Susan & David Example

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2015 Planning - Retirement @ 65

Personal Financial Analysis

Susan & David Example

for

A Registered Investment Advisor 2430 NW Professional Drive Corvallis, OR 97330

Asset Advisors Example, LLC

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Objectives

^A1

2015 Planning - Retirement @ 65

Your personal financial plan was prepared with concern for your specific goals and objectives. As you review this report, determine if your goals are obtainable or whether adjustments should be considered.

* Inflation Adjusted Expenses

* Monthly Expenses in Today's Dollars RETIREMENT OBJECTIVES:

Age Your financial plan is based on the

following income requirements.

$9,429 ^{G4, G12}

65 $8,038

10,935 7,406

73

7,406

82 14,176

* Includes basic personal expenses, itemized deductions, insurance, mortgage and debts, savings and investment deposits.

SURVIVOR OBJECTIVES:

In the event of your premature death, you indicated that your heirs would need the following amounts of monthly income:*

David Susan

$4,733 ^{F6, F4}

Initial income amount needed: $4,755

*Amount of expenses will vary. Refer to Survivor report for details. Includes basic personal expenses, insurance premiums, itemized deductions and loan payments.

Your financial analysis includes consideration of the cost of educating your children. Education costs now represent one of the most substantial expenses for a family. Unless careful planning and preparation is performed, these costs could seriously affect your ability to accumulate funds for your retirement.

EDUCATION FUNDING:

Name Cost / year Inflated cost at 3.90% ^A20

Bonnie $15,100 $77,524

Andy 16,400 72,250

$149,774 Total

OTHER:

Estimates used in the reports are based on a life expectancy age for Susan of 91.

The life expectancy age for David is assumed to be 90.

You have indicated additional financial goals including:

Age Amount

Inflation Rate %

A17

Retirement trip 61 $15,000 6.00

Sail boat 65 20,000 4.00

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Net Worth

A4

The Net Worth graph illustrates the amount of your assets, including savings, investments, retirement accounts, and personal assets, less liabilities such as mortgages, loans, credit card balances, etc.

Your objective should be to measure your net worth on a regular schedule in order to assure that you are improving your financial strength.

Assets: $1,281,187

Ordinary income accounts $159,603 359,254 Investment accounts

199,000 Retirement accounts

50,580 Personal assets

($399,140) Less Debts

$882,047 Net Worth

A5

Real estate 512,750

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Net Worth Statement

^A5

Susan David Joint / CP Trust/Other Total

Ordinary Income Accounts:

$12,200

Checking accounts, cash $12,200

3,500

Savings accounts 3,500

31,603

Money Market Accounts 31,603

20,000

Certificate of Deposit 20,000

22,000

Gov't bonds, T-Bills, funds 22,000

25,000

Muni bonds, funds 25,000

30,000

Annuities (fixed, variable) 30,000

12,450 2,850

Insurance Cash Value and Dividends 15,300

Total 42,450 28,350 88,803 159,603

Equity (Investment) Accounts:

15,000 45,429

Stocks 60,429

242,417 2,745 29,063

Mutual Funds 274,225

24,600

Other ventures/businesses 24,600

Total 257,417 2,745 99,092 359,254

Retirement Accounts:

93,500

401(k) accounts 93,500

77,300

403(b), SEP, Simple 77,300

16,000

Roth accounts 16,000

12,200

Inherited IRAs 12,200

Total 105,700 93,300 199,000

Personal Use Assets:

15,000

Personal Property 15,000

2,500

Jewelry, furs 2,500

12,000 19,600

Autos 31,600

1,480

Stock Options (Bargain Element) 1,480

Total 28,480 2,500 19,600 50,580

Real Estate Assets:

307,000

Residence 307,000

5,750

Real Estate, REIT 5,750

200,000

Rental real estate 200,000

Total 312,750 200,000 512,750

ASSETS

$407,495 $1,281,187

Total Assets $746,797 $126,895

Susan David Joint / CP Trust/Other Total

LIABILITIES

($272,000)

Residence mortgage ($272,000)

(6,640)

Credit Cards (6,640)

(2,500)

Life insurance loans (2,500)

(118,000)

Rental real estate (118,000)

($390,000.00) ($399,140)

Total Liabilities

NET WORTH $126,895 $17,495 $882,047

Note: Assets held in a Revocable Trust are included in the grantors assets.

$737,657

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Asset Summary

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Account Value

Percent of Total

Weighted Average*

Rate of Return

Assets by TYPE: _C8

This view looks at your retirement assets by the way they are treated for income taxes (the retirement estimate report uses this grouping for illustrating future values).

$47,303 7.26% 2.44%

Taxable

350,004 53.74% 7.45%

Equity/Other

30,000 4.61% 7.25%

Tax-Deferred

25,000 3.84% 5.70%

Tax-Free

183,000 28.10% 6.21%

Retirement accounts

16,000 2.46% 4.00%

Roth accounts

6.58%

$651,307 100%

* Weighted average rate excludes assets which were not intended to be used for retirement.

