Plan Right, Retire Right.
SM
With roots dating to 1851, The Phoenix Companies, Inc. helps individuals solve diverse and often highly complex financial and business planning needs with an array of life insurance and annuity products and services reflecting the company’s deep insights into the changing wants and needs of the marketplace.
Make Your Move Retirement planning strategies with fixed annuities
Guarantees are based on the claims-paying ability of the issuing company, PHL Variable Insurance Company or Phoenix Life Insurance Company. Annuities are long-term investment vehicles particularly suitable for retirement assets. Annuities held within qualified plans do not provide any additional tax benefits. Early withdrawals may be subject to surrender charges. Withdrawals are subject to ordinary income tax, and if taken prior to age 59 1⁄2 , a 10% IRS penalty may also apply. Phoenix annuities are issued by Phoenix Life Insurance Company (East Greenbush, NY) and PHL Variable Insurance Company (PHLVIC) (Hartford, CT). PHLVIC is not authorized to conduct business in NY and ME. These insurers are separate entities and each is responsible only for its own financial condition and contractual obligations. Phoenix FoundationsSM is distributed by Phoenix Equity Planning Corporation. Members of The Phoenix Companies, Inc. A5066BR (brochure) ©2009 The Phoenix Companies, Inc. A5066BRZ (kit) BPD36911
5-09
G r ow t h , p r ot e c t i o n a n d f l e x i b i l i t y
Products in color represent product categories that Phoenix has offerings in. Lower Savings CDs accounts
Potential Risk/Reward
Higher
Money Traditional Equity market fixed indexed accounts annuities annuities Immediate annuities
Pick the right retirement products to fit your strategy.
What’s your next move?
Variable annuities
Mutual funds
Traditional stocks
Helping people since 1851 Phoenix has a long, proud history of helping individuals and families reach their financial goals with innovative life insurance and annuity products.
with features and benefits to fit a range of savings and income needs. By staying in touch with what’s important to customers now, we are able to create products that will continue to meet their varied and changing needs well into the future.
When it comes to retirement planning, we take a solutions-based approach to designing products
The Phoenix Companies — Corporate and Product Highlights
1851 1861
Insured President Abraham Lincoln
1926-50 1955 1967
2005 2006 2007 2008
Known as the “Retirement Income Company”
First to reduce life insurance premiums for women
First to lower life insurance premiums for nonsmokers
2000-Present 2001
Founded as American Temperance Life Insurance Company, Hartford, CT
Annual Phoenix Wealth Survey monitors financial trends, behaviors and needs of the market
The Phoenix Companies, Inc. goes public (NYSE: PNX)
First spousal guaranteed minimum withdrawal benefit rider
One of the first variable products to offer actively-managed ETF asset allocation funds
Launched Phoenix FoundationsSM, a registered equity index annuity*
First to launch a guaranteed income feature for managed money
*The Securities and Exchange Commission has not approved or disapproved this security, nor passed upon the accuracy or adequacy of the prospectus. Any representation to the contrary is a criminal offense.
Plan Right, Retire Right. A well-designed retirement plan provides opportunity for growth, protection and flexibility.
Define and design your retirement plan A well-designed retirement plan can help you keep up with a lifetime of changing needs.
• How long until you retire – or are you already retired – and how many years do you need to plan for? 10, 20, even 30?
Retirement planning is personal. Before you can design your plan, it’s important to define the kind of retirement you want, starting with the basics:
Your answers will help your financial representative develop a plan to address your needs. Your plan may include owning a variety of financial products that can give you the opportunity for growth and protection of assets and the flexibility to adapt to your changing needs.
• How much money will you need for essentials? For example, housing, food and health care. • How much income for “extras”? These would be the costs of club memberships, travel, hobbies.
What is your retirement goal… today? Next year? In 10 years? No matter what your objectives are now, they will likely change over time.
Flexibility • Life changes
Transfer Assets
• Needs shift to family • Plan your legacy Protection • Secure your future
Generate Income
• Supplemental income • Start now or wait until ready Growth
Accumulate Assets
• Build a strong asset base • Adapt to changing markets • Plan for the risks ahead
1
Every plan starts with a process rigorous four-step process to manage billions of dollars in retirement assets on behalf of their investors.
