, almost anything — always at competitive rates. Education Loans Let PNC be your guide through the sometimes bewildering maze of borrowing options out there. As one of the nation’s “Top 10” providers of educational loans, PNC has the experience and the knowledge to help you with virtually every aspect of financial aid. Our education lending group is able to secure some of the best rates and repayment options in the business. We can guide you step by step through the process of selecting the right loan, completing the right forms and finding the right rate. Call 1-800-762-1001 or visit pnconcampus.com to learn more today. PNC Bank Visa Platinum Select Rewards Credit Card The credit card designed especially with PNC checking account customers in mind offers great interest rates, no annual fee options, purchase security, return protection and extended warranties, as well as special pricing advantages for Overdraft Protection on any PNC checking account. *Loans subject to credit approval. 1 All first mortgage products are offered and provided by PNC Mortgage, LLC. PNC Mortgage, LLC is licensed in New Jersey as a Department of Banking Mortgage Banker and Secondary Mortgage Loan Licensee. PNC Mortgage, LLC may not be available in your area. Credit subject to approval. Information is accurate as of the date of printing and is subject to change without notice. 2007 PNC Mortgage, LLC. All Rights reserved. Looking for the best home mortgage? Find solutions for all types of homebuyers through PNC Mortgage, LLC∑ at 1-800-778-6678 between 8:30 a.m. and 8:00 p.m. Eastern time, Monday through Friday, or visit us at pncmortgage.com. PNC Mortgage, LLC may not be available in your area. Ask us for more details today. PNC Directions 23 Finding Out How Much You Can Borrow Is Easy at PNC.com Payment Protection Worried about what happens to your debt if an emergency or disaster strikes? Then ask about Payment Protection Plans that feature credit life and credit disability insurance. Credit Disability is designed to make the payments on your loans in the event you get sick or hurt. Credit Life will pay off the loan in the event of your death.1 Talk with your PNC Bank representative about the coverage amounts and terms available. Whether you’re buying a home or looking to tap into your home equity to do some remodeling or purchase a vacation property, boat or RV, PNC has a number of tools and resources available to you at pnc.com to help you crunch the numbers. Go to pnc.com, click on the Personal section, and then select “Loans & Lines of Credit” under the Products and Services section. Look for Tools and Resources on the left-hand side of the page. There you’ll find: Borrowing Planner: Loan or Line — Answer a few brief questions and determine what type of loan may be right for you. Borrowing Power Calculator — Want to figure out how much of a home mortgage payment you can comfortably afford? This calculator will help you find out. How large a line of credit can I obtain? — This comprehensive multi-step calculator can help you determine how much home equity you can tap into. How much will my loan payments be? — Use this calculator to quickly find out how much a mortgage or other loan will cost you each month. At PNC.com, you can also check current rates on home mortgages and home equity as well as apply for a loan online. Credit Life and Credit Disability coverage amounts are subject to ◊ minimum limitations that may result in partial coverage of the payments 1 on the loan balance. A Home Equity Line of Credit That Lets You Lock in a Rate Do you like the flexibility of a home equity line of credit? But still want to lock in an interest rate? Well now you can have both. Ask about our Choice Home Equity Line of Credit. It gives you the opportunity to lock in an interest rate when you draw against your credit line. And you can hold up to three interest rate “lock-ins” at a time. 24 Volume 5, Issue 1 Business Banking Cash Flow Effectively managing cash flow is one of the most critical aspects of operating a business, and PNC Bank offers a wide range of business tools to enable you to meet virtually any cash flow need or challenge. Keeping Liquid* Liquidity – Cash you have on hand or assets that can be easily converted to cash now or in the near future. Premium Business Money Market – The amount of money in your account determines your interest rate based on current money market rates—and rates can increase as your balance grows. Treasury Enterprise Account1 – Not just a checking account, this package allows you to manage your cash efficiently, help reduce your business’ costs, improve cash flow and simplify your accounting. This package meets the needs of larger companies with significant deposits, multiple checking accounts and the flexibility to invest excess cash deposits. Business Lines of Credit2 – Instead of waiting until your money is tight and you need financing, request a line of credit when things are going well. You’ll have easy access by check and flexibility when it comes to rates repayment schedules and