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Comprehensive, effective planning for your future – and your family’s future

When Raymond James was founded in 1962, it did not follow the path of its peers – a transaction-oriented style of business based simply on selling investment products. Instead, the firm's founder, Bob A. James, stressed the importance of counseling individual clients, understanding their needs and concerns, and building customized financial plans.

Today, Raymond James financial advisors continue to embrace this philosophy, encouraging clients to focus on long-term investing and develop diversified portfolios. Our objective was – and still is – to help people plan for life.

Remaining sensitive to the changing needs of our clients, we keep a watchful eye on today's complex financial marketplace. And we offer a comprehensive selection of investment alternatives to help meet clients' evolving needs. Our firm is also a leader in providing fee-based alternatives to traditional commission transactions, with experience in fee-based planning since the late 1960s.*

* In a fee-based account clients pay a quarterly fee, based on the level of assets in the account, for the services of a financial advisor as part of an advisory relationship. In deciding to pay a fee rather than commissions, clients should understand that the fee may be higher than a commission alternative during periods of lower trading. Advisory fees are in addition to the internal expenses charged by mutual funds and other investment company securities. To the extent that clients intend to hold these securities, the internal expenses should be included when evaluating the costs of a fee-based account. Clients should periodically reevaluate whether the use of an asset-based fee continues to be appropriate in servicing their needs. A list of additional considerations, as well as the fee schedule, is available in the firm's Form ADV Part II as well as the client agreement.

With all of its innovation, our firm's founding premise remains unchanged. That's why we are dedicated to providing clients with complete financial planning services and personalized, professional assistance. Simply put, we believe our business is people and their financial well-being ... and we are committed to our clients' success.

Planning: The Key to Financial Success

We pass through several phases in life, each with different financial requirements. For example, the financial needs of a young married couple are not the same as those of a retired couple. That is why continuous, long-term planning is essential. Typically, most people take three basic financial steps:

• Wealth accumulation – the building of a solid, diversified financial foundation from which to expand over time. During this phase, allocation of money for a home, investments, life insurance and educational expenses is coordinated with tax-planning strategies to ensure that current and future income is used effectively.
• Wealth conservation – the inclusion of a variety of investment strategies and further diversification, designed to preserve and grow assets to help ensure adequate funds for current living expenses and future retirement needs. A strategy for generating consistent income in the future is now more important than ever as retirement costs continue to increase.
• Wealth distribution – the proper allocation of assets to heirs. Good estate planning should provide for the orderly transfer of assets while avoiding unnecessary tax burdens.

In addition to the complexities and changing priorities that occur over a lifetime, a financial plan also is affected by fluctuating economic conditions, taxes and inheritance laws. We have the expertise to thoughtfully design a plan with your circumstances in mind, helping you develop a long-term financial strategy for your individual needs.

The Raymond James Advantage

As financial advisors with Raymond James, we possess the necessary tools to guide you through every step of the financial planning process, including:

• Helping you define specific financial goals by reviewing your financial situation in depth, taking into account your income, assets and liabilities, current portfolio, risk tolerance, and investment time horizon.
• Offering you flexible account options, including traditional investment accounts or a variety of fee-based alternatives that feature quarterly fees and low or no transaction costs.
• Helping with the paperwork that often accompanies investing.
• Accessing and evaluating up-to-the-minute market data, research reports, and other economic and financial information.
• Using computer-generated models to show you how asset allocation and investment diversification may enhance your portfolio, as well as how much time you may need to accumulate a specific amount of money for retirement and other purposes.
• Offering you a variety of investment options and services to meet your needs – including retirement, education, tax and estate planning, stocks, bonds, load and no-load mutual funds, CDs, insurance, annuities, trust services, asset management, and banking services.
• Working with your other professional advisors, such as attorneys and tax specialists, to help ensure coordination in all areas of your financial life.
• Meeting with you on a regular basis to evaluate the performance of your investments and to make sure that they're in line with your goals.

