RETIREMENT SURVIVAL GUIDE

7 Tips for Success

Jeffrey A. Johnston, ChFC

President of Premier Investments of Iowa, Inc.

Table of Contents

Page 2 Introduction

Page 3 Survival Tip #1 Build a Personal Media

Filter

Page 5 Survival Tip #2 Don’t Allow Your Money to

Consume or Control You

Page 7 Survival Tip #3 Develop a Fair Rate of

Return

Page 9 Survival Tip #4 Understand the Value of

Asset Allocation

Page 11 Survival Tip #5 Never Invest Out of Fear –

Invest from Confidence

Page 13 Survival Tip #6 Financial Independence is a

Process not a Product

Page 15 Survival Tip #7 3 Most Important Questions

Introduction

I have been in the business for twenty-three years. Over that

time I have seen many ideas, fads, schemes, and products come

and go. However, year in and year out there seems to be some

constants that never change. This guide was written for you, the

average hard working American, who is struggling with the two

basic human emotions of greed and fear. I have outlined for you,

in simple terms, what I call my Retirement Survival Guide. I have

implemented these concepts in my practice

over the years and believe that these have

become our core philosophy at Premier

Investments of Iowa, Inc.

I am not convinced that $2.00 stock trades, low cost ETF’s,

24/7 financial shows, hundreds of financial magazines, get rich

quick guru’s, tapes, or classes will make you a better investor. (If

that were the case, then from 1990 - 2009 when the S&P 500 Index

averaged +8.2% per year the average equity investor would not

have averaged only +3.17% (see survival tip #4). However, this is

precisely the case. Everything is in place to make us better

investors, but that’s just not happening. Why?

1

I have used my dieting example many times in workshops to

illustrate my point. We have more information today than ever

before on weight control and healthy

eating. Just ten years ago we did not even

know what a saturated fat was! Yet, we are

still the heaviest industrial country in the

world and growing. The knowledge and

information is not the problem. The

problem simply put, is us. I believe we do

not need any more information, in fact we

need less. I hope that by writing this guide,

you will be able to see things from a

different perspective; one of realism and

confidence, not fear and greed.

Enjoy!

2

Survival Tip #1

Build an Internal Media Filter

What I Have Learned:

My most successful clients have the

tremendous ability to tune out the

external chaos

In our office, we call this the “Apocalypse de Jour.” It seems that

every year we can find reasons not to invest money or to sit on the

sidelines.

Here are some examples provided by Transamerica:

1940’s - Double Digit Inflation, WWII

1950’s - Korean War

1960’s - Vietnam War

1970’s - Oil Crisis, Double Digit Inflation, DOW 1,000

1980’s - Savings & Loan Crisis, Black Monday Crash

1990’s - Dot Com Bubble, Y2K

2000’s - Recession, US Downgrade, Subprime Crisis,

Eurozone Crisis, DOW 14,000

3

The scariest words we hear today are, “It’s different this time.” Of

course, it will always be different. You cannot control the chaos or

noise. You can only control how you react to it. Until we learn how

to build an internal media filter, we will never reach our full

potential in building true wealth.

Do Now:

Develop ways to tune out the media. Limit your daily time to 30

minutes and use your new found free time to do the following:

- Take a friend/family member out to lunch

- Read a book you have kept putting off

- Travel somewhere within 2 hours of home

- Go to a new restaurant

- Do absolutely nothing for a day

Key Point:

Stop feeling like you are always missing out on something.

4

Survival Tip #2

Don’t allow your money to consume or control you.

What I have Learned:

My most successful clients control their money;

they are not financial hoarders.

Ever watch the show Hoarders? I often see people so consumed by

watching their money grow and so determined to be rich that they

lose focus and sight of everything around them. I once heard a story

about a 68 year old grandparent that did not want to spend the $700

on a plane ticket to fly across the country to see her grandchildren,

whom she had not seen in five

years. She had an investable net

worth of $1.5 million dollars. At a

5% return, that represents

approximately 3.5 days of growth

out of the 365 days in a year! (Purely a mathematical point, not a

guaranteed return). Are you serious? What good is wealth if you

never enjoy it? It is often quoted that in our country the average

inheritance is spent in the first 2-4 years. Need I go any further?

5

Do Now:

- Develop ways to see the big picture.

- Live well within your means (income).

- Remember that memories are forever, possessions are not.

- Find time (this year) to spend some of your money.

- Expect the best, but prepare for the worst.

Key Point:

It’s about the quality of your life not the quantity.

6

Survival Tip #3

Develop a personal Fair Rate of Return

What I Have Learned:

My most successful clients try to beat their own goals,

never an index or the market.