secured, unsecured and overdraft protection options. Business Sweep Checking* – If you normally have more money in your business checking account than you need to cover your daily operating expenses, let that extra cash work for you with a sweep account. A sweep account allows you to keep enough money in your checking account to cover all day-to-day expenses and automatically invests any excess cash at the end of each day, while 1.877.BUS.BNKG pnc.com maintaining the security of FDIC insurance to the maximum permitted by law. Business Certificates of Deposit – Options Fast Find Business Cash Flow Personal Finance Financing Value-Added Services include multi-term CDs with automatic renewal, variable-rate CDs and CDs that allow withdrawal of funds after the first seven days with no penalty. To give your business flexibility in managing its cash flow, we offer terms from as short as seven days to as long as 10 years. 25 27 27 29 Å Making & Collecting Payments Improve your cash position by simply streamlining your systems for paying bills and collecting from your customers. Remote Deposit For Business – Now you can deposit checks for your business without making a trip to the bank! Remote deposit lets you make (transmit) deposits at your convenience — 24/7 right from your place of business.4 Free up more time in your day — time better spent on running your business. Ask your PNC Business Banker how remote deposit can be a simple and convenient way to make check deposits. Merchant Services3 – PNC Merchant Services® offers more than credit and debit card acceptance. Our solutions encompass traditional non-cash acceptance, gift cards, statement and reconciliation tools, e-commerce options, Electronic Check Acceptance® (ECA®) and more! Services are backed up with one-on-one customer service 24 hours a day, 365 days a year. Plus, receive free next-day funding for payments deposited to your PNC Bank Business checking account.3 Call 888-562-2300 today and ask for a complimentary analysis of your current processing statement to validate whether you are receiving the best rates for your business. PNC Directions 25 Conducting Everyday Business* We can help you choose the right checking account to handle your specific needs. Business Enterprise Checking Free Business Checking 1 1 Are you just getting your business started? Or maybe you don’t have a lot of transactions. > No minimum balance or monthly maintenance fee Your daily transactions are growing as fast as your business. > No monthly maintenance fee when you maintain an average monthly collected balance of $10,000 Business Basic Checking1 Analysis Business Checking1 If your business is active, with high transaction volumes and substantial balances, your higher balances can work for you to offset fees. > A la carte pricing — you only pay for the services you use Okay, your banking needs are still pretty basic, but you want more options than with our Free Business Checking. > No monthly maintenance fee when you maintain an average monthly collected balance of $2,500 What comes with a PNC Business Checking Account > Multiple accounts combined on one detailed monthly statement Free Business Checking Business Basic Checking Business Enterprise Checking Analysis Business Checking daily deposit account activity and transaction history up to 90 days. See the status of your loan balances and verify payments. View images of cleared checks and deposit tickets up to 180 days. Transfer funds between your accounts,7 including draws on select lines of credit. Place stop-payment orders and order copies of checks, deposits or statements. PINACLE® Express – For growing businesses that need to expand their cash management, PINACLE Express provides an affordable and easy-to-use way to conduct your company’s banking online. With a single sign-on, you have one-stop, 24-hour access to critical information and a variety of services that help you monitor and control complex cash management activities. PINACLE® Web – When your business has grown enough to need sophisticated Treasury Management Services, PINACLE Web provides our most sophisticated cash management tools. All the features of PINACLE Express are included, plus a selection of online cash management services from PNC Treasury Management. Combined transaction items free each month 200 300 500 Cash deposited free each month Up to $5,000 Up to $10,000 Up to $50,000 Free Online Banking2 and Online Bill Pay Yes Yes Yes Free Visa® Check Card with Reward Points14 Yes Yes Yes Yes Free next-day funding on Visa® and MasterCard® payment transactions with PNC Merchant Services3 Yes Yes Yes Yes Non-Profit Checking – PNC supports the efforts of Yes non-profit organizations with an account designed exclusively for them—featuring no minimum balance requirement and no monthly maintenance fee. Specialty Checking* Yes A selection of accounts for very specific industries and situations. Free global ATMs Yes Yes 25% discount on Clarke American® checks Yes Yes Analysis Business Checking With Interest – A Merchant Services discounts6 Yes Free first order