Retirement Income
Strategies
from USAA Wealth Management
September 21, 2012
G. Keener Gill, Jr. CFP®
AVP Wealth Management
Region Executive
Views and opinions expressed in this seminar are provided for informational purposes only and are subject to change. This
discussion should not be considered a recommendation, tax, legal or other estate planning advice, but rather a general
overview of the subject matter discussed. Consult with your tax, legal or estate planning professional regarding your own
specific situation. Examples given are hypothetical illustrations and not necessarily an indication of the benefits or
features of any USAA product.
Diversification and asset allocation are investment strategies and do not protect against losses or guarantee that an
investor’s goal will be met.
Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL
PLANNER™ in the United States, which it awards to individuals who successfully complete CFP Board’s initial and
ongoing certification requirements.
USAA Wealth Management is a service of USAA. USAA means United Services Automobile Association and its
affiliates. Financial planning services and financial advice provided by USAA Financial Planning Services Insurance
Agency, Inc. (known as USAA Financial Insurance Agency in California, License # 0E36312 ), a registered investment
adviser and insurance agency and its wholly owned subsidiary, USAA Financial Advisors, Inc., a registered broker dealer.
Investments/Insurance: Not FDIC Insured ● Not Bank Issued, Guaranteed or Underwritten ● May Lose Value
Investing in securities products involves risk, including possible loss of principal.
Bank products provided by USAA Federal Savings Bank, Member FDIC.
140210-0812
2
About USAA
• Founded in 1922 by 25 U.S.
Army Officers
• Headquarters in San Antonio,
Texas
• Member-based organization
• Membership earned through
military service and can be
passed down through the
generations
3
USAA MISSION
The mission of
the association is
to facilitate the
financial security
of its members,
associates, and their
families through provision
of a full range of highly
competitive financial
USAA CORE
VALUES
Service
Loyalty
Honesty
Integrity
products and services; in
so doing, USAA seeks to
be the provider of choice
for the military
community.
4
Financial Products and Services
•
•
•
•
•
Insurance
Investments
Wealth Management
Retirement
Advice
-
Face to Face
Telephone
Internet - usaa.com
Video Telephony
Investments/Insurance: Not FDIC Insured Not Bank Issued, Guaranteed or Underwritten May Lose Value
Investment and insurance products are not deposits, not insured by FDIC or any government agency, not guaranteed
by the Bank. Investments and certain insurance products may lose value.
5
About USAA Wealth Management
Service · Loyalty · Honesty · Integrity
WEALTH
MANAGEMENT
7
Capabilities and Core Values
You want someone
who’s looking out for
you
Financial
Planning
• Income planning
• Estate planning
• Legacy planning
Investments
• Professional management
• More than 40 years of experience
• Clear philosophy
Trust Services
• Foundation management
• Family management
• Fiduciary oversight
Insurance
• Highest property and casualty industry
ratings for financial strength
• Integrated with estate planning solutions
INSURANCE
|
INVESTMENTS
|
USAA Wealth
Management brings this
level of service, loyalty,
honesty and integrity to
managing your portfolio.
RETIREMENT
|
ADVICE
USAA Beliefs
Some of our guiding principles:
USAA believes………that every Member should have a personalized and actionable financial
plan that is relevant to his/her station of life and financial position. The plan is the blueprint or
roadmap on the journey to the life you want to have in the future.
USAA believes……Members should take lifestyle and longevity into account to minimize the
potential for income shortfalls beyond life expectancy.
USAA believes……………losses due to unforeseen events can significantly impact one’s
retirement, therefore Members should insure for liability limits that are at least equivalent to
their net worth.
USAA believes……………Married Members should ensure adequate income for a surviving
spouse in the event of death.
USAA believes……………the Military Survivor Benefit Plan should be elected with the
maximum 55% benefit for the surviving spouse in most cases.
8
USAA Beliefs
Some of our guiding principles:
USAA believes……………diversification across and within asset classes can mitigate risk.
USAA also recommends diversity of “account types” for investments to maximize preferential
tax treatment before and during retirement.
USAA believes……………Members should cover basic living needs with guaranteed income
sources, supported by a diversified portfolio allocated based on risk, time and needs parameters.
USAA believes……………That periodic reviews of all elements of the plan components are
necessary such as: cash flow, savings, personal insurance, property insurance, employee
benefits programs and investments. Annual check-ups are recommended.
USAA believes……Asset consolidation allows Members to simplify portfolio management, and
retirement income planning and helps to coordinate and maintain the elements of Members’
overall financial and legacy plans.
9
Retirement Income Strategies
Retirement Income Planning
Assess income
sources
Review and
reassess
Calculate
spending needs
Design an income
distribution plan
Identify retirement
risks
Identify and fill
income gaps
11
7 Risks to be aware of
Risks to Manage in Retirement
Cost of Living
Retirement Income
Ability to leave a
legacy
Affordability of
Healthcare
Longevity
Market Exposure
Long-term Care
12
Which is the “right” strategy for you?
USAA or its affiliates do not provide tax advice. Taxpayers should seek advice based upon their own
particular circumstances from an independent tax advisor. The information is provided for informational
purposes only and is not intended to substitute for obtaining professional financial advice. Please
thoroughly research and seek professional representation before acting on any information you may have
found in this article. This article in no way attempts to provide advice that relates all personal
circumstances.
13
Which is the “right” strategy for you?
Answer : It Depends....
USAA or its affiliates do not provide tax advice. Taxpayers should seek advice based upon their own
particular circumstances from an independent tax advisor. The information is provided for informational
purposes only and is not intended to substitute for obtaining professional financial advice. Please
thoroughly research and seek professional representation before acting on any information you may have
found in this article. This article in no way attempts to provide advice that relates all personal
circumstances.
14
Set a Withdrawal Order
1
2
3
4
5
Fully
taxable
savings and
investments
Tax-free
municipal
bonds
Growthoriented
stocks and
stock
mutual
funds
Nondeductible
traditional
IRAs and
annuities
Employer
plans and
deductible
IRAs
6
Roth
IRAs
15
Withdrawal Options
Substantially equal periodic payments (SEPPs)
Spend the income, conserve the principal
Spend down over estimated life expectancy
Withdraw a set percentage of your portfolio’s value
16
What Percentage?
% Withdrawn
annually
Number of years before assets are gone
3%
38
4%
28
5%
21
6%
17
7%
14
8%
9%
10%
13
11
10
Assumptions
•Portfolio invested 40% in stocks and 60% in bonds
•Financial markets perform as they did over the ten
year period (2000 through 2009)
Actual earnings would vary from year to year. If the withdrawal percentage is consistently lower than the annual return, assets
will last indefinitely. As interest rates rise, existing bond prices fall. Past performance is no guarantee of future results.
Examples given are hypothetical illustrations and not an indication of the benefits or features of any USAA product and should
not be considered a recommendation. Investing in securities products involves risk, including possible loss of principal.
Source: NPI.
17
• Schedule an appointment to review
your legacy planning strategy
• New to USAA Wealth Management?
• Request a complimentary consultation
• Ask us about USAA’s full line of
financial solutions
Next Steps
USAA Wealth Management is a service of USAA. USAA means United Services Automobile Association and
its affiliates. Financial advice provided by USAA Financial Planning Services Insurance Agency, Inc. (known as
USAA Financial Insurance Agency in California, License # 0E36312), and USAA Financial Advisors, Inc., a
registered broker dealer.