The document discusses strategies for transitioning from the retirement accumulation stage to the retirement income stage. It introduces the 3-7-5 strategy which involves identifying three levels of retirement expenses, seven sources of retirement income, and five options for improving income. The strategy is illustrated through a hypothetical example of a retired couple, Ken and Patty, and how their retirement income sources could be reallocated to better match their expenses. The key steps are analyzing anticipated retirement expenses versus income and developing recommendations to enhance income through options like working longer or adjusting investments.

1. Re-Engineering
Retirement SM
[Presenter name, credentials]
Retirement readiness with the 3-7-5 strategy
Insurance and annuities are issued by Allianz Life Insurance Company of North America
Neither Allianz, its agents, or representatives offer tax or legal advice. Clients shoulduse with the
USA-1274a (R-8/2007) For Broker/Dealer use only – Not for always consult public.
with qualified tax/legal advisors concerning their own situation.
© Copyright 2008 Allianz. All rights reserved.

2. Types of retirement
expenses
Sources of
income
Options for making
income cover expenses
Transition from accumulation to income
USA-1274a (R-8/2007) For Broker/Dealer use only – Not for use with the public.

3. Important retirement questions
 Will I have enough to retire
when I want to retire?
 Will I run out of income in
retirement?
 How will inflation affect my
retirement income?
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4. Retirement readiness?
● Don’t have formal retirement strategies
● Assume they have limited options for improving their
financial situation once they reach retirement
● Confused about the complexity of financial issues
● Limited knowledge of and/or help in the retirement
income strategies process
● Think retirement is simply the reverse of accumulation
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5. The retirement
income strategy
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6. Agenda: Re-Engineering Retirement
Difference between accumulation and income
The 3-7-5 retirement strategy / Case study
Next steps
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7. Thinking differently
Retirement accumulation stage
Retirement Retirement
Accumulation Income
Stage Stage
Financial Have enough
Objective money to retire
Asset
Portfolio allocation
Allocation
Time Known to
Horizon retirement
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8. Thinking differently
How much will we have?
How much money will we need?
Will we have enough to get by?
Will there be enough for extras?
Will there be something for our
heirs?
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9. Thinking differently
Retirement income stage
Retirement Retirement
Accumulation Income
Stage Stage
Financial Have enough
Not outlive assets
Objective money to retire
Asset Withdrawal
Portfolio allocation
Allocation allocation
Time Known to
Horizon retirement
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10. Thinking differently
The “Lost Decade”
$12,000
10,000
8,000
6,000 The Wall Street Journal, March 26, 2008
The S&P 500: 1999 through February 2008. Total return on $10,000 investment adjusted for
inflation. Note: Not possible to invest directly in the index.
Standard & Poor’s 500® index (S&P 500®) is comprised of 500 stocks representing major U.S. industrial sectors. “Standard &
Poor’s®,” “S&P®,” “S&P 500,” “Standard & Poor’s 500,” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have
been licensed for use by Allianz Life Insurance Company of North America. The product is not sponsored, endorsed, sold or
promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of purchasing the product.
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11. Thinking differently
Sequence of returns
Bad returns later / sooner
$3,000,000
1250000
Hypothetical value
12.1% Year 30:
Hypothetical value at 0% Year 1:
24.6% 12.1%
Year 29:
750000 Year 2:
14.3% 24.6%
Year 28:
Year 3:
5.2% 14.3%
Year 27:
Year 4:
22.2% 5.2%
Year 26:
$500,000
250000
Year 5: 22.2%
17
19
21
1
3
5
7
9
11
13
15
23
25
27
29
11.0% Year 5:
Year 26: 11.0%
3.7% Year 4:
Year 27:
-19.7% 3.7%
Year 3:
Year 28: - 19.7%
- 0.8% Year 2:
Year 29: - 0.8%
-17.9% Year 1:
Year 30: - 17.9%
0 5 10 15 20 25 30
Year
This example is shown for illustrative purposes only and is not intended to predict or project future results. It is not intended
to represent any specific product or investment, and does not reflect the deduction of taxes or product fees or expenses.
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12. Thinking differently
Retirement income stage
Retirement Retirement
Accumulation Income
Stage Stage
Financial Have enough
Not outlive assets
Objective money to retire
Asset Withdrawal
Portfolio allocation
Allocation allocation
Time Known to Unknown to date
Horizon retirement of death
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13. Thinking differently
How can we make the most of my retirement
income sources?
What should we reposition in consideration of tax
and transfer issues?
What should we spend first, next, last?
What should we hold?
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14. Thinking differently
Retirement income strategies
Retirement Retirement
Accumulation Re-Engineering
Income
Stage Transition to:
Stage
Retirement
Financial Have enough Maximize sources
Not outlive assets
Objective money to retire of income
Asset Reposition assets
Withdrawal
Portfolio allocation to meet needs
Allocation allocation
and goals
Time Known to Unknown to date
Retirement
Horizon retirement of death transition
strategies
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15. The 3-7-5 Strategy
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16. 3-7-5 Strategy
Levels of Sources of
Retirement Retirement Options
Expense Income