of Clarke American checks Yes qualifying business, non-profit, government agency or sole proprietor can open the account. This account has the features of Analysis Business Checking plus earns interest on the entire account balance. An Earnings Credit does not apply to this account. Earnings credit rate used to offset fees Free Personal Performance Checking Account15 Yes Yes Yes (We reserve the right to limit the number of free Performance accounts per business relationship) Free overdraft protection set up1 Loan origination fee discount1 Free Online Bill Pay6 – Use your PC to pay business bills and schedule future or recurring payments. Spend less time writing checks, reordering checks and buying stamps. Take advantage of vendors who offer electronic delivery of invoices. Save time by downloading invoices and their payment history into popular business accounting programs. Best of all, it’s free. Treasury Management Services – PNC Bank offers an extensive array of Treasury Management Services to help you manage your company’s cash 26 Volume 5, Issue 1 Yes Yes Yes flow and financial position, streamline business operations, gain better control and accelerate your collection processes.Talk to us about electronic tax payment lockbox services, ACH, Wire Transfer, Zero Balance Account, Money Room Services and more. Online Information & Reporting Free Online Banking5 – Online Banking gives you free 24-hour access to your PNC Bank accounts, for a complete picture of your business finances. View your current day ledger and available balances, IOLTA (Interest On Lawyers’ Trust Accounts) – Specifically designed to manage funds for multiple clients. Interest earned on an IOLTA, less any permitted service fees, is forwarded to the state IOLTA board. No minimum balance or monthly maintenance fee. Client Escrow Management Account – Managing and tracking client escrow accounts made easy. This account has one master account that can be linked to any number of individual client sub-accounts. Option to earn interest on client accounts. Account provides one detailed monthly statement. 1.877.BUS.BNKG pnc.com Personal Finance Personal Banking* – It’s what you need to run your life right now. And cover what’s going to happen later. • Checking • Savings • Online Banking • Money Market Accounts and CDs • Mortgages and Home Equity Loans8 • Education and Personal Loans • Credit Cards Investments** – This is the dream part. Where you see your kids dressed in graduation gowns. A second home on a rocky coast. Teeing off on the first fairway of your retirement. • IRAs and Retirement Plans • Education Savings Plans • Brokerage Services • Mutual Funds • Annuities • Tax-Advantaged Investments Financing At PNC, we’re always looking for ways to help our clients meet the challenges of running their businesses. When it comes to credit, that means providing flexible interest rates, convenient repayment terms and credit availability. We help you choose the right loan from a wide range of loan products, so we can match interest rate, term and other features for your particular situation and needs. Our lending philosophy is what truly sets us apart—our goal is to ultimately say “yes” as often as possible.8 Managing Cash Flow A line of credit can help you manage the peaks and valleys of your cash flow. Choice CreditSM for Business Line of Credit – An unsecured line of credit that puts from $5,000 up to $100,000 at your fingertips.9 Applying is easy and quick, with a simple application and a decision, in most cases, in one business day or less. Plus, you can access your funds online or by writing a check, or with optional overdraft protection for your PNC Bank Business Checking Account. Business Equity Line of Credit – Provide some capital for your business by using the equity in your home or company building. Available in amounts from $10,000 to $1,000,000. Offers variable interest rate based on Prime Rate10 and a 10-year principal repayment. Easy online access or by writing a check. Secured Line of Credit – Use your company’s assets to free up cash. Because the line of credit is backed by the value of your business assets, inventory and receivables, it offers lower interest PNC Directions 27 rates than unsecured options. Available in amounts from $100,000 to $2,000,000, and interest-only payments deducted automatically from your PNC Bank business checking account. Growing Your Business Solutions for financing business expansion, the purchase of a business, equipment purchases or other major business expenses. Choice CreditSM for Business Installment Loan – Choose a fixed or variable term loan with a variable interest rate based on Prime Rate10 and a repayment schedule that best fits your situation. Payments are deducted automatically from your PNC Bank Business Checking Account. Available in amounts from $2,500 to $100,000. Business Equity Term Loan – Use the equity in your home or company building or both to get the cash you need. Payments are deducted automatically from your PNC Bank business checking account. Available in amounts