Planning for retirement is one of the most important things you’ll ever do. It takes great discipline to create a plan and even more, to follow it.
Likewise, individuals can benefit from taking an institutional approach to the retirement planning process.
No one knows this more than institutional investors, such as pension funds, who follow a
Start planning today following these four steps
1.
I dentify your retirement goals — When do you want to retire? How much income will you need? How much risk are you willing to take with your investments?
2. Determine your asset allocation strategy — You’ll want the right mix of asset classes and appropriate allocations to each type based on your goals, risk tolerance and timing. This may include stocks for growth, bonds for income, and short-term investments (cash) for stability.
1. Identify Goals 4. Monitor & Rebalance
3. Create a portfolio that is diversified — Based on the asset allocation plans you determine in Step 2, choose a broad mix of investments within each asset class. Diversification is important and can help spread out the risk.
2. Develop Strategy 3. Select Portfolio
4. Monitor your account — Rebalance at least once a year to keep it in line with your goals. If your goals or situation changes, revisit Step 1 to see if an update to your plan is in order.
2
Invest for long-term growth Different types of investments produce different results over time. It’s impossible to predict the performance of stock and bond markets. Returns can often swing between highs and lows over short periods of time.
You will want your retirement portfolio to strike the right balance of risk and reward potential that is comfortable for you. Younger individuals may be willing to take more risk and own more stocks. As you grow older, you may want to reduce your risk and loss potential by reducing stocks and increasing bonds and other fixed income securities.
Here you can see how stocks have historically outperformed bonds and U.S. Treasury bills and outpaced inflation over the long term. However, stocks also carry the greatest risk.
History of financial markets
12%
10.8 9.0
8.5
8.3
8.7
8%
6.7
6.3
6.0 4.9
4%
0%
4.5 3.7
4.3 3.2
2.8
2.5
(0.6) 60 Years 1949-2008
40 Years 1969-2008
20 Years 1989-2008
10 Years 1999-2008
Average annualized rates of return. Treasury bills are guaranteed by the U.S. government; corporate bonds and stocks are not. Generally, the higher the risk, the higher the potential return. Stocks tend to be the most volatile; bonds offer a fixed return. For illustrative purposes only; does not represent the performance of any single investment. Past performance is no guarantee of future results. Source: Mulberry Communications, ©2009 using data provided by Global Financial Data, Inc. Used with permission. Stocks are represented by the Wilshire 5000® Index, bonds by 10-year U.S. Treasury bonds and Treasury bills by U.S. 90-day Treasury bills. Inflation is represented by the Department of Labor All Urban Consumer Price Index. The Wilshire 5000 index measures the performance of the entire U.S. stock market, covering over 5,000 securities. Performance is calculated on a total-return basis with dividends reinvested. The index is unmanaged and not available for direct investment.
3
Asset allocation drives results One of the most important ways to help protect your portfolio from market ups and downs is to develop an asset allocation strategy, allocating assets among different asset classes such as stocks, bonds and short-term securities. Your strategy should be based on your financial goals, time frame and comfort with investment risk.
A Nobel Prize-winning study published in 1986 (and updated in 1991) found that, on average, more than 90% of a portfolio’s performance is due to asset allocation, and the rest to stock picks and market timing. A 1999 study reached a similar conclusion: Asset allocation has been the biggest determinant of performance, with 40% attributable to this factor alone.*
How you allocate your assets is considered to be the biggest driver of portfolio performance. Because all asset classes take turns outperforming each other over time, you can lessen market volatility in your portfolio by owning a variety of different asset classes.
Asset allocation does not guarantee against a loss, and there is no guarantee that a diversified portfolio will outperform a non-diversified portfolio. Past performance does not guarantee or predict future results.
Asset Allocation is Key to Performance
8.5% of return due to security selection and investment timing
91.5% of return due to asset allocation
Sources: 1986 and 1991 portfolio performance studies by Gary P. Brinson, L. Randolph Hood and Gilbert L. Beebower, based on data from 91 large corporate pension plans over a 10-year period. The results shown are from the 1991 study and vary slightly from the 1986 study which found 93.6% of performance is due to asset allocation and only 6.4% to stock picking and market timing. *The 1999 study was published by Roger Ibbotson and Paul Kaplan, based on 10 years of monthly returns for 94 balanced mutual funds and 10 years of quarterly returns for 58 pension funds. They concluded about 40% of a fund’s performance is derived from differences in asset allocation, and the remaining 60% from other factors as the timing of moves between asset classes, security style within asset classes, security selection, and expenses.
