Financial Plan - d2zm3gcvr8kng7.cloudfront.net … · Financial Plan Prepared for: John and Katie...

Financial Plan

Prepared for: John and Katie Traditional

Prepared by: Keith Cervenka, CFP® LPL Home Office- FPG

4707 Executive Drive San Diego, CA 92121

(800) 877-7210

LPL Financial 9785 Towne Centre Drive

San Diego, CA 92121

April 01, 2015

Securities and advisory services offered through LPL Financial – A Registered Investment Advisor, Member FINRA/SIPC

Table of Contents

Table of Contents ................................................................................................................................ 2 Disclaimer ........................................................................................................................................... 4 Financial Statements Analysis ............................................................................................................ 6

Net Worth Statement ................................................................................................................ 7

Your Current Income ................................................................................................................ 8 Your Current Expenses ............................................................................................................ 9 Your Current Cash Flow ......................................................................................................... 10 Net Worth Details ................................................................................................................... 11 Emergency Reserves ............................................................................................................. 12

Retirement Analysis .......................................................................................................................... 13 The Power of Tax Deferred Growth ....................................................................................... 14

IRA Rollover ........................................................................................................................... 16 Steps Toward Achieving Your Retirement .............................................................................. 17 The Cost of Your Retirement .................................................................................................. 18 Your Retirement Income ........................................................................................................ 20

Building a Nest Egg ................................................................................................................ 21 The Big Picture ....................................................................................................................... 22

Options for Meeting Your Retirement Needs .......................................................................... 23 Retirement Income Details ..................................................................................................... 24 Pre-Retirement Savings and Growth ...................................................................................... 25

Capital Resources Details ...................................................................................................... 26 Needs vs. Resources Details ................................................................................................. 27

Asset Allocation Analysis .................................................................................................................. 28

Asset Allocation Terminology ................................................................................................. 29

Asset Allocation Process ........................................................................................................ 31 Your Current Asset Allocation ................................................................................................ 33 Your Recommended Asset Allocation .................................................................................... 35

Current vs. Recommended Allocation .................................................................................... 37 Qualified vs. Non-Qualified Allocation .................................................................................... 39

Your Asset Types ................................................................................................................... 41 Risk Tolerance Questionnaire ................................................................................................ 43 Current vs. Recommended Details ........................................................................................ 45

Holdings Details ..................................................................................................................... 47 Life Insurance Analysis ..................................................................................................................... 48

Types of Life Insurance .......................................................................................................... 49

Q & A on Life Insurance ......................................................................................................... 52

The Need for Life Insurance ................................................................................................... 54 Premature Client Death .......................................................................................................... 55

The Cost of a Premature Death ................................................................................... 56 Your Current Resources .............................................................................................. 57 Survivor Income Details ............................................................................................... 58

Capital Resources Details ........................................................................................... 59 Survivor Needs Details ................................................................................................ 61 Your Resources plus Additional Insurance .................................................................. 62 Capital Resources plus Insurance Details ................................................................... 63 Survivor Needs plus Insurance Details ........................................................................ 65

Premature Spouse Death ....................................................................................................... 66

The Cost of a Premature Spouse Death ...................................................................... 67 Your Current Resources .............................................................................................. 68

Survivor Income Details ............................................................................................... 69 Capital Resources Details ........................................................................................... 70 Survivor Needs Details ................................................................................................ 72 Your Resources plus Additional Insurance .................................................................. 73 Capital Resources plus Insurance Details ................................................................... 74

Survivor Needs plus Insurance Details ........................................................................ 76 Analysis Result Summary ................................................................................................................. 77 Information Summary ........................................................................................................................ 81

Disclaimer

The following report is a diagnostic tool intended to review your current financial situation and suggest potential planning ideas and concepts that may be of benefit. The purpose of the report is to illustrate how accepted financial and estate planning principles may improve your current situation. This report is based upon information and assumptions provided by you (the client). This report provides broad and general guidelines on the advantages of certain financial planning concepts and does not constitute a recommendation of any particular technique. We recommend that you review your plan annually, unless changes in your personal or financial circumstances require more frequent review. The term "plan" or "planning," when used within this report, does not imply that a recommendation has been made to implement one or more financial plans or make a particular investment. Nor does the plan or report provide legal, accounting, financial, tax or other advice. Rather, the report and the illustrations therein provide a summary of certain potential financial strategies. The reports provide projections based on various assumptions and are therefore hypothetical in nature and not guarantees of investment returns. You should consult your tax and/or legal advisors before implementing any transactions and/or strategies concerning your finances. Additionally, this report may not reflect all holdings or transactions, their costs, or proceeds received by you. Prices that may be indicated in this report are obtained from sources we consider reliable but are not guaranteed. Past performance is no guarantee of future performance and it is important to realize that actual results may differ from the projections contained in this report. The presentation of investment returns set forth in this report do not reflect the deduction of any commissions or fees or product charges that may apply to any particular investment. Deduction of such charges will result in a lower rate of return as compared to that set forth in this report. The information contained in this report is not written or intended as financial, tax or legal advice. The information provided herein may not be relied on for purposes of avoiding any federal tax penalties. You are encouraged to seek financial, tax and legal advice from your professional advisors. This report may be provided as part of a financial plan being offered either through LPL Financial or a third-party registered investment advisor. Please refer to the financial planning agreement you signed for further information about the parties providing services. This report may or may not contain general or specific recommendations for implementation. Please understand that you are under no obligation to implement any recommendations that may be included within this report or the financial plan; however, if you choose to, you may implement through a financial advisor associated with LPL Financial. You may decide to implement through the purchase or sale of one or more securities or insurance products on a commission basis or through asset management services in an investment advisory relationship for an ongoing fee. Please refer to the client agreement and any disclosure documents related to any implementation services you choose for further information. LPL Financial representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial. Investors should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The prospectus contains this and other information about the investment company. You can obtain a prospectus from your financial representative. Read carefully before investing.

This analysis must be reviewed in conjunction with the limitations and conditions disclosed in the Disclaimer page. Projections are based on assumptions provided by the

advisor/representative, and are not guaranteed. Actual results will vary, perhaps to a significant degree. The projected reports are hypothetical in nature and for illustrative purposes only. Return assumptions do not reflect the deduction of any commissions, or fees or product charges that may apply to any particular investment. Deduction of such charges would result in a

lower rate of return. Consult your tax and/or legal advisor before implementing any tax or legal strategies. Past performance is no guarantee of future results. The market for all securities is subject to fluctuation such that upon sale an investor may lose principal.

Securities and advisory services offered through LPL Financial â€“ A Registered Investment Advisor, Member FINRA/SIPC

Version 9.6.0.175 § Prepared on April 01, 2015 by Keith Cervenka, CFP® § Personal and Confidential § of 86

I/We have received and read this Disclaimer page and understand its contents and, therefore, the limitations of the report. Furthermore, I understand that none of the calculations and presentations of investment returns are guaranteed.

Client(s):

John Traditional Date

Katie Traditional Date

Advisor:

Keith Cervenka, CFP® Date






Financial Statements Analysis






Net Worth Statement In order to determine your current financial position, it is good to prepare a net worth estimation at least once per year. This report outlines the difference between the total value of your assets (which includes things like: your home, investments, savings accounts) and your liabilities (mortgages, credit cards, etc.). Net Worth equals Assets minus Liabilities.

Total Assets

$1,585,170

Total Liabilities

($600,000)

Total Net Worth

$985,170

Assets John Katie Joint/ROS Total

Portfolio Assets Cash Equivalents -- -- $10,000 $10,000 Taxable Investments -- -- $207,858 $207,858 Qualified Retirement $203,955 $78,965 -- $282,920 Roth IRAs -- $84,392 -- $84,392 Annuities $100,000 -- -- $100,000 Life Insurance -- -- -- --

Property

Real Estate -- -- $900,000 $900,000

Total Assets $303,955 $163,357 $1,117,858 $1,585,170 Liabilities John Katie Joint Total

Mortgages -- -- ($600,000) ($600,000)

Total Liabilities $0 $0 ($600,000) ($600,000)

Total Net Worth $303,955 $163,357 $517,858 $985,170






Your Current Income Managing your cash flow often starts with examining your sources of income. There are many reasons you may want to better understand your sources of income. Your financial situation has changed, your income is irregular, you plan to apply for a loan or you just want a better feel for where your money is coming from. We are going to look at your sources of income in two distinct buckets. First, we are going to look at your Salary and Bonus income. These are commonly referred to as earned income.

Salary & Bonus

$170,000

Other Income

$12,000

Total Income

$182,000

Your current Salary and Bonus income for John and Katie comes from the following sources:

John's Salary $120,000 / yr

Katie's Salary $50,000 / yr

These flows in combination makeup your gross Salary and Bonus income which is $170,000 between the two of you. In addition, you may also have other income streams from non-employment sources. Your current sources of income other than Salary and Bonus are as follows:

Rental Income $12,000 / yr

Those flows in combination contribute to an annual other income total of $12,000. When we combine your salary and bonus income sources with your “Other” income sources, this results in total

current year income of $182,000 coming in through your door this year.






Your Current Expenses

The next step in understanding and evaluating your cash flow situation is to understand your expense outflows. There are several categories of expenses we will look at, but we will start with your basic annual living expenses. You

currently expect to have $63,000 of basic living expenses per year.

You currently have liability payments of $46,020 per year, which are not included in the above basic living expenses. Those liability payments are as follows:

Home Mortgage $28,992 / yr

Rental Mortgage $17,028 / yr

Basic Living Expenses

$63,000

Liability Payments

$46,020

Insurance Premiums

$450

Income Taxes

$45,500

Goal Savings

$24,000

Total Expenses

$178,970

You currently have insurance premium payments of $450 per year, which are not included in the above basic living expenses. Those premium payments are as follows:

Disability Policy from Work $450 / yr A significant expense category to consider is income tax payments. While you should consider consulting your tax advisor before making major financial decisions, we can estimate your current income tax expense with some

simple assumptions. Your current income is $182,000. Assuming we apply an effective income tax rate of

25.0%, this results in a current income tax expense of $45,500 per year. One of the most important ingredients in successfully reaching your future financial goals is saving the appropriate amount towards those goals. Therefore, the final expense category we are looking at are your dedicated savings

towards goals. You have other annual savings in total of $24,000. After accumulating the expense amounts in each expense category, your current total annual expenses are

$178,970.






Your Current Cash Flow Businesses will often times create a Sources and Uses of Cash statement to evaluate their income and expense decisions and to monitor profitability. Similarly, a personal cash flow statement can help you evaluate your personal income and expense flows and see if your are running “in the red” or “in the black”. If your income is greater than your expenses, you will have additional money to put into a dedicated fund for use in achieving your goals. However, if expenses exceed your income, you may need to look at ways to change this result. We have already gathered your income flows and expected expense flows and have listed them in the table below:

Total Income

$182,000

Total Expenses

($178,970)

Net Cash Flow

$3,030

Income Total

Salary and Bonus $170,000 Other Income $12,000

Total Income $182,000 Expenses Total

Living Expenses ($63,000) Liability Payments ($46,020) Insurance Premiums ($450) Income Taxes ($45,500) Goal Savings ($24,000)

Total Expenses ($178,970)

Net Cash Flow $3,030

How does your net cash flow stackup?

We have taken a look at all your current income sources, and we have estimated your total income to be

$182,000. We have also accumulated all of your current expense flows, and have estimated your total

expenses to be ($178,970). This results in a positive net cash flow of $3,030 for the current year. The chart below summarizes this information.






Net Worth Details Assets John Katie Joint Total

Portfolio Assets Cash Equivalents Cash Reserve -- -- $10,000 $10,000

Taxable Investments Merrill Lynch Account -- -- $167,858 $167,858 Vanguard Money Market -- -- $40,000 $40,000

Qualified Retirement John's 401K $203,955 -- -- $203,955 Katie's Roth 403b -- $78,965 -- $78,965

Roth IRAs Katie's Roth IRA (converted) -- $84,392 -- $84,392

Annuities John's Annuity $100,000 -- -- $100,000

Life Insurance Term Life on Jon -- -- -- -- Term Policy for Katie -- -- -- --

Total Portfolio Assets $303,955 $163,357 $217,858 $685,170 Property Assets Real Estate Home -- -- $600,000 $600,000 Rental Home -- -- $300,000 $300,000

Total Property Assets $0 $0 $900,000 $900,000

TOTAL ASSETS $303,955 $163,357 $1,117,858 $1,585,170 LIABILITIES John Katie Joint Total

Mortgages Home Mortgage -- -- ($400,000) ($400,000) Rental Mortgage -- -- ($200,000) ($200,000)

TOTAL LIABILITIES $0 $0 ($600,000) ($600,000)

TOTAL NET WORTH $303,955 $163,357 $517,858 $985,170

TOTAL NET WORTH: $985,170






Emergency Reserves A financial hardship or crisis is closer than some would like to admit. A big part of your financial fitness is being prepared. Nothing can derail your financial plans more than not having adequate cash reserves. Those who are unprepared are then forced to borrow at high interest rates or liquidate investment assets or real estate at inappropriate times. Think of the following scenarios and ask yourself if you are prepared:

You are laid off or redeployed to a lower paying job

A serious accident has left you or your spouse unable to work

A loved one is hospitalized and you are forced to miss considerable work

An unexpected death or illness that requires time and money to handle

Emergency Reserves

$10,000

Total Emergency Need

$21,702

Emergency Reserve Deficit

$11,702

Today, your total living expenses are $9,042 per month (or $108,500 each year). In case you need to access

your emergency reserves, let's assume you will need enough in this fund to cover 80.0% of those living expenses

or $7,234 each month. When determining how much to keep in an emergency reserve most experts agree that it depends on your unique circumstances. However, it is usually safe to earmark at least 3-6 months of living expenses. In this scenario, let's

assume you want to create an emergency reserve equal to 3 months of living expenses.