from $10,000 to $1,000,000 and for a repayment period of up to 20 years.11 Business Credit Solutions Need Short-term working capital, equipment purchases and general business needs Working capital, equipment purchases, expansion and building improvements Larger working capital needs, seasonal inventory purchases, equipment and machinery purchases Business Secured Term Loan – Use assets like accounts receivables and inventory to secure funding for equipment, machinery or other major expenses. Competitive fixed interest rates and a variety of repayment options are offered. Available in amounts from $10,000 to $2,000,000 and a term up to seven years. Other Business Financing Needs – PNC also offers business credit solutions for specific borrowing needs —such as Commercial Mortgages and Business Vehicle Financing. Leasing options are available and offer your company the opportunity to procure equipment at a fixed rate for a fixed amount of time.*** SBA Loans and Other Government-Sponsored Business Loan Programs – The U.S. Small Business Administration (SBA) offers a number of loan programs, some of which are targeted to specific types of businesses, owners or opportunities. PNC Bank can help you choose the right program with the right features to meet your borrowing needs. Ask your PNC Business Banker about SBA loans and other government-sponsored business loan programs today. 8 PNC Solution Loan Amounts Choice CreditSM for Business $2,500 to $100,000 Business Equity Loan $10,000 to $1,000,000 Secured Loan Line of Credit $100,000 to $1,000,000 Term Loan $10,000 to $2,000,000 Manage routine expenses better. PNC Platinum Business Rewards MasterCard® – Keep business and personal expenses separate. Our Platinum Business Rewards MasterCard® is a great way to manage and control travel, entertainment and other business expenses. Track expenses by category or employee. Purchasing Card – A streamlined process for purchasing a variety of business goods and services. Reduces costs and paperwork associated with purchase orders and checks. Provides flexible spending limits, merchant controls and fraud prevention. Employee Benefits – PNC provides access to 401(k)s,† Simple IRAs, group insurance12 ** and our own WorkPlace Banking program—a program providing personal banking services and educational seminars to your employees at no cost to your company. Talk to a PNC Business Banker about 401(k) plans today and discover a competitive edge in attracting and retaining employees. Benefits Unsecured Line of Credit with check, telephone and online access and a variable interest rate based on the Prime Rate.10 Or Term Loan with either a fixed interest rate or variable interest rate based on the Prime Rate.10 Simple application and decision, in most cases, in one business day or less. Optional overdraft protection for your PNC Business Checking Account. Line of Credit secured by primary residence and/or owner-occupied commercial property, with check, telephone and online access and a variable interest rate. Or Term Loan secured by primary residence and/or owner-occupied commercial property with a fixed interest rate. Equity in real estate you own – your home, your company’s building or both, can be used to secure a longer repayment term and lower interest rate compared to other loan options. Line of Credit secured by business assets with check and telephone access and variable interest rate, based on the Prime Rate.10 Or Term Loan secured by business assets with a fixed interest rate. Leverage the value of your receivables, inventory and equipment to obtain larger loan amounts. Optional overdraft protection for your PNC Bank Business Checking Account. 2 3 4 5 Commercial Mortgage $50,000 to $2,000,000 Loan secured by commercial property. Choice of fixed or variable interest rate. Streamlined process to buy or refinance your company’s building. Purchase business vehicle Business Vehicle Loan $10,000 to $250,000 Loan secured by vehicle, with a fixed interest rate. 100% financing of new cars and trucks, 80% financing of used vehicles. Value Added Services Paychex® – PNC provides access to Paychex®, a leading provider of payroll processing services.13 Paychex streamlines the administration of employee compensation programs and provides all the documentation necessary to keep your payroll system in compliance with state and federal requirements. Visa® Extras – Turn everyday business purchases into redeemable points for the rewards you want or need—just by signing your name. You can also earn points for online or electronic purchases.14 The choice is yours every time you use your PNC Bank Visa® Business Check Card for a qualifying purchase when you enroll in Visa® Extras.14 Business Insurance – Protect your business. PNC provides access from simple, low-cost insurance packages for small businesses to more comprehensive, customized insurance solutions for businesses with more complex needs.12 Talk to your PNC Business Banker. 