Provided are items to look for when planning your retirement income with social security benefits, please contact me with any questions.

1. Getting the Most from Social Security The Brantley Group Simple. Relevant. Impactful.

2. Agenda Know Your Benefit Understand Your Options Maximize Your Benefit

3. Know Your Benefit Sources for retirement income for average income earners to sustain 80% – 100% of pre-retirement income Employer-Sponsored Retirement Plan and Personal Savings Social Security Source: Social Security Administration, Office of Policy. Office of Research, Evaluation Statistics, Fast Facts and Figures About Social Security, 2010.

4. Know Your Benefit

5. Source: 2010 Social Security Administration, ssa.gov/retire4/retirechart.htm. Know Your Benefit Full Retirement Age 67 1960 and later 66 + 10 months 1959 66 + 8 months 1958 66 + 6 months 1957 66 + 4 months 1956 66 + 2 months 1955 66 1943-1954 Full Retirement Age Birth Year Social Security Full Retirement Age

6. Receive benefits earlier Higher monthly check No penalty for employment Highest monthly paycheck No penalty for employment Smallest monthly check Potential reduction penalty for employment No interim benefits Receive benefits later 62 70 AGE PROS CONS Full Retirement Age Know Your Benefit Your Age and Your Benefit

7. Electing your benefit — early vs. late Working while collecting your benefit Examining your tax situation Considering your spouse’s benefit Understand Your Options

8. Understand Your Options Early vs. Late 130% 120% 110% 90% 80% 70% Early vs. Late Benefit Election Assuming Full Retirement Age at 66. Source: Social Security Administration. 100% 62 63 64 65 67 68 69 70 Take Benefits Earlier Take Benefits Later Retire at age 66 with full monthly benefit

9. Working While Collecting Understand Your Options * Adjusted Gross Income (AGI). ** At FRA your benefit amount is adjusted to accommodate for the earlier reduction. None For every $3 over the limit, $1 is withheld from benefits until the month in which full retirement age is reached For every $2 over the limit, $1 is withheld from benefits Considerations No limits on earnings At Full Retirement Age or older** $37,680 In the year Full Retirement Age is reached $14,160 Under Full Retirement Age 2011 Income* Limits Age

10. Examining Your Tax Situation Understand Your Options Note: State and local taxes may differ. * Provisional Income is Adjusted Gross Income including any tax-exempt interest plus 50% of Social Security benefits . Source: 2010 Social Security Administration, http://www.ssa.gov/pubs/10035.html . Up to 85% Over $34,000 Up to 50% $25,000 - $34,000 0% Under $25,000 Taxed Benefits Provisional* Income Single Filing Up to 85% Over $44,000 Up to 50% $32,000 - $44,000 0% Under $32,000 Taxed Benefits Provisional* Income Married Filing Jointly

11. Consider Spouse’s Benefit Understand Your Options A widowed spouse may collect survivor benefits (up to 100% of their deceased spouse’s benefit) Option 3 Survivor Benefit Lower-earning spouse may collect a higher spousal benefit (up to 50% of their spouse’s full benefit) if the spouse has filed Lower-earning spouse collects his or her own individual benefit Option 2 Spousal Benefit Option 1 Individual Benefit

12. Consider Spouse’s Benefit Understand Your Options Sam and Ann, both age 62 Full Retirement Age: 66 $1,035 $1,035 $724 Spousal Benefit $2,733 $1,180 Age 70 $2,071 $900 Age 66 $1,562 $675 Age 62 Sam Ann Name Social Security Benefits

13. Maximize Your Benefit 1 Benefit will be reduced if not at Full Retirement Age. Both individuals must have filed for Social Security benefits. 2 Effective December 8, 2010, Social Security Administration published new rules regarding the withdrawal policy and will make a final ruling in 2011. Provides flexibility to cease taking benefits if life situation changes. Individuals are allowed to change their earlier claiming decision. 2 Do-Over Can earn delayed credits and then claim their higher personal benefit at a later age or may help spouse to receive greater survivor benefit. Allows spouse to claim spousal benefit. Can increase the overall lifetime benefits, specifically considering survivor planning. Benefit A Full Retirement Age individual may claim one-half of their spouse’s benefit, delay taking their own benefit. 1 Claim Now, Claim More Later Individuals at FRA or later who have claimed benefits then suspend the benefits. When benefits are reinstated down the road, they will receive a higher benefit amount. Claim and Suspend Definition Social Security Strategy

14. Calculate expected Social Security benefit Determine your plan to maximize your benefit Apply for retirement benefits Getting Started Maximize Your Benefit

16. Retirement Income Planning

18. Things to Consider When you are considering when to collect retirement benefits, one important factor to take into account is how long you might live. According to data compiled by the Social Security Administration: A man reaching age 65 today can expect to live, on average, until age 83. A woman turning age 65 today can expect to live, on average, until age 85. And those are just averages. About one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95. Life Expectancy