The primary investment objective for your emergency reserves is safety not return. You currently have $10,000 of cash available to use in this type of an emergency fund.

How prepared for an emergency are you? According to what you told us, you have $10,000 of cash available to handle a short term emergency. Looking at

the $7,234 worth of expenses you're going to face each month for 3 months, you're going to need a total

emergency reserve fund of $21,702. This means you have a deficit of $11,702. The chart below shows your reserves versus your total emergency need.






Retirement Analysis






The Power of Tax Deferred Growth Why pay taxes now if you don't have to? Tax deferred vehicles allow you to make investments today and defer paying taxes on investment growth until the funds are withdrawn. Because it could be many years before you need to tap these funds, this allows for many years of potential investment growth. Contributions made on either a pre-tax or tax deductible basis reduce your current taxable income, potentially allowing you to invest more. As any growth is tax-deferred, your balance will increase more quickly than if you had placed your money in a taxable vehicle. This could result in more accumulation for you and your heirs. The following table and chart show the difference in taxable and tax-deferred growth for a person saving $9,000 per year over 30 years*:

10 Years 20 Years 30 Years

Taxable Balance $128,434 $366,708 $808,758

Tax Deferred Balance $144,865 $472,402 $1,212,957

Difference $16,431 $105,694 $404,198

Tax Deferred Balance After Taxes

$131,149 $399,301 $977,218

*Assumes 8.5% Rate of Return, 25% federal tax rate on the growth of the asset. The tax-deferred values exclude the 10% penalty that would potentially be assessed if the values were withdrawn prior to age 59 ½. Lower tax rates on capital gains and dividends would make the return on the taxable investment more favorable, reducing the difference in performance between the two types of accounts. Historically, higher rates of return have been accompanied by higher volatility. Please consider your personal investment horizon and income tax brackets, both current and anticipated when making an investment decision.

Popular Tax Deferred Investment Vehicles There are many tax-deferred investment vehicles available to you. The table below lists some of the most popular:

401(k) Accounts

A defined contribution plan offered by a corporation to its employees affording three main advantages. First, contributions come out of your paycheck before taxes, lowering your taxable income. Second, tax deferred growth and third, the potential for an employer match on your contribution. All withdrawals are subject to ordinary income taxes and may be subject to a 10% federal tax penalty if taken prior to 59 1/2.

403(b) Accounts

Also a defined contribution plan but made available to certain employees of certain non-profit and charitable organizations. Both a 401(k) and 403(b) have a maximum annual contribution in 2014 of $17,500, and individuals over age 50 can contribute an additional 'catch-up' contribution of $5,500. All withdrawals are subject to ordinary income taxes and may be subject to a 10% federal tax penalty if taken prior to 59 1/2. Withdrawals from 403(b) accounts are prohibited before the occurrence of certain events such as attaining age 59 1/2, severance from employment, disability or hardship.

Traditional Individual Retirement Account (IRA)

A Traditional IRA is a retirement investing tool for employed individuals and their non-working spouses that allows annual contributions up to a specified maximum amount. Tax deductions may be allowed on the contribution amount depending upon the individual’s income and whether or not they participate in an employer-sponsored retirement plan. Any withdrawal of tax-deductible amounts is subject to ordinary income taxes, as well as a 10% federal tax penalty if taken before age 59 1/2.






Roth IRA

Similiar to a Traditional IRA, a Roth IRA allows individuals to contribute up to a specified maximum amount. Unlike a Traditional IRA, a Roth IRA cannot accept contributions if the owner has adjusted gross income over a certain amount. All contributions made to a Roth IRA are done on an after tax basis. However, if plan requirements are met, withdrawals of earnings are tax-free.

Annuities

An annuity is a contract, offered by an insurance company, between an investor and an insurance company, designed to provide payments to the holder at specific intervals, usually after retirement. Annuities are tax-deferred, meaning that the earnings grow tax-deferred until withdrawal. Money distributed from the annuity will be taxed as ordinary income in the year the money is received. Money withdrawn prior to age 59 1/2 may be subject to a 10% federal tax penalty. Annuities provide no additional tax advantages when used to fund a qualified plan. Annuities may have additional charges such as mortality and expense risk charges, annual administrative expenses, surrender charges, and fees associated with the subaccount such as the operating expenses of the investment portfolios. Variable annuities are long-term, tax-deferred investment vehicles designed for retirement purposes and contain both an investment and insurance component. Variable annuity contract holders are subject to investment risks, including the possible loss of principal invested. Investors should carefully consider the investment objectives, risks, charges and expenses of the variable annuity before investing. Variable annuities are sold only by prospectus, which contains more complete information about the investment company. Please request a prospectus from your financial representative and read it carefully before investing. Guarantees are based on the claims paying ability of the issuer. Withdrawals of taxable amounts made prior to age 59 ½ are subject to 10% federal penalty tax in addition to income tax and surrender charges. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. The investment returns and principal value of the available sub-account portfolios will fluctuate so that the value of an investor’s unit, when redeemed, may be worth more or less than their original value.






IRA Rollover When you leave your employer for a new job, or to enter retirement, you must often decide what to do with any money you have in your employer-sponsored 401(k) or other retirement plan. Since funds in your retirement accounts are generally funded with pre-tax contributions, they will be subject to ordinary income tax upon distribution. Without proper planning, you could lose as much as 40%¹ of this nest egg to taxes and penalties. Depending upon your unique situation, you may have four different options to consider:

Leave funds in your old employer's plan (if allowed by employer)

Roll the money into your new employer's plan (if available; may be subject to waiting period)

Withdraw your funds with a cash distribution

Roll your funds into another Individual Retirement Account (IRA) or Individual Retirement Annuity

Three ways of taking a $100,000 plan distribution Direct Rollover to an IRA

Keep 100% of value of your savings building for the future.

Indirect Rollover 20% mandatory federal tax withholding by your employer, and burden shifts to you to come up with an equal amount of funds to complete a full rollover within 60 days.

Cash Distribution Have the check made out to you and keep the cash. Distribution is treated as taxable income and may be subject to early withdrawal penalty of an additional 10%. 20% withholding applies.

¹Assumes 30% federal tax bracket and additional 10% penalty due to withdrawals made prior to age 59½

The Benefits of a Direct Rollover Reduced Taxation

With a direct rollover, you avoid the 20% mandatory withholding imposed on cash distributions including indirect rollovers and there is no immediate federal income tax levied. This results in the entire balance continuing to grow tax deferred until you begin to make withdrawals from your account. Additionally, since the rollover is not considered a taxable distribution, the 10% penalty for early withdrawals (prior to age 59½) is also avoided.

Increased Investment Choices Many employer sponsored plans are limited in the number and types of options available for investment. In an IRA, you can choose from among a range of investment options such as stocks, bonds, mutual funds, money market accounts, fixed interest options or annuities.

Consolidation The more accounts you have, the more difficult it is to keep track of everything. Consolidating into a single IRA can make tracking balances and monitoring withdrawals easier, while cutting down on paper-work.

Important Notes Differences in Investments

When considering rolling over your investment funds, be aware of differences in features, fees and charges, and surrender charges between different investments. These fees and charges have not been included in the discussion above. Had fees and charges been deducted, the values reflected would have been lower.






Steps Toward Achieving Your Retirement

Step 1 - Determine Your Cost of Retirement Achieving your retirement goals will not happen automatically. The first step to consider as retirement approaches is to determine your cost of retirement. Your cost of retirement will be affected by many factors. Three of the most significant are:

Your monthly retirement living expenses A common rule of thumb is somewhere between 70% and 100% of your annual earned income prior to retirement.

Your retirement age This is the age at which you plan to stop working full time and start accessing your retirement portfolio assets.

Your life expectancy This will define how many years your retirement costs will continue to be incurred.

Step 2 - Apply Your Income Sources Once your cost of retirement assumptions have been defined, you can start to look at the income sources that will be available to you in retirement to help offset your retirement costs. Income sources may include among other things:

Social Security

Pensions

Immediate annuity payments

Step 3 - Withdraw from Your Portfolio Assets Once your available income sources have been applied to your costs of retirement, you can take withdrawals against your portfolio assets to make up the difference. Portfolio assets commonly include:

Brokerage accounts

Money Market accounts

401(k)s, 403(b)s, and other employer-sponsored retirement accounts

IRAs

Annuities

Step 4 - If Necessary, Consider Changes If you determine that you are not on track to achieve your retirement objectives, you will need to consider making some changes. These changes may include:

Saving more before you retire

Redefining your retirement age

Considering part time employment during retirement

Spending less during retirement

Combination of above






The Cost of Your Retirement Thinking about retirement is often difficult. It is hard to be concerned about what will happen 20 to 30 years in the future, while you are stretching your resources to meet your needs today. It is, however, critical to think about how you will support yourself (and your spouse) during retirement. With people living longer, you may wind up spending as much as a third of your life in retirement. The first step is often looking at what your cost of retirement may be. So, what level of expenses can you expect in retirement? Let’s assume that

you retire at age 66 (2031), have retirement living expenses of $7,167 per

month (or $86,004 each year) and that those expenses grow at 3.00% each

year from now until Katie is age 90 (2058). Over the 28 years of your

retirement, your living expenses would total $5,924,947. And when you

factor in your desire to leave $500,000 to your heirs, the total cost of

retirement runs up to $6,424,947.

Retirement lasts from

2031 - 2058

(28 years)

Total Living Expenses

$5,924,947

Desired Remainder

$500,000

Total Cost of Retirement

$6,424,947

How high will your expenses grow?

The chart below illustrates the mounting costs of your retirement, showing that you can expect an annual living

expense of $86,004 today to grow to $138,011 in your first year of retirement (2031) and to $306,563 in your last year (2058).

Keep in Mind... It does not necessarily cost less to live during retirement. While for some it may be true that they will need less money in retirement, it is not always the case. Health care costs, entertainment and travel expenses are examples of living expenses that can be expected to go up, not down, during your






retirement years.






Your Retirement Income Although you may no longer be employed full-time during your retirement years, that doesn’t mean your income will disappear entirely. Income sources like pension plans, annuities, social security or part-time employment can help offset your retirement living expenses. During retirement, your income will come from the following sources:

John's Social Security $21,864/yr

2031-2058

Katie's Social Security $17,340/yr

2034-2058

Rental Income $12,000/yr 2031-2058 For this analysis, your retirement income will be indexed at an annual rate of 3.00% and be subject to an income tax rate of 25.0%.


$6,424,947

Total Net Retirement Income

$2,410,835

Funding Gap

$4,014,112

Percent Funded by Income

38%

Will your income be enough?

The chart below compares your total retirement expenses to the total net income you expect to receive during the

28 years of your retirement. Based on the income assumptions above, your retirement income alone will not be enough to fully offset your retirement expenses.

Keep in Mind... According to a January 2014 update of AARP's report "Staying Ahead of the Curve 2013: The AARP Work and Career Study", 70% of experienced workers (ages 45-75) intend to keep working during their retirement years.






Building a Nest Egg Often, the primary resource you have for offsetting the cost of retirement is the value of your accumulated capital resources. These resources are assumed to grow over time through regular savings and growth, resulting in a "nest egg" that may partially or completely offset your cost of retirement. With

a total retirement cost of $6,424,947, you would need to amass total capital

resources of $4,150,095 by the time you retire in 2031 (assuming a rate of

return on assets of 5.00% prior to retirement and 5.00% during retirement

and 25.0% tax on any withdrawals). To get an idea of the size of the nest egg that you would need to accumulate before you retire, we'll take a look at your existing resources and your planned savings.

You currently have $367,312 in qualified savings and $317,858 in non-qualified savings. These savings are assumed to grow at an annual rate of

5.00% before retirement and at an annual rate of 5.00% after retirement. When withdrawals are made, those withdrawals will be taxed at a rate of

25.0%.

From now until retirement you plan to save $2,000 each month in qualified

funds and $0 in non-qualified funds. In addition, your employer(s) make

monthly contributions to your qualified assets in the amount of $400. These

contributions will increase each year by 3.00%.


$6,424,947

Nest Egg Needed at Retirement

$4,150,095

Nest Egg Available

$2,369,835

Percent of Needed Nest Egg

57%

Will your nest egg be enough?

The chart below illustrates the difference between the nest egg you'd need at retirement in order to fully offset your expenses and the nest egg you are likely to accumulate. You can see that your assets alone are not likely to be sufficient to fund your entire retirement.






The Big Picture There are two main resources at your disposal with which you can offset the costs of retirement: income and your capital resources. You accumulate capital throughout your pre-retirement years through savings and growth. Additionally, various outside sources may provide you with a steady income during retirement. By comparing the combination of these resources with your expected retirement expenses, you can get a picture of how successful you will be in financing your retirement.

