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T. Rowe Price
Retirement Funds Investment Review
Presented by:
Jerome Clark, CFA
Portfolio Manager
February 11, 2009
Wyatt Lee, CFA
Investment Analyst
Webinar Dial-In: 1-877-407-6910
Passcode: T. Rowe Price
Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Today’s Agenda
I. Introduction
II.
T. Rowe Price Target Date Overview
III. Case for Target Date Equity Exposure
IV.
2008 Retirement Fund Performance and Attribution
V. Questions
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Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Biographical Backgrounds
Jerome A. Clark, CFA
Jerome Clark is a vice president of T. Rowe Price Group, Inc., T. Rowe Price Associates, Inc., and a
portfolio manager in the Asset Allocation Group. He manages the Program for Charitable Giving
portfolios, College Savings Plan portfolios, and the T. Rowe Price Retirement Funds. Jerome is a
vice president of the Personal Strategy Funds and an Investment Advisory Committee member of
the Spectrum Funds. He is also a member of the Asset Allocation Committee. Prior to joining the
firm in 1992, Jerome was a Captain in the United States Marine Corps and spent three years as a
mathematics instructor at the U.S. Naval Academy. He earned a B.S. in mathematics from the
U.S. Naval Academy, an M.S. in operations research from the Naval Postgraduate School, and an
M.B.A. in finance from Johns Hopkins University. Jerome has also achieved the Chartered
Financial Analyst accreditation.
Wyatt A. Lee, CFA
Wyatt Lee is a vice president of T. Rowe Price Associates, Inc. and is an investment analyst in the
Asset Allocation Group. Previously, Wyatt was based in T. Rowe Price’s London office and was
responsible for developing a portfolio and performance analysis function to focus on non-U.S.
equity strategies. He has also managed a team of investment performance analysts in the Equity
Division. Prior to joining the firm in 1999, he was a research analyst for Summit Strategies
Group, an institutional investment consultant. He earned a B.Sc. in mathematics and political
science, cum laude, from Vanderbilt University and an M.B.A. in finance from the Olin School of
Business at Washington University, where he was a Charles F. Knight Scholar. Wyatt has also
achieved the Chartered Financial Analyst accreditation.
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Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

T. Rowe Price Target Date Overview
Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

T. Rowe Price Asset Allocation Snapshot
Asset Allocation Assets Under Management: $46.2 Billion 1
As of December 31, 2008
1 The combined asset allocation assets under management of the T. Rowe Price group of companies. The t. Rowe Price group of
companies includes T. Rowe Price Associates, Inc., T. Rowe Price international, Inc., T. Rowe Price Global Investment Services
Limited, and T. Rowe Price (Canada), Inc.
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Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Retirement Funds Investment Philosophy
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Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Retirement Funds Glidepath
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Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Retirement Funds Performance
Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal
value, and return will vary, and you may have a gain or loss when you sell your shares. To obtain the most recent month-end performance, call
1-800-638-7890.
Request a prospectus, which includes investment objectives, risks, fees, expenses, and other information that you should read and consider
carefully before investing
Effective May 31, 2008, the broad weighted index for each fund changed to include the Russell 3000 Index, MSCI All Country World Ex U.S.
Index, the Barclays Capital U.S. Aggregate Index, and the Citigroup 3-Month Treasury Bill Index. Prior to this change, the broad weighted
index for each fund was comprised of the Dow Jones Wilshire 5000 Composite Index, the MSCI EAFE Index, the Barclays Capital U.S.
Aggregate Index, and the Citigroup 3-Month Treasury Bill Index. Each index is weighted at the appropriate strategic neutral allocation of
its respective asset class, which is predetermined and changes over time. Historical benchmark representations have not been restated.
The most recent mix of underlying indices as of December 31, 2008 can be found on page 29.
Figures include changes in principal value, reinvested dividends, and capital gain distributions.
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T. Rowe Price Investment Services, Inc., Distributor.
For Institutional Investor Use Only
Copyright 2009. T. Rowe Price Investment Services, Inc.

