Taking Action Toward Your Retirement GoalsInvestor Seminar

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Neither UBS Financial Services Inc. nor any of its employees provide legal or tax advice. You should consult with their personal legal or tax advisor regarding your personal circumstances.

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It is important that you understand the ways in which we conduct business and the applicable laws and regulations that govern us. As a firm providing wealth management services to clients in the U.S., we are registered with the U.S. Securities and Exchange Commission (SEC) as an investment adviser and a broker-dealer, offering both investment advisory and brokerage services. Though there are similarities among these services, the investment advisory programs and brokerage accounts we offer are separate and distinct, differ in material ways and are governed by different laws and separate contracts.

It is important that you carefully read the agreements and disclosures that we provide to you about the products or services we offer. While we strive to ensure the nature of our services is clear in the materials we publish, if at any time you seek clarification on the nature of your accounts or the services you receive, please speak with your Financial Advisor.

For more information, please visit our website at www.ubs.com/workingwithus

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The Changing Retirement Landscape

Bush Cites Plan That Would Cut Social SecurityApril 29, 2005

Will Baby Boomers Go Bust?May 16,2005

“Health-care expenses are easily the largest underestimated cost in retirement.”

May 9, 2005

Am I Ready To Retire? July 24, 2006

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Do You Have Questions About Preparing for Retirement?

¨ Am I saving enough? Am I going to outlive my assets?

¨ What should I do with the assets in my employers plan?

¨ When should I take distributions from my retirement plan?

¨ Am I affected by estate tax issues? Should I be doing

something to protect my beneficiaries?

¨ Who can help me address my concerns and plan for my

needs?

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Planning for Retirement: A 4 Stage Process

ReceivingSavingManagin

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Accumulating Toward Savings Goals

Eligible to Withdraw Assets from Qualified Plans

Drawing your Income from Retirement Savings

Preparing to pass Retirement Assets to Beneficiaries

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Saving

¨ Am I saving enough?

¨ Will I have enough to retire?

¨ Am I going to outlive my assets?

Saving

AccumulatingToward Savings Goals

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What Do These Numbers Mean?

80 – 110

20 – 30

2 – 4

Saving

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How Much Income Will You Need?How do you picture yourself in retirement?

Saving

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Inflation Erodes Retirement SavingsAnnual Inflation for Retirement-Related Expenses

2.4% 2.5%

2.6%

3.2%

4.4% 4.6%

5.9%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

All items Eating out

Food Rent of primary residenc

e

Presc.drugs/

medical supplie

s

Funeral costs

Hospitalservices

Nursing

home/ adult

daycare

3.8%

Health care costs increased 8.7% in 2001 – an all-time high of 14% of GDP

Source: U.S. Bureau of Labor Statistics; 10-year average annual inflation through 12/31/03. Nursing home and hospital service reflect 7-year through 12/31/03.

Saving

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Source: Social Security Administration, Period Life Table, 2003 (updated July 2007)

Longer Life Means Longer RetirementFDR Signed the Social Security Act in 1935

Saving

Life Expectancy

2007

Men – 74½

Women – 80

Life Expectancy (at Birth)

Life Expectancy

1935

Men – 59

Women – 63

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1As of August 20072TV Guide, January 20083U.S. Bureau of Labor Statistics, November 20074National Automobile Dealers Association, May 20075U.S. Department of Housing & Urban Development, November 20076Trends in College Pricing 2007, The College Board’s Annual Survey of Colleges, 2007-2008

Item 1980Current

First-Class Stamp $0.15$0.411

TV Guide $0.40$2.992

Loaf of Bread $0.52$1.243

Average New Car $7,571$28,4514

Average New Home$64,600$298,5005

College Education$4,806$13,5896

(4-year public annual tuition and room and board)

Reasons to Save for RetirementThe impact of inflation on your money

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The Effects of Inflation on Retirement Income

Source: UBS Investment Research provided through UBS Securities LLC (2004)

The forecasts or other information in this slide regarding the likelihood that various investment and economic outcomes might occur are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. In reviewing this information, please note that the analysis does not take into account actual market conditions which may severely affect the outcome of your goals over the long term. Past performance is not a guarantee of future returns.

Anticipated Income Needed at Retirement In Current Dollars

Income Needed 20 Years Later at Annual Average Inflation Rate of 2.5%

$100,000

$164,000

Saving

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Will I Outlive My Assets?Probability of Assets Lasting for 25 Year Retirement(Portfolio Allocation: 60% stocks/40% bonds)

0%

20%

40%

60%

80%

100%

4% 5% 6% 7% 8%

Source: UBS Quantitative Research Team (2004) based on historical return data for large-cap stocks and long-term Treasury bonds (from 1926-2003.)The forecasts or other information in this slide regarding the likelihood that various investment and economic outcomes might occur are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. In reviewing this information, please note that the analysis does not take into account actual market conditions which may severely affect the outcome of your goals over the long term. Past performance is not a guarantee of future returns.

