Dream Book®

Dream Book

®

Planning Beyond the Numbers

The future belongs to those who believe in the beauty of their dreams. Eleanor Roosevelt

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Envision the possibilities.

Joining the Peace Corps. Starting your own business. Learning piano. Biking across Tuscany. Buying a new home. Finding new ways to relax. Life has many opportunities whether you’re starting your first job, starting a family or entering retirement. Just ask yourself, “What could I do next?” Financial planning has traditionally been about numbers. How much money you have. How much you will need. How long it will last. Now there is a new way to plan for tomorrow. And it starts with your dreams. Sure, there’s still a lot of math involved. But we’re good at that. That’s why more people come to Ameriprise for financial planning than any other company.1 We helped pioneer financial planning more than 30 years ago and our financial planning process is defined by the Certified Financial Planner Board of Standards, Inc. Our unique and collaborative Dream > Plan > Track >®approach to financial planning starts with your dreams, not just the numbers. An Ameriprise financial advisor can help you turn your dreams into reality2 by first helping you define your dreams, then developing your plan and tracking progress toward your personal vision of fulfillment. Take the first step toward the life you’ve imagined — starting with this Dream Book guide.

1

Source: SEC Form ADV, Part 1A, Item 5, Dec. 31, 2006. Based on the number of financial planning clients annually disclosed in Form ADV, Part 1A, Item 5, available at adviserinfo.sec.gov as of December 31, 2006.

2

Ameriprise Financial cannot guarantee future financial results.

ameriprise.com

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People who write down their dreams are much more likely to achieve them. This guide is the first step to help you think about your dreams and which ones are most important. From there, we can work together to help make your vision come to life.

®

Sit down by yourself or with loved ones and start to imagine your future. Consider what drives you in your life and how that has changed over time. Start by recording where you are today: Name(s) Current age(s) Date What milestones do you see in your future? — start a family, send kids to college, buy a new home, retire, others

If you could do anything, time and money aside, what would it be? — spend time with family, buy a vacation home, start your own business

Top 10 life dreams 1

What would you like to add in your life? — more time, more money, others

Lose weight Become debt free E xercise more Write a book Stay healthy Take a cruise

What would you like to reduce in your life? — debt, job stress, others

Go to Hawaii Travel to Europe Pay off the mortgage Retire

1Source:

EONS™, Inc., survey of members over 50, 2007.

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What would you like to do?

Top 20 second careers 1 . Nonprofit executive

Use your imagination to create the possibilities for your future. Does anything stand out as most important? Career — change careers, start a new business, continue the work you love

2 . Patient representative 3 . Celebrant/religious leader 4 . Financial adviser 5 . Public school teacher 6 . Appraiser (residential real estate)

Hobbies — restore an old car, make quilts, garden, write a novel

7 . College professor 8 . Day care center teacher 9 . IRA specialist 10 . Labor relations manager 11 . Leasing consultant

Volunteer work — build homes for the homeless, volunteer for a political party, teach people to read

12 . Lobbyist 13 . Medical records coding technician 14 . Pension administrator 15 . Religious educator

Learning — go back to school, learn another language, get your

16 . Department retail sales manager

pilot’s license

17 . Retail sales staff 18 . Staff nurse (RN) 19 . Tax accountant 20 . Tutor

Relaxing and enjoying life — travel with family, read more, savor quiet time

Source: Research by Money magazine and Salary.com, 2007.

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Who do you want to spend time with? Maintaining social connections can be challenging throughout our lives. Young parents are often surprised by how much they miss just talking to adults. The newly self-employed may miss the “watercooler.” And the loss of work friends is the most unforeseen challenge of retirement.1 It’s important to take an active role in building and maintaining your support network of friends, family and acquaintances throughout your lifetime. Spouse or partner — consider new activities you may participate in together.

Family — how far away are your parents, children and

grandchildren? What activities do you like to do together? Do you desire or need to travel to see family members?

Some ways to develop new friendships: 2 et out with G your pet. ork out at a W local gym.

Friends — how much do you like to entertain and

o breakfast, D lunch or dinner with an acquaintance.

stay socially active?

Accept invites. Volunteer. J oin a cause you believe in.

New friends — how can you meet new people?

J oin a hobby group.

(consider classes, clubs and organizations)

o back to G school. ang out on H your porch.