Peer Group Performance Comparison
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Fund Returns have been affected by market volatility and are negative for certain periods.
Results will vary for other periods, and all funds are subject to market risk. Past performance cannot guarantee future results.
Lipper rankings are based on cumulative total return.
Source: Lipper, Inc.
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Copyright 2009. T. Rowe Price Investment Services, Inc.

Peer Group Comparison
Fund Returns have been affected by market volatility and are negative for certain periods.
Results will vary for other periods, and all funds are subject to market risk. Past performance cannot guarantee future results.
Lipper rankings are based on cumulative total return.
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Source: Lipper, Inc.
For Institutional Investor Use Only
Copyright 2009. T. Rowe Price Investment Services, Inc.

Case for Target Date Equity Exposure
Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Case for Target Date Equity Exposure
• Target-date products are designed for investors with a very diverse set of
retirement needs.
• T. Rowe Price target-date products are designed to provide assets from which to
draw retirement income over a long horizon. We recognize few investors need all
their assets at retirement.
• Under conservative retirement assumptions, most asset allocation strategies result
in successful retirement outcomes.
• Higher equity allocation is especially important to compensate for under-saving and
over-withdrawing behavior seen among plan participants.
• An extended glidepath design maintains the potential benefits of equity exposure in
retirement while re-distributing risk across the lifetime of the fund.
We believe adequate equity exposure and an extended glidepath best position
investors for a successful retirement.
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Copyright 2009. T. Rowe Price Investment Services, Inc.
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Plan Participant Behavior
Savings Rate
Withdrawal Rate
>15%
8.8%
9-10%
3.2% - Employer
Contribution 2
5.6% - Employee
Contribution 3
4%
Recommended Actual 1
Recommended Actual 4
1 Profit sharing/401(k) Council of America 51 st annual series (9/2008).
2 Non-highly compensated workers.
3 401(k) plan only.
4 T. Rowe Price plans (60-69 years old with installment sales).
Participant behavior is typically to under-save and over-withdraw.
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Copyright 2009. T. Rowe Price Investment Services, Inc.
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Longevity: Underlying Driver of Retirement Risk
Odds of at Least One Member of a 65-Year-Old Couple Living to Age….
Retirees face an increasing risk of “living too long” rather than “dying to soon.”
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Copyright 2009. T. Rowe Price Investment Services, Inc.
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Importance of Equity Exposure to Minimize Risk of Outliving Assets
Likelihood that payment stream duration exceeds 30 years
100
Stimulation Success Rate (%)
90
80
70
60
50
40
30
20
10
4% annual withdrawal
5% annual withdrawal
6% annual withdrawal
8% annual withdrawal
1
1
1
1
0
100% Fixed Income 20% Equity/ 80%
Fixed Income
40% Equity/ 60%
Fixed Income
60% Equity/ 40%
Fixed Income
80% Equity/ 20%
Fixed Income
100% Equity
• Virtually all asset allocations support a recommended 4% withdrawal rate with 90% success.
• Higher (5% and above) withdrawal rates benefit from higher equity allocations.
Adequate equity exposure is necessary to successfully fund long retirement horizons.
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1 Withdrawal increases annually by 3%.
Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Importance of Equity Exposure for Balances Late in Retirement
250
Purchasing Power Remaining 30 Years Post-Retirement
Purchasing Power Remaining (%)
200
150
100
50
0
100% Fixed
Income
20% Equity/
80% Fixed
Income
40% Equity/
60% Fixed
Income
60% Equity/
40% Fixed
Income
80% Equity/
20% Fixed
Income
100% Equity
Median Purchasing Power Remaining,
4% initial withdrawal1
25th percentile Purchasing Power
Remaining, 4% initial withdrawal
1