With a Total Retirement Cost of $6,424,947 and Total Net Retirement

Income Sources of $2,410,835, you will have a Remaining Need of

$4,014,112. Your projected nest egg of $2,369,835 will allow for Total

Capital Withdrawals of $3,507,917 (after taxes). Together, your income and

assets will cover 92% of your total retirement costs, leaving a shortfall of

$506,195.


$6,424,947

Total Retirement Income Sources

$2,410,835

Total Capital Withdrawals

$3,507,917

Shortfall

$506,195

Unfunded Years

1

Will you make it?

The chart below illustrates how your income sources and capital resources would be used to fund the annual expenses of your retirement. Years in which a shortfall exists (i.e. when you don’t have enough funds to cover your living expenses), show a deficit value in red. Based on the assumptions made in this analysis, your current savings and expected income will not be enough to support you through your retirement.






Options for Meeting Your Retirement Needs Based upon the assumptions utilized in this analysis, your current retirement goals are not projected to be achieved. What’s important is that you are taking a look at your retirement now, before it’s too late. There are several options which may - by themselves or in combination with each other - allow you to achieve your retirement goals, they include:

Save More Before You Retire

Take a look at your current expenses. Are there any which can be reduced or eliminated? By reducing your expenses now, you can save more of your income, which will in turn allow your savings to grow at a faster pace. To cover your funding shortfall solely by saving more before you retire (through

personal or employer contributions), you would need to save an additional $357 -

for a total of $2,757 per month - and increase that monthly amount by 3.00% each year until you retire. This solution assumes that your accumulated funds will

grow at a rate of 5.00% each year prior to retirement and 5.00% after retirement.

Increase Monthly Savings by

$357

(to $2,757 per month)


$6,424,947

Total Retirement Funding

$6,426,015

Percent Funded

100%

Spend Less During Retirement If you can’t increase your nest egg sufficiently to completely fund your shortfall, you should consider reducing your monthly retirement living expenses. When combined with other funding options, you may be able to live more efficiently without significantly impacting your retirement lifestyle. To make up your funding shortfall solely by reducing your expenses, you would

need to reduce your monthly living expenses by $232, to $6,935 per month. This

solution assumes that your expenses will grow at a rate of 3.00% each year.

Reduce Monthly Expenses by

$232

(to $6,935 per month)


$6,233,154


$6,234,911

Percent Funded

100%

Retire Later

One additional option is to examine delaying your retirement. By delaying the year in which you retire, you increase the size of your nest egg and reduce your overall cost of retirement at the same time.

You may be able to cover your funding shortfall by delaying your retirement by 1

year, until age 67. This assumes you continue your savings, at the previously defined levels, up to this new retirement age.

Delay Retirement

1 year (until age 67)


$6,286,936


$6,467,769

Percent Funded

102%






Retirement Income Details

Year Age John's

SS Income Katie's

SS Income Income

from Flows Total

Income

Income Taxes

@25.0% Net Income 2031 66/63 $35,085 $0 $19,256 $54,341 $13,585 $40,756 2032 67/64 36,138 0 19,834 55,972 13,993 41,979 2033 68/65 37,222 0 20,429 57,651 14,413 43,238 2034 69/66 38,339 30,406 21,042 89,787 22,447 67,340

2035 70/67 39,489 31,318 21,673 92,480 23,120 69,360 2036 71/68 40,673 32,258 22,324 95,255 23,814 71,441 2037 72/69 41,894 33,225 22,993 98,112 24,528 73,584 2038 73/70 43,150 34,222 23,683 101,055 25,264 75,791

2039 74/71 44,445 35,249 24,394 104,088 26,022 78,066 2040 75/72 45,778 36,306 25,125 107,209 26,802 80,407 2041 76/73 47,152 37,395 25,879 110,426 27,607 82,819 2042 77/74 48,566 38,517 26,655 113,738 28,435 85,303

2043 78/75 50,023 39,673 27,455 117,151 29,288 87,863 2044 79/76 51,524 40,863 28,279 120,666 30,167 90,499 2045 80/77 53,070 42,089 29,127 124,286 31,072 93,214 2046 81/78 54,662 43,351 30,001 128,014 32,004 96,010

2047 82/79 56,302 44,652 30,901 131,855 32,964 98,891 2048 83/80 57,991 45,991 31,828 135,810 33,953 101,857 2049 84/81 59,730 47,371 32,783 139,884 34,971 104,913 2050 85/82 61,522 48,792 33,766 144,080 36,020 108,060

2051 86/83 63,368 50,256 34,779 148,403 37,101 111,302 2052 87/84 65,269 51,764 35,823 152,856 38,214 114,642 2053 88/85 67,227 53,317 36,897 157,441 39,360 118,081 2054 89/86 69,244 54,916 38,004 162,164 40,541 121,623

2055 90/87 71,321 56,564 39,144 167,029 41,757 125,272 2056 91/88 0 58,261 40,319 98,580 24,645 73,935 2057 92/89 0 60,008 41,528 101,536 25,384 76,152 2058 93/90 0 61,809 42,774 104,583 26,146 78,437

3,214,452 803,617 2,410,835






Pre-Retirement Savings and Growth Non-Qualified Savings: $0/yr Qualified Savings: $24,000/yr Non-Qualified Capital Resources Today: $317,858 Employer Contributions: $4,800/yr Qualified Capital Resources Today: $367,312 Total Annual Savings: $28,800/yr Total Capital Resources Today: $685,170

Year Age BOY Capital

Resources Savings Capital Resources

after Savings Growth

at 5.00% EOY Capital

Resources 2015 50/47 $685,170 $28,800 $713,970 $35,699 $749,669 2016 51/48 749,669 29,664 779,333 38,967 818,300 2017 52/49 818,300 30,554 848,854 42,443 891,297 2018 53/50 891,297 31,471 922,768 46,138 968,906

2019 54/51 968,906 32,415 1,001,321 50,066 1,051,387 2020 55/52 1,051,387 33,387 1,084,774 54,239 1,139,013 2021 56/53 1,139,013 34,389 1,173,402 58,670 1,232,072 2022 57/54 1,232,072 35,420 1,267,492 63,375 1,330,867

2023 58/55 1,330,867 36,483 1,367,350 68,368 1,435,718 2024 59/56 1,435,718 37,577 1,473,295 73,665 1,546,960 2025 60/57 1,546,960 38,705 1,585,665 79,283 1,664,948 2026 61/58 1,664,948 39,866 1,704,814 85,241 1,790,055

2027 62/59 1,790,055 41,062 1,831,117 91,556 1,922,673 2028 63/60 1,922,673 42,294 1,964,967 98,248 2,063,215 2029 64/61 2,063,215 43,563 2,106,778 105,339 2,212,117 2030 65/62 2,212,117 44,869 2,256,986 112,849 2,369,835






Capital Resources Details Capital Resources Today: $685,170 Pre-Retirement Growth and Savings: $1,684,665 Total Resources at Retirement: $2,369,835


Resources

Net Withdrawals

to fund Expenses

Taxation on Withdrawals

at 25.0%

Total Withdrawal

of Capital

Total Capital after Withdrawal

Growth at 5.00%

EOY Capital Resources

2031 66/63 $2,369,835 $97,255 $32,418 $129,673 $2,240,162 $112,008 $2,352,170 2032 67/64 2,352,170 100,173 33,391 133,564 2,218,606 110,930 2,329,536 2033 68/65 2,329,536 103,178 34,393 137,571 2,191,965 109,598 2,301,563 2034 69/66 2,301,563 83,469 27,823 111,292 2,190,271 109,514 2,299,785

2035 70/67 2,299,785 85,973 28,658 114,631 2,185,154 109,258 2,294,412 2036 71/68 2,294,412 88,552 29,517 118,069 2,176,343 108,817 2,285,160 2037 72/69 2,285,160 91,209 30,403 121,612 2,163,548 108,177 2,271,725 2038 73/70 2,271,725 93,945 31,315 125,260 2,146,465 107,323 2,253,788

2039 74/71 2,253,788 96,762 32,254 129,016 2,124,772 106,239 2,231,011 2040 75/72 2,231,011 99,666 33,222 132,888 2,098,123 104,906 2,203,029 2041 76/73 2,203,029 102,656 34,219 136,875 2,066,154 103,308 2,169,462 2042 77/74 2,169,462 105,737 35,246 140,983 2,028,479 101,424 2,129,903

2043 78/75 2,129,903 108,908 36,303 145,211 1,984,692 99,235 2,083,927 2044 79/76 2,083,927 112,175 37,392 149,567 1,934,360 96,718 2,031,078 2045 80/77 2,031,078 115,540 38,513 154,053 1,877,025 93,851 1,970,876 2046 81/78 1,970,876 119,007 39,669 158,676 1,812,200 90,610 1,902,810

2047 82/79 1,902,810 122,576 40,859 163,435 1,739,375 86,969 1,826,344 2048 83/80 1,826,344 126,254 42,085 168,339 1,658,005 82,900 1,740,905 2049 84/81 1,740,905 130,042 43,347 173,389 1,567,516 78,376 1,645,892 2050 85/82 1,645,892 133,943 44,648 178,591 1,467,301 73,365 1,540,666

2051 86/83 1,540,666 137,962 45,987 183,949 1,356,717 67,836 1,424,553 2052 87/84 1,424,553 142,099 47,366 189,465 1,235,088 61,754 1,296,842 2053 88/85 1,296,842 146,363 48,788 195,151 1,101,691 55,085 1,156,776 2054 89/86 1,156,776 150,754 50,251 201,005 955,771 47,789 1,003,560

2055 90/87 1,003,560 155,276 51,759 207,035 796,525 39,826 836,351 2056 91/88 836,351 215,030 71,677 286,707 549,644 27,482 577,126 2057 92/89 577,126 221,482 73,827 295,309 281,817 14,091 295,908 2058 93/90 295,908 221,931 73,977 295,908 0 0 0






Needs vs. Resources Details

Year Age

Living Expenses

@3.00%

Income Applied Toward Needs

Capital Withdrawal

to Meet Needs

Remaining Need

(Deficit) 2031 66/63 $138,011 $40,756 $97,255 $0 2032 67/64 142,152 41,979 100,173 0 2033 68/65 146,416 43,238 103,178 0 2034 69/66 150,809 67,340 83,469 0

2035 70/67 155,333 69,360 85,973 0 2036 71/68 159,993 71,441 88,552 0 2037 72/69 164,793 73,584 91,209 0 2038 73/70 169,736 75,791 93,945 0

2039 74/71 174,828 78,066 96,762 0 2040 75/72 180,073 80,407 99,666 0 2041 76/73 185,475 82,819 102,656 0 2042 77/74 191,040 85,303 105,737 0

2043 78/75 196,771 87,863 108,908 0 2044 79/76 202,674 90,499 112,175 0 2045 80/77 208,754 93,214 115,540 0 2046 81/78 215,017 96,010 119,007 0

2047 82/79 221,467 98,891 122,576 0 2048 83/80 228,111 101,857 126,254 0 2049 84/81 234,955 104,913 130,042 0 2050 85/82 242,003 108,060 133,943 0

2051 86/83 249,264 111,302 137,962 0 2052 87/84 256,741 114,642 142,099 0 2053 88/85 264,444 118,081 146,363 0 2054 89/86 272,377 121,623 150,754 0

2055 90/87 280,548 125,272 155,276 0 2056 91/88 288,965 73,935 215,030 0 2057 92/89 297,634 76,152 221,482 0 2058 93/90 306,563 78,437 221,931 6,195

5,924,947 2,410,835 3,507,917 6,195






Asset Allocation Analysis






Asset Allocation Terminology

Asset Allocation Asset allocation is the process of determining how to spread an investment between categories of financial assets. Asset allocation is generally driven by the desire to optimize the risk-return trade-off according to an investor’s time horizon and risk tolerance. Asset allocation does not assure a profit and does not protect against loss in a declining market. Asset Classes Asset classes are broad investment categories offering different levels of risk and return. Asset class typically refers to highly distinct types of investments. The major categories are generally agreed to be stocks, bonds, cash, real estate, and commodities. These broad categories are oftentimes further divided into sub-types. For example, stocks are oftentimes further defined by whether the issuer is domestic or international, whether they have growth or value characteristics and/or their market capitalization. Bonds are often defined by whether the issuer is a municipality, corporation or government, and are also based upon their maturity length: short, intermediate and long. Diversification Diversification is designed to help reduce exposure to risk by investing in assets with different characteristics. The assets are unlikely to all move in the same direction because they react to market conditions in different ways. The goal of diversification is to reduce the risk in a portfolio. Risk is limited by the fact that not all asset classes or industries or individual companies move up and down in value at the same time or at the same rate. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not ensure against market risk. Risk Tolerance Risk tolerance is the level of risk you are willing to take on to achieve an investment goal. The higher your risk tolerance, the more risk you are willing to take on. Higher risk investments often have the potential for greater reward, but also a higher potential for greater loss. Risk tolerance may be assessed through the scoring of a risk tolerance questionnaire. Time Horizon Time horizon refers to the period of time a sum of money is expected to be invested. Your investment time horizon depends upon when and how much money will be needed. In general, the shorter the investment time horizon, the less risk an investor should be willing to accept. Time horizons are often stated as short term (1-3 years), medium term (3-5 years), and long term (10+ years). Portfolio Rebalancing Portfolio rebalancing is the process of making adjustments to counteract the fact that different assets perform differently over time. These adjustments are made to correct the asset allocation drift that results from performance differences in your asset selections. In general, you should consider rebalancing your portfolio at least once a year. Correlation Correlation is the technical term for comparing how different assets perform, relative to each other, during varying market cycles. Analysts measure this on a scale ranging from 1.0 (meaning the two assets move precisely in






tandem with each other) to -1.0 (meaning they move in opposite directions).