Saving

Withdrawal Rate

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Retirement Savings

After-TaxTax-Deferred/Tax-

Free

PretaxTax-Deferred

After-Tax Taxable

Save and Diversify among 3 different tax baskets

Traditional IRAs

Employer Plans:

401(k) PS 403(b) SEP457 SIMPLE

Non-Deductible IRA

Roth IRAs/Roth 401(k)

Annuities

Non-Qualified Plans

StocksBondsMutual FundsTax Rates:Capital Gains Dividends

Saving

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Traditional and Roth IRA Limits

Year Under Age 50 Age 50+

2007 $4,000 $5,000

2008 and after, asadjusted for inflation

$5,000 $6,000

401(k), 403(b), 457(b) Contribution Limits

Year Under Age 50 Age 50+

2008 $15,500 $20,500

Are You Taking Advantage of Your IRA?Increased Limits over Age 50 Can Help You Catch Up!

Saving

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Have You Considered a Roth IRA?Added benefits if your MAGI is …

¨ Contributions always non-deductible (after-tax)

¨ Can withdraw contributions at any time—no tax/penalty

¨ Qualified distributions from Roth are tax-free vs. tax-deferred— For Owner and Beneficiaries

¨ No required minimum distributions (RMDs) at 70½

Saving

Single Filers* Joint Filers*

Less than $101,000

Less than $159,000

*Eligibility for Roth contributions phase out for modified adjusted gross income (MAGI) between $101,000 to $116,000 (single filing), $159,000 to $169,000 (joint filing) for 2008.

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The Power of 401(k) ContributionsHow much can a 50-year old accumulate in a 401(k) before retiring at age 58?

50-year old earning $75,000*

Annual Contribution

6% Rate of Return

8% Rate of Return

10% Rate of Return

$4,500 (6%) $53,527 $59,036 $65,270

$10,000 (13.3%) $118,949 $131,190 $145,044

Note: Starting at age 50, this hypothetical illustration assumes various contributions that are made at the end of each month and lasts for 9 years until retirement.

*This illustration is hypothetical and does not represent the performance of any specific investment or security

Saving

Max of $20,500

$243,846 $268,941 $297,341

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Saving: Action Steps

¨ “Crunch the numbers” to get a clear picture of where you are today and what you need to do for the future

¨ Establish a formal financial plan that includes your retirement goals:

Consider saving with all three tax baskets

Maximize contributions to retirement plans

Explore Roth IRA option

Implement the plan and review progress

Saving

AccumulatingTowards Savings Goals

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Receiving

¨ Should I roll the assets over from my employer plan into an IRA

¨ What are my options?

¨ What are some key issues I should know?

Receiving

Eligible to distribute employer plans

Receiving

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When Can You Move Your Employer Plan Assets to an IRA?

Consolidate

401(k)

403(b)

457(b)

ESOP

Profit Sharing

Company Plan

While still employedIn-service withdrawal

Changing jobs

Retiring

Rollover IRA

Traditional IRAorRoth IRA*

Lump Sum Pensions—Access, if available, is typically only allowed at retirement. (Possibilities depend on plan provisions)

* effective 2008 under the Pension Protection Act, eligible qualified plan distributions may be rolled directly into a Roth IRA. Income limits on conversions still apply until 2010.

Consolidate

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Why Consolidate Assets in IRA?Advantages of IRA Consolidation

Receiving

Direct Financial Advisor Relationship for Guidance

Greater Investment Flexibility and Choice

More Flexibility in making Beneficiary Designations

Access to Funds: Distributions and Withdrawals

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Do you own company stock in your plan? Are there circumstances where taking a plan distribution and not rolling over to an IRA makes good planning sense?

Receiving

Rollover to IRA

Qualified Plan

After-Tax Account

Traditional IRA

Mutual Funds

Cash

Company Stock

Distribute SharesNUA

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Net Unrealized Appreciation (NUA)—Example

*Assumes a 33% ordinary income tax rate and 15% capital gains tax rate. Tax rates reflect federal taxes; state taxes may also apply. There may be additional tax considerations. Neither UBS Financial Services Inc. nor its employees (including Financial Advisors) provide tax or legal advice. You should consult with your attorney and tax advisor regarding your personal circumstances.

$100,000 in company stock held in 401(k) account

Standard 401(k)Distribution

NUA Treatment onCompany Stock

Cash out $100,000 Distribute in-kind andsell shares

Ordinary income tax

33% tax rate

Capital gains tax

15% tax rate

$100,000 x .33 = $33,000 Cost Basis$10,000 x .33 = $3,300 Appreciation

$90,000 x .15 = $13,500

$67,000 $83,200

Total tax savings = $16,200

Take Distribution

Minus Taxes*

Equals FinalBalance

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IRA to Roth IRA Conversion

Traditional IRA

MAGI* under $100,000?