Median Purchasing Power Remaining,
6% initial withdrawal1
25th percentile Purchasing Power
Remaining, 6% initial withdrawal 1
• Purchasing power remaining is an indication of the cushion provided.
• Remaining purchasing power universally increases with equity.
Equity exposure in retirement can help provide a cushion against unplanned events.
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1 Withdrawal increases annually by 3%.
Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Consideration of Downside at Retirement
Likelihood of Annual Return Less Than
20
Probability (%)
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100% Fixed Income
20% Equity/80% Fixed Income
40% Equity/60% Fixed Income
60% Equity/40% Fixed Income
80% Equity/20% Fixed Income
100% Equity
4
0
-5%
-10%
The risk of significant negative market returns should be taken into consideration.
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Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Distribution
A glidepath design maintains potential benefits of equity in retirement,
while re-distributing the risk.
1 55-20 Glidepath represents a 55% Equity/45% Fixed Income allocation at retirement that linearly decreases
equity exposure over 30 years. The final allocation is 20% Equity/80% Fixed Income.
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Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Historical Analysis of Alternative Glidepaths
$10,000,000
Resulting Value of $1MM Investment at Retirement 1
30-Year Horizon, 4% Initial Withdrawal, Inflation Adjusted 2
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$0
-$2,000,000
12/55 12/60 12/65 12/70 12/75 12/80 12/85 12/90 12/95 12/00 12/05
12/08
T. Rowe Price Glidepath Balance 10% Equity to Fixed Income Balance 20% Equity to Fixed Income Balance
3 4 5
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Equity = S&P 500 Index, Fixed Income = 1926-1972 U.S. IT Gov’t Index; 1973-1975 LB Gov’t/Corp Index; 1976-Present Barclays U.S. Aggregate Index
(formerly Lehman Brothers U.S. Aggregate Index), Cash = U.S. 30 Day T-Bills.
1 Positive balances reflect surplus assets at the end of a 30-year retirement horizon. Negative balances reflect the shortfall amount needed to fund the
specified withdrawals.
2 Assumes withdrawal increases annually by the % change in the Consumer Price Index for all Urban Consumers (CPI-U), not seasonally adjusted (if
greater than 0% (if annual % change of CPI-U is negative).
3 See p. 7 for T. Rowe Price Glidepath.
4 T. Rowe Price Glidepath with equity allocation reduced by 10% and fixed-income allocation increased by 10%, with minimum equity allocation of 20%.
5 T. Rowe Price Glidepath with equity allocation reduced by 20% and fixed-income allocation increased by 20%, with minimum equity
allocation of 20%.
Source: Ibbotson Associates, T. Rowe Price.
Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Historical Analysis of Alternative Glidepaths
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
-$500,000
Difference in Resulting Value of $1MM Investment at Retirement 1
30-Year Horizon, 4% Initial Withdrawal, Inflation Adjusted 2
12/55 12/60 12/65 12/70 12/75 12/80 12/85 12/90 12/95 12/00 12/05 12/08
T. Rowe Price Glidepath Balance vs. 10% Equity to Fixed Income Balance
T. Rowe Price Glidepath Balance vs. 20% Equity to Fixed Income Balance
1 Positive differences reflect higher ending assets in T. Rowe Price Glidepath. Negative differences reflect
lower ending assets in T. Rowe Price Glidepath.
2 Assumes withdrawal increases annually by the %change in the Consumer Price Index for all Urban Consumers (CPI-U),
not seasonally adjusted (if greater than 0% (if annual % change of CPI-U is negative).
Source: Ibbotson Associates, T. Rowe Price.
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Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Accumulation
Equity = S&P 500 Index, Fixed Income = 1968-1972 U.S. IT Gov’t Index; 1973-1975 LB Gov’t/Corp Index; 1976-Present Barclays U.S.
Aggregate Index (formerly Lehman Brothers U.S. Aggregate Index).
Source: Ibbotson Associates, T. Rowe Price.
Assuming contribution rate = 9%, starting salary = $50,000, and final salary = $50,000*1.03^39.
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Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