1 Features Purchase or finance commercial property 28 Volume 5, Issue 1 Conducting Everyday Business 6 7 8 9 See PNC Bank’s “Account Information - Business Checking Accounts and Related Charges” document for further information. Bank deposit products provided by PNC Bank, National Association and PNC Bank, Delaware. Members FDIC. All loans subject to credit approval and require automatic payment deduction from a PNC Bank business checking account. Origination and/or annual fees may apply. Next day funding valid only when processing Visa and Mastercard transactions is provided by PNC Merchant Services and funds are deposited into a PNC Bank Business Checking account. Merchant services is subject to credit approval and provided by PNC Merchant Services Company. Please speak with your representative for further details. PINACLE® is a registered trademark of The PNC Financial Services Group, Inc. Credits to the accounts are Monday - Friday after midnight. See the applicable “Funds Availability Policy” to determine when the funds will be made available. Remote deposit is subject to Bank approval. There are fees for certain optional PNC Online Banking Services. See our “Account Information – Business Checking Accounts and Related Charges” brochure for further information. Offers, products and pricing subject to change. Payment processing services are subject to credit approval and provided by PNC Merchant Services Company. See PNC Bank’s Business Checking Accounts and Related Charges for further information. Federal regulations prohibit you from making more than a total of 6 transfers each month to other accounts from a savings or money market account. All loans and lines of credit subject to credit approval and if applicable, require automatic deduction from a PNC Bank Business checking account. Origination and/or other fees may apply. All first mortgage products are offered and provided by PNC Mortgage, LLC. PNC Mortgage, LLC is licensed in New Jersey as a Department of Banking Mortgage Banker. PNC Mortgage, LLC may not be available in your area. Credit subject to approval. $175 annual fee applies to Choice CreditSM for Business Line of Credit. 1.877.BUS.BNKG pnc.com To learn more about how a relationship with PNC Bank makes banking easier, stop by any branch, call 1.877.BUS.BNKG or visit pnc.com “Prime Rate” means the highest prime rate published in the “Money Rates” section of The Wall Street Journal for the last day of the preceding calendar month. 11 20-year term available with residential equity only. † Securities and brokerage services are provided by PNC Investments LLC. Member NASD and SIPC. A licensed affiliate of PNC Bank, N. A. may receive compensation if you purchase. 12 Insurance products and advice are provided by PNC Insurance Services, LLC Inc., a licensed insurance agency affiliate of PNC Bank, N.A. or by licensed insurance agencies that are not affiliated with PNC Bank, N.A. PNC Insurance Services Inc. will receive compensation if you choose to purchase coverage through this program. A decision to purchase insurance will not affect the cost or availability of other products or services from PNC Bank, N.A. The coverage can be purchased from any source of your choice. 13 Payroll services are provided by Paychex, Inc. PNC Bank receives compensation from Paychex in connection with payroll services provided to PNC Banks’ customers. 14 A “qualifying purchase” is any signature-based purchase, phone or mail order purchase, or automatic bill payment made with an enrolled VISA card, which is processed or submitted through the VISA USA Transaction Processing System. 15 See our Consumer Schedule of Service Charges and Fees for further information. Bank deposit products provided by PNC Bank, National Association and PNC Bank, Delaware. Members FDIC.. 10 ≈ TT: 1-800-531-1648 * Bank deposit products provided by PNC Bank, National Association and PNC Bank, Delaware. Members FDIC. Loans subject to credit approval. Important Investor Information: Securities ** and brokerage services are provided by PNC Investments LLC, member NASD and SIPC. Annuities and other insurance products are offered by PNC Insurance Services, LLC, a licensed insurance agency. *** Leasing services provided by PNC Equipment Finance, LLC. ◊ PNC Directions 29 Investments goal is to buy a new home, pay for college, travel or prepare for retirement, a Capital Directions asset allocation strategy can be tailored to your time frame and needs. Professional money management, combined with quarterly rebalancing and an annual account review, make Capital Directions an ideal account for someone on the go. Å Whether you are a first-time or a seasoned investor, a PNC Investments Financial Consultant can help you translate your financial goals into a solid investment plan. With PNC Investments you’ll have access to a full range of investment products — including nonFDIC-insured stocks, bonds and mutual funds. Plus you’ll have the added convenience of doing all your banking and investing at one location. Creating a Sound Financial Plan — As your financial goals change, you’ll need a broad selection of investment alternatives to keep pace. For example, if