The ICA Guide

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Investing for retirement Meet Bob and Cathy Quan, just retired. They began preparing for retirement 15 years ago with their first investment of $1,000 a month in ICA. Their financial adviser set up an Automatic Investment Plan to move money directly from their checking account into the fund. Looking ahead to 20 years in retirement, and aiming to preserve their principal, the Quans plan to make monthly withdrawals at an annual rate of 5% of their account value at each year-end, reinvesting their dividends and capital gain distributions. It’s impossible to predict how much money the Quans will withdraw over the next 20 years, of course. But this chart shows how their plan would have worked if they had invested $1,000 a month from 1977 through 1991 and then withdrew 5% a year over a 20-year period ended December 31, 2011. They would have taken a total of $1,251,719 in withdrawals — and would still have $1,244,801 left. A program of regular investing neither ensures a profit nor protects against loss, and investors should consider their willingness to keep investing when share prices are declining. For illustrations of higher or lower withdrawal rates, please ask your financial adviser. * Cumulative volume discount applied when appropriate. 20 The ICA Guide Year Cumulative investment* Value of account Withdrawals 1977 $ 12,000 $ 11,562 — 1978 24,000 25,195 — 1979 36,000 42,440 — 1980 48,000 64,360 — 1981 60,000 76,289 — 1982 72,000 116,334 — 1983 84,000 151,995 — 1984 96,000 174,685 — 1985 108,000 246,465 — 1986 120,000 312,256 — 1987 132,000 339,917 — 1988 144,000 397,509 — 1989 156,000 527,242 — 1990 168,000 542,953 — 1991 180,000 699,995 — 1992 711,924 $35,000 1993 756,747 35,596 1994 720,034 37,837 1995 899,077 36,002 1996 1,023,230 44,954 1997 1,270,097 51,161 1998 1,489,260 63,505 1999 1,654,156 74,463 2000 1,633,212 82,708 2001 1,477,696 81,661 2002 1,195,646 73,885 2003 1,439,185 59,782 2004 1,502,479 71,959 2005 1,526,454 75,124 2006 1,686,789 76,323 2007 1,702,227 84,339 2008 1,045,893 85,111 2009 1,266,612 52,295 2010 1,333,659 63,331 2011 1,244,801 66,683 Total withdrawals: $1,251,719
Customizing withdrawals Over time, your income needs will probably vary. Your financial adviser can help you work out a plan that fits your circumstances. Here are a few examples, based on a hypothetical investment of $100,000, over the 20-year period ended December 31, 2011: Dividends in cash. $97,862 $306,236 Dividends in in in cash Ending value Year Dividends in cash Ending value 1992 $2,595 $100,553 1993 2,646 109,470 1994 2,807 106,847 1995 3,023 136,199 1996 3,151 159,140 1997 3,284 202,984 1998 3,695 245,396 1999 4,057 281,669 2000 4,556 287,889 2001 4,849 269,858 2002 4,933 226,219 2003 5,010 279,952 2004 5,048 301,977 2005 6,678 315,869 2006 7,454 358,337 2007 7,058 372,480 2008 7,687 236,940 2009 6,444 293,349 2010 6,330 318,332 2011 6,557 306,236 Total dividends in cash: $97,862 Self-adjusting withdrawals. (Assumes monthly withdrawals at an annual rate of 5% of the previous year’s account value.) $172,457 $171,322 Total withdrawals Ending value Year Withdrawals Ending value 1992 $ 5,000 $ 97,982 1993 4,899 104,151 1994 5,208 99,099 1995 4,955 123,740 1996 6,187 140,827 1997 7,041 174,804 1998 8,740 204,967 1999 10,248 227,662 2000 11,383 224,780 2001 11,239 203,376 2002 10,169 164,557 2003 8,228 198,076 2004 9,904 206,787 2005 10,339 210,086 2006 10,504 232,153 2007 11,608 234,278 2008 11,714 143,947 2009 7,197 174,324 2010 8,716 183,552 2011 9,178 171,322 Total withdrawals: $172,457 Fixed-amount withdrawals. (Assumes monthly withdrawals at an annual rate of 5% of the initial $100,000 investment.) $100,000 $267,234 Total withdrawals Ending value Year Withdrawals Ending value 1992 $5,000 $ 97,982 1993 5,000 104,044 1994 5,000 99,199 1995 5,000 123,819 1996 5,000 142,237 1997 5,000 178,953 1998 5,000 214,317 1999 5,000 244,315 2000 5,000 248,587 2001 5,000 232,247 2002 5,000 194,022 2003 5,000 239,124 2004 5,000 257,132 2005 5,000 269,520 2006 5,000 307,045 2007 5,000 320,265 2008 5,000 205,199 2009 5,000 254,893 2010 5,000 277,004 2011 5,000 267,234 Total withdrawals: $100,000 The ICA Guide 21
Page 1 and 2: The ICA Guide 2012 edition Investor
Page 3 and 4: ICA: A 78-year history of success O
Page 5 and 6: The Klausens invested their $200,00
Page 7 and 8: Investing in stocks requires skill
Page 9 and 10: How ICA is managed A fund’s long-
Page 11 and 12: $100,000,000 70,000,000 50,000,000
Page 13 and 14: Oil embargo 0.6 7.9 .4 .1 Nixon res
Page 15 and 16: Time, not timing, is what matters D
Page 17 and 18: The benefit of time Long-term inves
Page 19: Growth over a wide variety of perio
Page 23 and 24: A rare opportunity If The Investmen

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