It still amazes me how many people (and the media) believe that

financial independence is contingent on beating an index or the

market. Trying to beat anything other than your personal goal is

financial insanity! Herein lies the problem… most people do not

have a goal or plan. Northwestern Mutual recently found that 50%

of parents have no financial plan (Parents and Planning 2012 Poll).

In order to develop a personal Fair Rate of Return, you must have a

goal. I once asked a potential client to answer a simple question,

“If we decide our personal Fair Rate of Return (goal) is +6% per

year and the next year the market goes up +30% but you earn +8%

how will you feel?” His answer was, “I’d be disappointed you could

not keep up with the market. I expect

you to keep up with the averages!” He

is still not a client, nor will he ever be.

In this scenario he outperforms his goal

by 33% and yet he is unhappy. This

makes no sense to me. Why then even

have a goal? 7

Do Now:

- To establish a Personal Fair Rate of Return you must:

1) Have a target retirement date or distribution

(income) date.

2) Be willing to underperform the market on the

upside, yet outperform it on the downside.

- Do not get greedy; overconfidence is very harmful.

- Your goal needs to include inflation, taxes, expenses,

and the monthly income you will need from your

portfolio.

- Determine your personal risk level and what amount of

volatility you can handle?

Key Point:

Beating the market is irrelevant and a distraction.

Obtaining or beating your goal is the objective.

8

Survival Tip #4

Understand the Value of Asset Allocation

What I Have Learned:

My most successful clients own a little of everything all the time.

They don’t put it all in one basket.

My first investment class in college taught me the basic concept of

investment success. Get ready, this may surprise you… Buy Low

and Sell High. I know, complicated stuff. In and of itself, this

makes sense. However, when we add human emotions to the mix all

*?@# breaks loose, as evidenced by the chart below.

8%

7%

6%

5%

4%

3%

2%

1%

0%

8.20%

3.17%

7.01%

1.02%

S&P 500

Index

Average

Equity Fund

Investor

Barclays

Aggregate

Bond Index

Average

Fixed-Income

Investor

Source: DALBAR, Inc. Quantitative Analysis of Investor Behavior (QAIB) 2010. This chart displays the average annual returns for market indexes and the Average Equity and Fixed-Income Fund Investor and illustrates the negative effects that poor investor behavior – such as trying to time the market and chasing returns – can

have on a portfolio over time. Returns are compounded annually. Indexes’ annual returns assume an initial investment made in 1990. The Average Equity Fund Investor and Average Fixed-Income Fund Investor represent the aggregate action of all investors. The returns were calculated by treating aggregate industry flows as being representative of the average investor and applying these flows to an appropriate performance index. Past performance is no guarantee of future results.

Investors cannot invest directly in an index.

Investor Behavior Affects Returns

1990-2009

9

For the 19 years ending in 2009, the average Equity fund and fixed

income investor trailed the S&P 500 & Barclays Aggregate Bond

Index miserably. I know, I already said not to compare yourself to an

index, but hear me out on this. I doubt the actual returns they did

receive of 3.17% and 1.02% achieved their goals during that same

period. Why is this? I cannot be certain, but I bet it has something to

do with fear, greed, and asset allocation. In that same study, they

concluded that 93.6% of a portfolio’s returns were based on asset

allocation. (Please refer to the DALBAR chart on page 9).

Do Now:

- Diversify, Diversify, Diversify among all asset classes.

- Rebalance regularly

- Have non-correlated investments — Assets that do not

move in the same direction. By definition, you will have

some winners & losers

- Understand which stage of the investment cycle you are in:

* Accumulation

* Distribution

* Legacy

Key Point:

Remember, most of the time it is the singles, doubles, and triples

that win games; not the home runs!

10

Survival Tip #5 Never invest out of fear - Invest out of confidence.

Every so often I come across people who invested money in

something because they were scared into investing. An investment

should provide you with peace of mind, I get that. However, it

should also be looked at in the context of an overall plan, relative to

your risk level. I have learned that there are two ways people can be

motivated. They can be scared or they can be inspired. I prefer to be

a ‘glass half full’ type of person and would rather focus on

educating my clients on all the opportunities

and not get hung up on all the noise and

negative information. Please refer to Survival

Tip #1 How to build an internal media filter if

you need a refresher.

I recall a seminar/dinner invite a client received from another local

advisor. The words: mistakes, crash, loss, devastation, and

catastrophic were used repeatedly in an attempt to scare my client

into attending. It is important to emphasize the topics of discussion

when advertising a seminar, but this should be done in a more

proactive manner.