19. Receive benefits earlier Higher monthly check No penalty for employment Highest monthly paycheck No penalty for employment Smallest monthly check Potential reduction penalty for employment No interim benefits Receive benefits later 62 70 AGE PROS CONS Full Retirement Age Know Your Benefit Your Age and Your Benefit

20. Preparing Your Portfolio Past Performance is no guarantee of future results. Asset allocation/diversification does not guarantee a profit or protect against a loss. Fixed-income investment options are subject to interest rate risk, and their value will decline as interest rates rise. X X Preferred Securities Fund 5 X X Income Fund 4 X X High Yield Fund 4,5 X X Shortfall X X Global Diversified Income Fund 3,5 X X Inflation Market X Equity Income Fund 2 X Diversified Real Asset Fund 1 Longevity Potential Solutions from Principal Funds

22. Income Strategies Fixed-income investment options, including those that invest in mortgage securities, are subject to interest rate risk, and their value will decline as interest rates rise. Neither the principal of bond investment options nor their yields are guaranteed by the U.S. or any other government entity. Lower-rated securities are subject to additional credit and default risks. International investing involves increased risks due to currency fluctuations, political or social instability, and differences in accounting standards. REIT securities are subject to risk factors associated with the real estate industry and tax factors of REIT registration. Risks associated with preferred securities differ from risks inherent with other investments. In particular, in the event of bankruptcy, a company’s preferred securities are senior to common stock but subordinated to all other types of corporate debt. Income from municipal bond holdings may be subject to state and/or local taxes, and it may be subject to federal alternative minimum tax (AMT) for certain investors. An MLP that invests in a particular industry (e.g., oil and gas) may be harmed by detrimental economic events within that industry. As partnerships, MLPs may be subject to less regulation (and less protection for investors) under state laws than corporations. In addition, MLPs may be subject to state taxation in certain jurisdictions, which may reduce the amount of income paid by an MLP to its investors. Seeking Preservation Short Duration High Quality Core Bond Spread Yield Alpha Non Core Striving to Maintain Value Enhancing Alpha Potential 1-3 Year Duration AAA/AA Rated Bonds Cash Equivalents Investment-Grade Corporate Bonds Municipal Bonds Agency Securities Mortgage-Backed Securities Multi-Sector/Strategic Bond Funds High-Yield Bonds Preferred Securities Real Estate Investment Trusts Master Limited Partnerships (MLPs) Emerging Market Debt

23. Income Strategies Glossary of Terms: AAA/AA Rated Bonds: A ratings grade given to bonds indicating their credit quality. AAA and AA-rated bonds are considered “high-quality investment grade” by Standard & Poor’s. Agency Securities : Debt securities issued by U.S. government-sponsored entities and federally related institutions. Alpha: The excess return of an investment relative to that of its benchmark index. Corporate Bonds: Debt securities issued by a corporation and sold to investors. The backing for the bond is usually the payment ability of the company, which is typically money to be earned from future operations. Emerging Market Debt: Debt securities issued by governments or corporations in developing countries. High-Yield Bonds: High paying bonds with lower credit ratings than investment-grade corporate bonds, Treasury bonds, and municipal bonds. Because of the higher risk of default, these bonds pay a higher yield than investment-grade bonds. Investment Grade: A rating given to a bond indicating that it has a relatively low risk of default. Master Limited Partnerships: Publicly traded securities in partnership engaged in the production and transportation of natural resources, such as oil and gas. Mortgage-Backed Securities: A type of asset-backed security that is secured by a mortgage or collection of mortgages. Multi-Sector/Strategic Bond Funds: Fixed-income funds that invest in different types of bonds, such as corporates and municipals, or that seek to invest in multiple fixed-income sectors. Municipal Bonds: Debt securities issued by a state or local government entity to finance capital expenditures. Preferred Securities: A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred securities generally have dividends that must be paid out before dividends to common stockholders and the shares usually do not have voting rights. Real Estate Investment Trusts (REITs): Securities that sell like stocks on the major exchanges and invest in real estate directly, either through properties or mortgages. REITs receive special tax considerations and typically offer investors high yields, as well as a highly liquid method of investing in real estate. Short Duration: Duration is a measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. Short-duration securities are typically investments that have duration of less than three years.

24. Before investing, you should carefully consider a fund’s investment objectives, risks, charges, and expenses. Contact your financial professional, visit principalfunds.com, or call 800-222-5852 to obtain a prospectus containing this and other information. Read the prospectus carefully before investing. A mutual fund’s share price and investment return will vary with market conditions, and the principal value of an investment when you sell your shares may be more or less than the original cost. The content of this presentation is based upon reliable source material and is believed to be correct as of the time of creation; however is subject to change at any time without warning. Investors should consider consulting with their tax professionals prior to making decisions due to their unique circumstances. While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that The Principal ® is not rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc., member of the Principal Financial Group ® . Principal Funds Distributor, Principal Shareholder Services, Principal Management Corporation and its affiliates, and Principal Funds, Inc. are collectively referred to as Principal Funds. MM4787H | 11/2010 | t1010270409 ©2010 Principal Financial Services, Inc. WE’LL GIVE YOU AN EDGE ® Disclaimers