4
Diversify with different asset classes Because asset classes historically take turns outperforming each other, you can lessen volatility in your portfolio and may increase your return potential over time by owning a variety of investments in different asset classes. Not putting all your eggs in one basket also applies to how you invest within the major asset classes.
your portfolio. For instance, a diversified stock allocation might include U.S. and foreign holdings, small and large companies, and growth and value stocks. A diversified fixed income allocation might include a mix of investment-grade and high yield bonds. Asset allocation and diversification do not guarantee against a loss, and there is no guarantee that a diversified portfolio will outperform a nondiversified portfolio.
Diversification — spreading your investments among many different holdings across a wide range of investment styles — may further benefit
All Asset Classes Offer Opportunity Over Time
Source: Frank Russell Company
2008
International (Int’l) is represented by the MSCI EAFE® (Morgan Stanley Capital International Europe, Australasia, Far East) Index, a free float-adjusted market capitalization (cap) index that measures developed foreign market equity performance, excluding the U.S. and Canada. Fixed Income is represented by the Lehman Brothers Aggregate Bond Index, which measures the U.S. investment grade fixed rate bond market. Small-Cap Growth is represented by the Russell 2000® Growth Index, a market cap-weighted index of growth-oriented stocks of the smallest 2,000 companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. Small-Cap Value is represented by the Russell 2000® Value Index, a market capweighted index of value-oriented stocks of the smallest 2,000 companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. Large-Cap Blend is represented by the S&P 500® a free-float market cap-weighted index of 500 of the largest U.S. companies. Mid-Cap Growth is represented by the Russell Midcap® Growth Index, a market cap-weighted index of medium-cap, growth-oriented stocks of U.S. companies. Mid-Cap Value is represented by the Russell Midcap® Value Index, a market cap-weighted index of medium-cap, value-oriented stocks of U.S. companies. LargeCap Growth is represented by the Russell 1000® Growth Index, a market cap-weighted index of growth-oriented stocks of the 1,000 largest companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. Large-Cap Value is represented by the Russell 1000® Value Index, a market cap-weighted index of value-oriented stocks of the 1,000 largest companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. REITs is demonstrated by the FTSE NAREIT Equity Index, which measures all tax-qualified REITs listed on the New York Stock Exchange, the American Stock Exchange and the NASDAQ National Market System.
5
Buy right, sit tight 1500
Market fluctuations are normal and an inevitable part of investing. Admittedly, this may make for a wild ride. But the easiest way to harm investment returns is to react emotionally — pulling your money after a significant market drop and jumping back in when you deem it “safe” to return.
1400 S&P 500® Index Values
THE HIGH COST OF EMOTIONS
As this chart shows, emotional reactions can do considerable damage to your portfolio over time, and may cause you to lose out on a potential rebound.
Emotional investors buy when they are optimistic again “euphoria”
“anxiety”
1300 “anxiety”
“excitement”
1200 1100 1000 900 800
The emotional cycle starts all over...
“fear”
Emotional investors sell when they are pessimistic
“fear”
“panic” “panic”
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: S&P 500® Index, January 1, 1999 through December 31, 2008. The S&P 500 Index is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. The index is unmanaged and not available for direct investment. For illustrative purposes only. Does not represent the performance of any single investment. Past performance is no guarantee of future results.
1500
the average investor falls short
Emotional investors buy here when they are optimistic again.
1400
Average annualized returns, January 1989 – December 2008
10
As the left bar in this chart depicts, an annual study of individual investor behavior found that1300 the average stock fund investor increased the value of their holdings by less than two percent 1200 annually over the last 20 years, simply by buying and selling and trying to time the market. S&P 500® Index Values
If, for that same period, that money were left 1100 alone in the stock market (second bar), or allocated between stocks and bonds (fourth bar), the returns would have been over four times 1000 better. Even the most conservative portfolio of government bonds alone (third bar), would have 900 produced much greater results than the results experienced by millions of mutual fund investors! What does this teach us? Buy and hold onto quality investments. Sit tight and resist letting your emotions take over, no matter what the market does.