Service That Extends Beyond Financial Planning

Confidentiality is a top priority in our client relationships. We appreciate the trust our clients place in us and never take that trust for granted. Naturally, any business we conduct is held in strict confidence – just as you would expect from your physician, attorney or any other professional.

We provide objective information and unbiased guidance. Because we are not required to sell specific products, we have the freedom to help you select the investments that are right for you.

Sound investment decisions are based on facts and careful research, not emotions. However, we know it's not always easy to make sensible choices, especially in a fluctuating market. We can help you employ disciplined, long-term strategies that help protect against short-term market swings. Together, we'll establish reasonable investment goals – and stick to them.

Now Is the Time to Make It Happen

The decision to begin the financial planning process should not be taken lightly, nor should it be postponed. The earlier your plan begins, the greater the potential for rewards.

Raymond James has always been a leader in financial planning services. As financial advisors within the firm, we remain committed to its ideals – unwavering integrity, innovation, quality and, above all, outstanding client service.

Retirement: How Prepared Are You?

Whether it's fast approaching or years away, you've likely thought about how you'd like to spend your retirement. But have you thought about how you're going to get there? Have you wondered ...

• Will I be financially ready for retirement?
• Do I have specific retirement objectives?
• Do I have a written retirement plan?
• Do I know how much money I may need?
• Do I understand the impact of tax deferral on my retirement investments?
• Am I aware of the different types of plans available to me … and their benefits?

Asking yourself these questions is the first step to reaching the retirement you envision. At Raymond James, we can offer you the knowledge and resources to help realize your goals.

Bringing Your Future into View

Planning for retirement early is increasingly important as retirement costs continue to rise.

Providing for retirement is the single most important long-term financial goal of most Americans. Because we are living longer, some of us can plan to spend 20, 30 or more years in retirement.

With growing anxiety over the availability of Social Security and diminishing corporate-sponsored pension plan benefits, there is a pressing need for you to take charge and adequately prepare for your retirement. Whether you are five years or 25 years from retiring, proper planning is essential to attaining your retirement goals.

To Enjoy Your Ideal Future, You Must Plan for It

For many individuals, everyday financial demands such as mortgage payments, tuition bills or the expense of caring for an elderly parent can often overshadow their good intentions of investing for retirement. Others simply assume that Social Security and company pension benefits will be enough. Still others may neglect to actively manage what they do set aside, keeping their retirement assets anchored in investments that are no longer the best options.

In general, many people simply meander toward retirement with no set course. Yet they hope to be able to one day enjoy the things they have always dreamed of doing – traveling, buying a second home, starting a new hobby ... living with dignity.

None of these goals can be fully realized without establishing direction toward a secure financial future through proper planning. Doing so requires careful preparation and realistic goal-setting – determining where you are now, where you would like to be in the future and what you may need to help get you there.

The Right Plan Starts with You

The process of developing a sound financial plan begins with three basic steps:

Review your individual retirement objectives. What do you hope to accomplish? How do you want to spend your retirement? Your goals need to be both specific and realistic.

Outline your tolerance for risk. How much risk – which, in some form or another, is inherent in all investments – are you willing to take? Are you prepared to lose a portion of your hard-earned money? Are you willing to watch your investments fluctuate in value, hoping to enhance your potential for greater returns?

Determine your time horizon. How long do you have until you will retire? Would you have time to recover if some of your higher-risk investments lost value in the short term? Is your time horizon flexible? How much control do you have?

What Will You Need to Attain Your Retirement Objectives?

Your retirement may finally let you pass the days as you please, so long as your nest egg can provide for your financial needs. The size of the nest egg you will need, then, depends almost entirely on how and where you spend your retirement.

When you retire, you may find yourself in a lower income tax bracket. Living costs may also change. Some expenses, such as a mortgage or child's college tuition, may disappear, while others, like medical or travel expenses, could increase.

