Your Money at Stake: What 30-, 40-, and 50-Year-Olds



Your Money at Stake: What 30-, 40-, and 50-Year-Olds
Your Money at Stake: What 30-, 40-, and 50-Year-Olds Need to
Know NOW About Social Security
Webcast Transcript
Recorded on July 30, 2013
Michael Santoli, Senior Columnist, Yahoo! Finance
Bill Hunter, Director, Personal Retirement Solutions at Merrill Lynch®
Kurt Czarnowski, Social Security expert, Czarnowski Consulting
Sharon Miller, Managing Director and National Sales Executive at Bank of America
Please see important information at the end of this video.
Chapter 1: Perspective on Social Security
MR. SANTOLI: Hello, and welcome to this special webcast: “Your Money at Stake: What 30-,
40-, and 50-year-olds need to know now about Social Security,” sponsored by Merrill Edge.
I'm Michael Santoli, a senior columnist at Yahoo! Finance, and I'm here today with a panel of
financial professionals who will help us take a closer look at Social Security and the role it may
play in your retirement strategies for your future—whether you're just starting your career, in
mid-career and trying to balance your priorities for investing, or getting closer to retirement.
Our three panelists today are very well equipped to discuss Social Security and how it may
affect your retirement strategy.
Kurt Czarnowski was Regional Communications Director for the Social Security Administration
for nearly 20 years. Today he speaks frequently about Social Security on the radio and at
retirement planning seminars all across the U.S.
Sharon Miller is Managing Director and National Sales Executive at Bank of America,
overseeing Merrill Edge Financial Solutions Advisors who offer retirement planning and
guidance to Merrill Edge clients.
I'm also joined by Bill Hunter, Director of Merrill Lynch's Personal Retirement Solutions Group.
Bill and his team develop strategies to help individual investors pursue their retirement goals.
To kick off our discussion, I'll ask Kurt Czarnowski to give us a little history and perspective on
Social Security. So Kurt, set us up.
MR. CZARNOWSKI: Thank you, Michael. It's great to be here.
You know, the Social Security program is now more than 78 years old, and each and every
month Social Security pays about $63 billion in benefits to about 57 million people in this
country. And what I came to see during my time with the agency, and now that I'm out on my
own, is that despite the age of the program, despite the size of the program, and despite the
economic impact that Social Security has on the country today, unfortunately the myths and
misunderstandings that are out there about what it is, as well as what it isn't, are staggering.
So in our time together today, I want to focus on some of the philosophical issues that I think
those workers in their 30s, 40s, and 50s need to know about the Social Security program—
both what it is, as well as what it isn't.
And I think the single biggest misunderstanding people have about the program is that they
think about Social Security just as a retirement program. It's important for people of all ages to
understand that Social Security is more than just retirement. It's really this broad-based social
insurance program which, through its disability protection and survivor insurance protection,
provides income security for workers and their families of all ages.
Who Gets Benefits from Social Security?
If we look at this chart of today's Social Security beneficiaries, it brings home the point that
Social Security isn't just a program for old people.
In fact a third of the people who collect a monthly Social Security payment are not retired
workers, including among them 1.9 million children who collect survivor benefits because their
parent has passed away. There are nearly 9 million workers who collect monthly disability
payments because they're unable to work. So Social Security is more than just retirement.
And it's particularly important for younger workers to understand that, because Social Security
did a study of today's 20-year-olds.
Importance of Social Security to Young Americans
One in four is going to become disabled before reaching retirement age; one in eight will pass
away before reaching retirement age, and it's because of this disability protection and survivor
insurance protection that Social Security is really this broad-based program for folks. People
often say, "Will it be there for me in the future?" I say absolutely—I believe firmly it'll be there
for you in the future. But because of the disability protection and the survivor protection, it's
important for people to understand that the program is there for them today.
But just as important: Understand what the Social Security program isn't. Social Security, from
its inception nearly 78 years ago, was never intended to be somebody's sole source of income.
It was always intended to provide a base or a foundation that people can count on being there,
but it's a base or a foundation that people must take steps to supplement. For the average
worker these days, the Social Security payment that they collect is intended to replace only
around 40 percent of someone's preretirement income.
Now, from my perspective, I don't care how people supplement their Social Security payment.
