SEGUIMIENTO, EVALUACIÓN Y CONTROL.

Alternatives - Your retirement situation is projected based on your desired spending and current pattern of investing. Alternatives are

planning tools that require implementation and that, may provide additional retirement resources. A new retirement situation is projected based on the alternative pattern (the suggested pattern) of investing and desired spending.

Annuity - Life insurance annuity contracts are useful planning tools that have two phases: the accumulation phase and the

annuitization phase. During the accumulation phase, you make a lump-sum payment or periodic payments to an insurance company, which invests the funds in a portfolio that earns a return. The portfolio value fluctuates with that of the underlying securities within the portfolio, and the portfolio grows tax-deferred. During the annuitization period, you receive regular payments from the annuity. Generally, the payments continue until you die or until your spouse dies, if later.

Asset returns - The combined return stated as an annual percentage consisting of current income and capital appreciation from an

investment.

Defined benefit pensions - Traditional pensions plans that promise workers a specific monthly benefit at retirement. The amount of

the benefit is known or can be determined in advance and is usually based on factors that include earnings, age at retirement, and length of service. The benefit is usually stated as a percentage of final salary and years of service, or as a specific amount and years of service. For example, a benefit might be stated as two percent of final salary for every year worked at the company, or as $100 per month for every year worked at the company. Payments generally continue for the longer of the life of the worker of the life of the worker's spouse, but may be reduced when paid to a surviving spouse. Payments may be guaranteed by the Pension Benefit Guarantee Corporation, a federal agency.

Full benefit retirement age - The age at which a qualifying individual can begin receiving full Social Security benefits without

reduction for early retirement. For individuals born before 1938, full benefit retirement age is 65. This age is gradually increased for individuals born after 1937 until it reaches age 67 for individuals born in 1960 or later.

Inflation - The overall upward price movement of goods and services in an economy, usually measured by the Consumer Price Index

and stated as a rate of increase.

Investment assets - Assets that are currently subject to federal, state, and local taxes. Be sure to indicate the appropriate percentage

available to fund retirement.

Life expectancy - The age to which you are expected to live. In this retirement analysis, funding will be provided until the age that

you indicate as your life expectancy. Because, individual health and longevity circumstances vary, and no one knows the exact time of death, an age should be selected that is appropriate for your individual circumstances.

Longevity - Living longer than expected can be a problem if you are using assets to fund retirement. If your assets run out before you

die, you may not be able to support yourself. Longevity planning should include an evaluation of how long your family members before you have lived. If you have a history of longevity in your family, you should plan for a long life expectancy. Annuities provide a good planning strategy for longevity concerns. A life annuity guarantees a periodic income throughout your (and potentially your spouse's) entire life.

Long-term care needs - If you reach a point in life where you are not physically or mentally able to care for yourself, you will likely

incur long-term care expenses. Generally, the best provision for long-term care expenses is a long-term care insurance policy.

Net assets withdrawn - In this analysis, retirement spending goals are first met by any contractual income that the retiree is expected

to receive. If the spending goal cannot be completely funded by contractual income during any month in retirement, assets are withdrawn to provide for the need. Since taxes may be due upon withdrawal of an asset, the system withdraws an amount sufficient to provide for the need and to pay any taxes due. The net asset withdrawal is the amount available after taxes to meet retirement spending needs.

Other government benefits - Benefits that are paid by any government entity to an individual in place of, or in addition to Social

Security retirement benefits. Benefits may include state retirement benefits, railroad retirement benefits, federal retirement benefits, or any other payments made by a government entity.

Retirement Glossary

Percentage of assets available - You are able to indicate the percentage of your assets that are available to help meet your retirement

spending goals. Generally, this will be 100%, unless you do not have access to part of an asset or you would like that asset to be preserved and passed to heirs.

Retirement needs - In this analysis, retirement needs consist of your basic spending goal and any additional spending goals that you

have defined. The basic spending goal is assumed to continue until death. For married couples, the basic spending goal continues beyond the first to die until the surviving partner's death, but is adjusted at the first death by the percentage you input should be available for the surviving spouse. You are able to indicate the beginning and ending period for any additional goals. Please note that all goals are spending goals which means they are amounts you wish to spend and should not include any income taxes you may be required to pay. The system will estimate any income taxes due based on the rates input in the assumptions screen.

Retirement period - The period that begins when and individual quits working (retires) and continues until death. In this analysis, a

married couple's retirement period is assumed to begin when the first partner retires and continues until the longer of the partners' life expectancies.

Retirement plans - Accounts that are used to accumulate funds for retirement. Generally, retirement plans are tax deferred which

means taxes are not paid on earnings until withdrawals from the account begin. Contributions to retirement plans may also be tax-deductible which means taxes are not paid on the amounts contributed to the plan until withdrawals begin. Tax deductible contributions are called qualified contributions. Non-qualified contributions are made to a retirement plan after taxes are paid on the contribution amount. These accounts include 401(k), 403(b), SEP, Keogh, and IRAs.

Roth accounts - Include Roth IRAs and Roth 401(k)s. Contributions to Roth accounts are not tax deductible, but withdrawals from

Roth accounts are tax-free, as long as certain requirements are met. You can make tax-free withdrawals as long as you have had the IRA for 5 years, or you begin withdrawals after the owner reaches age 59 1/2.

Social Security - Social Security retirement benefits are paid to a qualifying individual every month after the benefits begin, until that

person dies. Benefits may begin any time after a qualifying individual reaches age 62. However, benefits will be reduced if they begin before the individual reaches full benefit age.

Social Security statement - A statement that the Social Security Administration sends to all wage earners each year on or around the

wage earner's birthday. The statement estimates the wage earner's expected benefit assuming the person continues to work until the full benefit retirement age.

Spending goal - The amount that you desire to spend annually during retirement. This amount should be an after-tax amount. The

analysis will inflate this amount each year during retirement. Before the amount is provided, the analysis will estimate taxes on income and taxes that may be due as assets are consumed. Amounts remaining after-taxes are available to provide for the spending goal.

Survivor - For married individuals, retirement funding is provided until the last life expectancy is reached. If there is a period between

the life expectancies of the partners, funding is provided after the first death at an adjusted level based on the inflated original spending goal and the percentage provided for the survivor.

Tax deferral - Money accumulates inside of qualified plans tax deferred, which means that taxes are not paid on the earnings within

the plan until withdrawals from the plan are made.

Work during retirement - Employment after the date one retires from one's career, sometimes necessary to meet financial needs.

Generally, post-retirement employment will provide a lower income or involve fewer hours.

Working spouse's pre-retirement income - Marriage partners may not retire at the same time. Since this analysis assumes that the

retirement period begins when the first partner retires, there may be a time during the retirement funding period in which one of the partners is working. The after-tax adjusted income from this partner can be made to be available to meet retirement needs. If you indicate that this income is available, it is reduced by income taxes, Social Security taxes, and any contributions made to retirement