Note: The Weighted Average Rate of Return is derived from the asset rates provided by you as shown on the Asset Detail report page. The effective return from each asset is computed and summed by type, and that sum is divided by the total value of that type asset. The resulting

weighted average reflects an estimated portfolio rate of return for that asset type. The rates used are assumed to be net of all fees and expenses.

Savings &

Investments

Retirement Accounts

Percent of Total

Assets by CLASS: _B8

This view is focused on the asset classes. It should be used to help you determine if your assets are positioned in concert with your own goals.

$12,200 1.72%

Reserves

102,103 28,200 18.40%

Income

47,417 6.69%

Growth and income

225,416 170,800 55.94%

Growth

122,171 17.25%

Aggressive Growth

100%

$509,307 $199,000

Savings &

Investments

Retirement Accounts

Percent of Total Assets by LIQUIDITY:

This view is concerned with the amount of liquid funds available. Refer to the Liquidity report for a more graphic illustration.

$47,303 $16,000 8.94%

Cash and Reserves

431,654 170,800 85.06%

Liquid

5,750 12,200 2.53%

Non-Liquid

24,600 3.47%

Other

$509,307 $199,000 100%

Note: Some of the assets listed here may have been excluded from the retirement projection. Refer to the Asset Detail report for specifics.

Assets listed include only "working" assets, not residence and personal property assets or insurance cash values.

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Liquidity

The above graph illustrates the liquidity level of your working assets, measuring the ability to convert working assets to cash if needed.

If you have too much of your money in "non-liquid" investments you may someday find yourself in a position where you need to have quick cash, but are unable to convert enough of your assets quickly.

Working Assets*

Total Assets**

Cash & Reserves Liquid

Non-Liquid Other

Your total liquidity level including your residence and personal property is 52%.

Your working asset liquidity ratio (cash and liquid assets divided by all working* assets) is 73%

$63,303 602,454 24,600 588,330

$63,303 602,454 217,950 24,600

This level of working asset liquidity should be adequate except in severe cases.

* Excluding residence and personal assets. Includes retirement accounts and rental real estate.

** Includes residence and personal assets in non-liquid category.

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A13

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Cash Flow

The information you provided for this analysis indicates that your income is greater than your scheduled expenses.

Monthly

You might consider using your surplus income for additional savings or investments.

You should regularly review your cash flow to determine if there are changes required in your spending habits.

Savings and Investments Living Expenses

Taxes Insurance

(2,008) (4,209) (3,237) (487)

(24,098) (50,480) (38,852) (5,835) Mortgage

Loan payments Income available

Total spending

Spendable income surplus

(2,400) (100)

(28,800) (1,200)

($12,441) ($149,265)

$919 $11,057

$13,360 $160,322

The graph above shows the relationship of your expenditures to your available income. The expenditures group includes your personal expenses as well as taxes, insurance premiums, debt and mortgage payments, savings and investments deposits.

Annual

Less:

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A15

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Cash Flow

^A15

Monthly Amount

Annual Amount

Percent of Income INCOME

$10,000 $120,000

Salaries & Wages 74.85% ^D3

2,083 25,000

Self Employment Income (Sch C) 15.59% ^H8

237 2,844

Interest 1.77% ^H1...H4

213 2,560

Dividends 1.59% ^H2

211 2,527

Capital Gains / Losses (Sch D) 1.58% ^H2

552 6,628

Rental Real Estate 4.13% ^B15

64 763

Required Minimum Dist. 0.48%

Total income available $13,360 $160,322 100.00%

Percent of Income EXPENSES

$2,178 $26,140

Federal and State Income Tax 16.30% ^D3

1,059 12,712

FICA Taxes 7.93% ^D3

2,400 28,800

Residence Mortgage 17.96% ^K1

100 1,200

Credit Cards 0.75% ^K1

306 3,670

Life Insurance 2.29% ^J1

65 785

Homeowners & Other Insurance 0.49% ^G15

78 930

Auto Insurance 0.58% ^G15

38 450

Disability Insurance 0.28% ^G15

261 3,132

Saving and Investment Additions 1.95% ^G12

941 11,296

Retirement Account Additions (IRA, 401(k), TSA, etc.) 7.04% ^G12

661 7,930

Reinvestment of Interest, Dividends and Capital Gains 4.95% ^H1...H4

145 1,740

Education Fund Deposits 1.09% ^A24

167 2,000

Charitable Contributions 1.25% ^D3

512 6,140

Property Tax 3.83% ^D3

417 5,000

Medical Expenses 3.12% ^D3

875 10,500

Food and Household Expenses 6.55%

445 5,340

Utilities 3.33%

367 4,400

Auto Operating and Maintenance 2.75%

167 2,000

Holidays 1.25%

250 3,000

Domestic Help 1.87%

300 3,600

Clothing 2.25%

417 5,000

Property Improvements/Upkeep 3.12%

167 2,000

Vacations 1.25%

83 1,000

Pet Expenses 0.62%

42 500

Books/Subscriptions 0.31%

Total spending and savings $12,441 $149,265 93.12%

Cash flow surplus (Income less Spending) $919 $11,057

Note: Items on this report represent only current year income and expenses. Amounts will vary in future years.

