ConservativeChoose a rate of return from 1% up to 4%. Assumes a portfolio of 20% equity and 80% fixed income. Returns for the taxable portfolio reflect approximately an 85% exposure to ordinary income and short-term capital gains tax rates and a 15% exposure to long-term capital gains and qualified dividends tax rates each year. Qualified dividends are taxed at the long-term capital gains rate.

Moderately ConservativeChoose a rate of return from 1% up to 5%. Assumes a portfolio of 35% equity and 65% fixed income. Returns for the taxable portfolio reflect approximately a 74% exposure to ordinary income and short-term capital gains tax rates and a 26% exposure to long-term capital gains and qualified dividends tax rates each year. Qualified dividends are taxed at the long-term capital gains rate.

ModerateChoose a rate of return from 1% up to 6%. Assumes a portfolio of 50% equity and 50% fixed income. Returns for the taxable portfolio reflect approximately a 63% exposure to ordinary income and short-term capital gains tax rates and a 37% exposure to long-term capital gains and qualified dividends tax rates each year. Qualified dividends are taxed at the long-term capital gains rate.

Moderately AggressiveChoose a rate of return from 1% up to 7%. Assumes a portfolio of 65% equity and 35% fixed income. Returns for the taxable portfolio reflect approximately a 52% exposure to ordinary income and short-term capital gains tax rates and a 48% exposure to long-term capital gains and qualified dividends tax rates each year. Qualified dividends are taxed at the long-term capital gains rate.

AggressiveChoose a rate of return from 1% up to 8%. Assumes a portfolio of 80% equity and 20% fixed income. Returns for the taxable portfolio reflect approximately a 41% exposure to ordinary income and short-term capital gains tax rates and a 59% exposure to long-term capital gains and qualified dividends tax rates each year. Qualified dividends are taxed at the long-term capital gains rate.

CustomChoose a rate of return from 1% to 8%. Also choose the amount of exposure to long-term capital gains tax rates using the slider; the remainder will be exposed to short-term capital gains tax rates.

Investment risks:There are risks associated with fixed income investments, including credit risk, interest rate risk and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is more pronounced for longer-term securities. In general, equity securities tend to have greater price volatility. The market value of securities may fall, fail to rise, or fluctuate, sometimes rapidly and unpredictably. Market risk may affect a single issuer, sector of the economy, industry, or the market as a whole.

The portfolio exposure to different tax rates was determined by the RiverSource Fund Management Group

The Taxable Portfolio contains a combination of after-tax principal and after-tax earnings which are reinvested. Annual earnings are reduced by current year income taxes with a portion taxed at ordinary income tax rates and a portion taxed at the corresponding lower long-term capital gains rate.

The Tax-Deferred Portfolio generally contains a combination of after-tax principal and untaxed earnings. Untaxed earnings can contribute to the portfolio’s growth and will be taxed at ordinary income tax rates when withdrawn from the account.

The graph shows both accumulation and income values for a taxable portfolio and tax-deferred portfolio assuming a hypothetical average annual return (reflected in the inputs). This does not represent the actual return of any investment, and may not be indicative of what you may experience for the portfolio selected. Fees would reduce the figures shown. Lower maximum tax rates on long-term capital gains and qualified dividends would make the investment return for the taxable investment more favorable, thereby reducing the difference between the investments shown. Losses recognized on taxable investments may provide current income tax benefits, potentially increasing the favorability of taxable accounts. Any federal and/or state tax penalties (e.g. for early withdrawals) would reduce the figures for tax-deferred investments. The taxable portfolio reflects a long-term capital gains exposure based on the investment portfolio you selected. Qualified dividends are taxed at the long-term capital gains rates. Taxation of both portfolios is based on the inputs provided; actual taxation will depend on either your individual tax circumstances or your beneficiary’s individual tax circumstances. You should consider your investment horizon and income-tax bracket, both current and anticipated, when making an investment decision, as these may further impact the results of the comparison. Any earnings in the tax-deferred portfolio are treated as fully taxable at ordinary income tax rates upon withdrawal.

This reflects after tax income. If there are earnings, a higher amount will be withdrawn from the tax-deferred portfolio to account for taxes.

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An increase in value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold. A short-term capital gain is from the sale of a capital asset held for one year or less. A long-term capital gain is form the sale of a capital asset held for more than one year.

Earnings

The profit that a company generates over a specific period of time.

Nonqualified assets

Assets that do not "qualify" for certain tax treatments or tax advantages related to retirement plans.

Qualified assets

Assets held in an account that "qualifies" for certain tax treatments and/or tax advantages. Examples include certain employee retirement plans or individual retirement accounts (IRAs). Investment earnings for these accounts are tax deferred. When withdrawn, the taxation of earnings or pre-tax contributions is dependent on the account type and circumstances surrounding the withdrawal. For example, the withdrawal of earnings from a Roth IRA is generally tax-free.

Ordinary Income

Income that is taxed at the highest federal tax rates.

Qualified dividends

Qualified dividends are the ordinary dividends subject to the same 0% or 15% maximum tax rate that applies to net capital gain.

Tax-deferred

Generally, income tax is levied only upon maturity or withdrawal of funds. In some cases there may be a penalty for early withdrawal.

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