Disclaimer: The traditional way of protecting retirement income looks at your current assets and assumes they will earn a fixed rate of return every year. We wish real life could be so certain, but it's not. Projecting income this way can create a false sense of security-or a false sense of insecurity. For instance, we might assume a 7% rate of return on your investments over the life of your plan based on the historical return for your specific asset mix. But it's highly unlikely that your portfolio will actually return 7% year in and year out. It's more likely that the return will fluctuate. Too often tough, people don't account for the timing of these fluctuations and cash flow demands. And that's important. Because what if the market-and your portfolio-decline in the very year that your child's college tuition is due? Or just when you've paid for that safari that you always promised yourself? The timing of strong and weak returns could mean the difference between the ultimate success or failure of your overall plan. Your Financial Advisor advisor, using powerful software developed by Smith Barney, can provide you with the Probability Analysis that helps you account for the uncertainty of market returns and assess the likelihood of reaching your goals. And how do you define success? Let's say your target goal is simply to retire at 55 and not outlive your money or sacrifice your current lifestyle. If you reach that goal in 900 of the 1,000 market simulations, our model suggests that you have 90% chance of meeting or exceeding your goal. But maybe you want to retire at 55 and also leave an estate worth $1 million. Probability analysis can estimate your chances of achieving both of these goals, or retiring early but not leaving the $1 million estate, or missing both. Of course, there can be no assurance that your simulated results will be achieved or sustained. Your actual results will surely vary. For example, our projections don't account for fees or transaction costs, which may be charged when you invest in an actual portfolio of securities. But 100% accurate forecasting isn't the goal of probability analysis. Making better, more informed decisions is. Your Financial Advisor advisor can help you identify a rate of success you'd be comfortable with and provide recommendations for reaching it. For example, you might be comfortable with a 75% statistical likelihood of reaching your goal. Or you might need an 85% success rate to sleep soundly at night. Whatever your number is, getting there may lead you to change your plans. You may plan to retire later-or earlier. To save more-or spend more. Or to change your asset allocation, or perhaps leave a smaller amount to heirs and charity. With probability analysis, your Financial Advisor advisor can show you how any one of these actions, or a combination of them, might improve your chances to success. Your Financial Advisor advisor won't apply probability analysis to any specific investment in your plan, such as a particular stock or mutual fund. Instead, it's performed on the asset classes represented in your portfolio, such as large cap stocks, taxable bonds and cash. The return estimates for various asset classes used in the simulations are forecast by the Investment Strategy Committee of Citigroup. The Committee uses market observations and a variety of statistical models to determine the average expected return on each asset class in your portfolio in 1,000 possible simulations. These estimates, along with data on historical risk are correlations between asset classes, are applied to your probability analysis. Of course, not all investments have long histories and extensive market data. The return projections can be particularly variable. So the Investment Strategy Committee has developed risk and return estimates based on intensive analysis of a wide range of factors. Even after calculating a thousand scenarios, using a year-by-year approach, and considering all your asset classes, probability analysis is only getting started. Your analysis will account for the impact of taxes on your earnings and distributions, as well as the effects of inflation and expected cash flows (remember that tuition bill?). We also look at your portfolio's asset mix every year, since you'll probably be invested differently during retirement than before it.

IMPORTANT: The projections or other information generated by Smith Barney's Probability Analysis tool regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results of the probability analysis may vary with each use and over time. Smith Barney's probability analysis does not account for fees or transaction costs, which may be charged when investing in an actual portfolio of securities. Historical risk measurements are drawn from the following market indexes, though investors may not invest directly in an index: Cash & Equivalents-Federal Reserve 90-Day Treasury Bills; U.S. Taxable Fixed Income-Ibbotson Intermediate Bond Index and Lehman Brothers Intermediate Government/Credit Index; U.S. Tax-Free Fixed Income-Lehman Brothers Municipal Index; Non-U.S. Fixed Income-Citigroup Global Markets Non-U.S. World Government Bond Index; Large-Cap Equities-S&P 500 Index; Mid Cap Equities-Russell Mid-Cap (800) Index; Small Cap Equities-Ibbotson Small Company Index and Russell 2000 Index; Core International Equities-MSCI EAFE Index; Emerging Markets-MSCI Emerging Markets Index. Investors may not invest directly in an index.