Retirement Income Sources: All Retirees, Ages 65+
And the chart before us shows that today's retirees do supplement their Social Security
payments in a number of different ways—through earnings, through pensions, through asset
income. But the key point for folks is to understand: It was never intended to be your only
source of income. You need to find ways to supplement Social Security, and the sooner that
people understand that and then take steps to do that, far more likely they are to have that
safe, secure, comfortable retirement that everybody aspires to.
MR. SANTOLI: Well, Bill, how should we start to think about those strategies for
supplementing income eventually in retirement?
MR. HUNTER: It's important to understand how Social Security plays into your retirement
planning because we all depend on it, even those retirees with the highest incomes. If you look
at retirement planning, it's often referred to as the three-legged stool, with pensions, Social
Security and savings. There actually is a fourth leg, which is earnings during their retirement
years, and even for those retirees with the largest incomes during those years, it still only
comprises 17 percent of their sources of income.
Retirement Income Sources: High-Income Retirees
So it's important for people to be responsible to make up for that difference, either through
savings in their working years or working part-time in their later years.
The folks that do work part-time in their later years, they actually do it because they want to,
not necessarily because they have to. A lot of the retirees nowadays want to remain vital and
productive, so it's something that they're doing to supplement their income.
Chapter 2: Will Social Security be there for you?
MR. SANTOLI: Well, we'll be talking a bit more about the idea of working during retirement a
bit later, but Sharon, I wonder: In your experience, how aware are nonretired folks of this
potential income challenge down the road?
MS. MILLER: Sure. And we'll get to the nuts and bolts about what people should be doing at
any age in preparation for retirement, but for the purposes of this discussion, let's talk about
what younger workers are hearing.
They're hearing a lot about Social Security in the media, and what they're saying is they do not
believe that it’s going to be available to them as an income source in retirement. And so they're
starting to save earlier than their parents did. They're investing more aggressively than their
parents did. They understand that recessions happen, unemployment happens, life happens
beyond our control. So they've learned those lessons and they're starting to prepare much
In a recent Merrill Edge report, we found that Gen Y investors—so those age 18 to 34—they
started saving at an average age of 22 years old, as opposed to the baby boomers, who
started saving at an average age of 35. This is clearly an advantage when you think about
these younger investors getting into their retirement years. They will have that compounded
effect of starting earlier.
Looking Ahead
In addition, we asked, “What do you plan on doing over the next 12 months?” Resoundingly
the Gen Y investors responded that they intended to grow their nest egg.
In addition, they said that they would be putting money away in the stock market—and when
you think about the percentage, 57 percent said that they would do that as opposed to the
national average of 29 percent. We also found that the Gen Y investors are going to rely much
less on the public sector, like Social Security or Medicare. Fifty percent will rely on that in their
retirement as a supplement, as opposed to two years ago, when we found that same stat at 63
percent. So you can see, increasingly, our clients are telling us they will rely less and less on
Social Security as their prime source of income.
MR. SANTOLI: Oh, it definitely sounds encouraging. But you know, Sharon brings up an
interesting point. For years we've seen these surveys that suggest that especially younger
people continually say they don't expect Social Security to be there for them, however they
might define that. So Kurt, comment on that.
MR. CZARNOWSKI: Sure. I hear that question and that concern raised all the time when I'm
out and in answering it, I like to think back to a famous quote from Mark Twain, who years ago
wrote, "Reports of my death have been greatly exaggerated." In dealing with this issue I think
the same thing is true, that reports of Social Security's demise are greatly exaggerated.
I think it's important to focus on the facts. Now, each year Social Security's Board of
Trustees—Secretary of Health and Human Services, Secretary of Labor, Secretary of the
Treasury, the Commissioner of Social Security and two members of the public—issue a report
for the American public on the financial health of the Social Security System. The report not
only details current status but also attempts to project 75 years into the future. And the 2013
report projects that, as currently constituted, assuming no changes to the program whatsoever,
absolute maintenance of the status quo going forward, Social Security is projected to have
enough money on hand to cover 100 percent of promised benefits each and every month
between now and the year 2033.
And the report also goes on to say from that point forward, Social Security is still anticipated to
have enough money to cover three-quarters of promised benefits going forward. So that's a lot
different than what a lot of people hear about the future of the program.
MR. SANTOLI: So then what you're saying is beyond the next 20 years, say, if nothing
changed, we might have a reduction potentially in the level of benefits, but obviously Social
Security would still be there.
MR. CZARNOWSKI: Absolutely. You know, a lot of the young folks in particular, hearing talk
about Social Security going bust, Social Security going bankrupt, leads them to mistakenly
believe that at some point Social Security will have no money whatsoever. But again we need
to deal with the facts.