A traditional rule of thumb suggests having an annual amount equal to approximately 75% of your income the year you retire in order to maintain your standard of living. For example, if you were to retire today and your annual household income is $100,000, you may need an inflation-adjusted $75,000 for each year you live in retirement.

The nest egg you accumulate must be able to support your annual income requirements. The table below will help you estimate the total nest egg you will need to provide 75% of your current salary for a 25-year retirement that begins at age 65:

• Select the age and annual household income that best fit your current situation from the table below.
• Find where the appropriate age row and salary column meet. This is the projected nest egg you may need at retirement.

Salary
Age	$75,000	$100,000	$125,000	$150,000
20	$5,545,950	$7,394,600	$9,243,250	$11,091,900
25	4,558,366	6,077,822	7,597,277	9,116,733
30	3,746,645	4,995,526	6,244,408	7,493,289
35	3,079,469	4,105,958	5,132,448	6,158,937
40	2,531,099	3,374,798	4,218,498	5,062,197
45	2,080,379	2,773,838	3,467,298	4,160,757
50	1,709,919	2,279,893	2,849,866	3,419,839
55	1,405,429	1,873,905	2,342,382	2,810,858
60	1,155,160	1,540,214	1,925,267	2,310,320
(Source needed from client)

Calculations assume a 4% inflation rate during retirement (which may actually be higher or lower) and an 8% investment return. Principal will be depleted after 25 years. No tax consequences were considered. All returns are hypothetical and are not intended to represent the performance of any specific investment. Investing involves risks and you may incur a profit or a loss.

While, at first glance, your projected nest egg may seem unattainable, remember, you do not have to earn it all. Much of what you need can come from your retirement investments working for you. Over time, the power of compounding – investment earnings building on investment earnings – can provide opportunities for growth in the value of your investments.

Once you establish a financial target, even a rough one as indicated by the chart above, we can work with you to develop an investment plan designed to help you attain it.

Choosing Appropriate Investments

In large part, your future security may depend upon how effectively you manage your retirement assets. While choosing from among the many options available may seem intimidating, seeking an acceptable rate of return from investments with which you are comfortable can make a big difference in the amount of funds available for retirement.

In determining which investments may be right for your portfolio, it is important to examine your risk tolerance and time horizon. These factors, along with your objectives, are crucial to developing an appropriate retirement plan.

Risk Tolerance and Asset Allocation

Any investment strategy must go beyond simply choosing the investments with the highest historical rates of return. Although most investments fluctuate in value, the market value of an investment that offers a higher potential for return tends to vacillate more than an investment with lower return potential. This fluctuation is known as volatility, and your ability to withstand it is your risk tolerance.

One of the best ways to manage the risk inherent in any investment portfolio is to spread savings among a variety of asset types with different behavior patterns, a strategy known as asset allocation. Over time, all categories of investments cycle in and out of market favor. Stocks, bonds, cash and cash equivalents often react differently to changes and events in the economy and the financial markets, and generally do not move in unison. Some will perform better than others in given situations.

By diversifying your savings among several asset types, you may be able to take advantage of the growth potential taking place in different sectors of the market. You may also avoid having all of your savings in one type of asset that is performing poorly.

Time Horizon

If you are a younger investor, you may be able to withstand short-term fluctuations in the value of your investments. Time can be your ally and, should you experience losses from your investments, you may have many years ahead to make a recovery. In this light, you may want to seek to maximize growth by concentrating your portfolio in stocks and growth mutual funds.

As you begin to approach retirement, you may want to consider maintaining a portion of your assets in stocks. Your retirement could last 20 years or more, and the returns from stocks may help you keep pace with inflation. However, this is usually the time to begin shifting some funds from stocks to bonds. Bonds tend to be more stable than stocks and are designed to provide a predictable cash flow. Shifting some assets to bonds, therefore, may help moderate the overall volatility of your portfolio.