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1

N ew Retirement Mindscape study, conducted in August 2005 by Ameriprise Financial in conjunction with Age Wave and Harris Interactive.

2

Source: MayoClinic.com, 2007.

Where do you dream of going? Travel is one activity that can satisfy many of your deepest desires. It can provide solitude, companionship, adventure or relaxation. The possibilities are endless. Destination — U.S., overseas, historical sites, places from your roots, homes of friends or family Did you know? 1 The 2007 average U. S. vacation cost per day for food and lodging, for a family of four is $269. In 1950 that number was $13.

How do you want to travel? — motor home, car, bicycle, motorcycle, plane, train

Furthermore, the most expensive states for food and lodging for a family of four are: Hawaii $650

How much traveling do you want to do? — number

istrict of D Columbia $611

of trips each year, duration

hode Island R $345 New York $326 ew Jersey N $324

Who are your travel companions? — spouse or partner, friends, children, tour groups

1

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S ource: AAA’s Annual Vacation Costs Survey, 2007.

Where do you see yourself living? Where you want to live is an important part of your vision for the future. Do you want to be part of a community? Do you want to try a new climate or lifestyle? Do you want to live in multiple locations? Stay in the area — loft in the city, current home, smaller/ maintenance-free home

Move closer to family — spend time with children, grandchildren or parents

Move for work — be in a hot spot for your field, start a business with a colleague

Relocate near activities you love — vacation home, overseas, learning community, active outdoor setting

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How do you intend to stay healthy and active? As your lifestyle and your health change throughout life, think about how you will take care of yourself. Consider it in broad terms, including mental and physical well-being, a healthy soul and a nurturing environment. Physical fitness — join a health club, take walks, learn martial arts, play golf, buy a home gym, practice yoga

Mental fitness — take classes, go to concerts, play chess or cards, write a book, practice meditation

Health care — learn about and make the most of your benefits: health insurance, health savings accounts, flexible spending accounts, medical help lines, Medicare, long-term care, prescription drugs

1Source:

Current Annuity Mortality Table: Society of Actuaries (2000).

Did you know? 1 An American male who reaches age 65 in good health has a 50% chance of living to age 85 and a 25% chance of living to age 92.

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How do you want to make a difference? Sometimes dreams can include helping others. Think about the people who matter to you, what you hope the future holds for them, and how you might help them realize their own dreams. What organizations or causes represent your values? How do you want to support them now and in the future? Think big. Family — fund education, instill values, teach personal skills

Community — serve on a board, provide volunteer outreach, do fund-raising, donate money

Friends — form support groups, be a mentor

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20 How do you want to make your lasting mark?

We all have a say in how we’re remembered. Our legacy is formed by the ideas, actions and causes to which we dedicate ourselves today. What’s important to you? What do you want to pass on to others? Family and friends — children, siblings, parents, friends, pets

Spiritual interests — your place of worship, religious organizations

Schools — your alma mater, your family members’ schools

Charities or causes — food banks, shelters, arts, research organizations

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What brings you happiness? As it turns out, money alone does not buy happiness. Having a vision for the future and planning for that vision are as important as money in achieving a fulfilling life.

From dreams to reality. How long will your money last in retirement? Thinking ahead to your retirement, you'll need to make sure you can live your dreams without depleting your savings. So, how long will your nest egg last? This chart may give you a rough idea of how long your savings could last if you made the following monthly withdrawals from your retirement savings. You can use this as a guide to help determine your retirement income. How closely does this align with your expectations and needs? Amount saved for retirement:

You can withdraw this much each month for: 10 years 20 years 50 years

$50,000

$400

$225

$150

$100,000

$800

$450

$300

$150,000

$1,200

$675

$450

$200,000

$1,600

$900

$600

$250,000

$2,000

$1,125

$750

$500,000

$4,000

$2,250

$1,500

$750,000

$6,000

$3,375

$2,250

$1,000,000

$8,000

$4,500

$3,000

$2,000,000

$16,000

$9,000

$6,000

Congratulations! Envisioning your dreams and putting them down on paper is the first step in making them a reality. The next step is to prioritize the goals that are most important to you and to establish milestones for reaching them. The most successful goals are those that follow the STAR technique:

1) Specific 2) Time-bound 3) Actionable 4) Relevant

Remember, you are not alone. Your Ameriprise financial advisor can help you refine your goals and estimate how much money it will take to realistically bring your vision to life.