Who Pays for Social Security?
From day one the Social Security program has operated on a pay-as-you-go basis, meaning it
is the payroll taxes collected from employers, employees and people who are self-employed,
that come into the Social Security system and then are turned right around and used to pay the
benefits for today's future Social Security beneficiaries.
So think about it. Absent a complete and total collapse of the United States economy so that
nobody is working anywhere, Social Security will always have a revenue stream of some sort.
Now the question facing the country is: As currently projected, is that revenue stream thought
to be enough to cover 100 percent of the benefits that have been promised? And beginning in
the year 2034, it isn't. There's going to be, as projected—again, assuming no changes—a 25
percent gap that needs to be closed to ensure that Social Security is able to continue to pay
100 percent of the benefits that have been promised.
Now you think about that gap and closing it. Two ways you can do it. You can do it on the
income side, or you can do it on the outflow side, and those are the issues confronting
Congress. We'll talk about that in a little bit more detail later on.
Chapter 3: Filling the funding gap
MR. SANTOLI: Yes, we'll get to those policy discussions. But Bill, let's also get to what's
exactly driving that projected shortfall.
MR. HUNTER: There's a logical reason. With the advances in medicine and adopting healthier
lifestyles, people are living longer.
The Good News: We Can Expect to Live Longer in Retirement
So the average life expectancy in the U.S. right now is 78 years. That's 30 years longer than it
was 100 years ago. So people are living longer. And some people tend to anchor on the 78
years. But, in fact, if you're a male turning age 65 today, you can expect to live on average until
you're 84. And for a female turning 65 today, they can expect to live on average to 86. So there
is a longevity issue there. As a matter of fact, there's a number of people turning 100 quite a
bit. I imagine everybody around this table can name somebody that's turned 100.
Living Longer in Retirement
If you think about it, for a couple who is 70 years old, one of them has a 50 percent chance of
reaching the age of 92. They have a 25 percent chance of reaching the age of 97, and a 10
percent chance of reaching 102. So basically you have more people claiming Social Security
and claiming for a longer period of time. This is putting a huge strain on this pay-as-you-go
MR. SANTOLI: In addition to the good news of everybody living longer, for the most part, we
also have another basic demographic issue: basically the ratio of people working versus
retirees, correct?
MR. HUNTER: Absolutely.
The Not-So-Good News: Social Security Is Threatened by an Aging Population
The number of people who are taking benefits from Social Security versus the workers paying
into the system has changed dramatically over the years. In 1950 there were 16 workers for
every person receiving benefits. Today, there's only 2.8 workers for every person taking out
benefits. And if you project to 2033, there’s only going to be 2.1 workers for every one person
receiving benefits. So again, not sustainable for a pay-as-you-go system.
As far as the intervention, and what needs to happen to put Social Security back on track, I'll
defer to Kurt.
MR. SANTOLI: Kurt, so what specific measures might we be discussing?
MR. CZARNOWSKI: Again I think it's important to review facts. The 2013 Trustees' Report
projects Social Security has enough money on hand to cover 100 percent of promised benefits
through 2033. Beginning in 2034 it's only projected to have enough money to cover about
three-quarters of the promised benefits. So basically you're dealing with an issue of how do
you close this 25 percent funding gap, and that's an issue Congress needs to deal with. The
sooner Congress deals with it, the better it is, because people have more time to plan and
adjust their retirement plans. But again, how do we deal with the issue?
Well, it comes back to the fact that Social Security is, again, this pay-as-you-go system. It's
money coming in each month; it's money going out. And so, as you think about how you fix the
issue, it's not dissimilar from your own situation at home. You have money coming in each
month; you have obligations and money going out each month. So if at the end of the month
you don't have enough money on hand to cover all of your obligations, you need to do one of
two things: You need to bring more money in or pay a little bit less money out. And that's the
issue confronting Social Security.
But think about it. If you close that 25 percent gap simply by bringing more money in, who are
you going to be impacting? You're going to be impacting younger workers. You're going to be
impacting employers. On the other hand, if you close that gap simply by reducing benefit
payments, reducing the outflow, who are you going to be impacting? Older folks—Social
Security beneficiaries. So in my view, the solution needs to be a blend—some increases on
the income side, some reductions on the outflow side—so that everybody feels they're giving
equally at the office, nobody feels they've been singled out for disparate treatment. And this is
the challenge confronting the Congress, confronting the American public in coming up with
these changes to the program.