800
8.7%
8.3%
“euphoria”
8.5%
“excitement”
The emoti cycle start all over...
“anxiety”
1.9%
0
“fear” Average Stock Mutual Fund Investor
“fear”
U.S. Stock Market
U.S. Bonds
Blended Portfolio (65% stocks, “panic” 35% bonds) Emotional investors sell here when they Source: Mulberry Communications, ©2009. First bar data is from the 2009 are pessimistic. “panic”
DALBAR “Quantitative Analysis of Investor Behavior” study and represents the collective behavior of stock fund investors tracked by the mutual fund industry’s trade organization, the Investment Company Institute. Second bar is performance of the S&P 500 Index. Third bar is performance of 10-year 1999 2005 portfolio 2006 2007 2008 2009 U.S. 2000 Treasury2001 bonds.2002 Fourth2003 bar is a2004 hypothetical with allocations of 65% to the Wilshire 5000® and 35% to 10-year U.S. Treasury bonds. This example is hypothetical and does not reflect the actual return of any investment. There can be no guarantee that any particular yield or return will be achieved for any investment.
6
What’s your strategy? Whether you are years away from retirement or retirement is just around the corner, your financial goals will vary and so should your planning strategy to meet those needs.
PRE-RETIREMENT — ACCUMULATION
IN RETIREMENT — INCOME
• Begin saving and investing early • Diversify among asset classes • Allocate more to equities for growth • Tolerate volatility with long-term focus
• Seek income while still pursuing some growth • Adjust asset allocation for greater stability • Maintain equities for inflationary protection • Protect against market downturns especially in early income years
TIMING OF LOSSES IMPACTS PORTFOLIO SUSTAINABILITY Your portfolio is most vulnerable in the years just before and after retirement. Losses, especially in the first few years, combined with withdrawals, can significantly impact your portfolio’s sustainability.
This example shows the greater damage losses have on a portfolio when they occur early in retirement, as income is being tapped.
Pre-Retirement — Portfolio A vs. B • 6% average annual returns • A – Losses in first 3 years, gains in last 8 • B – Gains in first 8 years, losses in last 3 • At year 11: account values are the same
Portfolio A
Year
Return
0
Value
In Retirement — Portfolio A vs. B • 6% average annual returns • $30,000 annual withdrawals • A – Losses in first 3 years, gains in last 8 • B – Gains in first 8 years, losses in last 3 • At year 11: A is about half the value of B!
Portfolio B Return
$500,000
Value
Portfolio A
Year
$500,000
Return
0
Value $500,000
Portfolio B Return
Value $500,000
1
-12%
440,000
15%
575,000
1
-12%
410,000
15%
545,000
2
-12%
387,200
15%
661,250
2
-12%
330,800
15%
596,750
3
-10%
348,480
15%
760,438
3
-10%
267,720
15%
656,263
4
10%
383,328
15%
874,503
4
10%
264,492
15%
724,702
5
10%
421,661
10%
961,953
5
10%
260,941
10%
767,172
6
10%
463,827
10%
1,058,149
6
10%
257,035
10%
813,889
7
10%
510,210
10%
1,163,964
7
10%
252,739
10%
865,278
8
15%
586,741
10%
1,280,360
8
15%
260,650
10%
921,806
9
15%
674,752
-10%
1,152,324
9
15%
269,747
-10%
799,625
10
15%
775,965
-12%
1,014,045
10
15%
280,209
-12%
673,670
15%
$892,360
-12%
$892,360
15%
$292,241
-12%
$562,830
11
11
m Portfolio B provides $270,589 more This hypothetical example is for illustrative purposes only and is not a prediction or guarantee of actual results which will vary from those described. This example is not intended to represent the value or performance of any specific product. The retirement vehicle in this example is assumed to be tax-deferred, so taxes are not paid until withdrawals are made. Annual withdrawals do not reflect the impact of taxes or inflation. Some retirement vehicles have charges, fees and expenses not reflected in the value column, which would also lower the amounts available for withdrawal.