11

Do Now:

- Investing should be fun, exciting, educational, and

worthwhile. Not intimidating, scary, stressful, or

depressing.

- Always have a goal in mind when you see a financial

advisor for the first time. Avoid walking in with the

attitude of, “my CD just matured, now what do I do?”

Key Point:

Be proactive (positive) not reactive (negative) in your personal

investment philosophy.

12

Survival Tip #6 Financial independence (planning) is a process, not a product.

It never ends.

It is very important to understand the Financial Planning is a

process. It is the ongoing nurturing of your portfolio in order to keep

up with the stages of life as you go through them. It is NOT a

product. It has no expiration date. Too often a financial professional

has one answer to all your problems. Wham! They slam all your

money into one perfect deal. For years, we have utilized a simple

strategy of segmenting your money into

responsibilities. Again, this is not an investment

or product. It is a process to allow your portfolio

to pursue different goals and objectives.

In times of chaos, this concept has worked well. I

want to emphasize that my definition of well is

more emotional than financial. Having a Fair

Rate of Return (Survival Tip #3) will focus on the financial aspect.

It is our belief that you should see your financial advisor a minimum

of four times in the first year. After which you should meet at least

twice a year in order to tweak your plan if needed. You should not

need to contact your advisor for your review. A system should be in

place to enable your review to be scheduled in advance.

13

Do Now:

- Develop a strong relationship with your advisor (if you

have one).

- Be patient with the plan. Fruit does not grow on trees

overnight.

- Be honest with your advisor and expect honest answers.

- Know what you are spending for the advice. How can you

know if what you pay your advisor is worth the expense

if you are not sure what you are paying them?

Key Point:

A product may ease some of your concerns, but a

plan will be designed to solve most of them.

14

Survival Tip #7 Answer the 3 Most Important Questions

Do you have the:

Knowledge, Desire and Time

To effectively & efficiently manage your money now and as you

grow older?

If you answer yes to all three questions, then you don’t need me!

Congratulations, you are in the minority and are probably capable of

investing for yourself. I will emphasize probably. For everyone else,

it is very important to consider hiring a professional to delegate

these concerns.

Hiring a financial advisor is no easy task. Try to talk to at least two

and consider these important items:

* Why are you hiring an advisor in the first place?

* What is the firm’s overall investment philosophy?

* How are the staff and infrastructure set up?

* Is your planner captive or independent?

* How is the technology set up to access your accounts?

* Solo shop or larger entity?

* What happens to your account if your advisor is no longer there?

* How are they compensated and how often?

* Can you handle the truth if it needs to be told?

15

Do Now:

- Decide if you can answer yes to the knowledge, desire

and time questions.

- If not, consider getting in touch with a financial

professional.

- Everything has a cost. The cost of doing nothing can be

expensive.

- Have enough pride to know your strengths and limitations.

- Trust but verify.

Key Point:

Do not take the decision to hire a financial planner lightly.

16

In Conclusion

Obtaining true wealth is subjective and very difficult to quantify; it

is very personal. True wealth should allow you to own your time as

opposed to time owning you. In other words, you should be able to

do what you want, when you want, and with whomever you want.

Far too often in our pursuit to achieve true wealth, we get deflected

or distracted by the day to day aspects of life. Without a financial

goal or plan, how do you measure success? I truly hope this short

but concise Retirement Survival Guide has been of benefit to you in

your personal quest for true wealth. If not, I guess there will always

be some great late night get rich quick infomercials for you to learn

from!

Good Luck!

Diversification and asset allocation strategies do not

assure profit or protect against loss.

17

You’ve saved for your

retirement. Now enjoy it!TM

Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Advisory services offered through

Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Premier Investments of Iowa, Inc. are not affiliated.

Premier Investments of Iowa Inc.

3600 First Avenue NE Suite 100

Cedar Rapids, IA 52402

(319) 363-3811

(800)383-6590

Jeffrey.Johnston@premieriowa.com

For more information regarding Jeff or

Premier Investments of Iowa, Inc. feel free to visit our website at

www.premierinvestmentsofiowa.com

Or simply follow us on Facebook, LinkedIn or Twitter!

Jeffrey A. Johnston, ChFC

President of Premier Investments of Iowa, Inc. and

Host of the weekly Premier Investments of Iowa,

Inc. Financial Hour on WMT 600 AM

Radio.

Jeff is a graduate of the University of Northern Iowa

and has over 23 years of experience in the investment

and estate planning business.

Jeff is also a frequent seminar presenter.

Visit our website below for upcoming dates!