But here's the thing about change in terms of Social Security: The Social Security program in
place today is not identical to the one that was created in 1935. It has always changed and
evolved as American society has changed and evolved. So I think it's unrealistic to think that
there won't be changes coming down the road. But I think there needs to be some changes.
And again, as I look at it, you want to have some increases on the income side, some
reductions on the outflow side, so again, everybody feels they're giving equally at the office.
MR. SANTOLI: So, Kurt, what specific measures might Congress consider to bridge this
projective gap?
MR. CZARNOWSKI: This issue of shortfall in Social Security is not a new one and people
have been thinking about it for a long time now. A lot of proposals are out there for
consideration, and it's important to remind folks that the Social Security Administration plays an
important role in this process because the Social Security Administration actuaries have tried
to play the role of honest broker and they go out and score or attempt to assess the financial
impact of some of these proposals that have been brought forward by different people. And if
people are interested in getting more information about some of these specific proposals—we'll
talk about a couple in a second—Social Security's website has some great information at and then in all cap letters OACT—an abbreviation for Office of the
Actuary—you get all kinds of good information about that. But there are some specific
proposals that you want to think about.
Proposals to Close the Social Security Gap
Again, we're talking about closing a gap on both the income side and the outflow side. So if
you look on the income side, somebody who's working in the Social Security system today
pays 6.2 percent payroll tax, and in 2013 on the first $113,700 that they make.
So one way you could bring some additional revenue into the system is by increasing the
payroll tax rate, that 6.2 percent that people pay. Incidentally, that has been unchanged since
1990. The rate has been the same for more than 20 years now. Another revenue increase
might be if you increase that cap, that $113,700. If you make above that, you don't pay Social
Security tax on any part of that. So you could increase the tax rate or you could increase the
tax base.
On the outflow side a number of different measures could be considered. To qualify for
retirement benefits today, you have to think about your Full Retirement Age, which for people
these days is age 66, but it tops out. Anyone born in 1960 or later has a Social Security Full
Retirement Age of 67. Full retirement is the age at which you get 100 percent of your benefits
based on your work history. But under the program you could also begin to collect as early as
age 62 if you choose to do so.
So one way to reduce outflow might be to increase that Full Retirement Age from its current
level of 67 upward because life expectancy is increasing. A second way might be to increase
that early retirement age from 62. And a third way to perhaps reduce the outflow is to increase
the number of years that Social Security looks at in calculating the amount of your retirement
These days Social Security looks at your highest 35 years of work and earnings in calculating
the amount of your payment. Well, people are working longer, so perhaps you might want to
change the calculation formula and increase the number of years that are used. This would
also slow the outflow of benefits. So again, close that 25 percent funding gap—some on the
income side, some on the outflow side—and I think there are reasonable ways that it can be
done. And again, if people have interest in getting more information, Social Security's actuary
website does provide a lot of good information on the impact of these and some other changes
that are being proposed.
MR. SANTOLI: So the point to keep in mind here, Kurt, it's not as if Congress is going to have
to rebuild Social Security from the ground up, but that over time, they may have to find ways to
bridge that 25 percent gap, is that right?
MR. CZARNOWSKI: It's absolutely correct, Mike. You hear a lot of talk about Social Security
being a program in crisis. It's not a program that faces any type of crisis. I prefer to think of it as
a program that faces challenges over the course of the next few years. Congress needs to
come together to decide ways that they can close this 25 percent funding gap by the year
Chapter 4: How delaying benefits helps
MR. SANTOLI: So, Bill, then, for individuals, how should they start thinking about these
choices surrounding the age at which they might claim?
MR. HUNTER: The key is education, learning how the system works, especially as it relates to
when people should claim Social Security. What we find is many Americans claim at 62, as
soon as they can, and I think part of the reason is they don't understand how the system
works. So, as Kurt was mentioning, there's a Full Retirement Age and in this chart it's denoted
with the red bar.
Collecting Social Security Benefits
You get 100 percent of your Social Security benefit at that time, but for every year you take it
earlier, you're actually reducing it by 6 percent. So for those that are taking it at 62 versus their
Full Retirement Age, they're locking in a 25 percent discount and, as a matter of fact, they do
not reset it at Full Retirement Age. You're locking in that discount. It's a permanent discount.
It's locked in for the rest of your life.
