Women and Wealth: Creating a Strategy That Works for You

Presented by: Dena K. Lewis Assistant Vice President Merrill Edge Financial Solutions Advisor™

The information in this presentation is intended to be a general introduction of Merrill Edge’s approach to wealth management. It is not intended to be either a specific offer by any Merrill Edge entity to sell or provide, or a specific invitation to apply for, any particular product or service.

Merrill Edge offers a broad range of brokerage, investment advisory (including financial planning) and other services. There are important differences between brokerage and investment advisory services, including the type of advice and assistance provided, the fees charged, and the rights and obligations of the parties. It is important to understand the differences, particularly when determining which service or services to select.

Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state or local tax penalties. Neither Merrill Lynch nor its Financial Solutions Advisors provide tax, accounting or legal advice. Clients should review any planned financial transactions or arrangements that may have tax, accounting or legal implications with their personal professional advisors.

Asset allocation, diversification and rebalancing do not assure a profit or protect against a loss in declining markets.

Investing in securities involves risks. There is always the potential of losing money when you invest in securities.

Investments in foreign securities involve special risks, including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are magnified for investments made in emerging markets.

Merrill Edge is available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), and consists of the Merrill Edge Advisory Center (investment guidance) and self-directed online investing. MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corporation. Banking products are provided by Bank of America, N.A., and affiliated banks, members FDIC and wholly owned subsidiaries of BAC.

Investment products:

Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value

© 2012 Bank of America Corporation. All rights reserved.

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| PPT-12-11-0270 | 6/2012

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Agenda

What we’ll discuss today:

 Women as a force in the economy and workplace  The unique challenges women face  Strategies for retirement planning  How a Merrill Edge Financial Solutions Advisors can help

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Women: a financial force

Financial preparedness

Ninety-five percent of U.S. women are involved in household financial decisions; 25% are the primary decision makers.

1 Are you prepared financially for:

 A long life well into retirement  What will happen to your loved ones if you die unexpectedly  The possibility you, a spouse or a parent becomes disabled 1 “Financial Experience & Behaviors Among Women,” 2010–2011 Prudential Research Study, www.prudential.com.

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Women: A force in the economy

Some economic factors about women today:

 Comprise 43% of top wealth holders 1  Will hold 50% of total private wealth (estimated to be $22T by 2020).

2  Make more than 80% of all consumer purchase decisions 3  Spend more than 70% of consumer dollars worldwide 4 1 Brian G. Raub , “Personal Wealth, 2004,” U.S. Internal Revenue Service, Statistics of Income Division, www.irs.gov.

2 Harvard Business Review. “The Female Economy “ September 2009 3 A.T. Kearney Consulting Firm, Trendwatching, 2007, www.trendwatching.com.

4 Boston Consulting Group “Women Want More: How to Capture Your Share of the World’s Largest, Fastest-Growing Market” August 2009

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Women in the workplace

Some statistics about women in the workplace:

 Women comprise 46.7% of the total U.S. labor force 1  They account for 51.5% of persons employed in management/professional positions 2  More than 8 million U.S. businesses are majority women-owned, with an economic impact of $3 trillion annually, translating into more than 23 million jobs 3  Women receive more bachelor’s and advanced college degrees than men 4 1

Women’s Employment During the Recovery

, U.S. Department of Labor, 2011, www.dol.gov.

2 Bureau of Labor Statistics, “Employed persons by detailed occupation, sex, race, and Hispanic or Latino ethnicity,” 2010.

3 The Economic Impact of Women Owned Businesses in the United States, Center for Women’s Business Research, 2009.

4 U.S. Census Bureau, Current Population Survey, 2010 Annual Social and Economic Supplement, April 2011.

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Unique challenges

Women face unique challenges that can impact their ability to realize longer-term goals:

 Increased life expectancy/greater retirement needs 1  Longer exposure to inflation/increased health care costs  Long-term impact of time spent out of work force 2  Earning 81.2% as much as men as a full-time worker 3

Life Expectancy in Years 1 80.5 75.5

Women Men

1 U.S. Census Bureau, Life Expectancy by Sex, Age, and Race: 2008 (most recent statistics).

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The MetLife Study of Caregiving Costs to Working Caregivers: Double Jeopardy for Baby Boomers Caring for Their Parents

, 2011.

3 Bureau of Labor Statistics, Current Population Survey, “Median weekly earnings of full-time wage and salary workers by detailed occupation and sex, 2010,” April 2011.

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What about your life?

Consider this:

 Are you living for today, maintaining a long-term time frame, or both?

 Is your financial strategy a balance between lifetime financial needs and the legacy you would like to leave?

 Are you familiar with your investment portfolio? Do you feel you have the right mix of stocks, bonds and cash to help meet your investment needs?

 Have you determined your tolerance —both financial and emotional— for investment risk?

 Have you worked to develop strategies to help meet your philanthropic goals?

 Do you have a will and/or trusts? If so, are they current?