you are in your 40s and thinking about retirement, you want to make sure you’re maximizing your employer retirement plan, funding an Individual Retirement Account (IRA) and considering other investment options. But as you get older, you may want to move some of your investments into less aggressive mutual funds, bonds and annuities. PNC Investments offers a wide variety of investment products and accounts to meet your changing needs, including: • Mutual Funds • 529 College Savings • Stocks Plans • Bonds — Both • Managed accounts municipal & corporate • Options • U.S. Treasury securities • Wealth transfer • Individual Retirement solutions Accounts • Long-term care • Annuities • And more Investment Account Options Whether you’re saving for a new home, planning for retirement or preparing for a child’s education, our Financial Consultants will work with you to help you design a plan to achieve your goals. You can meet with a PNC Investments Financial Consultant in person, talk over the phone or access your account online. We provide convenient trading, transfers 30 Volume 5, Issue 1 and settlements, and we have access to all major U.S. stock exchanges. In addition to a traditional cash or margin account, PNC Investments offers several specialized types of investment accounts. Our Financial Consultants can help you determine which account option best suits your needs. Investor’s Preferred Account® — Are you looking for a better way to manage your daily finances as well as your investments for the future? This asset management account allows you to access your money in several different ways (ATM, PNC Bank branch office, checks, debit card), move your money between accounts online and sweep your excess cash so it can earn money market rates almost immediately. Individual Retirement Accounts (IRAs) — If you are interested in saving as much as you can for retirement, an IRA is an option you should consider. In 2007, you can set aside up to $4,000 per year ($5,000 if you’re 50 or older) into an IRA. The benefit of an IRA is that the money grows tax deferred until it is withdrawn. Talk to us about whether a Traditional IRA or Roth IRA is right for you. And if you’ve left your job or are planning to leave your job, make sure to ask about a Rollover IRA — to help you avoid paying unnecessary taxes on your hardearned retirement money. Capital Directions® — Don’t keep all your eggs in one basket — that’s the idea behind Capital Directions. It uses an asset allocation strategy* to help you systematically distribute your investment dollars among three major asset classes — stocks, bonds and money market securities. Whether your 529 Plans — 529 Plans offer you a way to save money tax deferred for the education of your own child, your grandchild or even yourself. In addition to being able to have your money grow tax deferred, funds can be withdrawn for qualified college expenses free of federal taxes.** The money is professionally managed, and there are no income limitations or age restrictions. Unlike the Coverdell ESA, a 529 Plan allows you to invest substantial amounts of money. Several factors should be considered when selecting a 529 plan, including state tax treatment, investment performance and expenses. Coverdell Education Savings Accounts (ESAs) — Coverdell Education Savings Accounts allow you to contribute up to $2,000 per year for a child’s or grandchild’s college education. You can contribute until the child turns 18, and the money grows tax free until you use the money for higher education expenses. Retirement Accounts for the Small Business Owner and the Self-Employed — If you’re a sole proprietor or are otherwise self-employed, you can invest in a Simplified Employee Pension (SEP) IRA, Simple IRA, Money Purchase and ProfitSharing plan and possibly a 401(k) plan. Mutual Funds — Mutual funds are professionally managed investments that allow investors to pool their resources to purchase stocks, bonds and other investments. With an investment of as little as $500, you get the benefit of having your funds managed by professional money managers. That makes mutual funds ideal for people who don’t have the time, expertise or desire to monitor individual securities, and it is also an excellent choice for those just beginning an investment plan. Municipal Bonds — PNC Investments has access to municipal bonds and other fixed-income products in a wide range of maturities, quality ratings and purposes, including bonds in both the primary and secondary markets. Fixed Annuities — Fixed annuities provide the combination of a guaranteed stream of income and stable principal value. Issued by insurance companies, annuities are long-term investments that allow money to grow and compound tax deferred with minimal investment risk. Annuities are exempt from probate and will pass directly to the named beneficiary, avoiding the cost and delays of the legal process involved in settling an estate. Annuities also allow you to defer taxes on interest until it is actually withdrawn. Variable Annuities — Variable annuities are