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Future Cash Flow at Susan's Age 65

^A15a

Percent of Income INCOME

$203 $2,439

Interest 4.83% ^H1...H4

275 3,302

Dividends 6.54% ^H2

272 3,260

Capital Gains / Losses (Sch D) 6.47% ^H2

815 9,775

Rental Real Estate 19.39% ^B15

200 2,400

Pension Income 4.76%

99 1,186

Required Minimum Dist. 2.35%

2,340 28,078

Social Security 55.66%

Total income available $4,204 $50,440 100.00%

Percent of Income EXPENSES

$1,297 $15,565

Total Income Taxes 30.85% ^D4

2,400 28,800

Residence Mortgage 57.09% ^K1

100 1,200

Credit Cards 2.38% ^K1

405 4,865

Life Insurance 9.63% ^J1

84 1,006

Homeowners & Other Insurance 2.00% ^G15

99 1,191

Auto Insurance 2.35% ^G15

750 9,001

Reinvestment of Interest, Dividends and Capital Gains 17.84% ^H1...H4

100 1,200

Education Fund Deposits 2.38% ^A24

205 2,460

Charitable Contributions 4.88% ^G6

588 7,053

Property Tax 13.99% ^G6

586 7,036

Medical Expenses 13.94% ^G6

4,763 57,155

Other Net Expense 113.30% ^G8

1,281 15,371

Miscellaneous Expense 30.47%

801 9,607

Food and Household Expenses 19.05%

570 6,840

Utilities 13.56%

406 4,867

Auto Operating and Maintenance 9.66%

214 2,562

Holidays 5.09%

320 3,843

Domestic Help 7.61%

256 3,074

Clothing 6.09%

534 6,405

Property Improvements/Upkeep 12.70%

320 3,843

Vacations 7.61%

107 1,281

Pet Expenses 2.55%

53 640

Books/Subscriptions 1.26%

Total spending and savings $16,239 $194,865 386.27%

($12,035) ($144,425)

Note: Items on this report represent only current year income and expenses. Amounts will vary in future years.

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0.00%

6.97%

66.33%

24.00%

2.71%

$0

$63,303

100%

$908,307 TOTAL

More Conservative

(This section does not represent assets, but is an important basis for a solid financial plan.)

ESTATE and FAMILY PROTECTION Life, medical, and disability insurance

(The retirement account assets are included in the above groups.) RETIREMENT ACCOUNTS

CASH and RESERVES Stocks, Bonds Mutual Funds, CDs LIQUID INVESTMENTS

NON - LIQUID Partnerships

Real Estate, Mortgage, Notes

$217,950

$602,454

$24,600

Other Assets, Business Interests, etc.

Percent of Total More Aggressive

Asset Pyramid Chart

Proper management of your assets requires an understanding of the relationship between RISK and REWARD.

The pyramid below illustrates the assets by levels, with the safest at the bottom and the risk generally increasing as you near the top of the pyramid.

Dollar Amount

B3

Checking, Savings

Money Market, US Savings Bonds.

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Asset Allocation

As you manage your portfolio of savings and investment assets, it is important that you consider how the characteristics of each asset matches your overall level of risk tolerance and your current financial goals. The chart below illustrates a suggested percentage of assets for various risk tolerance levels.

B6

Conservative Moderate Very

Conservative

Asset Class _Aggressive

Your risk profile indicates an investor type of : Conservative

Typical percentage of assets allocated for various risk levels.

Very Aggressive

Your Custom Allocation

5 20

Reserves 20 15 5 20%

10 25

Income 30 20 10 25%

20 25

Growth and income 40 20 15 25%

35 25

Growth 10 30 25 25%

30 5

Aggressive Growth 15 45 5%

Misc

The allocation percentages illustrated above are only suggestions for your consideration, and are not intended to be a permanent allocation. As time passes and your goals change, it will be important that you review your portfolio to assure that the current mix of your assets is appropriate for your goals and for current economic and

This Asset Allocation does not guarantee a profit or protect against loss in declining markets.

100% 100%

100% 100% 100% 100%

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Asset Allocation

^B7

The following graph is provided to help you more easily visualize your present and suggested asset allocation.

This suggested mix is intended only for the current period, and you are encouraged to return regularly to review your personal goals and resources, the financial environment and to determine whether changes to the

suggested mix is appropriate. The percentages shown on the label area indicate the "Present / Suggested"

percent for each asset class.

Present Suggested

Res 1.72% 20.00%

Inc 18.40% 25.00%

Inc/Gr 6.69% 25.00%

Gr 55.94% 25.00%

AgGr 17.25% 5.00%

Misc 0.00% 0.00%

B8

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Allocation Worksheet

The following worksheet compares your present assets to the percentages suggested for your particular goals and risk tolerance level. If the amount in a class is too large or small, then the amount you might consider moving into or out of a category is shown in the "Amount To Move" column.

B8

Suggested Amount Present

Percent Percent

Amount (or out)

Amount to Move In Asset Class

1.72%

$12,200

Reserves $141,661 20.00% $129,461

18.40%

130,303

Income 177,077 25.00% 46,774

6.69%

47,417

Growth and income 177,077 25.00% 129,659

55.94%

396,216

Growth 177,077 25.00% (219,139)

17.25%

122,171

Aggressive Growth 35,415 5.00% (86,756)

Misc

It will be important to re-evaluate your asset mix on a regular basis and determine which assets should be further increased or decreased. As you make changes to your portfolio you should carefully review your current lifestyle needs and goals.

