Formulating A Retirement Strategy

1. Social Security

Social Security is the foundation on which you can build a secure retirement. If you have average earnings, you can expect your Social Security benefits to replace approximately 40% of those earnings. The percentage will be lower for people in the upper income brackets and higher for people with low incomes. To help you plan for retirement, each year the Federal Government sends you a personal Social Security Statement, which provides you with an estimate of the monthly benefit amounts you and your family may qualify for now and in the future. Your benefit amount is based on your earnings averaged over most of your working career. Your benefit amount also is affected by your age at the time you start receiving benefits. If you start your retirement benefits at age 62 (the earliest possible retirement age) your benefit will be lower than if you wait until your full retirement age. To learn more about Social Security Programs and access benefit calculators to test different ages or future earnings amounts, visit the Social Security Administration website at www.ssa.gov.

2. Company Pension Plans

Employers who sponsor a pension plan provide another source of retirement income. If you work for such a company, then your retirement plan likely falls into one of the following categories:

• Defined Benefit (DB) Plan: This is the traditional plan that promises to pay the employee a specific benefit on retirement - based on years of service, salary and age at retirement. Entirely funded by the employer, contributions and certain operational fees are tax-deductible.
• Defined Contribution (DC) Plan: A defined contribution plan provides an individual account for each participant. The benefits are based on the amount contributed and are also affected by income, expenses, gains and losses. Some examples of defined contribution plans include 401(k) plans, 403(b) plans, employee stock ownership plans and profit sharing plans. The 401(k) plan has become one of the most popular retirement plans for employers and employees alike. Employees defer a percentage of their own pre-tax compensation for retirement and their employer may match some or all of those pre-tax contributions.

3. Individual Retirement Accounts (IRAs)

An IRA is a long-term savings account that allows you to invest for your future while providing you with the opportunity to benefit from tax advantages along the way. The two most popular IRAs are the Traditional IRA and Roth IRA. Each has their own unique benefits and it may be helpful to speak to an HSBC Securities Financial Advisor at 1-800-662-3343 to assist you in determining which type of IRA is most appropriate for you. To learn more about the Traditional and Roth IRA, including an IRA comparison chart, view the links below:

• Traditional IRA
• Roth IRA
• IRA Comparison Chart

In addition to an IRA account, your HSBC Financial Advisor can work with you to develop an investment plan to help you prepare for a secure future.

Securities and annuities are provided by Registered Representatives and Insurance Agents of HSBC Securities (USA) Inc., member NYSE/FINRA/SIPC, registered Futures Commission Merchant, a wholly-owned subsidiary of HSBC Markets (USA) Inc. and an indirectly wholly-owned subsidiary of HSBC Holdings plc.

Insurance products are offered through Insurance Agents of HSBC Insurance Agency (USA) Inc., a wholly-owned subsidiary of HSBC Bank USA, N.A., an affiliate of HSBC National Bank USA, and an indirectly wholly-owned subsidiary of HSBC Holdings plc. Products and services may vary by state and are not available in all states.

Securities, Annuities and Insurance Products are:

HSBC Securities (USA) Inc. or any other member of the HSBC Group may from time to time underwrite, perform or seek to perform investment banking services for issuers or make a market or otherwise buy or sell as principal securities or other instruments, or together with the issuers directors, officers and employees may have either a long or short position in securities, commodities, currencies or other instruments or futures or options contracts convertible into securities or other instruments.

All decisions regarding the tax implications of your investment(s) should be made in connection with your independent tax advisor.