long-term, tax-advantaged investments issued by insurance companies. They offer the potential of higher returns through a range of investment options. However, the rate of return will fluctuate depending on the performance of the underlying investment portfolios, and principal value is not guaranteed. As with fixed annuities, your investment in a variable annuity is tax deferred. Wealth Transfer Solutions — In addition to helping our customers accumulate wealth, PNC recognizes the critical importance of helping our customers efficiently pass their wealth to their heirs. Ask today about the wealth transfer solutions we provide. Long-Term Care — If you’re concerned about safeguarding your hard-earned money against unforeseen and potentially devastating medical expenses, talk to us about long-term care products. Long-term care can help provide for nursing, home health and adult day care support in the event of a medical emergency. Online Account Access — Monitoring your investments has never been easier. You can access your accounts securely 24 hours a day, view your balance and holdings, transfer money between accounts, check on trade status, perform research on your holdings, review your recent transaction history, get stock quotes and more, all through Online Banking at pnc.com. *Asset allocation does not eliminate fluctuating prices, returns or other risks associated with investing. **The tax law exempting earnings on your investment and qualified withdrawals from federal income tax expires on Dec. 31, 2010. Unless revised, qualified withdrawals made after 2010 will be subject to federal income taxes. Qualified withdrawals may be subject to state and local taxes. Important Investor Information: Securities and brokerage services are provided by PNC Investments LLC. Member NASD and SIPC. Annuities and other insurance products are offered by PNC Insurance Services, LLC, a licensed insurance agency. PNC Investments is a subsidiary of PNC Bank, National Association. 1.800.PNC.6111 pnc.com PNC Directions 31 Wealth Management Wealth Management Services Building Preserving • Stock option planning • Banking solutions • Dynasty, Total Return, Asset Protection and Tax-Advantaged trusts • Risk management solutions • Sophisticated portfolio hedging strategies • Coordination of tax planning techniques with your other advisors • Insurance planning • Family wealth consulting Growing Giving • Investment management • Retirement planning, including IRA and 401(k) rollovers • Customized asset allocation strategies • Full-service brokerage • Discretionary portfolio management • Mutual funds • Municipal investment management • Separately Managed Accounts • Trust and estate planning solutions • Business succession planning • Charitable giving strategies • Private Foundation Management Services • Liquidity solutions • Customized credit and lending, including mortgages* • Special business practice financing • Financial planning • Education financial planning The more wealth you accumulate, the more you need a comprehensive, customized approach to managing it. That’s why so many people turn to PNC Wealth Management for sophisticated solutions to complicated financial dilemmas. At PNC, we spend our time getting to know you as a unique individual, with unique concerns about your money. We listen carefully to what keeps you up at night. And we deliver. PNC Wealth Management strives to understand the needs of senior executives, retirees, business owners, women investors, professional practices and other successful individuals. We have the depth of resources to address those needs with customized, practical solutions. By guiding you through the myriad of financial choices, we help chart a path toward financial security for you. For your children. For generations to come. We listen to your needs and design creative solutions for you. As our client, you receive close, personal attention from a seasoned professional. Before proposing a solution, we strive to understand your total financial picture — including assets not managed by PNC — to create a complete financial profile. A dedicated team of wealth management specialists selects solutions to help meet your individual needs across a wide array of services. You can choose to develop an integrated, comprehensive wealth management plan or select individual services to help implement an existing plan. PNC Wealth Management works to anticipate your needs and to proactively propose new solutions to keep you moving toward your goals, whatever they might be: investing for retirement, providing for future health care or funding a college education. We offer you a broad spectrum of planning, investment, banking and credit services, plus the in-depth knowledge to help find the right solution for you. For over 150 years, PNC Wealth Management has been helping people preserve, grow and pass on their wealth. Today, we offer PNC Integrated ApproachSM. It is a customized investment management process designed to help meet each client's unique goals, time horizon and risk tolerance. This