Please recognize that the asset mix suggested above is not intended as a guarantee or assurance of future results. The suggested asset classes and their percentages do not represent an offer to sell or a solicitation of a purchase of any particular security, but are provided only as an illustration of a possible portfolio mix based on your stated goals and risk level.

Asset allocation does not guarantee a profit or protect against loss in declining markets.

* The asset category amounts shown do not include your residence, rental real estate and personal property.

$708,307

TOTAL* $708,307

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Retirement

The amount of monthly income needed for retirement can increase dramatically when inflation is

considered. The above graph illustrates the impact of inflation on your desired income by showing annual expenses in today's dollars as well as the same items adjusted for inflation.*

If you have not accumulated enough capital to last through your lifetime, you could then find yourself dependent on others during the years when you most desire your financial independence. The graph above illustrates the amount of your capital available each year, or the amount of cumulative income shortage wh

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Retirement Needs Analysis

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In order to determine whether you will have adequate income and capital to fund your retirement, a number of factors must be evaluated:

– Income needed for basic living expense and number of years required.

– Income available from Social Security, pensions or other sources.

– Extraordinary income or expense items that will affect your retirement capital.

– Existing savings, investment and retirement funds and annual additions to the accounts.

– The effect of inflation on income and expenses.

– The rate of return you are able to earn on your accounts.

You are now ages 58 and 60 and plan to retire at ages 65 and 65. That leaves you only 7 years to prepare for your financial independence.

The anticipated expenses and various income streams available are illustrated below. In order to help you visualize the relative value of the income streams, we have shown the total amount of payments needed or received over your retirement years through life expectancy, as well as the value of the streams of income at retirement.

In Today's Dollars at 6.00%

NPV Discount Inflation

Adjusted Amounts (b)

Cumulative Income/Expense Total Monthly

Amounts in Today's $ (a)

Inflation

Income needed: Rate

$8,540 3.60%

$8,540 Current living expenses

9,429

3.60% $3,982,016 $1,280,524

Living expenses at age 65 8,038 (c)

10,935 3.60%

7,406 Expenses at age 73

14,176 3.60%

7,406 Expenses at age 82

Total Income

Sources of income: (d)

2.00%

1,344

Social Security - Susan at age 67 1,606 627,083 188,264 ^G11

2.00%

1,487

Social Security - David at age 67 1,708 623,673 217,778 ^G11

2.00%

Spouse Pension 1 137 137 49,831 17,400 ^G9

Rental real estate income 116,507 56,340

Other income items & insurance 331,788 178,413 ^G8

Misc Inc./Exp.(e) Miscellaneous expenses:

(42,697) G8

(65,361) Education funding and other goals

(69,214) ^G8

(134,669) Other expense items

$1,548,852 Total income or expenses

$2,433,164 Income shortfall - amount needed compared to amount available

$1,160,000(f) Estimated capital required at retirement to satisfy this shortfall

Including an assumed 6.00% after-tax rate of return on capital.

(a) Total expense = personal expense, itemized deductions, insurance premiums, debts and mortgages, saving and investments. (G4) (b) Inflation adjustments apply only to those items exposed to inflation (not debts, life insurance, etc.)

(c) Cumulative living expense is the total of all expense payments needed during retirement through life expectancy.

(d) The "Sources of income" represents the sum of all monthly or annual income expected from Social Security, pensions (after tax) or other anticipated post-retirement income sources. Any life insurance benefit shown is received at life expectancy.

(e) Total of all post-retirement expense items from education, goals and other income and expense report.

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Retirement Capital Analysis

^C4

$2,433,164

The remaining expense anticipated as described on the Retirement Needs Analysis is . . . . C3 (This amount was carried forward form the Retirement Needs analysis page.)

$1,160,000

At age 65 the remaining expense could require capital of approximately . . . .

(This assumes an after tax rate of return of 6.00% on assets used to fund shortage. The actual amount of capital needed will vary depending on the type of savings and investments used and their tax treatment.)

Future** Value at age 65 Current

average after tax rate * Current

weighted average

rate Current value used

for retirement estimate Current

year annual additions Estimate of future

asset account values

H8 H7 H5…H10 H5…H9 H4 H3 H2 H1

Total Asset values $651,307 6.58% 5.91% $1,070,059

Roth accounts - David 2,796 16,000 4.00% 4.00% 38,955

6,600 77,300 6.50% 6.50% 166,825

Deductible retirement - David

Deductible retirement - Susan 9,100 105,700 6.00% 6.00% 248,871

48,963

30,000 7.25% 7.25%

Tax-Deferred annuity or govt bonds.

36,850

25,000 5.70% 5.70%

Tax-Free accounts

3,132 350,004 7.45% 6.32% 529,594

Equity & other accounts

$47,303 2.44% 1.67%

Taxable Accounts

* The after-retirement rate may differ substantially from the pre-retirement rate, particularly on deductible retirement accounts.