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Saving for Retirement

Impacts to lifetime earnings

The earnings gap between genders and career interruptions may hinder a woman’s lifetime earnings

U.S. Department of Labor U.S. Bureau of Labor Statistics June 2010

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Contribute as much as you can

Contribute the maximum to your 401(k) plan or IRA, including catch-up contributions 2011 Individual Retirement Accounts (IRAs) 1 Individuals under age 50

$5,000

Age 50+ catch-up contribution

$1,000

Employer Sponsored Plans 2 Individuals under age 50

$16,500

Age 50+ catch-up contribution

$5,500

1 Contribution limits are for traditional and Roth IRAs. 2 These contribution limits apply to 401(k), 403(b) and 457b plans.

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Start investing early

Career interruptions can be challenging for saving for retirement. However, investing early can help you later 1,200k 1,000k 800k 600k 400k 200k 0k

Susan Joan

Hypothetical example 3 , assumes an 8% annual return in a brokerage IRA Assumptions Susan

 Starting at age 22 invests $3,000 per year for 43 years until her retirement  Her balance at age 65: $1,067,849

Joan

 Starting age 22 invests $3,000 per year for 8 years.  She then leaves the workforce until she is 50  She then returns for 15 more years and contributes $6,000  Her balance at age 65: $726,250 1 The data illustrated in the bar graph is hypothetical and not indicative of the performance of any particular investment. Chart assumes annual IRA contributions made on January 1 each year of investing. Assumes annual rate of return of 8% on a non-FDIC insured brokerage investment and tax-deferred compounding in an IRA. Past performance is no guarantee of future results. An account may earn more, may earn less, or may incur a loss. Final account balances are prior to any distributions, fees, and taxes which would lower the ending balance. Taxes may be due upon distribution. You may be subject to a 10% additional federal tax if you withdraw prior to age 59½. Investing in this manner does not ensure a profit or guarantee against loss. Investing in securities involves risks due to price fluctuations.

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Explore your tax-deferred account options

There are a variety of retirement account solutions to consider Do you have access to a 401(k) right now?

Have you changed jobs?

Are you married and not in the workforce?



YES:

Maximize contributions to employer-sponsored retirement plans or at least contribute enough to earn the company match available. 

NO:

Open an IRA and maximize contributions including “catch-up” contributions (if eligible) 

YES:

Roll over your 401(k) or other employer sponsored retirement plan from a previous employer into an IRA. 

YES:

Participate in a ‘Spousal IRA’ if eligible

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Investment strategies to help meet your financial goals

Your strategy shaped by your life

Consider this:

 Find the appropriate asset mix for your goals, timetable and risk tolerance  Keep your accounts diversified to help protect against market volatility  Consider whether your investment selections are likely to keep up with inflation  Rebalance regularly*  Review your strategy with your Financial Solutions Advisor at least once a year as you near retirement *Asset allocation, diversification and rebalancing do not assure a profit or protect against loss in declining markets.

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A strategy defined by your goals

Your overall investment strategy depends on:

 Your goals, timetable and tolerance for risk  A balance of stocks, bonds and cash  Monitoring and rebalancing your portfolio

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Determining an appropriate asset allocation

Merrill Edge Asset Allocation Models Conservative 25% 20% 55% Moderately Conservative 10% 50% 40% Moderate 5% 35% 60% Moderately Aggressive 5% 25% 70% Aggressive 5% 15% 80% Bonds Stocks Cash

Source: Bank of America Merrill Lynch Research Investment Committee (RIC) Report, January 2012. Models are for illustrative purposes only. Merrill Lynch has changed the allocations for each model in the past and may change the allocations in the future, depending upon research and investment strategy recommendations.

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Choices within each asset class

Bonds: Income generation

 Corporate  Municipal

Stocks: Portfolio growth

 Dividends  Market capitalization  International/Emerging markets

Other assets

 Real assets, cash  Private equity, hedge funds Some or all alternative investments may not be suitable for certain investors. Many alternative investment products, specifically private equity and most hedge funds, require purchasers to be “qualified purchasers” within the meaning of the federal securities laws (generally, individuals who own at least $5 million in “investments” and institutional investors who own at least $2.5 million in “investments,” as such term is defined in the federal securities laws). No assurance can be given that any alternative investment’s objective will be achieved. Many alternative investment products are sold pursuant to exemptions from securities registration and, for example, may not be subject to the same regulatory requirements as mutual funds or other registered securities. In addition to certain general risks, including but not limited to risk of loss of principal, illiquidity of certain investment vehicles and lack of transparency with respect to fund portfolio holdings, each product will be subject to its own risks, including strategy and market risk. Certain alternative investments result in the investors’ receipt of tax reporting information.

This information is for illustrative purposes only. It is not intended to serve as investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances.

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Merrill Edge Wealth Management Process

We can help you organize your financial life.

 We help you look at your financial life in total and establish objectives that balance several goals simultaneously, such as a child’s education, your retirement and your wealth transfer plan.