Roth IRA

Tax-deferred Income

Recently retired with lower income?

Tax-free Income**

Receiving

*MAGI - modified adjusted gross income ** For all qualified distributions

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Roth IRA Rollover: A New Opportunity in 2008

Employer-Sponsored Plan

MAGI* under $100,000?

Roth IRA

Tax due on pre-tax contributions and earnings

Opportunity for tax-free distributions in the future**

Receiving

* MAGI – Modified adjusted gross income

** For all qualified distributions

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Receiving: Action Steps

¨ Discuss with your Financial Advisor, if applicable, the opportunities relating to:

Taking an in-service withdrawal from your qualified plan.

Consolidating your retirement assets in

an IRA

Utilizing Net Unrealized Appreciation for your company stock

Converting from a traditional to Roth IRA or rolling over a distribution from an employer-sponsored plan directly to a Roth IRA

Receiving

Eligible to Distribute from Qualified Plans

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Managing

¨ How can I take distributions without penalties?

¨ When am I required to begin taking distributions?

¨ How can I structure my investments to help provide the income I will need?

Managing

Taking income from IRA

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Managing—Taking Distributions from IRA

Managing

Taking Income from a Traditional IRA

Age

Pre 59½

Age

Over 59½

Age

70½ +

IRC 72(t) No more early withdrawal penalties

Required Minimum

Distributions

When can I… When do I have to…

Managing

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Providing Enough Income In Retirement

Individuals age 65+ with annual incomes of $50,000 or more

Managing

Investment Income

Earned Income

Pensions & Annuities

Social Security

Other

1.6%

40.9%22.9%

20.0%

14.6%

Source: Employee Benefit Research Institute (EBRI) estimates of the March 2007 Current Population Survey

Individuals may be responsible for over 60% of their retirement income

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Do My Savings Cover My Income Needs?

¨ How should I invest – asset placement? ¨ Which assets should I withdraw from first?¨ Am I being tax efficient with my capital gains and dividends?¨ How should I withdraw income? Do I have a plan in place? ¨ Am I taking on an appropriate level of risk for my desired

return?

Managing

Essential¨ Housing¨ Health Insurance¨ Food/Living

Expenses

Discretionary¨ Travel¨ Entertainment¨ Hobbies/Leisure

Sources of Income¨ Social Security¨ Pensions¨ Earned Income

¨ Personal Investments: Cash Flow

Tax Deductible

Tax-Deferred

After Tax

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Managing: Action Steps

¨ Work with your Financial Advisor to develop a comprehensive strategy for:

Providing an income stream designed to support your desired retirement lifestyle

Managing retirement assets to last during your expected lifetime

Ensuring you are set-up to take your required minimum distributions

Managing

Taking income from IRA

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Passing Wealth

¨ Am I affected by Estate tax issues?

¨ Should I be doing something to protect my beneficiaries?Transferring

retirement assets to beneficiaries

Transferring

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Beneficiary Designation—Advantages of a Stretch IRA What is the “Stretch IRA” Strategy?

IRA Owner

IRA Beneficiary

Beneficiary has ability to take minimum required distributions from inherited IRA over his/her own life expectancy

Transferring

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An Example of the Stretch IRAStrategy at Work

Transferring

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An Example of the Stretch IRA Strategy at Work$300,000 initial balance in IRA pays total distributions of over $2.1 million over 46 years*

* Asset growth is based on a 7% rate of return and assumes all generations receive their respective required minimum distributions as defined by the IRS on December 31 of each year distributions are required. This number assumes that each generation elected to take only the required minimum over the longest period allowed by current law. Should any recipient elect to take distributions greater than the minimum distribution or receive a lump sum at any point, this total would significantly change.

This illustration is hypothetical and not meant to represent the performance of any specific investment or security. Actual returns will vary and principal value will fluctuate. Individual results will vary.

Distributions are subject to income taxes. This illustration is based on current tax and regulations law (as of November 2005), which may change in the future.

Transferring

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Beneficiary Review DiscussionBeneficiary designations are more important than ever!

Make a beneficiary review part of your planning process: ¨ IRA accounts should have updated beneficiary designations on

file- you should review your beneficiary plan with your legal advisor

¨ Review your beneficiary form to ensure it has been completed correctly

Primary listed

Contingent listed

Multiple beneficiaries—designate shares

Copy of Beneficiary Form to FA, Attorney

Review annually/life event changes

Transferring

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TransferringTransferring: Action Steps

Preparing to transfer retirement assets to beneficiaries

Transferring ¨ Set up meeting with your Financial Advisor and legal advisor to discuss:

Reviewing your will

Beneficiary Review

Titling of assets

Life Insurance needs

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No Matter What Stage You’re In . . .

The choices you make today will affect the quality of your retirement and the size of your

estate.

ReceivingSavingManagin

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abUBS Financial Services Inc.