Asset Allocation Process Step 1:---Define your Goals and Time Horizon The first step in the asset allocation process is to define your goals and the corresponding time horizon for those goals. Typical investment goals include:

Funding your retirement

Funding the educational needs of children and grandchildren

Funding goals like a vacation home or wedding

Creating an inheritance or other legacy fund

Generally accepted time horizons are:

1 to 3 years -- Immediate

3 to 5 years -- Short Term

5 to 10 years -- Intermediate Term

Over 10 years -- Long Term

Step 2:---Assess your risk tolerance Assessing your risk tolerance generally involves completing a risk tolerance questionnaire. There are many factors that are examined when assessing an investor's risk tolerance. These may include:

Time horizon

Financial resources

Pursuit of multiple goals

Investment experience

Liabilities or obligations of the investor

Personality

Step 3:---Identify Target Asset Allocation Model for Implementation Often the net result of a risk tolerance questionnaire is a recommended allocation for you to implement. This recommended allocation may be represented as a model portfolio. Here are some examples of suggested model portfolios that are based upon an investor's risk tolerance:

Income

Income and Growth

Growth and Income

Growth

Aggressive Growth

Step 4:---Review and Rebalance Regularly No one should expect their investments to run on autopilot and monitor themselves. That is why the most important step in the asset allocation process may be making sure you continue to monitor your allocation. Different assets perform differently over time. This may result in the need to rebalance your portfolio on a regular






basis. Additionally, changes in your life, like marriage, divorce, a new child, serious illness or injury, may change your tolerance for risk and therefore a change to your asset allocation.






Your Current Asset Allocation Asset Allocation is a term used to define how an investor distributes their investments across multiple classes of assets, such as stocks, bonds, real estate and cash. Generally, the asset allocation that best suits your needs is determined with the help of a professional financial advisor. The table and chart below defines your allocation today based upon the data you provided.

Asset Class

Market Value

% of Portfolio

Large US Growth $37,238.00 4.41% Large US Value $55,027.00 6.51% Large US Blend $80,277.00 9.50% Mid Cap US Growth $102,918.00 12.18% Mid Cap US Value $5,352.00 0.63% Mid Cap US Blend $20,042.00 2.37% Small US Growth $25,007.00 2.96% Small US Value $5,262.00 0.62% Small US Blend $40,033.00 4.74% US Balanced $160,000.00 18.93% Large Foreign $43,990.00 5.20% Small Foreign/EM $3,198.00 0.38% Short Term Municipal Bond $177.00 0.02% Intermediate Term Municipal Bond $152.00 0.02% Long Term Municipal Bond $5,947.00 0.70% Intermediate Long High Quality $103,275.00 12.22% Other $157,275.00 18.61%

Total $845,170.00 100.00%

The Blended Rate is the weighted average of the market index rates of returns that underlie each asset class of a given model portfolio. Account fees are not taken into consideration. All investments involve risks that you will lose value including the amount of your initial investment. Investments that offer the potential for higher rates of return generally involve greater risk of loss. Note: reinvestment transactions that involve selling existing






investments may involve transaction costs associated with the sale of those assets as well as transaction costs associated with the purchase of new investments. International investing: There are special risks associated with international investing, such as political changes and currency fluctuations. These risks are heightened in emerging markets. Small/Mid-Capitalization investing: Investments in companies with small or mid-market capitalization ("small/mid-caps") may be subject to special risks given their characteristic narrow markets, limited financial resources, and less liquid stocks, all of which may cause price volatility. High-Yield investing: Investments in high yielding debt securities are generally subject to greater market fluctuations and risk of loss of income and principal, than are investments in lower yielding debt securities. Inflation Protected Bond investing: Interest rate increases can cause the price of a debt security to decrease. Increases in real interest rates can cause the price of inflation-protected debt securities to decrease. Interest payments on inflation-protected debt securities can be unpredictable. Interest Rate Risk: This risk refers to the risk that bond prices decline as interest rates rise. Interest rates and bond prices tend to move in opposite directions. Long-term bonds tend to be more sensitive to interest rate changes and therefore may be more volatile.






Your Recommended Asset Allocation Based upon the scoring of the risk tolerance questionnaire, a recommended asset allocation has been generated. This model portfolio is consistent with your time horizon and risk tolerance objectives. The table and chart below define this recommended portfolio across multiple asset classes.

Asset Class

Market Value

% of Portfolio

Large US Growth $84,517.00 10.00% Large US Value $84,517.00 10.00% Mid Cap US Growth $33,807.00 4.00% Mid Cap US Value $33,807.00 4.00% Small US Growth $16,903.00 2.00% Small US Value $16,903.00 2.00% Large Foreign $42,259.00 5.00% Intermediate Long High Quality $253,551.00 30.00% Other $278,906.00 33.00%

Total $845,170.00 100.00%

The Blended Rate is the weighted average of the market index rates of returns that underlie each asset class of a given model portfolio. Account fees are not taken into consideration. All investments involve risks that you will lose value including the amount of your initial investment. Investments that offer the potential for higher rates of return generally involve greater risk of loss. Note: reinvestment transactions that involve selling existing investments may involve transaction costs associated with the sale of those assets as well as transaction costs associated with the purchase of new investments. International investing: There are special risks associated with international investing, such as political changes and currency fluctuations. These risks are heightened in emerging markets. Small/Mid-Capitalization investing: Investments in companies with small or mid-market capitalization ("small/mid-caps") may be subject to special risks given their characteristic narrow markets, limited financial resources, and less liquid stocks, all of which may cause price volatility.






High-Yield investing: Investments in high yielding debt securities are generally subject to greater market fluctuations and risk of loss of income and principal, than are investments in lower yielding debt securities. Inflation Protected Bond investing: Interest rate increases can cause the price of a debt security to decrease. Increases in real interest rates can cause the price of inflation-protected debt securities to decrease. Interest payments on inflation-protected debt securities can be unpredictable. Interest Rate Risk: This risk refers to the risk that bond prices decline as interest rates rise. Interest rates and bond prices tend to move in opposite directions. Long-term bonds tend to be more sensitive to interest rate changes and therefore may be more volatile.






Current vs. Recommended Allocation This report compares your current allocation with the recommended model portfolio resulting from your answers to the risk tolerance questionnaire.

Asset Class

Market Value

% of Portfolio

Large US Growth $37,238.00 4.41% Large US Value $55,027.00 6.51% Large US Blend $80,277.00 9.50% Mid Cap US Growth $102,918.00 12.18% Mid Cap US Value $5,352.00 0.63% Mid Cap US Blend $20,042.00 2.37% Small US Growth $25,007.00 2.96% Small US Value $5,262.00 0.62% Small US Blend $40,033.00 4.74% US Balanced $160,000.00 18.93% Large Foreign $43,990.00 5.20% Small Foreign/EM $3,198.00 0.38%

Asset Class

Market Value

% of Portfolio

Large US Growth $84,517.00 10.00% Large US Value $84,517.00 10.00% Large US Blend $0.00 0.00% Mid Cap US Growth $33,807.00 4.00% Mid Cap US Value $33,807.00 4.00% Mid Cap US Blend $0.00 0.00% Small US Growth $16,903.00 2.00% Small US Value $16,903.00 2.00% Small US Blend $0.00 0.00% US Balanced $0.00 0.00% Large Foreign $42,259.00 5.00% Small Foreign/EM $0.00 0.00%






Short Term Municipal Bond $177.00 0.02% Intermediate Term Municipal Bond $152.00 0.02% Long Term Municipal Bond $5,947.00 0.70% Intermediate Long High Quality $103,275.00 12.22% Other $157,275.00 18.61%

Total $845,170.00 100.00%

Short Term Municipal Bond $0.00 0.00% Intermediate Term Municipal Bond $0.00 0.00% Long Term Municipal Bond $0.00 0.00% Intermediate Long High Quality $253,551.00 30.00% Other $278,906.00 33.00%

Total $845,170.00 100.00%

The Blended Rate is the weighted average of the market index rates of returns that underlie each asset class of a given model portfolio. Account fees are not taken into consideration. All investments involve risks that you will lose value including the amount of your initial investment. Investments that offer the potential for higher rates of return generally involve greater risk of loss. Note: reinvestment transactions that involve selling existing investments may involve transaction costs associated with the sale of those assets as well as transaction costs associated with the purchase of new investments. International investing: There are special risks associated with international investing, such as political changes and currency fluctuations. These risks are heightened in emerging markets. Small/Mid-Capitalization investing: Investments in companies with small or mid-market capitalization ("small/mid-caps") may be subject to special risks given their characteristic narrow markets, limited financial resources, and less liquid stocks, all of which may cause price volatility. High-Yield investing: Investments in high yielding debt securities are generally subject to greater market fluctuations and risk of loss of income and principal, than are investments in lower yielding debt securities. Inflation Protected Bond investing: Interest rate increases can cause the price of a debt security to decrease. Increases in real interest rates can cause the price of inflation-protected debt securities to decrease. Interest payments on inflation-protected debt securities can be unpredictable. Interest Rate Risk: This risk refers to the risk that bond prices decline as interest rates rise. Interest rates and bond prices tend to move in opposite directions. Long-term bonds tend to be more sensitive to interest rate changes and therefore may be more volatile.






Qualified vs. Non-Qualified Allocation When making investment choices, it may be important to understand your allocation in your Qualified accounts and your allocation in your Non-Qualified accounts. The taxation differences between these types of accounts may influence your investment objectives. The table and chart below compares your allocation in Qualified accounts and Non-Qualified accounts.

Asset Class

Market Value

% of Portfolio

Large US Growth $28,260.00 9.99% Large US Value $27,656.00 9.78% Large US Blend $26,383.00 9.33% Mid Cap US Growth $3,125.00 1.10% Mid Cap US Value $4,472.00 1.58% Mid Cap US Blend $4,320.00 1.53% Small US Growth $0.00 0.00% Small US Value $48.00 0.02% Small US Blend $19.00 0.01% Large Foreign $15,284.00 5.40%

Asset Class

Market Value

% of Portfolio

Large US Growth $8,978.00 4.12% Large US Value $27,371.00 12.56% Large US Blend $23,894.00 10.97% Mid Cap US Growth $41,060.00 18.85% Mid Cap US Value $0.00 0.00% Small US Growth $23,760.00 10.91% Small US Value $0.00 0.00% Small US Blend $24,400.00 11.20% Large Foreign $18,396.00 8.44% Intermediate Long High Quality $0.00 0.00%






Small Foreign/EM $2,875.00 1.02% Short Term Municipal Bond $177.00 0.06% Intermediate Term Municipal Bond $152.00 0.05% Long Term Municipal Bond $5,947.00 2.10% Intermediate Long High Quality $99,573.00 35.19% Short Inter High Quality $16,149.00 5.71% Other $48,480.00 17.14%

Total $282,920.00 100.00%

Short Inter High Quality $0.00 0.00% Intermediate Long High Yield $0.00 0.00% Foreign Bond $0.00 0.00% REIT $0.00 0.00% Cash $50,000.00 22.95%

Total $217,859.00 100.00%

The Blended Rate is the weighted average of the market index rates of returns that underlie each asset class of a given model portfolio. Account fees are not taken into consideration. All investments involve risks that you will lose value including the amount of your initial investment. Investments that offer the potential for higher rates of return generally involve greater risk of loss. Note: reinvestment transactions that involve selling existing investments may involve transaction costs associated with the sale of those assets as well as transaction costs associated with the purchase of new investments. International investing: There are special risks associated with international investing, such as political changes and currency fluctuations. These risks are heightened in emerging markets. Small/Mid-Capitalization investing: Investments in companies with small or mid-market capitalization ("small/mid-caps") may be subject to special risks given their characteristic narrow markets, limited financial resources, and less liquid stocks, all of which may cause price volatility. High-Yield investing: Investments in high yielding debt securities are generally subject to greater market fluctuations and risk of loss of income and principal, than are investments in lower yielding debt securities. Inflation Protected Bond investing: Interest rate increases can cause the price of a debt security to decrease. Increases in real interest rates can cause the price of inflation-protected debt securities to decrease. Interest payments on inflation-protected debt securities can be unpredictable. Interest Rate Risk: This risk refers to the risk that bond prices decline as interest rates rise. Interest rates and bond prices tend to move in opposite directions. Long-term bonds tend to be more sensitive to interest rate changes and therefore may be more volatile.






Your Asset Types The multiple asset classes that define your asset allocation, can be grouped into 5 asset types; Equities, Tax-exempt bonds, Taxable bonds, Cash and Other. These higher level asset type categories contain multiple asset classes within each. The table and chart below defines how you are allocated across these asset types.

