Nuveen Investments Research Shows Uncertain Investment Returns Pose Challenge to Retirees Making Regular Withdrawals.

CHICAGO -- In view of recent stock market performance, retirees may be all too familiar with the potential negative impact of uncertain returns on their investment portfolio. New research from Nuveen Investments reaffirms the challenge, showing how return rates coupled with periodic withdrawals can play havoc with retirement nest eggs.

Bottom line, Nuveen experts found that investors making regular withdrawals from their portfolios could have significantly more wealth to support their golden years if negative annual returns occur later in their portfolios' lifecycle rather than sooner. Additionally, a Nuveen study shows that a portfolio that combined stocks and bonds in various proportions could provide significantly more downside protection while still preserving considerable upside potential for retirees living off their investments.

In analyzing the impact of equity returns from 1983 to 2002, Nuveen tested a hypothetical $1 million portfolio invested in the stock market (S&P 500 Index) and the need to withdraw $75,000 each year adjusted for an annual inflation rate of 3%. At the end of 2002, the ending value was $5,412,109, with more positive annual returns occurring earlier in the study. But if the order of annual returns is reversed, resulting in a bad start with three straight negative years, the portfolio never recovers and expenses would exceed assets by $111,173.

With mixed portfolios over the same time period, researchers found that diversification produced a range of lower highs and higher lows. A 60/40 equity to bond ratio (S&P 500 Index to long-term Treasury bonds), rebalanced annually, achieved the best overall outcome - downside protection almost twice as great as the sacrifice of upside potential. In this scenario, the ending balance from a favorable order of returns was $4.2 million ($800,000 less than all-equity) and $1 million from an unfavorable reversed order of returns ($1.5 million more than all-equity).

For more information on these studies, as well as other wealth management and retirement planning topics, visit the Nuveen Investments Generations website at www.nuveen.com/generations.

This research should not be construed as tax, legal or investment advice of any kind and contains no recommendations to buy or sell any specific securities. The statements contained in the reports are solely based on the opinions of Nuveen Research. Certain information was obtained from third party sources which we believe to be reliable but are not guaranteed. Past performance is no guarantee of future results. Tables accompanying the research were provided for illustration purposes only and do not reflect the performance of any actual portfolio. Different benchmarks and economic periods will produce different results and the results for individual portfolios will vary depending on market conditions and the composition of the portfolio. All investments carry a certain degree of risk including the possible loss of principal and there is no assurance that an investment will provide positive performance over any period of time.

Nuveen Investments provides high-quality investment services designed to help secure long-term client goals. The Company serves institutional clients, financial advisors and high-net-worth investors. The firm's asset management capabilities are marketed through four distinct brands, each with an independent investment team and area of expertise: Nuveen, focused on fixed-income investments; NWQ, specializing in value-style equities; Rittenhouse, dedicated to blue chip growth equities; and Symphony, with expertise in alternative investments and equity and income portfolios. In total, the Company manages approximately $119 billion in assets. Nuveen Investments, Inc. is listed on the New York Stock Exchange and trades under the symbol "JNC."