7
Plan for tomorrow, today S&P 500® Performance (1999-2008) 1500 1400
What if your retirement date happens to coincide with a falling...
1300 1200 1100
...or down market?
1000 900 800
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
The S&P 500 is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. Performance shown reflects dividends reinvested and does not predict or project future performance of the index.
We know that markets are unpredictable, and it pays to stay the course over time. But what if a downturn occurs when you’re about to retire or have just retired? Many Americans are facing this very question today.
Fortunately, there are strategic steps you can take to prepare for the unpredictable Your financial representative offers retirement products that can help protect your principal and provide you with a reliable income stream.
Phoenix offers retirement products that can help add growth, protection and flexibility to your retirement plan. Growth
protection
flexibility
• Tax-deferred earnings
• Preserve principal while pursuing growth
• Multiple product solutions
• A portfolio to fit your goals, risk tolerance and time horizon • Range of conservative, fixed income products to higher risk/reward offerings
• Generate income you can’t outlive • Ensure a comfortable future for your family
8
• Customizable to meet your goals today • Adaptable as your life’s needs change
Helping people since 1851 Phoenix has a long, proud history of helping individuals and families reach their financial goals with innovative life insurance and annuity products.
with features and benefits to fit a range of savings and income needs. By staying in touch with what’s important to customers now, we are able to create products that will continue to meet their varied and changing needs well into the future.
When it comes to retirement planning, we take a solutions-based approach to designing products
The Phoenix Companies — Corporate and Product Highlights
1851 1861
Insured President Abraham Lincoln
1926-50 1955 1967
2005 2006 2007 2008
Known as the “Retirement Income Company”
First to reduce life insurance premiums for women
First to lower life insurance premiums for nonsmokers
2000-Present 2001
Founded as American Temperance Life Insurance Company, Hartford, CT
Annual Phoenix Wealth Survey monitors financial trends, behaviors and needs of the market
The Phoenix Companies, Inc. goes public (NYSE: PNX)
First spousal guaranteed minimum withdrawal benefit rider
One of the first variable products to offer actively-managed ETF asset allocation funds
Launched Phoenix FoundationsSM, a registered equity index annuity*
First to launch a guaranteed income feature for managed money
*The Securities and Exchange Commission has not approved or disapproved this security, nor passed upon the accuracy or adequacy of the prospectus. Any representation to the contrary is a criminal offense.
Plan Right, Retire Right. A well-designed retirement plan provides opportunity for growth, protection and flexibility.
Plan Right, Retire Right.
SM
With roots dating to 1851, The Phoenix Companies, Inc. helps individuals solve diverse and often highly complex financial and business planning needs with an array of life insurance and annuity products and services reflecting the company’s deep insights into the changing wants and needs of the marketplace.
Make Your Move Retirement planning strategies with fixed annuities
Guarantees are based on the claims-paying ability of the issuing company, PHL Variable Insurance Company or Phoenix Life Insurance Company. Annuities are long-term investment vehicles particularly suitable for retirement assets. Annuities held within qualified plans do not provide any additional tax benefits. Early withdrawals may be subject to surrender charges. Withdrawals are subject to ordinary income tax, and if taken prior to age 59 1⁄2 , a 10% IRS penalty may also apply. Phoenix annuities are issued by Phoenix Life Insurance Company (East Greenbush, NY) and PHL Variable Insurance Company (PHLVIC) (Hartford, CT). PHLVIC is not authorized to conduct business in NY and ME. These insurers are separate entities and each is responsible only for its own financial condition and contractual obligations. Phoenix FoundationsSM is distributed by Phoenix Equity Planning Corporation. Members of The Phoenix Companies, Inc. A5066BR (brochure) ©2009 The Phoenix Companies, Inc. A5066BRZ (kit) BPD36911
5-09
G r ow t h , p r ot e c t i o n a n d f l e x i b i l i t y
Products in color represent product categories that Phoenix has offerings in. Lower Savings CDs accounts
Potential Risk/Reward
Higher
Money Traditional Equity market fixed indexed accounts annuities annuities Immediate annuities
Pick the right retirement products to fit your strategy.
What’s your next move?
Variable annuities
Mutual funds
Traditional stocks