Asset Type/Class

Market Value

% of Portfolio

Equities

Large US Growth $37,237.77 4.41% Large US Value $55,026.34 6.51% Large US Blend $80,276.83 9.50% Mid Cap US Growth $102,918.54 12.18% Mid Cap US Value $5,352.38 0.63% Mid Cap US Blend $20,042.22 2.37% Small US Growth $25,006.74 2.96% Small US Value $5,261.58 0.62% Small US Blend $40,033.21 4.74% US Balanced $160,000.00 18.93% Large Foreign $43,989.43 5.20% Small Foreign/EM $3,198.08 0.38%

Total $578,343.00 68.43%

Bonds

Short Term Municipal Bond $176.69 0.02% Intermediate Term Municipal Bond $151.89 0.02% Long Term Municipal Bond $5,946.80 0.70% Intermediate Long High Quality $103,275.46 12.22% Short Inter High Quality $16,324.01 1.93% Intermediate Long High Yield $26,006.20 3.08% Foreign Bond $2,108.50 0.25% Strategic Income $25,000.00 2.96%

Total $178,990.00 21.18%

Cash

Cash $51,856.84 6.14%

Total $51,857.00 6.14%

Other

REIT $10,000.00 1.18% Commodities $25,980.00 3.07%






Total $35,980.00 4.26%

Total $845,170.00 100.00%






Risk Tolerance Questionnaire Risk tolerance can be defined as the extent to which an individual chooses to risk a less-favorable outcome in the pursuit of a more-favorable outcome. A person's risk tolerance is often assessed by answering a series of questions in a questionnaire. The main objective of this type of questionnaire is to determine an investor's time horizon and to quantify the investor's risk tolerance to volatility in their expected returns. This report summarizes your answers to this type of risk tolerance questionnaire.

1. What is your age?

56 and over 2. What is your primary financial goal?

Wealth preservation 3. What is the time frame for you to achieve your financial goals?

0 – 5 years 4. Which of the following best describes your financial goals?

Preserving principal and earning a moderate amount of current income 5. How do you expect your standard of living five years from now to compare to your standard of living

today?

The same as it is today 6. Five years from today, you expect your portfolio value to be:

Portfolio value is not my primary concern; I am more concerned with current income 7. Generating current income from your portfolio is:

A primary concern (only if you are about to retire) 8. With the income generated from your portfolio, you plan to:

Use it for living expenses 9. You have just received a windfall of $50,000. How would you invest it?

I would invest in something that offered moderate current income and was very conservative 10. Which of the following statements would best describe your reaction if the value of your portfolio were






to suddenly decline by 15%?

I would be very concerned because I cannot accept fluctuations in the value of my portfolio 11. Which of the following investments would you feel most comfortable owning?

Certificates of deposit 12. Which of the following investments would you least like to own?

Stocks of new growth companies 13. Which of the following investments do you feel are the most ideal for your portfolio?

Certificates of deposit 14. How optimistic are you about the long-term prospects for the economy?

Unsure 15. Which of the following best describes your attitude about investments outside the U.S.?

Unsure

This analysis must be reviewed in conjunction with the limitations and conditions disclosed in the Disclaimer page. Projections are based on assumptions provided by the advisor/representative, and are not guaranteed. Actual results will vary, perhaps to

a significant degree. The projected reports are hypothetical in nature and for illustrative purposes only. Return assumptions do not reflect the deduction of any commissions, or fees or product charges that may apply to any particular investment. Deduction of such charges would result in a lower rate of return. Consult your tax and/or legal advisor before implementing any tax or legal strategies. Past performance is no guarantee of future results. The market for all securities is subject to fluctuation

such that upon sale an investor may lose principal. Securities and advisory services offered through LPL Financial â€“ A Registered Investment Advisor, Member FINRA/SIPC


Current vs. Recommended Details Current Asset Allocation

Large

Growth Large Value

Large Blend

Mid Cap

Growth

Mid Cap

Value

Mid Cap

Blend Small

Growth Small Value

Small Blend Balanced

Lg Foreign

Small Foreign

St Term Muni

Bd

It Term Muni

Bd

Lg Term Muni

Bd

It High Qual

Bd Other Total

ALL ASSETS - CURRENT ALLOCATION 529 Plan for Amanda $0 $0 $0 $0 $0 $0 $0 $0 $0 $95,000 $0 $0 $0 $0 $0 $0 $0 $95,000 529 Plan for Peter 0 0 0 0 0 0 0 0 0 65,000 0 0 0 0 0 0 0 65,000 Cash Reserve 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10,000 10,000 John's 401K 26,709 27,656 26,184 2,422 4,472 3,930 0 48 19 0 3,080 925 76 130 5,289 73,207 29,808 203,955 John's Annuity 0 0 30,000 0 0 15,000 0 0 10,000 0 10,000 0 0 0 0 0 35,000 100,000 Katie's Roth 403b 1,551 0 199 703 0 390 0 0 0 0 12,204 1,950 101 22 658 26,366 34,821 78,965 Katie's Roth IRA (converted) 0 0 0 58,733 880 722 1,247 5,214 5,614 0 310 323 0 0 0 3,702 7,646 84,391 Merrill Lynch Account 8,978 27,371 23,894 41,060 0 0 23,760 0 24,400 0 18,396 0 0 0 0 0 0 167,859 Term Life on Jon 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Term Policy for Katie 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Vanguard Money Market 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 40,000 40,000

Totals 37,238 55,027 80,277 102,918 5,352 20,042 25,007 5,262 40,033 160,000 43,990 3,198 177 152 5,947 103,275 157,275 845,170

RECOMMENDED PORTFOLIO (INCOME WITH MODERATE GROWTH)

Recommended Portfolio (Inc with Mod Growth)

10.00% 10.00% 0.00% 4.00% 4.00% 0.00% 2.00% 2.00% 0.00% 0.00% 5.00% 0.00% 0.00% 0.00% 0.00% 30.00% 33.00% 100.00%

Large

Growth Large Value

Large Blend

Mid

Cap Growth

Mid

Cap Value

Mid

Cap Blend

Small Growth

Small Value

Small Blend Balanced

Lg Foreign

Small Foreign

St Term

Muni Bd

It Term

Muni Bd

Lg Term

Muni Bd

It High

Qual Bd Other Total

All Assets 4.41% 6.51% 9.50% 12.18% 0.63% 2.37% 2.96% 0.62% 4.74% 18.93% 5.20% 0.38% 0.02% 0.02% 0.70% 12.22% 18.61% 100.00% Recommended Portfolio (Inc with Mod Growth)

10.00% 10.00% 0.00% 4.00% 4.00% 0.00% 2.00% 2.00% 0.00% 0.00% 5.00% 0.00% 0.00% 0.00% 0.00% 30.00% 33.00% 100.00%

% Disparity 5.59% 3.49% -9.50% -8.18% 3.37% -2.37% -0.96% 1.38% -4.74% -18.93% -0.20% -0.38% -0.02% -0.02% -0.70% 17.78% $ Disparity 47,279 29,490 (80,277) (69,111) 28,455 (20,042) (8,104) 11,641 (40,033) (160,000) (1,732) (3,198) (177) (152) (5,947) 150,276

The Blended Rate is the weighted average of the market index rates of returns that underlie each asset class of a given model portfolio. Account fees are not taken into consideration. All investments involve risks that you will lose value including the amount of your initial investment. Investments that offer the potential for higher rates of return generally involve greater risk of loss. Note: reinvestment transactions that involve selling existing investments may involve transaction costs associated with the sale of those assets as well as transaction costs associated with the purchase of new investments. International investing: There are special risks associated with international investing, such as political changes and currency fluctuations. These risks are heightened in emerging markets. Small/Mid-Capitalization investing: Investments in companies with small or mid-market capitalization ("small/mid-caps") may be subject to special risks given their characteristic narrow markets, limited financial resources, and less liquid stocks, all of which may cause price volatility.





High-Yield investing: Investments in high yielding debt securities are generally subject to greater market fluctuations and risk of loss of income and principal, than are investments in lower yielding debt securities. Inflation Protected Bond investing: Interest rate increases can cause the price of a debt security to decrease. Increases in real interest rates can cause the price of inflation-protected debt securities to decrease. Interest payments on inflation-protected debt securities can be unpredictable. Interest Rate Risk: This risk refers to the risk that bond prices decline as interest rates rise. Interest rates and bond prices tend to move in opposite directions. Long-term bonds tend to be more sensitive to interest rate changes and therefore may be more volatile.





Holdings Details This report defines the individual holdings within each of the investment accounts. Additionally, the report outlines which asset class each holding falls into and their approximate percentage of the total portfolio.

Holding Ticker CUSIP Units Price Market

Value Asset Class

% of Portfolio

John's 401K PIMCO FUNDS TOTAL RETURN FUND INSTITUTIONAL SHARES PTTRX 10,000.000 $10.86 $108,600.00 It High Qual Bd(67.41%)... 20.29% VANGUARD 500 INDEX FD ADMIRAL SHS VFIAX 500.000 $190.71 $95,355.00 Large Value(28.90%)... 17.82% Katie's Roth 403b FIDELITY AGGRESSIVE INTERNATIONAL FUND FIVFX 1,000.000 $17.03 $17,030.00 Lg Foreign(71.66%)... 3.18% FIDELITY INVESTMENT GRADE BOND FUND FBNDX 4,500.000 $7.99 $35,955.00 It High Qual Bd(73.33%)... 6.72% Fidelity Series Commodity Strategy Fd 750.000 $34.64 $25,980.00 Commodities 4.85% Katie's Roth IRA (converted) FIDELITY NEW MARKETS INCOME FUND FNMIX 750.000 $15.18 $11,385.00 It High Yield Bd(47.10%)... 2.13% FIDELITY SMALL CAP DISCOVERY FUND FSCRX 500.000 $30.67 $15,335.00 Small Blend(36.61%)... 2.87% Markel Corp (Holding Co) MKL 75.000 $768.96 $57,672.00 Mid Cap Growth 10.78% Merrill Lynch Account Apple Inc. AAPL 30.000 $124.43 $3,732.90 Large Growth 0.70% Caterpillar Inc. CAT 100.000 $80.03 $8,003.00 Large Value 1.50% Cisco Systems, Inc. CSCO 100.000 $27.53 $2,752.50 Large Blend 0.51% CryptoLogic Limited 5,000.000 $3.68 $18,396.00 Lg Foreign 3.44% Disney (Walt) Co. (The) DIS 50.000 $104.89 $5,244.50 Large Growth 0.98% Ford Motor Co. (DE) F 1,200.000 $16.14 $19,368.00 Large Value 3.62% Heartland Express, Inc. HTLD 1,000.000 $23.76 $23,760.00 Small Growth 4.44% Microsoft Corporation MSFT 520.000 $40.66 $21,140.60 Large Blend 3.95% The Middleby Corporation MIDD 400.000 $102.65 $41,060.00 Mid Cap Growth 7.67% United States Steel Corp. X 1,000.000 $24.40 $24,400.00 Small Blend 4.56%

Total Holdings $535,169.50 100.00%






Life Insurance Analysis






Types of Life Insurance

Term Insurance This type of Life Insurance provides coverage on the insured for a specified period of time (5, 10, or 20 years for example) as long as the premiums are paid and the policy is not canceled. Annual Renewable Term Provides a fixed amount of coverage for one year and allows the policy owner to renew the coverage each year, without evidence of insurability. Level Term Provides a fixed amount of coverage with premiums that are fixed over a certain period of time, often in 10 year increments. Decreasing Term Provides for coverage that decreases throughout the term of coverage, while the premiums remain level. Often times used for a short term decreasing liability like a mortgage.

Permanent Insurance* Permanent Life Insurance provides coverage for the insured’s entire life - as long as premiums are paid on time and the policy is not canceled - and generally allows for a build up of cash value. The most common types of Permanent Insurance are: Whole Life The oldest kind of permanent insurance, where premiums are fixed and guaranteed and remain level throughout the policy’s lifetime. Provided premiums are paid on time, this coverage also provides a guaranteed cash value and guaranteed death benefit. Guarantees are dependent upon the claims-paying ability of the issuing insurance company. Universal Life Universal Life allows the owner after the initial payment to pay flexible premiums. The owner may change the death benefit from time to time (increase in coverage may require evidence of insurability) and vary the amount and timing of premium payments subject to certain minimums and standards. Variable Universal Life A form of permanent coverage that combines premium and death benefit flexibility with allowing the policy owner to choose among different investment options. Values fluctuate based on market volatility. The extent to which this form of coverage is permanent is also dependent on the performance of the underlying investments. Variable universal life insurance policy holders are subject to investment risks, including the possible loss of principal. Variable universal life insurance is sold by prospectus. Before purchasing a variable universal life insurance policy, investors should carefully consider the investment objectives, risks, charges and expenses of the variable universal life insurance policy and its underlying investment choices. For this and other information, obtain the prospectuses for the variable universal life insurance policy and its underlying investment choices from your registered representative. Please read the prospectuses carefully before investing or sending money.






*Length of coverage is permanent for whole life as long as premiums are paid. This may not be true of universal life or variable universal life insurance.






A Feature Comparison of Term and Permanent Life Insurance Feature Term Permanent*

Length of Coverage Specific Period of time as long as premiums are paid. Lifetime as long as premiums are paid

Premiums • Determined by age and health • Typically lower than permanent coverage

• Determined by age and health • Initially higher than term coverage with portion

to cash value

Cash Value Not Available Potential for cash value accumulation on a Tax

Deferred Basis

Face Amount Typically Level Level and/or Flexible

Key Advantage Provides the highest death benefit for lowest

premium when need is temporary. Provides lifetime protection combined with the

potential for cash value accumulation.