Tax rate on interest is 31.75% before retirement, 31.75% after. Dividend and Capital Gain taxed at 15.00% before retirement and 15.00% after.

**Future values that are less than current values indicate that some of the assets have been consumed prior to retirement.

You might have as much as $1,070,059 capital available at retirement. You may need additional capital of $89,941.

Your current funds could last until your age 89 at which time your funds will be depleted.

The above results are hypothetical, based on the assumptions used, and are not guaranteed. The illustration is provided for educational purposes and does not represent any specific investment, class of investments or investment style.

In order to make up this shortage of capital required for your retirement, you have several choices:

1. Increase the before-tax "weighted average" rate of return on all your existing asset accounts to . . .

rate Average

6.75% ^C5

2. Increase the amount of money being added to your savings and investments.

You would have to make the following additional monthly deposits at a return of . . . 5.00%

7.00%

9.00%

after tax = after tax = after tax =

$950

$510

$280

(Assuming deposits ^C5

are increased by 3.50% per year.)

Note: The monthly additions are made into a side fund and computed to assure that asset account balances are never less than $0.

3. Delay your retirement by 1 years until ages 66 and 66.

4. Reduce your retirement spending by $4,000

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Retirement Capital Notes

The Retirement Capital Analysis report lists existing savings and investment accounts and shows hypothetical values at retirement age. The analysis is based on assumed rates of return information supplied by you and is not an estimate or guarantee of future performance. The assumptions used are detailed below.

The tax rate used for ordinary income items prior to retirement is 31.75% and after retirement is 31.75%. Thetaxable income includes interest, non-qualified dividends, tax deferred and retirement accounts distributions.

Tax on qualified dividends, capital gains and appreciation is computed at the rate of 15.00% before retirementand 15.00% after retirement.

Income taxes

The rates used are estimates based on your current tax bracket and may or may not reflect the rates that might be in effect at any time in the future. These rates are used for illustration purposes only and future changes in the tax laws or in your taxable income level may significantly affect the tax results of this analysis.

Future Values at Retirement Age

Each type of asset illustrated in the previous page uses a different assumed rate of return and tax treatment for estimating the future result. The assumed rates of return are derived from the asset and rate information you provided and may not actually reflect future results and are used for illustration purposes. The Current Weighted Average Rates come from the Asset Summary report. The Current After Tax Rates reflect the effective tax treatment of each asset type as described below.

Taxable Accounts

Equity and Other Accounts

Interest earned on this asset type is taxed at the ordinary tax rate each year, both before and after retirement. As interest is earned, the estimated tax is deducted and the remaining interest is reinvested.

The appropriate income tax effect is applied to the portfolio return based on the sources of income (interest, dividend, capital gain and appreciation). The after-tax return is reinvested.

Tax-Free Accounts

The income on this asset type is assumed to be fully exempt from tax and the entire return is reinvested each year.

Tax-Deferred Accounts

In years when there are no distributions from the accounts, the entire return is reinvested with no tax effect. In any year when a distribution is made, the distribution is assumed to come first from the accumulated tax-deferred returns. When all the accumulated tax-deferred returns have been distributed, the annual earnings are then taxed when distributed. The balance of distributions are treated as non-taxable distribution of the original capital. All taxable distributions are taxed at the ordinary income tax rate.

Deductible Retirement Accounts

Annual returns on these accounts are reinvested each year with no income tax. When distributions are made, the entire amount is taxed at the ordinary income tax rate. If distributions are made prior to age 59 1/2 they may be subject to an additional 10% excise tax penalty. Distributions must begin by age 70 1/2 unless special conditions apply.

C4a

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Total Value (Monthly deposits increase at 3.50% per year. Annual deposit amounts shown.)

Total Value Total

Value

Original estimate plus monthly additions into side fund.