Conversely, if you're at your Full Retirement Age and you actually waited, for each year you
deferred claiming your Social Security, you're actually increasing your benefit by 8 percent a
year. So between Full Retirement Age and age 70, where it levels off, you're actually
increasing it 8 percent a year. Which, If you think about it, what other investments are
guaranteed for 8 percent? So if you look at the difference between taking it at age 62 versus
waiting until age 70, there's a 76 percent difference in your monthly benefits.
MR. SANTOLI: And how does that convert into actual dollars people might actually experience
every month?
MR. HUNTER: You know that's a great question because people like to talk in dollars, not
necessarily in percentages.
The Difference Waiting Can Make
So in that same example, at Full Retirement Age, if Social Security payments has a $24,000
annual payment if you took it at age 62, you'll only be getting $18,000, so again, locking in that
discount. Conversely, if you wait to age 70 instead of Full Retirement Age, that increases to
almost $32,000.
So again, it's a 76 percent difference between $18,000 annually if you take it at 62 versus
$32,000 when you take it at age 70. That's significant, especially as people retire and
potentially live 10, 20, 30 years.
Cumulative Lifetime Social Security Benefits
This next chart actually shows the difference in real dollars over time. So for those that took it
at 62—that $18,000 a year if they live to 85 versus somebody who started taking at 70 and
they live to 85, there's a difference of about $62,000 just from that difference there. However, if
they waited until 95 where it's exponential growth, there's hundreds of thousands of dollars of
difference—there's the difference between $594,000 versus $792,000. So we're almost talking
$200,000. So that is significant.
It should be recognized though that not everybody can wait to claim Social Security, whether
it’s their savings or investments or because they lost their job or they have health issues.
At Merrill Lynch we believe it should be a very deliberate, thoughtful, strategic, well-informed
discussion that you have with your spouse or your financial professional to determine what's
right for your situation.
MR. SANTOLI: And for those who are lucky enough to be able to wait if they so choose, why
do you think they don't work to maximize their retirement income that way?
MR. HUNTER: I think three things. First, it's the present bias: They want the “bird in the hand”
—in fact behavioral finance calls this the present bias. Also "crowd think": Knowing that a
number of people take it at 62, they just assume the crowd is moving in the right direction. And
also, the idea that they view it as tactical planning, because I don't think they realize it's tens or
hundreds of thousands of dollars at stake. So it's avoiding the tactical planning, the crowd bias,
and the present bias.
MR. SANTOLI: Sharon, does that sound familiar in your work?
MS. MILLER: Pretty typical.
Ages at Which People Claim Social Security Benefits
Historically, folks have opted at about the rate of 73 percent to begin taking their Social
Security payments early. It doesn't mean they all start at age 62, but clearly, three quarters of
the population are opting to take them before Full Retirement Age.
Chapter 5: Is it realistic to plan on working longer?
MR. SANTOLI: If a person is delaying taking Social Security, it's also because they're
continuing to work. You hear a lot of younger, mid-career people say that they anticipate being
able to work a lot later and then perhaps delay taking Social Security until 70. Is that realistic?
MS. MILLER: I think it's a lot more optimistic than realistic in our studies. In fact, an EBRI
study found that half of today's retirees had to retire sooner than they had anticipated. And
again, I think we talked about it a lot today on the panel, but it's all around that they could have
a health issue, something beyond their control, perhaps downsizing, with all the recession
we've seen. So again, we want to make sure that we're planning for those unexpected and not
necessarily counting on the ability to work in retirement.
70 percent of people that were already in retirement said that they would keep working;
however, only 27 percent were actually working. So you can see that differential there. What
people think is going to happen and what actually happens can be very different once you get
Comparison of Expected and Actual Work for Pay in Retirement
In addition, this next chart from that same study shows that. The blue line shows those folks
that said they would keep working in retirement versus the green line, that depicts who actually
did. That has been remarkably similar over the past 15 years. It really hasn't changed much.
So again, for those that are thinking that they will be working in retirement as a source of
income, these are absolutely sobering statistics.
MR. HUNTER: It's very similar to a Merrill Lynch Age Wave study. We just fielded this with the
affluent investors. We found that 60 percent of the folks retired earlier than they expected, and
then we further queried about why that is. And the number one answer was personal health
Reasons for Early Retirement
About 34 percent said it was a personal health problem; or 24 percent said they lost their job.
And with the health problems, it's really a double hit. You have that unexpected increase in
medical costs, and you're losing that potential income. So the message here is just
concentrate on what you can control. So, save early and often.