2008 Retirement Fund Performance & Attribution
Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Retirement Funds Performance Relative to Benchmark
Effective May 31, 2008, the broad weighted index for each fund changed to include the Russell 3000 Index, MSCI All Country World Ex U.S. Index, the Barclays
Capital U.S. Aggregate Index, and the Citigroup 3-Month Treasury Bill Index. Prior to this change, the broad weighted index for each fund was comprised of the
Dow Jones Wilshire 5000 Composite Index, the MSCI EAFE Index, the Barclays Capital U.S. Aggregate Index, and the Citigroup 3-Month Treasury Bill Index.
Each index is weighted at the appropriate strategic neutral allocation of its respective asset class, which is predetermined and changes over time. Historical
benchmark representations have not been restated.
The most recent mix of underlying indices as of December 31, 2008 can be found on page 29.
Past performance cannot guarantee future results.
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Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Retirement Funds 1 Sources of Value Added – Total Fund
1 The funds’ investment in many underlying funds means that they will be exposed to the risks of different areas of the market. Investors should note that the higher the fund’s
allocation to stocks, the greater the risk.
Value Added: the performance difference between the portfolio and its custom benchmark.
Structural Effect: the impact of any differences between the portfolio's strategic neutral design and its benchmark, including the use of investment sectors that are not
represented in the benchmark, and the performance differences between an asset class and the underlying investment sectors chosen to represent it.
Allocation Effect: the aggregate performance impact of differences in the portfolio asset classes & sector weights relative to their blended sector benchmarks.
Selection Effect: the aggregate impact of the performance difference between the underlying sector portfolios and their respective sector indices.
Cash Flow & Rebalancing: the impact of intra-month cash flows and rebalancing transactions.
Performance used in calculations are net of fees.
Numbers may not add to 100% due to rounding; all numbers are percentages.
Analysis represents the total fund performance of each fund relative to its respective broad weighted benchmark as calculated by T. Rowe Price’s proprietary attribution
model, and includes all underlying mutual funds.
Figures shown are net of fees.
24 Past performance cannot guarantee future results.
For Institutional Investor Use Only
Copyright 2009. T. Rowe Price Investment Services, Inc.

Retirement Funds Major Contributors & Detractors
Structural Effect and Allocation Effect
One Year Ending December 31, 2008
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Totals for each effect may not be equivalent to underlying component pieces due to the exclusion of component effects that can be
considered immaterial in size.
Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Retirement Funds Major Contributors & Detractors
Security Selection Effect
One Year Ending December 31, 2008
1 Represents International Stock Fund, International Growth & Income Fund, and Overseas Stock Fund.
Totals for each effect may not be equivalent to underlying component pieces due to the exclusion of component effects that can
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be considered immaterial in size.
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Copyright 2009. T. Rowe Price Investment Services, Inc.

Retirement Funds Benchmark Allocations
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Effective May 31, 2008, the broad weighted index for each fund changed to include the Russell 3000 Index, MSCI All Country World Ex U.S. Index, the Barclays
Capital U.S. Aggregate Index, and the Citigroup 3-Month Treasury Bill Index. Prior to this change, the broad weighted index for each fund was comprised of the
Dow Jones Wilshire 5000 Composite Index, the MSCI EAFE Index, the Barclays Capital U.S. Aggregate Index, and the Citigroup 3-Month Treasury Bill Index. Each
index is weighted at the appropriate strategic neutral allocation of its respective asset class, which is predetermined and changes over time. Historical benchmark
representations have not been restated.
Copyright 2009. T. Rowe Price Investment Services, Inc.
For Institutional Investor Use Only

Overview of Monte Carlo Analysis
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For Institutional Investor Use Only

Overview of Monte Carlo Analysis
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82288 2/09
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For Institutional Investor Use Only