*Length of coverage is permanent for whole life as long as premiums are paid. This may not be true of universal life or variable universal life insurance. Most insurance policies contain exclusions, limitations, reductions of benefits and terms for keeping them in force. Your representative can provide you with costs and complete details.






Q & A on Life Insurance

How do I determine how much insurance I need? The amount of coverage you need depends upon your individual circumstances. Things to consider include anticipated final expenses, ongoing living expenses for your spouse and children, any outstanding debts (like mortgages), anticipated education costs for children, and any expenses required for business continuity. Remember that needs will change over time and inflation can greatly impact future costs.

How are life insurance cash values and death benefits taxed? Under current tax law:

Cash value growth in a life insurance policy is typically tax deferred.

If policy is surrendered for cash value, the difference between the cash value and your basis in the policy is subject to income tax.

Policy loans are typically not treated as a taxable distribution.

Generally, death benefit proceeds are not subject to income tax.

Note: Policy loans and withdrawals reduce the policy’s cash value and death benefit. While withdrawals up to the basis paid into the contract and loans thereafter will generally not create an immediate taxable event, substantial tax ramifications could result upon contract lapse or surrender. If the policy is a modified endowment contract (MEC), all withdrawals and loans are treated as coming first from the policy gain, are subject to ordinary income tax, and may incur an additional 10% penalty tax if the owner is under 59 1/2.

What are some features to consider when purchasing an insurance policy? Accelerated benefits rider – A life insurance rider that allows for the early payment of some portion of the

policy face amount if the insured suffers from a terminal illness or injury.

Accidental death benefit rider – A life insurance rider providing for an additional benefit when death occurs by accidental means.

Convertible Term Insurance – Term insurance which can be exchanged (converted), at the option of the policy owner and without evidence of insurability, for a permanent policy.

Waiver of premium – A rider exempting the insured from paying premiums after he or she has been disabled for a specified period of time.

Note: The above features may be available for an additional charge.

What is Cash Surrender Value? This contract term refers to the amount payable to a permanent life policy owner upon surrender of the policy. It is equal to the current cash value of the policy, less any charges due upon surrender.

What is an Irrevocable Life Insurance Trust (ILIT)? An ILIT is a trust which holds a life insurance policy and in which the grantor has completely given up all rights in the property in the trust and retains no rights to revoke, terminate, or modify the trust in any way. This type of trust is often times utilized to remove the value of the life insurance from the insured's estate and provide tax free






liquidity for an estate.






The Need for Life Insurance

Do you need life insurance? Keep in mind that life insurance isn’t for the people who die, it is for the people who live. If you have one or more people in your life that depend upon you financially – such as a spouse, children or other loved ones – you likely have a need for life insurance. Ask yourself: when you die, will your family’s financial security be protected? Life insurance is used by most people to replace the income lost due to a premature death. Your ability to earn an income could be considered your family’s biggest asset, and without it your family’s standard of living and financial security could be lost. By supplying your loved ones with an income even after your death, you can help to ensure their financial future.

What can Life Insurance Protect?

Life insurance can guard against the need for your family to make drastic changes to their plans should the unexpected occur. Death benefits are almost always free from income tax and can help protect their ability to meet:

Final expenses

Day to day living expenses

Education expenses for your children

Outstanding liabilities like mortgages

Family business continuity needs

A legacy for your grandchildren

A comfortable retirement for your spouse

Remember: Your financial needs today may not be the same as your needs tomorrow. Changes in your life such as marriage, the birth of a child, a new job, starting a business or getting a divorce necessitate a re-evaluation of your life insurance needs.






Premature Client Death






The Cost of a Premature Death When a person dies prematurely, they leave behind many expenses with which their dependents must cope. Everyday living expenses, ongoing liabilities such as mortgage payments, and the funding of education for children are just a few examples of the expenses that may need to be covered. Life Insurance can help provide a safety net by which you can ensure that those you leave behind are able to meet their expenses and enjoy the standard of living that you would want. The first step in determining what the right level of protection is for you and your family is to get an idea of the expenses that will need to be funded in the event of your premature death.

Total Future Living Expenses

$5,342,905

Total Liabilities & Education

$947,597

Total Expenses

$6,290,502

What will your expenses be?

Based upon the anticipated expenses listed below, you can expect to incur $6,290,502 of total expenses over

the 44 years following John's premature death in 2015. The chart below shows the portion of the total cost associated with each type of expense.

YOUR ANTICIPATED EXPENSES

Living Expenses: $5,000 per month

($60,000 per year)

Expenses Grow at: 3.00% per year

Fund Expenses Until: Death of Spouse 2058

Liabilities to Pay Off: $600,000

Educations to Fund: Amanda's College

Peter's College

Keep in Mind... The cost of a premature death does not remain constant. As certain life events occur, it makes sense to review how these costs may change and whether you are properly protected. These life events may include purchasing a new home, the birth of a child, changing jobs, divorce or retirement.






Your Current Resources Your capital resources, insurance proceeds and continuing income sources can be used to offset the expenses that will occur after a premature death. But these resources may not be enough. Let’s take a look at how your assets

and income stack up against your projected expenses in the event that John

dies prematurely in 2015.

Katie will have the following sources of income to help cover expenses until 2058:


2034-2058

Katie's Salary $50,000/yr 2015-2031

Total Years to Fund

44

Years Currently Funded

5

Unfunded Years

39

Additional Insurance Needed

to cover shortfall

$1,192,000

You currently have $685,170 of available capital resources and $150,000 in existing life insurance coverage. Together, these assets provide a total of

$835,170 to offset your projected expenses.

For purposes of this analysis, we’ll assume that capital resources and insurance proceeds will grow at 5.00%

prior to Katie's assumed retirement age and 5.00% after retirement. Withdrawals from capital resources will be

taxed at a rate of 25.0%. Income will be indexed at 3.00% and will be subject to a 25.0% income tax.

How will you cover your expenses?

The chart below illustrates how your income, capital resources and insurance benefits would stack up against your projected expenses. Each column represents the total expenses in a given year, and the colors in each column indicate the resources used to meet those expenses.






Survivor Income Details

Year Age Income

from Flows SS Income

Total Income

Sources

Income Taxes

@25.0%

Net Income Applied to

Needs Surplus Income

2015 47 $50,000 $0 $50,000 $12,500 $37,500 $0 2016 48 51,500 33,780 85,280 21,320 61,800 2,160 2017 49 53,045 34,794 87,839 21,960 63,654 2,225 2018 50 54,636 35,836 90,472 22,618 65,564 2,290

2019 51 56,275 36,912 93,187 23,297 69,890 0 2020 52 57,964 19,010 76,974 19,244 57,730 0 2021 53 59,703 19,580 79,283 19,821 59,462 0 2022 54 61,494 0 61,494 15,374 46,120 0

2023 55 63,339 0 63,339 15,835 47,504 0 2024 56 65,239 0 65,239 16,310 48,929 0 2025 57 67,196 0 67,196 16,799 50,397 0 2026 58 69,212 0 69,212 17,303 51,909 0

2027 59 71,288 0 71,288 17,822 53,466 0 2028 60 73,427 0 73,427 18,357 55,070 0 2029 61 75,629 0 75,629 18,907 56,722 0 2030 62 77,898 0 77,898 19,475 58,423 0

2031 63 0 0 0 0 0 0 2032 64 0 0 0 0 0 0 2033 65 0 0 0 0 0 0 2034 66 0 38,339 38,339 9,585 28,754 0

2035 67 0 39,489 39,489 9,872 29,617 0 2036 68 0 40,673 40,673 10,168 30,505 0 2037 69 0 41,894 41,894 10,474 31,420 0 2038 70 0 43,150 43,150 10,788 32,362 0

2039 71 0 44,445 44,445 11,111 33,334 0 2040 72 0 45,778 45,778 11,445 34,333 0 2041 73 0 47,152 47,152 11,788 35,364 0 2042 74 0 48,566 48,566 12,142 36,424 0

2043 75 0 50,023 50,023 12,506 37,517 0 2044 76 0 51,524 51,524 12,881 38,643 0 2045 77 0 53,070 53,070 13,268 39,802 0 2046 78 0 54,662 54,662 13,666 40,996 0

2047 79 0 56,302 56,302 14,076 42,226 0 2048 80 0 57,991 57,991 14,498 43,493 0 2049 81 0 59,730 59,730 14,933 44,797 0 2050 82 0 61,522 61,522 15,381 46,141 0

2051 83 0 63,368 63,368 15,842 47,526 0 2052 84 0 65,269 65,269 16,317 48,952 0 2053 85 0 67,227 67,227 16,807 50,420 0 2054 86 0 69,244 69,244 17,311 51,933 0

2055 87 0 71,321 71,321 17,830 53,491 0 2056 88 0 73,461 73,461 18,365 55,096 0 2057 89 0 75,665 75,665 18,916 56,749 0 2058 90 0 77,935 77,935 19,484 58,451 0

2,585,557 646,396 1,932,486





Capital Resources Details Capital Resources Today: $685,170

Existing Life Insurance Benefits: $150,000 Total Capital Resources: $835,170

Pre-Retirement Growth Rate: 5.00% Post-Retirement Growth Rate: 5.00%


Resources

Withdrawals from

Insurance Proceeds

Withdrawals from

Savings

Taxation on Savings

Withdrawals at 25.0%

Net Withdrawals

Applied to Expenses

Income Added

to Capital

Total Capital after Withdrawals Growth


2015 47 $835,170 $150,000 $630,000 $157,500 $622,500 $0 $55,170 $2,759 $57,929 2016 48 57,929 0 0 0 0 2,160 60,089 3,004 63,093 2017 49 63,093 0 0 0 0 2,225 65,318 3,266 68,584 2018 50 68,584 0 0 0 0 2,290 70,874 3,544 74,418

2019 51 74,418 0 50,385 12,596 37,789 0 24,033 1,202 25,235 2020 52 25,235 0 25,235 6,309 18,926 0 0 0 0 2021 53 0 0 0 0 0 0 0 0 0 2022 54 0 0 0 0 0 0 0 0 0

2023 55 0 0 0 0 0 0 0 0 0 2024 56 0 0 0 0 0 0 0 0 0 2025 57 0 0 0 0 0 0 0 0 0 2026 58 0 0 0 0 0 0 0 0 0

2027 59 0 0 0 0 0 0 0 0 0 2028 60 0 0 0 0 0 0 0 0 0 2029 61 0 0 0 0 0 0 0 0 0 2030 62 0 0 0 0 0 0 0 0 0

2031 63 0 0 0 0 0 0 0 0 0 2032 64 0 0 0 0 0 0 0 0 0 2033 65 0 0 0 0 0 0 0 0 0 2034 66 0 0 0 0 0 0 0 0 0

2035 67 0 0 0 0 0 0 0 0 0 2036 68 0 0 0 0 0 0 0 0 0 2037 69 0 0 0 0 0 0 0 0 0 2038 70 0 0 0 0 0 0 0 0 0

2039 71 0 0 0 0 0 0 0 0 0 2040 72 0 0 0 0 0 0 0 0 0 2041 73 0 0 0 0 0 0 0 0 0 2042 74 0 0 0 0 0 0 0 0 0

2043 75 0 0 0 0 0 0 0 0 0 2044 76 0 0 0 0 0 0 0 0 0 2045 77 0 0 0 0 0 0 0 0 0





2046 78 0 0 0 0 0 0 0 0 0

2047 79 0 0 0 0 0 0 0 0 0 2048 80 0 0 0 0 0 0 0 0 0 2049 81 0 0 0 0 0 0 0 0 0 2050 82 0 0 0 0 0 0 0 0 0

2051 83 0 0 0 0 0 0 0 0 0 2052 84 0 0 0 0 0 0 0 0 0 2053 85 0 0 0 0 0 0 0 0 0 2054 86 0 0 0 0 0 0 0 0 0

2055 87 0 0 0 0 0 0 0 0 0 2056 88 0 0 0 0 0 0 0 0 0 2057 89 0 0 0 0 0 0 0 0 0 2058 90 0 0 0 0 0 0 0 0 0






Survivor Needs Details

Year Age Liabilities Education

Costs

Living Expenses

@3.00% Total

Expenses

Income Applied

Towards Needs

Capital Withdrawal

to Meet Needs

Remaining Need

(Deficit) 2015 47 $600,000 $0 $60,000 $660,000 $37,500 $622,500 $0 2016 48 0 0 61,800 61,800 61,800 0 0 2017 49 0 0 63,654 63,654 63,654 0 0 2018 50 0 0 65,564 65,564 65,564 0 0

2019 51 0 40,148 67,531 107,679 69,890 37,789 0 2020 52 0 84,289 69,556 153,845 57,730 18,926 77,189 2021 53 0 86,818 71,643 158,461 59,462 0 98,999 2022 54 0 89,423 73,792 163,215 46,120 0 117,095

2023 55 0 46,919 76,006 122,925 47,504 0 75,421 2024 56 0 0 78,286 78,286 48,929 0 29,357 2025 57 0 0 80,635 80,635 50,397 0 30,238 2026 58 0 0 83,054 83,054 51,909 0 31,145

2027 59 0 0 85,546 85,546 53,466 0 32,080 2028 60 0 0 88,112 88,112 55,070 0 33,042 2029 61 0 0 90,755 90,755 56,722 0 34,033 2030 62 0 0 93,478 93,478 58,423 0 35,055