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17. 3-7-5 Strategy
Three levels of retirement expenses
Expenses
Legacy Funds remaining for your heirs
Desired Lifestyle “extras”
Survival Expenses to cover your most basic needs
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18. 3-7-5 Strategy
Seven sources of income for retirement
Expenses Income
Sources of
Welfare - charity Not desirable
Legacy
Continued Employment Phase into retirement gradually
Nonqualified Assets
Mutual funds, CDs, stocks, bonds
(NQA)
Roth IRA
Desired Tax deferred / tax free
Traditional IRA ERISA contributions and rollovers
Qualified ERISA Employer sponsored plans
Survival
Social Security The base
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19. 3-7-5 Story
Hypothetical story
Ken and Patty at retirement
Note: This example is shown for illustrative purposes only and does not represent actual Allianz clients..
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20. 3-7-5 Story
Ken & Patty – age 66
Combined Social Security $2,000 per month
Defined Benefit (Pension) income $500 per month
Home is mortgage free Zero
IRA (including rollover) $500,000
Savings portfolio $400,000
Estimated annual Survival expenses: $36,000
retirement expenses Desired expenses: $20,000
Desire to leave a legacy
Note: This example is shown for illustrative purposes only. All figures are pre-tax estimates.
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21. 3-7-5 Story
Ken & Patty
Sources of Income Re-Engineering Retirement Expenses
Welfare – charity
Legacy
Continued Employment
Nonqualified Assets
(NQA) $400,000
Desired
Roth IRA None
$20,000
Traditional IRA $500,000
Qualified $6,000
ERISA Survival
$36,000
Social Security $24,000
Note: This example is shown for illustrative purposes only. All figures are pre-tax estimates.
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22. 3-7-5 Story
Ken & Patty
Sources of Income Re-Engineering Retirement Expenses
Welfare – charity
Legacy
Continued Employment
$280,000
NQA (25 years @ 5% return)
Desired
Roth IRA None
$120,000 annuity $20,000
Traditional IRA $500,000
Qualified $6,000 $6,000
ERISA Patty’s pension plan
Survival
$6,000
$36,000
Social Security $24,000
$24,000
5% Rate of return is for illustrative purposes only. Guarantees are backed by the financial strength and claims paying ability
of the issuing company. 22
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23. 3-7-5 Story
Ken & Patty
Sources of Income Re-Engineering Retirement Expenses
Welfare – charity
Continued Employment Legacy
Work part-time until age 70
$280,000
NQA (25 years @ 5% return)
Desired
Roth IRA None
$120,000 annuity $20,000
Traditional IRA $500,000
Qualified $6,000 $6,000
ERISA Patty’s pension plan
Survival
$6,000
$36,000
Social Security $24,000
$24,000
Note: This example is shown for illustrative purposes only. All figures are pre-tax estimates.
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24. 3-7-5 Story
Ken & Patty
Sources of Income Re-Engineering Retirement Expenses
Welfare – charity
Roth IRA
Continued Employment Legacy
Work part-time until age 70
$280,000
NQA (25 years @ 5% return)
From nonqualified $1,750
Desired
Roth IRA From IRA IRA RMD $18,250
$120,000 annuity $20,000
Traditional IRA IRA $500,000
Qualified $6,000 $6,000
ERISA Patty’s pension plan
Survival
$6,000
$36,000
Social Security $24,000
$24,000
Note: This example is shown for illustrative purposes only. All figures are pre-tax estimates.
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25. 3-7-5 Strategy
But what if …?
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26. 3-7-5 Strategy
5 Options to improve income
Sources of Income Options Expenses
Welfare – charity Lower your expectations
Legacy
Continued Employment
Spend less and save
Nonqualified Assets more now
Roth IRA Decide to work longer. Desired
Traditional IRA
Take on more investment risk
Company retirement
programs Survival
Social Security Combination (or all) of above
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27. 3-7-5 Strategy
Current standard
5 Options at work of living
$ needed to supplement income
$ now (401(k))
$ additional (401(k)) $ more Retirement
0%
8 -1 %
ive 6 - 8
Combination of all options ss e - 6%
gre derat tive 4
Ag Mo rv a
Co nse
70?
45 Age 65
Time
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.
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28. 3-7-5 Strategy
5 Options at work Current standard
of living
Combination of all options
$ needed to supplement income
$ additional (401(k)) $ more
6 - 8%
de rate 4-
6%
Mo ve
ervati
C ons
45 Age 65 68?
Time
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.
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29. Summary
Many people approaching retirement are worried about
their financial security in retirement
Evaluate how well your retirement expenses
match up with your retirement income
Re-Engineering Retirement can help you
successfully transition from accumulation to
income
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30. What is the next step?
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31. Next steps
Next steps?
● Lets meet for an analysis and recommendations
● Analysis and anticipated retirement expenses compared
to anticipated retirement income
● Recommendations for positioning thf ese?
DFs o resources to help
enhance income have P
D o we designed to compensate for an
● Options (if needed)
anticipated shortfall of income
This analysis is not a comprehensive financial or retirement plan. Planning
services are available at additional cost and offered only by appropriately
licensed registered investment advisors.
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32. Thank you!
Not FDIC insured  May lose value  No bank or credit guarantee  Not a
deposit  Not insured by any federal government agency or NCUA/NCUSIF
USA-1274a (R-8/2007) For Broker/Dealer use only – Not for use with the public.
© Copyright 2008 Allianz. All rights reserved.