Revised Estimate With All Assets at 6.75%

Ages

Original Capital Estimate

Retirement Estimate Solution

C5

5.00%

950 510

7.00% 9.00%

280

$712,901

$711,919 60

58 $11,400 $723,584 $6,120 $718,239 $3,360 $715,421

778,696 776,556

61

59 11,799 800,891 6,334 789,875 3,478 784,011

849,324 845,842

62

60 12,212 883,917 6,556 866,893 3,599 857,748

892,307 887,804

63

61 12,639 940,761 6,785 917,385 3,725 904,710

956,277 951,217

64

62 13,082 1,020,269 7,023 990,188 3,856 973,727

1,015,317 1,009,672

65

63 13,540 1,096,111 7,269 1,058,968 3,991 1,038,454

1,076,532 1,070,059

66

64 14,014 1,175,259 7,523 1,130,687 4,130 1,105,846

999,041 991,166

67

65 1,101,748 1,056,177 1,030,309

941,493 931,344

68

66 1,047,584 1,001,055 974,160

996,012 983,015

69

67 1,105,203 1,057,766 1,029,847

1,054,078 1,037,914

70

68 1,166,353 1,118,068 1,089,139

1,112,992 1,093,397

71

69 1,228,407 1,179,346 1,149,428

1,235,632 1,205,571

72

70 1,347,488 1,297,732 1,266,858

1,221,283 1,180,264

73

71 1,329,442 1,279,088 1,247,300

1,203,386 1,151,229

74

72 1,308,040 1,257,197 1,224,554

1,179,931 1,116,243

75

73 1,281,076 1,229,871 1,196,445

1,152,736 1,077,055

76

74 1,250,322 1,198,898 1,164,781

1,314,016 1,224,525

77

75 1,406,656 1,355,175 1,320,480

1,293,044 1,188,711

78

76 1,380,160 1,328,806 1,293,668

1,267,559 1,148,237

79

77 1,349,481 1,298,460 1,263,039

1,236,872 1,102,009

80

78 1,313,549 1,263,091 1,227,581

1,200,538 1,049,592

81

79 1,271,955 1,222,319 1,186,943

1,158,050 990,494

82

80 1,224,234 1,175,708 1,140,730

1,108,735 924,045

83

81 1,169,743 1,122,648 1,088,374

1,051,559 837,431

84

82 1,095,700 1,050,391 1,017,175

952,694 724,380

85

83 995,862 952,734 920,985

846,992 583,710

86

84 869,081 828,572 798,758

713,039 427,909

87

85 727,880 690,472 663,130

599,690 296,034

88

86 611,353 577,578 553,321

471,501 144,529

89

87 475,980 446,426 425,951

327,424 18,198

90

88 366,607 341,919 326,019

187,922 91

89 260,346 241,235 230,808

66,726 92

90 144,602 129,610 123,396

2 93

91 17,759 4,738 730

94 92

Monthly deposits are computed to assure that assets never fall below $0 prior to last life expectancy.

* An asterisk (*) indicates that the monthly deposits would exceed 1/3 of your income and this option is not practical.

NA - The "N/A" sign in the monthly amount area indicates that no monthly deposits are required.

C6

(20)

$651,307 Total Acct Values (end of year)

$151,045 Annual Deposits

$318,805 Other Inc/Exp Social

Security

$1,250,756

$436,600 Pension &

Min. Dist.

($3,982,016)

Tax Due Each Year Return

on Assets Scheduled

Dist.

Annual Surplus (shortage) Income available/Other expenses

Ages

Annual Expenses

Retirement Capital Estimate

C6

31.75%

$711,919 ($4,343)

$43,570

60 $521

58 $521 $21,628

776,556 (4,640)

47,570 (261)

61 554

59 293 22,225

845,842 (4,948)

51,871 (1,690)

62 589

60 (1,101) 24,326

887,804 (5,136)

56,067 (33,682)

63 627

61 (33,055) 25,005

951,217 (5,295)

60,438 (17,912)

64 668

62 (17,244) 26,493

1,009,672 (5,503)

64,582 (15,766)

65 712

63 (15,054) 15,473

1,070,059 (5,696)

68,337 (17,796)

66 759

64 (17,037) 15,895

991,166 (5,117)

66,715 20,501 (49,112)

67 (113,143) 2,447

65 (139,306)

931,344 (4,012)

61,400 20,911 (24,701)

68 (114,688) 2,535

66 (115,944)

983,015 (3,649)

61,090 40,603 67,572

69 (115,220) 2,628

67 (4,417)

1,037,914 (3,830)

64,496 41,415 69,066

70 (117,528) 2,727

68 (4,320)

1,093,397 (4,056)

68,034 42,244 70,586

71 (120,032) 8,360

69 1,157

1,205,571 (4,391)

66,779 43,089 108,383

72 (100,234) 8,816

70 60,054

1,180,264 (4,519)

69,011 43,950 (3,902)

73 (124,173) 18,009

71 (66,115)

1,151,229 (4,058)

67,776 44,829 (3,850)

74 (127,633) 19,036

72 (67,618)

1,116,243 (3,519)

65,863 45,726 (5,266)

75 (131,221) 20,166

73 (70,596)

1,077,055 (2,921)

63,583 46,640 (5,217)

76 (134,942) 19,776

74 (73,742)

1,224,525 (3,285)

66,346 47,573 182,354

77 (138,799) 20,731

75 111,859

1,188,711 (3,576)

69,221 48,525

78 (142,799) 21,859

76 (72,415)

1,148,237 (3,024)

67,634 49,495

79 (146,947) 22,953

77 (74,498)

1,102,009 (2,365)

65,033 50,485

80 (151,248) 24,157

78 (76,606)

1,049,592 (1,651)

62,073 51,495

81 (155,708) 25,352

79 (78,861)

990,494 (877)

58,732 52,525

82 (160,334) 26,598

80 (81,212)

924,045 (233)

55,022 53,575

83 (165,132) 27,895

81 (83,661)

837,431 (11,471)

50,561 54,647

84 (170,108) 29,244

82 (86,217)

724,380 (27,430)

44,697 55,740

85 (175,269) 30,564

83 (88,965)

583,710 (42,782)

37,177 56,854

86 (180,622) 31,802

84 (91,965)

427,909 (47,231)

28,446 57,992

87 (186,175) 26,655

85 (101,529)

296,034 (41,157)

17,738 59,151

88 (167,878) 20,254

86 (88,473)

144,529 (46,235)

11,094 60,334

89 (173,840) 14,120

87 (99,386)

18,198 (15,409)

2,087 61,541

90 (180,039) 5,488

88 (113,010)

32,974

91 (157,061)

89 (124,086)

33,634

92 (162,698)

90 (129,064)

34,306

93 (168,548)

91 (134,241)

94 92

H1...H8

H1...H8 D4

B15, G8 G11

H1...H8 G9,G11

G4

Note: All incomes/expenses are represented in after-tax values with 85% of Social Security taxable. Tax rate on income and interest is 31.75% before retirement,31.75% after. Dividend and Capital Gain taxed at 15.00% before retirement and 15.00% after.

