Allianz Life Insurance Company of North America Allianz

Allianz Life Insurance Company of North America Allianz Life Insurance Company of New York Rethinking your Retirement [Name, title] ENT-913 -N (R-6/2016)

Please note [Producer name, producer company name] is not an employee of Allianz Life Insurance Company of North America (Allianz), Allianz Life Insurance Company of New York (Allianz Life® of NY), or their subsidiaries or affiliated companies. This material is prepared by Allianz Life Insurance Company of North America and its affiliate Allianz Life Insurance of New York for use by financial professionals. This material is prepared by Allianz Life Insurance Company of North America (Allianz) and its affiliate Allianz Life Insurance of New York (Allianz Life® of NY) for use by its financial professionals.

Before we begin This presentation is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that Allianz Life Insurance Company of North America (Allianz), Allianz Life Insurance Company of New York (Allianz Life® of NY), and Allianz Life Financial Services, LLC, their affiliated companies, and their representatives and employees do not give legal or tax advice. Allianz, Allianz Life of NY, and Allianz Life Financial Services, LLC are affiliated companies. Please keep in mind that producers must be currently registered with a broker/dealer or registered investment advisor to recommend the liquidation of funds held in securities products, including those within an IRA or other retirement plan, for the purchase of an annuity. • Not FDIC insured • May lose value • No bank or credit union guarantee • Not a deposit • Not insured by any federal government agency or NCUA/NCUSIF

Retirement dream § We are living longer, healthier lives § Retirement is an opportunity to pursue hobbies, travel, visit with loved ones, etc. § But, for many of us, the real retirement dream may be to be financially independent § Need realistic retirement strategies to make that a reality

Retirement reality § Procrastination today is common. Not often do we plan to fail, instead we fail to plan § Other issues are given higher priorities § Longer you wait, the harder to make up the difference § Even a few years can make a big difference

Never too early to start preparing for retirement Starting retirement savings early with $200/month additional savings at 5% per year over 10 years Year Start Add Interest rate Year end value 1 $40, 000. 00 $200/month 5% $44, 512. 50 2 $44, 512. 50 $200/month 5% $49, 255. 80 3 $49, 255. 80 $200/month 5% $54, 241. 90 4 $54, 241. 90 $200/month 5% $59, 483. 00 5 $59, 483. 00 $200/month 5% $64, 992. 30 6 $64, 992. 30 $200/month 5% $70, 783. 40 7 $70, 783. 40 $200/month 5% $76, 870. 80 8 $76, 870. 80 $200/month 5% $83, 269. 70 9 $83, 269. 70 $200/month 5% $89, 995. 90 10 $89, 995. 90 $200/month 5% $97, 066. 20 This hypothetical example is shown for demonstration purposes only and doesn’t represent any specific product or investment. These figures don’t reflect taxes or product fees and expenses.

Retirement reality § Never too early to get started § Withdrawal rates also important

Withdrawal rates are important Rate of withdrawal in first year $700, 000 $600, 000 5% $500, 000 $400, 000 4% 6% 8% $300, 000 $200, 000 $100, 000 AGE 65 80 88 95 110 This chart is for illustrative purposes only and does not reflect taxes or investment/product fees or expenses, which would reduce the amount of time the savings would last. This chart shows how long retirement savings may last at a 4%, 5%, 6%, and 8% withdrawal rate in the first year, withdrawals in subsequent years increased for inflation. The chart is a hypothetical example and assumes $500, 000 beginning balance in retirement, withdrawals taken at the beginning of each month, a 3% annual inflation rate, and a 6% annual rate of return, compounded monthly. This hypothetical example does not represent the performance of any specific investment product, taxes, or product fees.

Agenda 1. Retirement today 2. Taking action 3. Refocus 4. Options 5. Putting it all together 9

1 Retirement today 10

Retirement landscape § Recent market turmoil adding to the fears of running out of money § Afraid to take action - Don’t know where we are at in our retirement strategies - Are often afraid to find out § Job losses a reality - Fear of losing job or have recently lost job § Other needs take priority

Retirement today Refocus on your retirement strategies § Walk through where you are at financially today § Walk through where you want to be to have a reasonable retirement tomorrow § Focus on what you can control

2 Taking action 13

Taking action 1. Save more now § Why don’t we save? - It’s hard to do and includes unpleasant things like budgeting and doing without. However, it is often a necessity. § Save for retirement regularly through a variety of sources (401 k, etc. ) § Increasing savings now can mean less retirement income replacement needed later

Saving more now can reduce amount of additional income needed later $5, 000 401(k) 73% $45, 000 Today $10, 000 401(k) $7, 000 Pension $16, 000 Social Security Retirement (First year only) This hypothetical example is for illustrative purposes only. The retirement income totals are hypothetical and for demonstration purposes only. For simplicity, this example addresses only the first year of retirement.

Saving more now can reduce amount of additional income needed later $5, 000 $3, 000 401(k) 90% 73% $42, 000 $45, 000 Today $10, 000 $15, 000 401(k) $7, 000 Pension $16, 000 Social Security Retirement (First year only) This hypothetical example is for illustrative purposes only. The hypothetical additional savings is based on an annual 3. 5% rate of return over 20 years, enabling a $5, 000. additional withdrawal in the first year of retirement.