At retirement, preservation of capital will become a primary concern and may necessitate a shift to shorter-term investments, such as U.S. Treasury bills, CDs and money market accounts, for some of your assets. These exhibit virtually no volatility, but provide little or no protection against inflation. For this reason, you should continue to maintain a position in equities.

Tax-Deferred and Tax-Sheltered Investments

To encourage Americans to save more, federal legislation has created several tax-favored savings alternatives. You may be fortunate to have access to one or more retirement plans through your employer, such as a 401(k), 403(b), SEP or SIMPLE plan. You may also invest in an IRA or annuity and enjoy the benefits of tax-deferred earnings. Even common stocks, mutual funds and traditional asset managers provide some of the benefits of tax deferral.

The advantage of using a tax-deferred rather than a taxable alternative for retirement planning purposes is illustrated below. Assuming an 8% rate of return on a $100 investment made in the beginning of 2005, an effective tax rate of 25% and a time period of 30 years, consider these hypothetical results:

This is a hypothetical example and is not intended to represent the performance of any specific investment. Investing involves risk and you may incur a profit or a loss.

Basically, investing on a tax-deferred basis involves paying taxes later rather than sooner. With a tax-deferred investment, not only do contributions to the investment grow without taxation, but returns from the investment that are reinvested will grow without taxation as well. Of course, funds generally become taxable upon withdrawal and, for withdrawals made prior to age 59½, a 10% federal penalty tax may apply.

An alternative to tax-deferred investments, the Roth IRA is a tax-sheltered retirement program that is available to investors who have an adjusted gross income below an annual ceiling of eligibility. Contributions made to Roth IRAs are never tax deductible. The advantage of having this type of investment is that when the money is withdrawn from the account, none of it – and that includes the earnings – will be taxed, assuming that the Roth IRA has been open for at least five tax-years and the taxpayer is older than age 59½.

It Helps to Have Time on Your Side

No matter what your age, promptly beginning your retirement investing is vital, as time can be a great ally. Consider the following hypothetical example to demonstrate the possible effects of long-term investing: Someone who begins investing 15 years before retirement to accumulate a $500,000 nest egg would have to invest $17,050 each year, in comparison to the $4,087 required of someone with a 30-year time horizon, assuming an 8% annual rate of return. This theoretical example assumes investments are made on the first of the year and returns are compounded annually.

Planning for retirement early has been particularly important for the baby boomer generation. It will continue to be important for future generations because the costs of retirement for these groups are expected to be much higher than for prior generations, due to longer life expectancies, the anticipated steady rise in healthcare costs, less financial support from Social Security and Medicare, the eroding effects of inflation, and the prevailing desire to retire earlier than previous generations.

Protecting Against Inflation

For all practical purposes, inflation is a permanent part of our lives. However, unless it shoots to alarmingly high levels, as it sometimes does, inflation is rarely discussed or even noticed. Inflation begins to show itself most dramatically at exactly the worst time – often when you are retired and no longer have a salary keeping pace with the cost of living.

For instance, suppose you plan on retiring with an annual income of $75,000. If you assume a 4% inflation rate and wish to maintain your standard of living, you will require an annual income of more than $111,000 in 10 years and an unbelievable $164,000 after 20 years of retirement. It's a daunting situation, but if you begin to plan now, you can help protect yourself against the negative effects of inflation.

The Help of an Experienced Professional

Haphazard investing rarely works. Indeed, everyone needs a retirement plan that evolves with changes in their personal lives.

However, navigating today's financial environment is not as difficult as you might think. By taking the time to understand your needs, we can help assess your present situation and design a plan to help meet your individual retirement goals.

Our business is people and their financial well-being. We devote our best efforts to meeting and, when possible, exceeding our clients' expectations. We strive to make your goals our own, and to offer valuable financial solutions to help achieve them.

A Big Step Toward a Future of Independence

With sound planning and appropriate investments, Raymond James financial advisors can help bring the retirement you've always envisioned within your reach. We are prepared to help you begin planning your future today.

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Andrew Schmitt Vice President, Investments Contact Us