(21)

15,924

(Taxes divided by Adjusted Gross Income) (Combined Federal

and State tax rates)

Effective tax rate = 26.74%

Marginal tax rate = 31.75%

Tax Rates:

$38,853 10,216 12,712

Total Tax

FICA (social security) tax Federal Income Tax Taxable income

Itemized or Standard deductions Personal exemptions

Adjusted Gross Income

Income taxes can consume a substantial portion of your income. One of your objectives should be to control the amount of taxes you must pay through careful management of your income and investment portfolio. The tax calculations are based on the 2013 tax tables.

Income Tax

Estimated income and taxes for the current year:

Gross income Adjustments

$145,283

$155,550 (10,267)

$99,382

Other tax or credits State income tax

(29,900) (16,000)

D2

D3

(22)

The following calculations give an idea of the amount of taxes you might pay based on the income and asset information provided. These amounts are approximations only and the actual tax amounts may be higher or lower than illustrated.

Income Taxes

^D3

Gross Taxable

INCOME:

G16,17

$120,000

$120,000 Salaries and Wages

H1...H4

1,419 2,844

Interest

2,560 H2

2,560 Dividends*

25,000 G16

25,000 Schedule C (self employment)

H1...H4

2,527 2,527

Schedule D (net capital gain/loss)*

3,281 3,281

Schedule E (passive gain/loss)

H5..H6d,H9,H1

763 Retirement Account Distributions 763

$155,550 GROSS INCOME

Adjustments:

H5,H6a...H

($5,200)

$5,200 Retirement account deposits - Susan

H6...H6d

(3,300) 3,300

Retirement account deposits - David

(1,767) 3,532

Self Employment FICA

$145,283 ADJUSTED GROSS INCOME

Gross Allowed

Itemized Deductions:

11,545 K1

11,545 Mortgage interest

2,000 G14

2,000 Charitable contributions

5,000 G14

Medical expenses & premiums

6,140 G14

6,140 Property taxes

10,216 10,216

State taxes

0 G14

Misc Itemized deductions

$99,382 Personal exemptions ( 4 )

(29,900) (16,000)

$12,600 TAXABLE INCOME

Itemized deductions $29,900

or Standard deductions

TAX SUMMARY:

Federal Income Tax (Joint) $15,924

FICA (Social Security) & HI Tax 12,712

State Income Tax 10,216

$38,853 TOTAL TAXES

Your combined Federal & net State marginal tax bracket is 31.75 % .

Your total taxes equal 26.74 % of your Adjusted Gross Income, and 39.09% of your Taxable income.

*Dividend and Capital Gains taxed at 15.00 %.

(23)

$828,358 David dies first

Current Situation

With Trusts

$1,639,907 (811,548) (888,382)

$1,639,907

With Trusts Current

Situation

Susan dies first

Less

Net estate Debts and expenses

Estate Taxes

All assets including life insurance

$745,775

E3

Less bequests to other than spouse (5,750)

(24)

93,300 105,700

$612,167

8,745 193,747 135,000

David dies first*

Illustrating the potential savings available buying a Credit Shelter Trust (CST) and an Irrevocable Life Insurance Trust (ILIT).

This report shows results if both deaths occur now. For future death ages refer to the "Estate Planning Options" Report.

Gross Estate

297,500 193,747

Susan dies first*

Life Insurance (net of loans) (1) 1/2 Joint or Community property Separate property - David Separate property - Susan First death

Estate Tax Illustration

^E4

(With and without trust planning)

Retirement plans (2)

$430,793

$1,209,115

(53,079) (2,574) (130,911)

Estate (before trusts)

($368,401)

(195,000) (15,000) (201,640)

(20,849) Less expenses:

Debts

Total Expenses

$840,714 $165,140

($265,653) (15,000)

Other expenses/gifts Final expenses Administration @ 3.00%

Bequests to other than spouse To credit shelter trust (3)

Life insurance outside estate or held in ILIT

$5,750 $5,750

$238,017

$297,500 $135,000

135,000 193,747 David dies second*

135,000

Gross Estate

93,300

Susan dies second*

$834,964 8,745

$834,964 193,747 Second death

Net estate from spouse

Retirement plans (2)

$1,265,757 $595,240 93,300 8,745

Life Insurance (net of loans) (1) Separate property

1/2 Joint or Community property

Without trusts With trusts Without trusts With trusts

105,700

$165,140

297,500 612,167 193,747 297,500

$941,754 105,700 612,167

$165,140 193,747

$1,374,254

Total expenses Debts

Less expenses:

Administration @ 4.00%

Final expenses

Charity, other expenses, gifts

($519,982) (15,000)