Withdrawal rates shown are based on an average pre-tax rate of return of 9.6% and blended tax rate of 20%. Annual rate of withdrawal assumptions (as a percentage of savings): 10-year projection — 9.6%; 20-year projection — 5.4%; 50-year projection — 3.6%. Withdrawal rates are based on a 75% likelihood of success for an investor. Success is defined as meeting your income need every year of the projection, adjusted for inflation. Average pre-tax rate of return is hypothetical and is not representative of the actual rate of return you would experience. Blended tax rate is determined by dividing an investor’s total tax liability by their total income. Consult with your tax advisor about your personal situation as your holdings and blended tax rate will likely differ from this illustration. Ameriprise Financial does not provide tax advice.

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Turn your dreams into goals.

Dream #1

specific. ieve? Be h c a to t an se ve n -d ay do you w a on on i (S) What n u i ly r e

ise . A lask an c r u

H os t a fam a Be l, G ran d m a Pa t, e ll y, L isa , K dm ln vi t e G ran es, Ju d y, Sh a w n , E ll i e , m N a t h an , Ja ue G re g an d S pri n g 2 0 09 ne. S li d a e d a - $1 7 ,0 0 0 0 0 n? Set ,0 e h 12 w $ y B (T) ill it cost? w much w Ho ? it d to take o you nee d e h o w m u ch s p n i te s m r n e o t e ti c d a o t en t t (A) W ha a t rave l ag o t lk a T ) 1 12 pe ople . m i ly sh i r ts, or fa f , e t is os c u r c ll i : w u d ge t n e ove rall b i m r e t e ow D 2) g m on e y. isor abo u t h v n i d d a n l e ia sp c n 0 a 0 $1 e fi n r A m e ri pris u o o t lk a T 3) h is d r e am . t o a c h i e ve t

4) vant? y is it rele track, wh n

h ol d h at we ca t s e i or m e m i ty To c r e a t e fa est o f o u r li ves. an opp or t u n r n e e h r t ld i or h f c o d t n on gra i ld r e n an d Gi ve o u r c h t o t h e r wise a f ford . no t h e y c o u ld

lf on ep yourse (R) To ke m i ly

You may find the following format useful in getting more specific about your most important dreams. First, write out each dream using the STAR technique (specific, timebound, actionable, relevant). Then, prioritize your dreams and work with your Ameriprise financial advisor to develop your plan and track your progress along the way.

Dream #1 (S) What do you want to achieve? Be specific.

(T) By when? Set a deadline.

How much will it cost?

(A) What action steps do you need to take?

1)

2)

3)

4)

(R) To keep yourself on track, why is it relevant?

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Dream #2

Dream #3

(S) What do you want to achieve? Be specific.







1)

1)

2)

2)

3)

3)

4)

4)


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Dream #4

You may also find this worksheet useful in seeing the overall picture of the dreams you hope to achieve.


Planning for your dreams Worksheet — example One-time costs Dream/Goal




1)

2) 3)

4)

Year needed Cost per year

Travel to see siblings Cabin $40,000 2008 College for kids Boat $40,000 2011 Family cruise to Alaska $12,000 2009

$10,000 $15,000 $50,000

# of years

Start date

15 15 8

2007 2007 2010

Planning for your dreams Worksheet One-time costs

Dream/Goal

Cost

Ongoing costs

Cost

Year needed

Ongoing costs Cost per year

# of years

Start date


Take a look at the dreams you’ve described. You will probably see that some require more financial planning than others. That’s why it’s important to share your Dream Book guide with those close to you and your financial advisor. Working with an advisor, you can begin to see your personal priorities, create a plan that includes your dreams and track your ongoing progress.

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We’re redefining financial planning with Dream Plan Track ®. Now that you’ve completed your Dream Book guide, you are one step closer to making your dreams a reality. At this point, you have envisioned the possibilities for your future and defined and prioritized your goals. Are you ready to take the next step?

all your financial advisor to help turn your dreams C into goals with financial solutions.

T o find a financial advisor, call 1-800-AMERIPRISE or visit ameriprise.com.

eevaluate your situation regularly as your dreams R may change over time.

SM

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