2031 63 0 0 96,282 96,282 0 0 96,282 2032 64 0 0 99,171 99,171 0 0 99,171 2033 65 0 0 102,146 102,146 0 0 102,146 2034 66 0 0 105,210 105,210 28,754 0 76,456

2035 67 0 0 108,367 108,367 29,617 0 78,750 2036 68 0 0 111,618 111,618 30,505 0 81,113 2037 69 0 0 114,966 114,966 31,420 0 83,546 2038 70 0 0 118,415 118,415 32,362 0 86,053

2039 71 0 0 121,968 121,968 33,334 0 88,634 2040 72 0 0 125,627 125,627 34,333 0 91,294 2041 73 0 0 129,395 129,395 35,364 0 94,031 2042 74 0 0 133,277 133,277 36,424 0 96,853

2043 75 0 0 137,276 137,276 37,517 0 99,759 2044 76 0 0 141,394 141,394 38,643 0 102,751 2045 77 0 0 145,636 145,636 39,802 0 105,834 2046 78 0 0 150,005 150,005 40,996 0 109,009

2047 79 0 0 154,505 154,505 42,226 0 112,279 2048 80 0 0 159,140 159,140 43,493 0 115,647 2049 81 0 0 163,914 163,914 44,797 0 119,117 2050 82 0 0 168,832 168,832 46,141 0 122,691

2051 83 0 0 173,897 173,897 47,526 0 126,371 2052 84 0 0 179,114 179,114 48,952 0 130,162 2053 85 0 0 184,487 184,487 50,420 0 134,067 2054 86 0 0 190,022 190,022 51,933 0 138,089

2055 87 0 0 195,722 195,722 53,491 0 142,231 2056 88 0 0 201,594 201,594 55,096 0 146,498 2057 89 0 0 207,642 207,642 56,749 0 150,893 2058 90 0 0 213,871 213,871 58,451 0 155,420

6,290,502 1,932,486 679,215 3,678,801






Your Resources plus Additional Insurance Your capital resources, insurance proceeds and continuing income sources can be used to offset the expenses that will occur after a premature death. But these resources may not be enough. Let’s take a look at how your assets

and income stack up against your projected expenses in the event that John


Katie will have the following sources of income to help cover expenses until 2058:


2034-2058

Katie's Salary $50,000/yr 2015-2031

Additional Insurance

$1,192,000

Years Funded

44

Unfunded Years

0

Assets Remaining in Estate

$772


$835,170 to offset your projected expenses. With additional life insurance

benefits of $1,192,000 you will be able to fully offset your projected expenses.


prior to Katie's assumed retirement age and 5.00% after retirement. Withdrawals from capital resources will be








Capital Resources plus Insurance Details Capital Resources Today: $685,170

Existing Life Insurance Benefits: $150,000 Additional Life Insurance Benefits: $1,192,000

Total Capital Resources: $2,027,170



Resources

Withdrawals from

Insurance Proceeds

Withdrawals from

Savings

Taxation on Savings


Net Withdrawals

Applied to Expenses

Income Added

to Capital



2015 47 $2,027,170 $622,500 $0 $0 $622,500 $0 $1,404,670 $70,234 $1,474,904 2016 48 1,474,904 0 0 0 0 2,160 1,477,064 73,853 1,550,917 2017 49 1,550,917 0 0 0 0 2,225 1,553,142 77,657 1,630,799 2018 50 1,630,799 0 0 0 0 2,290 1,633,089 81,654 1,714,743

2019 51 1,714,743 37,789 0 0 37,789 0 1,676,954 83,848 1,760,802 2020 52 1,760,802 96,115 0 0 96,115 0 1,664,687 83,235 1,747,922 2021 53 1,747,922 98,999 0 0 98,999 0 1,648,923 82,446 1,731,369 2022 54 1,731,369 117,095 0 0 117,095 0 1,614,274 80,714 1,694,988

2023 55 1,694,988 75,421 0 0 75,421 0 1,619,567 80,978 1,700,545 2024 56 1,700,545 29,357 0 0 29,357 0 1,671,188 83,559 1,754,747 2025 57 1,754,747 30,238 0 0 30,238 0 1,724,509 86,225 1,810,734 2026 58 1,810,734 31,145 0 0 31,145 0 1,779,589 88,979 1,868,568

2027 59 1,868,568 32,080 0 0 32,080 0 1,836,488 91,824 1,928,312 2028 60 1,928,312 33,042 0 0 33,042 0 1,895,270 94,764 1,990,034 2029 61 1,990,034 34,033 0 0 34,033 0 1,956,001 97,800 2,053,801 2030 62 2,053,801 35,055 0 0 35,055 0 2,018,746 100,938 2,119,684

2031 63 2,119,684 69,131 36,201 9,050 96,282 0 2,014,352 100,718 2,115,070 2032 64 2,115,070 0 132,228 33,057 99,171 0 1,982,842 99,142 2,081,984 2033 65 2,081,984 0 136,195 34,049 102,146 0 1,945,789 97,289 2,043,078 2034 66 2,043,078 0 101,941 25,485 76,456 0 1,941,137 97,057 2,038,194

2035 67 2,038,194 0 105,000 26,250 78,750 0 1,933,194 96,660 2,029,854 2036 68 2,029,854 0 108,151 27,038 81,113 0 1,921,703 96,085 2,017,788 2037 69 2,017,788 0 111,395 27,849 83,546 0 1,906,393 95,320 2,001,713 2038 70 2,001,713 0 114,737 28,684 86,053 0 1,886,976 94,349 1,981,325

2039 71 1,981,325 0 118,179 29,545 88,634 0 1,863,146 93,157 1,956,303 2040 72 1,956,303 0 121,725 30,431 91,294 0 1,834,578 91,729 1,926,307 2041 73 1,926,307 0 125,375 31,344 94,031 0 1,800,932 90,047 1,890,979 2042 74 1,890,979 0 129,137 32,284 96,853 0 1,761,842 88,092 1,849,934

2043 75 1,849,934 0 133,012 33,253 99,759 0 1,716,922 85,846 1,802,768 2044 76 1,802,768 0 137,001 34,250 102,751 0 1,665,767 83,288 1,749,055





2045 77 1,749,055 0 141,112 35,278 105,834 0 1,607,943 80,397 1,688,340 2046 78 1,688,340 0 145,345 36,336 109,009 0 1,542,995 77,150 1,620,145

2047 79 1,620,145 0 149,705 37,426 112,279 0 1,470,440 73,522 1,543,962 2048 80 1,543,962 0 154,196 38,549 115,647 0 1,389,766 69,488 1,459,254 2049 81 1,459,254 0 158,823 39,706 119,117 0 1,300,431 65,022 1,365,453 2050 82 1,365,453 0 163,588 40,897 122,691 0 1,201,865 60,093 1,261,958

2051 83 1,261,958 0 168,495 42,124 126,371 0 1,093,463 54,673 1,148,136 2052 84 1,148,136 0 173,549 43,387 130,162 0 974,587 48,729 1,023,316 2053 85 1,023,316 0 178,756 44,689 134,067 0 844,560 42,228 886,788 2054 86 886,788 0 184,119 46,030 138,089 0 702,669 35,133 737,802

2055 87 737,802 0 189,641 47,410 142,231 0 548,161 27,408 575,569 2056 88 575,569 0 195,331 48,833 146,498 0 380,238 19,012 399,250 2057 89 399,250 0 201,191 50,298 150,893 0 198,059 9,903 207,962 2058 90 207,962 0 207,227 51,807 155,420 0 735 37 772






Survivor Needs plus Insurance Details


Costs

Living Expenses

@3.00% Total

Expenses

Income Applied

Towards Needs

Capital Withdrawal

to Meet Needs

2015 47 $600,000 $0 $60,000 $660,000 $37,500 $622,500 2016 48 0 0 61,800 61,800 61,800 0 2017 49 0 0 63,654 63,654 63,654 0 2018 50 0 0 65,564 65,564 65,564 0

2019 51 0 40,148 67,531 107,679 69,890 37,789 2020 52 0 84,289 69,556 153,845 57,730 96,115 2021 53 0 86,818 71,643 158,461 59,462 98,999 2022 54 0 89,423 73,792 163,215 46,120 117,095

2023 55 0 46,919 76,006 122,925 47,504 75,421 2024 56 0 0 78,286 78,286 48,929 29,357 2025 57 0 0 80,635 80,635 50,397 30,238 2026 58 0 0 83,054 83,054 51,909 31,145

2027 59 0 0 85,546 85,546 53,466 32,080 2028 60 0 0 88,112 88,112 55,070 33,042 2029 61 0 0 90,755 90,755 56,722 34,033 2030 62 0 0 93,478 93,478 58,423 35,055

2031 63 0 0 96,282 96,282 0 96,282 2032 64 0 0 99,171 99,171 0 99,171 2033 65 0 0 102,146 102,146 0 102,146 2034 66 0 0 105,210 105,210 28,754 76,456

2035 67 0 0 108,367 108,367 29,617 78,750 2036 68 0 0 111,618 111,618 30,505 81,113 2037 69 0 0 114,966 114,966 31,420 83,546 2038 70 0 0 118,415 118,415 32,362 86,053

2039 71 0 0 121,968 121,968 33,334 88,634 2040 72 0 0 125,627 125,627 34,333 91,294 2041 73 0 0 129,395 129,395 35,364 94,031 2042 74 0 0 133,277 133,277 36,424 96,853

2043 75 0 0 137,276 137,276 37,517 99,759 2044 76 0 0 141,394 141,394 38,643 102,751 2045 77 0 0 145,636 145,636 39,802 105,834 2046 78 0 0 150,005 150,005 40,996 109,009

2047 79 0 0 154,505 154,505 42,226 112,279 2048 80 0 0 159,140 159,140 43,493 115,647 2049 81 0 0 163,914 163,914 44,797 119,117 2050 82 0 0 168,832 168,832 46,141 122,691

2051 83 0 0 173,897 173,897 47,526 126,371 2052 84 0 0 179,114 179,114 48,952 130,162 2053 85 0 0 184,487 184,487 50,420 134,067 2054 86 0 0 190,022 190,022 51,933 138,089

2055 87 0 0 195,722 195,722 53,491 142,231 2056 88 0 0 201,594 201,594 55,096 146,498 2057 89 0 0 207,642 207,642 56,749 150,893 2058 90 0 0 213,871 213,871 58,451 155,420

6,290,502 1,932,486 4,358,016






Premature Spouse Death






The Cost of a Premature Spouse Death When a person dies prematurely, they leave behind many expenses with which their dependents must cope. Everyday living expenses, ongoing liabilities such as mortgage payments, and the funding of education for children are just a few examples of the expenses that may need to be covered. Life Insurance can help provide a safety net by which you can ensure that those you leave behind are able to meet their expenses and enjoy the standard of living that you would want. The first step in determining what the right level of protection is for you and your family is to get an idea of the expenses that will need to be funded in the event of your premature death.

Total Future Living Expenses

$4,719,798

Total Liabilities & Education

$947,597

Total Expenses

$5,667,395

What will your expenses be?

Based upon the anticipated expenses listed below, you can expect to incur $5,667,395 of total expenses over

the 41 years following Katie's premature death in 2015. The chart below shows the portion of the total cost associated with each type of expense.

YOUR ANTICIPATED EXPENSES

Living Expenses: $5,000 per month

($60,000 per year)

Expenses Grow at: 3.00% per year

Fund Expenses Until: Death of Spouse 2055

Liabilities to Pay Off: $600,000

Educations to Fund: Amanda's College

Peter's College

Keep in Mind... The cost of a premature death does not remain constant. As certain life events occur, it makes sense to review how these costs may change and whether you are properly protected. These life events may include purchasing a new home, the birth of a child, changing jobs, divorce or retirement.