(15,410) (195,000)

(139,048) (15,000)

($364,458) (36,830)

(195,000)

(273,151) (208,351)

($453,995) (201,640)

($545,895) (15,000)

(29,005) (294,851)

(201,640) (34,405)

(15,000)

Estimated Federal Estate tax

$745,775

(64,650)

$0

$230,782

Tentative Federal estate tax 64,650

Net taxable estate

$0 Less applicable estate tax credit

151,638

$828,359 (278,860)

$487,759 278,860

(246,737) 246,737

(151,638)

$0 $0

Income tax on ret. plans at 20% (2) Remainder Estate

(36,600) 745,775

432,500 230,782 238,017

(36,600) (36,600)

828,359

432,500 Life Insurance Trust or not in estate (1)

Credit shelter trust (3)

Irrevocable trust, other assets (net)

(36,600)

487,759

$864,699

Estate and Trust to heirs $709,175 $791,759 $883,659

- Less CST and ILIT (670,517) (432,500)

(25)

Life Insurance

^F2

The shaded area of the graph shows the amount of capital available at a given age. The line represents the amount of funds needed to provide capital for immediate cash needs and income for the survivor. If at any time the line extends above the shaded area, the difference indicates and amount of additional capital needed in the form of insurance.

The graph is interpreted to show the amount of insurance needed if death occurs at a selected age. For example, if no shortage is shown now, then the amount of capital available now will be adequate through life expectancy. If a shortage is indicated 10 years from now, then additional insurance will be required only if death occurs at that age.

(26)

Age

Survivor Capital Estimate - David Survives

F4

(npv @ 6.00%) ($2,906,321) $361,021 $1,106,161 $265,955 ($1,173,183)

Income Needed and Sources

Needed Insurance Life Total

Additions**

Plus Net Assets Needs

Cash Immediate for Income

Needed Capital Income

Surplus/Short Other

Inc/Exp Soc Sec &

Pensions**

Income**

Earned Personal

Expenses*

$623,857

$54,495

$5,808

$37,482 ($281,526) ($327,849)

$68,000 ($56,795)

60

680,443 55,536

5,826

38,231 (352,912) (316,459)

70,040 (58,561)

61

740,737 20,418

(10,828)

19,498 (429,623) (301,832)

72,141 (60,393)

62

805,113 5,072

(26,831)

19,888 (475,819) (286,597)

74,305 (62,290)

63

841,784 21,141

(10,769)

20,286 (509,440) (270,257)

76,535 (64,910)

64

899,376 (40,325)

(8,327)

26,988 (561,147) (253,460)

(58,986) 65

952,755 (43,390)

(10,057)

27,528 (554,491) (235,781)

(60,861) 66

1,007,704 (76,920)

(36,813)

30,118 (544,370) (211,283)

(70,225) 67

925,123 (52,766)

(12,156)

30,721 (500,112) (188,259)

(71,331) 68

861,395 (31,410)

8,662

31,335 (477,353) (164,767)

(71,407) 69

908,931 (32,303)

8,978

31,962 (474,584) (143,121)

(73,243) 70

959,451 (33,360)

9,297

32,601 (470,756) (120,494)

(75,258) 71

1,011,557 77,290

121,962

33,253 (465,642) (96,978)

(77,925) 72

1,120,241 (39,231)

9,948

33,918 (570,870) (345,793)

(83,097) 73

1,093,311 (41,140)

10,277

34,597 (565,891) (336,441)

(86,014) 74

1,062,775 (44,606)

9,144

35,289 (558,705) (326,217)

(89,039) 75

1,026,441 (46,700)

9,481

35,994 (547,621) (315,327)

(92,175) 76

985,735 123,640

182,354

36,714 (533,778) (303,799)

(95,428) 77

1,131,801 (61,353)

37,449 (689,445) (292,858)

(98,801) 78

1,094,743 (64,103)

38,198 (669,459) (280,473)

(102,300) 79

1,053,187 (66,967)

38,961 (645,524) (266,799)

(105,929) 80

1,006,074 (69,952)

39,741 (617,288) (252,300)

(109,693) 81

952,980 (73,061)

40,536 (584,373) (236,929)

(113,597) 82

893,436 (76,301)

41,346 (546,374) (220,636)

(117,647) 83

826,798 (79,675)

42,173 (502,856) (203,728)

(121,848) 84

740,280 (83,190)

43,017 (453,352) (185,633)

(126,207) 85

628,032 (86,852)

43,877 (397,363) (164,975)

(130,729) 86

508,954 (90,666)

44,754 (334,352) (142,575)

(135,421) 87

377,036 (94,639)

45,650 (263,747) (118,758) 5,470

(140,289) 88

265,475 (98,777)

46,563 (184,933) (119,901) 39,359

(145,340) 89

137,250 (103,087)

47,494 (97,252) (123,744) 83,747

(150,581) 90

91 92 93 94

* Includes basic personal expenses plus insurance premiums, debt payments and itemized deductions.

**Earned income, pensions and retirement accounts reduced by 15.00% for income taxes.

J3 J3 J3 J3 J2 C6

Susan & David Example

Personal Financial Analysis