457 retirement education for life ® is your retirement rockin’ or rollin’?

457

Retirement Education for LIFE®

Is Your RetirementIs Your RetirementRockin’ or Rollin’?Rockin’ or Rollin’?

457

Retirement Education for LIFE®

NRM-3448A0.1 (308)

Nationwide Retirement SolutionsRetirement Education for LIFE™

Retirement Specialists are registered representatives of Nationwide Investment Services Corporation, member FINRA. In Michigan only: Nationwide Investment Svcs. Corporation.

How to Manage YourInvestment Risk

How to Mange Your Investment RiskHow to Mange Your Investment RiskRetire — 3

Today, you will …

• Define the main types of investment risk

• Learn three ways to manage investment risk

• Prepare an action plan to help you manageinvestment risk


What is risk?

The possibility

of loss


Investment risk

Five main types:

•Volatility (market risk)

•Purchasing power (inflation risk)

•Business-specific

•Interest rate

•Longevity

Action step


Managing investment risk

Three methods (strategies):

• Match investments to time horizon

• Diversification

• Dollar cost averaging

Action step


Jane’s time horizon

• Life expectancy 85

• Expected retirement age 65

• Current age 40

• Time horizon: 85 - 40 = 45 years NOT 65 - 40 = 25 years

Action step


Use of diversification as part of an overall investment strategy does not assure a profit or guarantee against loss in a declining market.

DiversificationDiversification is the

principle of __________

your assets around, or not

putting all of your _____ in

one basket.

spreading

eggs

Action step


This illustration is hypothetical and is not intended to predict or project investment results. It doesn't reflect any fees or charges. If they were, the results would be lower.

Diversification in action• Option #1• $50,000 @ 2% for 25 years =

• Option #2

• $10,000 @ -100% =

• $10,000 @ 0% =

• $10,000 @ 5% for 25 yrs =

• $10,000 @ 8% for 25 yrs =

• $10,000 @ 10% for 25 yrs =

$ 0$ 10,000$ 33,864$ 68,485$108,347

$220,696

$ 82,030


$10 .79 13

$10 .59 17

$10 .39 26

$10 .79 13

Amount Price # of Golf Balls

Dollar cost averaging does not assure a profit and does not guarantee against loss in a declining market.

Dollar cost averaging


• $10 .79 13

• $10 .59 17

• $10 .39 26

• $10 .79 13

Average store price per ball $2.56 divided by 4 = 64

cents

Average price paid per ball $40 divided by 69 = 58

cents

$40 $2.56 69

Dollar cost averaging

Amount Price # of Golf Balls

Action step

Please be aware that dollar cost averaging does not assure a profit and does not guarantee against loss in a declining market.


DefinitionTime

horizonDiversificati

on

Dollar cost

averaging

The risk that you might not have enough money on which to retire

The up and down movements In the price of an investment

The risk that your money won’tbuy as much in the future

The risk that the value of aparticular company’s stock declines

How an upward move in interest rates makes the value of your fixed income investment decline

Volatility

Purchasingpower

Business–specific

Interest rate

Accumulation

Type of risk

Tools for managing risk

Action step



DefinitionTime


on

Dollar cost

averaging






Volatility

Purchasingpower

Business–specific

Interest rate

Accumulation

Type of risk

Action step


So what can you do?

• Annually rebalance your investments

• Change allocation as you get closer to retirement

• Invest fixed amounts at regular intervals

• Diversify

Ways to manage risk

Action step


Why combine other retirement dollars into this plan?

• It may make investing easier!

• Personal help now and after you retire

• May pay less in annual account fees

• Nationwide is an industry leader in both 457(b) and 401(k) markets


What types of accounts can you combine?

• Qualified 401(k) retirement plan

• Qualified 403(b) retirement plan

• Rollover IRA, Contributory IRA or SIMPLE IRA account

You can transfer other 457 dollars or rollover dollars from a:

There are differences between deferred compensation plans, individual retirement accounts, and qualified plans, including fees and when you can access funds. There may be sales charges or other fees when you move money out of your current account. You should consider all factors before making a decision. Assets rolled over from a qualified plan, DROP plan or IRA may be subject to a 10% penalty tax if withdrawn prior to age 59½. Neither Nationwide, nor any of its representatives give legal or tax advice.


Tools and services to make informed investing decisions

Information provided by Retirement Specialists is for educational purposes only

and is not intended as investment advice.

Action step

• Face-to-face

• Online

• By phone

• Other financial education workshops

How to Mange Your Investment RiskHow to Mange Your Investment Risk

Thank you for your attendance!

Retire — 22

457 retirement education for life ® is your retirement rockin’ or rollin’?

Documents

investment risk slide

managing investment

main types of investment

volatility market risk

nationwide investment

project investment results

overall investment strategy

dollar cost averaging