 We’ll work with you to build an investment strategy that allows the different pieces of your financial life to work together, taking into consideration not only your various goals, but also the levels of risk you’re prepared to take to pursue them.

 The strength of your strategy will mean little if it falls short at execution. We draw from a vast array of proprietary and nonproprietary products to help you customize integrated solutions.

 Your relationship with us should be based on accountability. That means we’ll meet with you to help you review your progress, measure results against your objectives and make adjustments as necessary.

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Retirement Income Strategies

Longer life expectancy, longer retirement

How long must your money last?

 People are now living longer in retirement  You may need income for 20 to 30 years after your paychecks stop

Life Expectancy Beyond Retirement at Age 65 Male Age 65 Female Age 65 50% chance of living to 85 25% chance of living to 92 50% chance of living to 88 25% chance of living to 94 Couples Age 65 at least one person has a 50% chance of living to 92 at least one person has a 25% chance of living to 97 A healthy 65 year old female has a 50% chance of living until 88 or 23 more years.

Source: Annuity 2000 Mortality Table, Society of Actuaries. Figures assume you are in good health. 22 22

You need answers to plan effectively

Retirement income planning can help you answer these critical questions What kind of lifestyle do I want?

When can I retire?

How much will I need?

How can I make sure I don’t run out of money?

How can I recover from losses in my portfolio?

How will I know if I’m on track?

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Create a retirement income plan

Understanding your income and expenses can help you structure an investment strategy to meet essential and discretionary expenses

Consider solutions with a guaranteed* income stream like annuities to help meet your essential daily living expenses

Target Spending Level Funding Gap Portfolio Draw Down Income Planned Expenditures Employment Income Pension Pension Social Security Planned Income

*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 Merrill Lynch or its affiliates, nor do Merrill Lynch or its affiliates make any representations or guarantees regarding the claims-paying ability of the issuing insurance company. Variable annuities are sold by prospectus only. Before investing, investors should carefully consider the investment objectives, risks, charges and expenses of the variable annuity and its underlying investment options. The current contract prospectus and underlying fund prospectuses provide this and other important information. Please contact your Financial Solutions Advisor to obtain the prospectuses. Please read the prospectuses carefully before investing or sending money

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Structuring your portfolio for now and later

Merrill Edge uses a three pronged investment approach to help meet your needs throughout retirement

 Create an asset allocation strategy that reflects your needs  Align investment objectives, liquidity and risk tolerance  Consider various tax implications  Asset allocation does not assure a profit or protect against loss in declining markets

Long-Term

Wealth Transfer

Intermediate-Term

Longevity

Short-Term

Consumption

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Estate planning considerations

The importance of estate planning

Estate planning includes:

 Financial strategy that incorporates investments, retirement accounts, life insurance, trusts  Legal documents as required by state law  Tax planning as per federal and state tax laws  Beneficiary Planning

Special considerations:

 Durable power of attorney  Living will  HIPAA health care authorization and release

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Distributing your assets per your wishes

Will

 Provides for the distribution of assets after your death  Applies to assets owned in your name not otherwise the subject of beneficiary designations  Does not address lifetime planning, e.g., incapacity  Is subject to probate proceedings  Requires court-appointed personal representative

Living Trust

 Provides benefits while you are still alive, including during incapacitation, and after death  Allows limited probate proceedings for pour-over will  Applies to all assets titled in the name of the trust  Addresses lifetime management of assets  Requires grantor-appointed trustee

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Beneficiary planning

It is important to make appropriate beneficiary designations to ensure that:

 Your assets pass to your beneficiaries according to your wishes  Your assets avoid the potential delay and expense of probate  Your beneficiaries have the opportunity to extend or “stretch”, the tax-deferred earning period of the assets

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Putting it all together

Do you have any questions?

We’ve discussed:

 Women as a financial force  Retirement  Investment strategies to help meet your financial goals  Philanthropy  Caregiving  Estate planning strategies

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Building and enriching your financial life

Solutions Service Pricing

 Enjoy a single, comprehensive view of your Merrill Edge and Bank of America account balances for easier financial management.  We offer brokerage accounts and IRAs through Merrill Edge, and checking accounts and CDs through Bank of America, N.A.  Call the Merrill Edge Advisory Center to speak with one of our Financial Solutions Advisors.  We will give you personalized advice and guidance for your specific situation.   Merrill Edge clients enjoy clear and transparent pricing. Talk to us about our simple account fees, flat rate equity trades and other benefits.

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Building and enriching your financial life

Merrill Edge Financial Solutions Advisor

 Dena Lewis Merrill Edge Financial Solutions Advisor™ 678-686-7364 / [email protected]

Merrill Edge Advisory Center

 Contact your local Financial Solutions Advisor: Dena K. Lewis 678-686-7364 / [email protected]

Bank at Work

 Go to

www.merrilledge.com/bankatwork or

888-609-4650 to learn more.

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Have your money working for you.

Thank you

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