Chapter 6: What you can do now
MR. SANTOLI: Well, clearly, what we've learned here today is that there are so many different
decisions that we have to make over a long period of time, and much planning that probably
should go into how you think about Social Security and how it fits into your retirement. So,
probably a good place to try to boil it down. Kurt, what should people take away from the
discussion in your mind?
MR. CZARNOWSKI: First and foremost, people—especially younger workers—need to
recognize that Social Security is more than just a retirement program. There's important
disability protection and survivor protection that are there for younger workers, in particular, in
case they need it. We all hope they're not going to need it, but it is there in case they do, and
they should be focusing on that and not just thinking about Social Security as some program
down in the future.
Second, I think people need to understand—and I firmly believe—that Social Security will be
there for them in the future. But it's unrealistic to think that there won't need to be changes
made to the program down the road. It's incumbent on Congress to act, and the sooner that
Congress acts, the better it will be.
But there will be some changes made to ensure that Social Security continues to provide this
third point—a base of income protection, a foundation that people can count on being there.
But the key takeaway is it was never intended to be your only source of income in retirement,
and people must take steps to supplement their Social Security payment. And the sooner they
start to take those steps, the more likely they are to have that comfortable retirement that
people of all ages hope to have.
MR. SANTOLI: Bill, what would you like people to take away from this discussion?
MR. HUNTER: My three takeaways: First, when you're looking at Social Security, it should be
done holistically as part of your retirement plan, and it should not be done in isolation. It should
be done with a spouse, understanding the tradeoffs and the issues.
Second, save and invest early and often. These are things you can control. So save and invest
early and often. And last, life is dynamic, so should your retirement plan be. There are a lot of
changes in life, some wanted, some unwanted, so it is not a "set it and forget it." Make a
dynamic retirement plan.
MR. SANTOLI: And, Sharon, how should people put this in practice, this advice?
MS. MILLER: I think it's important, first of all, to set your strategy. What do you want your
retirement to look like?
And then, as Bill just alluded to, it's really, really critical that you make sure that you're
monitoring that over time. You need to keep reevaluating as life changes. As the years go on,
make sure that you have evaluated where you are and where you want to get to. In addition,
these are very complex needs that we've talked about today, complex themes, and so it may
be important that you talk to a financial professional who can help guide you through some of
these discussions.
What to Think About
Now, I'm going to get pretty tactical here, but we're talking about our 30s, 40s, and 50s and
what clients should be doing at any age through their investing life span. I think in the 30s it's
critical that you start to establish and build toward what you want that retirement to look like.
So begin contributing to your retirement accounts. Make sure that you have an adequate
emergency fund set aside.
Moving to your 40s, you're probably earning more during those years, so you want to make
sure that you're increasing your contributions to either your 401(k) or your retirement account
at work. And again, make sure that you have adequate emergency savings because, as we
talked about a lot today, life happens, unemployment happens, recessions happen, and you
want to make sure that you're not putting a big dent in your retirement savings because of one
of those events.
In your 50s, if one of these life events has happened and you haven't been able to save as
much, it's important that you begin to catch up. You can put more money aside by contributing
to your IRA, contributing more in your 50s through catch-up contributions.
These are all big decisions. You want to make sure you know what your strategy is, where
you're going for retirement, and again you may want to enlist the help of a financial
MR. SANTOLI: All right, excellent guidance. Thank you, Sharon, and thanks to all three of you
for being here today. I'd also like to thank you for tuning in. I hope you gained some helpful
information from our panelists and I invite you to visit to learn
I'm Michael Santoli. Thank you for watching.
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Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in
declining markets.
Any information presented about tax considerations affecting client financial transactions or
arrangements is not intended as tax advice and should not be relied upon for the purpose of
avoiding any tax penalties. Neither Merrill Edge 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 tax advisors.
Merrill Edge is available through Merrill Lynch, Pierce, Fenner & Smith Incorporated
(MLPF&S), and consists of the Merrill Edge Advisory Center (investment guidance) and selfdirected online investing.
MLPF&S is a registered broker-dealer, member SIPC, and a wholly owned subsidiary of Bank
of America Corporation (“BAC”).
Investment products offered through MLPF&S and insurance and annuity products offered
through Merrill Lynch Life Agency Inc.:
Are Not FDIC
Are Not Bank Guaranteed
May Lose Value
Are Not Deposits
Are Not Insured by Any
Federal Government
Are Not a Condition to Any
Banking Service or Activity
© 2013 Bank of America Corporation. All rights reserved.

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