personalized, easy-to-understand approach reduces the complexities that are often associated with managing financial success. At the same time, it helps to enhance your opportunity to achieve desirable results through all market cycles. Also, through our website, pnc.com, you can access all of your account information anytime, day or night. *Home Equity loans and credit accounts are subject to credit approval. ◊ FDIC-insured bank deposit products are provided by PNC Bank, National Association and PNC Bank, Delaware, which are Members FDIC. PNC Capital Markets is the marketing name used for the investment banking and capital markets activities conducted by The PNC Financial Services Group, Inc. (“PNC”) through its subsidiaries PNC Bank, National Association and PNC Capital Markets, Inc. PNC Capital Markets, Inc. is a registered broker-dealer and a member of the NASD and SIPC. Services such as the syndication of loans, public finance underwriting and advisory services, securities underwriting and trading, private placements, asset securitizations and merger and acquisition advisory services are provided by PNC Capital Markets, Inc. Foreign exchange and derivative products are obligations of PNC Bank, National Association. PNC is a registered service mark of PNC. Investment and wealth management, fiduciary services and FDIC-insured banking products and services are provided by the PNC subsidiaries, PNC Bank, National Association and PNC Bank, Delaware. PNC does not provide legal, tax or accounting advice. Securities products and brokerage services are offered through J.J.B. Hilliard, W. L. Lyons, Inc. and PNC Investments LLC, which are registered broker-dealers and members of the NASD and SIPC. J.J.B. Hilliard, W.L. Lyons, Inc. is also a member of the NYSE. Insurance products and advice may be provided by PNC Insurance Services, LLC and J.J.B. Hilliard, W.L. Lyons, Inc., licensed insurance agency affiliates of PNC or by licensed insurance agencies that are not affiliated with PNC; in either case a licensed insurance affiliate will receive compensation if you choose to purchase insurance through these programs. A decision to purchase insurance will not affect the cost or availability of other products or services from PNC or its affiliates. Investments and Insurance: Not FDIC Insured. No Bank or Federal Government Guarantee. May Lose Value. The chart (opposite page) can help you assess which products and services might be appropriate for your wealth stage. Our Client Promise We commit to be your trusted advisor — the first place you turn for advice and solutions. We promise to understand your unique needs and aspirations, to always act in your best interest and to judge our success by your success. For more information about any of our wealth management services, or for a complimentary consultation, contact us at 1-888-762-6226 or visit us online at pnc.com. 32 Volume 5, Issue 1 1.888.762.6226 pnc.com PNC Directions 33 Life is a journey. And we’ve been helping customers navigate that journey and achieve their dreams for over 150 years. We know how to help people get to their particular financial goals, and you sense this in our people. In their can-do optimism and attitude of helpfulness. And it’s reflected in every one of our progressive products and services that help enable our customers to get to where they want to go in life. We think and act a bit differently. Like giving consumers the opportunity to do away with the hassle of ATM fees, for example, and making free ATMs available worldwide. Or the fact that we have more certified green buildings than any other company in the world.1 Simply because it’s the right thing to do. We draw inspiration from our customers. We listen closely to them. And we’re especially gratified that J.D. Power and Associates ranked PNC Bank “Highest in Customer Satisfaction with Small Business Banking.”2 We have solutions for big business clients as well. Our dedication to the Corporate and Institutional space is yielding strong results. In fact, last year we were named “Financing Principal of the Year” at the Middle Market Financing Awards sponsored by The M&A Advisor. For all your goals, plans and dreams, PNC will be there. To uncomplicate. To navigate. And to accelerate your journey. pnc.com/leadingtheway According to the U.S. Green Building Council, November 2006. 2PNC Bank received the highest numerical score in the proprietary J.D. Power and Associates 2006 Small Business Banking Satisfaction Study.SM Study based on 4,996 total responses, measuring 13 financial institutions and measures opinions of small business customers with annual revenues from $100,000 to $10 million. Proprietary study results are based on experiences and perceptions of customers surveyed in July–September 2006. Your experiences may vary. Visit jdpower.com. Banking and lending products and services and bank deposit products are provided by PNC Bank, National Association and PNC Bank, Delaware, which are Members FDIC. ©2007 The PNC Financial Services Group, Inc. All rights reserved. FORM 124752-0307 1 ◊