Taking action 2. Control debt 3. Working longer § Pension delays § Social Security delays 4. Look at options to protect a portion of your income

3 Refocus on what you can control 18

Refocusing REFOCUS on retirement expense strategies § Focus on what you can control § Help manage expenses - Survival income (Needs) - Desired income (Wants) - Legacy income (Wishes)

Refocusing on the levels of retirement expenses Three levels of retirement expenses Expenses Legacy Funds remaining for your beneficiaries Desired Lifestyle “extras” Survival Expenses to cover your most basic needs

Refocusing by reviewing sources of income REVIEW sources of income § Help you gain control over sources by knowing where they are - Social Security - Defined Benefit plans - 401(k)s Please keep in mind that your producer must be currently registered with a broker/dealer to recommend the liquidation of funds held in securities products, including those within an IRA or other retirement plan, for the purchase of an annuity.

Refocusing by reviewing sources of income Seven sources of retirement income Sources of Income Welfare or charity Not desirable Continued employment Phase into retirement gradually Nonqualified Assets (NQA) Mutual funds, CDs, stocks, bonds Roth IRA Tax-deferred/tax-free Traditional IRA Contributions and rollovers Employer sponsored plans Employer-sponsored plans Social Security The base

Refocusing on income strategies § Supplementing defined contribution pension plans § Consider using annuities for a portion of income protection - More optional guarantees, sometimes for an additional cost - Reliability of future income Guarantees are backed by the financial strength and claims paying ability of the issuing company.

4 Options 24

Options § Start with a clean mental slate § Rethink overall retirement strategies - Rethinking income in place of accumulation - You always have an asset base to work with

Options § Refocus on additional retirement issues - Beneficiaries updated/correct - Legacy - Life insurance: Provides income tax-free death benefit that can be used to help replace income of primary wage earner - Health care and long term care

Options Retirement accumulation stage Financial objective Have enough money to retire Asset allocation Portfolio allocation Time horizon Known to retirement Retirement income stage

Options Retirement income stage Retirement accumulation stage Retirement income stage Financial objective Have enough money to retire Not outlive assets Asset allocation Portfolio allocation Withdrawal allocation Time horizon Known to retirement Unknown to date of death

Options Rethinking retirement strategies Financial objective Asset allocation Time horizon Retirement accumulation stage Retirement income stage Rethinking retirement strategies Have enough money to retire Not outlive assets Rethinking retirement expenses Portfolio allocation Withdrawal allocation Rethinking portfolio with longer-term goals Unknown to date of death Rethinking retirement income vehicles such as annuities Known to retirement

Options § Health care and long term care § Many clients look at their retirement strategies based on their current good health status § They fail to prepare for possible future health issues or health care needs The projected average health care cost for a couple 65 years old retiring in 2015? 1 $266, 589 1 Health. View 30 Services, “ 2015 Retirement Health Care Costs Data Report, ” Health. View Insights, 2015.

5 Putting it all together 31

Putting it all together § What if there are gaps between accumulation and income needs? § Refocusing our retirement financial strategies

Putting it all together Five options for income/expense gaps Sources of Income Options Welfare or charity Lower your expectations Continued employment Nonqualified assets (NQA) Spend less and save more now Roth IRA Decide to work longer Traditional IRA Employer sponsored plans Social Security Expenses Legacy Desired Take on more risk Combination (or all) of above Survival

Putting it all together How do these 5 options work? $ now (401(k)) $ additional (401(k)) $ more sive s e r te Agg odera e M ativ v r e s Con Combination of all options Time 45 Retirement Age This example is shown for illustrative purposes only and is not intended to predict or project future results. Your actual results will vary. Please note that with the potential for greater returns comes greater risk and volatility. 65 $ needed to supplement income Current standard of living 70?

Putting it all together Current standard of living Combination may be most effective additional (401(k)) $ more $ needed to supplement income $ rate e d e Mo ativ v r e s Con Time 45 Age This example is shown for illustrative purposes only and is not intended to predict or project future results. Your actual results will vary. Please note that with the potential for greater returns comes greater risk and volatility. 65 68?

Rethinking retirement strategies § Rethink your retirement strategies § Refocus on what you can control - Use the strategic workbook § Review your existing retirement strategies § Protect your retirement future

Summary 1. Retirement today 2. Taking action 3. Refocus 4. Options 5. Putting it all together 37

Disclosures This presentation is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that Allianz Life Insurance Company of North America and Allianz Life Insurance Company of New York, their affiliated companies, and their representatives and employees do not give legal or tax advice. Clients are encouraged to seek advice for their personal situations from their tax and legal professionals. Purchasing an annuity within a retirement plan that provides tax deferral under sections of the Internal Revenue Code results in no additional tax benefit. An annuity should be used to fund a qualified plan based upon the annuity’s features other than tax deferral. All annuity features, risks, limitations, and costs should be considered prior to purchasing an annuity within a tax-qualified retirement plan. All annuity contract and rider guarantees, or annuity payout rates, are backed by the claims-paying ability of the issuing insurance company. They are not backed by the broker/dealer from which this annuity is purchased, by the insurance agency from which this annuity is purchased, or any affiliates of those entities, and none makes any representations or guarantees regarding the claims-paying ability of Allianz Life Insurance Company of North America or Allianz Life Insurance Company of New York. Guarantees do not apply to the performance of the variable subaccounts, which will fluctuate with market conditions. • Not FDIC insured • May lose value • No bank or credit union guarantee • Not a deposit • Not insured by any federal government agency or NCUA/NCUSIF Products are issued by Allianz Life Insurance Company of North America, 5701 Golden Hills Drive, Minneapolis, MN 554161297. www. allianzlife. com. In New York, products are issued by Allianz Life Insurance Company of New York, 28 Liberty Street, 38 th Floor, New York, NY 10005 -1422. www. allianzlife. com/new-york. Variable products are distributed by their affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416 -1297. www. allianzlife. com. Only Allianz Life Insurance Company of New York is authorized to offer annuities and life insurance in the state of New York.

Thank you. Questions?