Your Current Resources Your capital resources, insurance proceeds and continuing income sources can be used to offset the expenses that will occur after a premature death. But these resources may not be enough. Let’s take a look at how your assets

and income stack up against your projected expenses in the event that Katie


John will have the following sources of income to help cover expenses until 2055:


2031-2055

John's Salary $120,000/yr 2015-2031

Total Years to Fund

41


21

Unfunded Years

20


to cover shortfall

$485,000


$760,170 to offset your projected expenses.


prior to John's assumed retirement age and 5.00% after retirement. Withdrawals from capital resources will be









Survivor Income Details

Year Age Income

from Flows SS Income

Total Income

Sources

Income Taxes

@25.0%

Net Income Applied to

Needs Surplus Income

2015 50 $120,000 $0 $120,000 $30,000 $90,000 $0 2016 51 123,600 26,790 150,390 37,598 61,800 50,992 2017 52 127,308 27,594 154,902 38,726 63,654 52,522 2018 53 131,127 28,422 159,549 39,887 65,564 54,098

2019 54 135,061 29,274 164,335 41,084 107,679 15,572 2020 55 139,113 15,077 154,190 38,548 115,642 0 2021 56 143,286 15,529 158,815 39,704 119,111 0 2022 57 147,585 0 147,585 36,896 110,689 0

2023 58 152,012 0 152,012 38,003 114,009 0 2024 59 156,573 0 156,573 39,143 78,286 39,144 2025 60 161,270 0 161,270 40,318 80,635 40,317 2026 61 166,108 0 166,108 41,527 83,054 41,527

2027 62 171,091 0 171,091 42,773 85,546 42,772 2028 63 176,224 0 176,224 44,056 88,112 44,056 2029 64 181,511 0 181,511 45,378 90,755 45,378 2030 65 186,956 0 186,956 46,739 93,478 46,739

2031 66 0 35,085 35,085 8,771 26,314 0 2032 67 0 36,138 36,138 9,035 27,103 0 2033 68 0 37,222 37,222 9,306 27,916 0 2034 69 0 38,339 38,339 9,585 28,754 0

2035 70 0 39,489 39,489 9,872 29,617 0 2036 71 0 40,673 40,673 10,168 30,505 0 2037 72 0 41,894 41,894 10,474 31,420 0 2038 73 0 43,150 43,150 10,788 32,362 0

2039 74 0 44,445 44,445 11,111 33,334 0 2040 75 0 45,778 45,778 11,445 34,333 0 2041 76 0 47,152 47,152 11,788 35,364 0 2042 77 0 48,566 48,566 12,142 36,424 0

2043 78 0 50,023 50,023 12,506 37,517 0 2044 79 0 51,524 51,524 12,881 38,643 0 2045 80 0 53,070 53,070 13,268 39,802 0 2046 81 0 54,662 54,662 13,666 40,996 0

2047 82 0 56,302 56,302 14,076 42,226 0 2048 83 0 57,991 57,991 14,498 43,493 0 2049 84 0 59,730 59,730 14,933 44,797 0 2050 85 0 61,522 61,522 15,381 46,141 0

2051 86 0 63,368 63,368 15,842 47,526 0 2052 87 0 65,269 65,269 16,317 48,952 0 2053 88 0 67,227 67,227 16,807 50,420 0 2054 89 0 69,244 69,244 17,311 51,933 0

2055 90 0 71,321 71,321 17,830 53,491 0

3,840,695 960,181 2,407,397





Capital Resources Details Capital Resources Today: $685,170

Existing Life Insurance Benefits: $75,000 Total Capital Resources: $760,170



Resources

Withdrawals from

Insurance Proceeds

Withdrawals from

Savings

Taxation on Savings


Net Withdrawals

Applied to Expenses

Income Added

to Capital



2015 50 $760,170 $75,000 $660,000 $165,000 $570,000 $0 $25,170 $1,259 $26,429 2016 51 26,429 0 0 0 0 50,992 77,421 3,871 81,292 2017 52 81,292 0 0 0 0 52,522 133,814 6,691 140,505 2018 53 140,505 0 0 0 0 54,098 194,603 9,730 204,333

2019 54 204,333 0 0 0 0 15,572 219,905 10,995 230,900 2020 55 230,900 0 50,937 12,734 38,203 0 179,963 8,998 188,961 2021 56 188,961 0 52,467 13,117 39,350 0 136,494 6,825 143,319 2022 57 143,319 0 70,035 17,509 52,526 0 73,284 3,664 76,948

2023 58 76,948 0 11,888 2,972 8,916 0 65,060 3,253 68,313 2024 59 68,313 0 0 0 0 39,144 107,457 5,373 112,830 2025 60 112,830 0 0 0 0 40,317 153,147 7,657 160,804 2026 61 160,804 0 0 0 0 41,527 202,331 10,117 212,448

2027 62 212,448 0 0 0 0 42,772 255,220 12,761 267,981 2028 63 267,981 0 0 0 0 44,056 312,037 15,602 327,639 2029 64 327,639 0 0 0 0 45,378 373,017 18,651 391,668 2030 65 391,668 0 0 0 0 46,739 438,407 21,920 460,327

2031 66 460,327 0 93,291 23,323 69,968 0 367,036 18,352 385,388 2032 67 385,388 0 96,091 24,023 72,068 0 289,297 14,465 303,762 2033 68 303,762 0 98,973 24,743 74,230 0 204,789 10,239 215,028 2034 69 215,028 0 101,941 25,485 76,456 0 113,087 5,654 118,741

2035 70 118,741 0 105,000 26,250 78,750 0 13,741 687 14,428 2036 71 14,428 0 14,428 3,607 10,821 0 0 0 0 2037 72 0 0 0 0 0 0 0 0 0 2038 73 0 0 0 0 0 0 0 0 0

2039 74 0 0 0 0 0 0 0 0 0 2040 75 0 0 0 0 0 0 0 0 0 2041 76 0 0 0 0 0 0 0 0 0 2042 77 0 0 0 0 0 0 0 0 0

2043 78 0 0 0 0 0 0 0 0 0 2044 79 0 0 0 0 0 0 0 0 0 2045 80 0 0 0 0 0 0 0 0 0





2046 81 0 0 0 0 0 0 0 0 0

2047 82 0 0 0 0 0 0 0 0 0 2048 83 0 0 0 0 0 0 0 0 0 2049 84 0 0 0 0 0 0 0 0 0 2050 85 0 0 0 0 0 0 0 0 0

2051 86 0 0 0 0 0 0 0 0 0 2052 87 0 0 0 0 0 0 0 0 0 2053 88 0 0 0 0 0 0 0 0 0 2054 89 0 0 0 0 0 0 0 0 0

2055 90 0 0 0 0 0 0 0 0 0






Survivor Needs Details


Costs

Living Expenses

@3.00% Total

Expenses

Income Applied

Towards Needs

Capital Withdrawal

to Meet Needs

Remaining Need

(Deficit) 2015 50 $600,000 $0 $60,000 $660,000 $90,000 $570,000 $0 2016 51 0 0 61,800 61,800 61,800 0 0 2017 52 0 0 63,654 63,654 63,654 0 0 2018 53 0 0 65,564 65,564 65,564 0 0

2019 54 0 40,148 67,531 107,679 107,679 0 0 2020 55 0 84,289 69,556 153,845 115,642 38,203 0 2021 56 0 86,818 71,643 158,461 119,111 39,350 0 2022 57 0 89,423 73,792 163,215 110,689 52,526 0

2023 58 0 46,919 76,006 122,925 114,009 8,916 0 2024 59 0 0 78,286 78,286 78,286 0 0 2025 60 0 0 80,635 80,635 80,635 0 0 2026 61 0 0 83,054 83,054 83,054 0 0

2027 62 0 0 85,546 85,546 85,546 0 0 2028 63 0 0 88,112 88,112 88,112 0 0 2029 64 0 0 90,755 90,755 90,755 0 0 2030 65 0 0 93,478 93,478 93,478 0 0

2031 66 0 0 96,282 96,282 26,314 69,968 0 2032 67 0 0 99,171 99,171 27,103 72,068 0 2033 68 0 0 102,146 102,146 27,916 74,230 0 2034 69 0 0 105,210 105,210 28,754 76,456 0

2035 70 0 0 108,367 108,367 29,617 78,750 0 2036 71 0 0 111,618 111,618 30,505 10,821 70,292 2037 72 0 0 114,966 114,966 31,420 0 83,546 2038 73 0 0 118,415 118,415 32,362 0 86,053

2039 74 0 0 121,968 121,968 33,334 0 88,634 2040 75 0 0 125,627 125,627 34,333 0 91,294 2041 76 0 0 129,395 129,395 35,364 0 94,031 2042 77 0 0 133,277 133,277 36,424 0 96,853

2043 78 0 0 137,276 137,276 37,517 0 99,759 2044 79 0 0 141,394 141,394 38,643 0 102,751 2045 80 0 0 145,636 145,636 39,802 0 105,834 2046 81 0 0 150,005 150,005 40,996 0 109,009

2047 82 0 0 154,505 154,505 42,226 0 112,279 2048 83 0 0 159,140 159,140 43,493 0 115,647 2049 84 0 0 163,914 163,914 44,797 0 119,117 2050 85 0 0 168,832 168,832 46,141 0 122,691

2051 86 0 0 173,897 173,897 47,526 0 126,371 2052 87 0 0 179,114 179,114 48,952 0 130,162 2053 88 0 0 184,487 184,487 50,420 0 134,067 2054 89 0 0 190,022 190,022 51,933 0 138,089

2055 90 0 0 195,722 195,722 53,491 0 142,231

5,667,395 2,407,397 1,091,288 2,168,710






Your Resources plus Additional Insurance Your capital resources, insurance proceeds and continuing income sources can be used to offset the expenses that will occur after a premature death. But these resources may not be enough. Let’s take a look at how your assets

and income stack up against your projected expenses in the event that Katie


John will have the following sources of income to help cover expenses until 2055:


2031-2055

John's Salary $120,000/yr 2015-2031

Additional Insurance

$485,000

Years Funded

41

Unfunded Years

0

Assets Remaining in Estate

$8,211


$760,170 to offset your projected expenses. With additional life insurance

benefits of $485,000 you will be able to fully offset your projected expenses.


prior to John's assumed retirement age and 5.00% after retirement. Withdrawals from capital resources will be








Capital Resources plus Insurance Details Capital Resources Today: $685,170

Existing Life Insurance Benefits: $75,000 Additional Life Insurance Benefits: $485,000

Total Capital Resources: $1,245,170



Resources

Withdrawals from

Insurance Proceeds

Withdrawals from

Savings

Taxation on Savings


Net Withdrawals

Applied to Expenses

Income Added

to Capital



2015 50 $1,245,170 $560,000 $13,333 $3,333 $570,000 $0 $671,837 $33,592 $705,429 2016 51 705,429 0 0 0 0 50,992 756,421 37,821 794,242 2017 52 794,242 0 0 0 0 52,522 846,764 42,338 889,102 2018 53 889,102 0 0 0 0 54,098 943,200 47,160 990,360

2019 54 990,360 0 0 0 0 15,572 1,005,932 50,297 1,056,229 2020 55 1,056,229 0 50,937 12,734 38,203 0 1,005,292 50,265 1,055,557 2021 56 1,055,557 0 52,467 13,117 39,350 0 1,003,090 50,155 1,053,245 2022 57 1,053,245 0 70,035 17,509 52,526 0 983,210 49,161 1,032,371

2023 58 1,032,371 0 11,888 2,972 8,916 0 1,020,483 51,024 1,071,507 2024 59 1,071,507 0 0 0 0 39,144 1,110,651 55,533 1,166,184 2025 60 1,166,184 0 0 0 0 40,317 1,206,501 60,325 1,266,826 2026 61 1,266,826 0 0 0 0 41,527 1,308,353 65,418 1,373,771

2027 62 1,373,771 0 0 0 0 42,772 1,416,543 70,827 1,487,370 2028 63 1,487,370 0 0 0 0 44,056 1,531,426 76,571 1,607,997 2029 64 1,607,997 0 0 0 0 45,378 1,653,375 82,669 1,736,044 2030 65 1,736,044 0 0 0 0 46,739 1,782,783 89,139 1,871,922

2031 66 1,871,922 0 93,291 23,323 69,968 0 1,778,631 88,932 1,867,563 2032 67 1,867,563 0 96,091 24,023 72,068 0 1,771,472 88,574 1,860,046 2033 68 1,860,046 0 98,973 24,743 74,230 0 1,761,073 88,054 1,849,127 2034 69 1,849,127 0 101,941 25,485 76,456 0 1,747,186 87,359 1,834,545

2035 70 1,834,545 0 105,000 26,250 78,750 0 1,729,545 86,477 1,816,022 2036 71 1,816,022 0 108,151 27,038 81,113 0 1,707,871 85,394 1,793,265 2037 72 1,793,265 0 111,395 27,849 83,546 0 1,681,870 84,094 1,765,964 2038 73 1,765,964 0 114,737 28,684 86,053 0 1,651,227 82,561 1,733,788

2039 74 1,733,788 0 118,179 29,545 88,634 0 1,615,609 80,780 1,696,389 2040 75 1,696,389 0 121,725 30,431 91,294 0 1,574,664 78,733 1,653,397 2041 76 1,653,397 0 125,375 31,344 94,031 0 1,528,022 76,401 1,604,423 2042 77 1,604,423 0 129,137 32,284 96,853 0 1,475,286 73,764 1,549,050

2043 78 1,549,050 0 133,012 33,253 99,759 0 1,416,038 70,802 1,486,840 2044 79 1,486,840 0 137,001 34,250 102,751 0 1,349,839 67,492 1,417,331





2045 80 1,417,331 0 141,112 35,278 105,834 0 1,276,219 63,811 1,340,030 2046 81 1,340,030 0 145,345 36,336 109,009 0 1,194,685 59,734 1,254,419

2047 82 1,254,419 0 149,705 37,426 112,279 0 1,104,714 55,236 1,159,950 2048 83 1,159,950 0 154,196 38,549 115,647 0 1,005,754 50,288 1,056,042 2049 84 1,056,042 0 158,823 39,706 119,117 0 897,219 44,861 942,080 2050 85 942,080 0 163,588 40,897 122,691 0 778,492 38,925 817,417

2051 86 817,417 0 168,495 42,124 126,371 0 648,922 32,446 681,368 2052 87 681,368 0 173,549 43,387 130,162 0 507,819 25,391 533,210 2053 88 533,210 0 178,756 44,689 134,067 0 354,454 17,723 372,177 2054 89 372,177 0 184,119 46,030 138,089 0 188,058 9,403 197,461

2055 90 197,461 0 189,641 47,410 142,231 0 7,820 391 8,211






Survivor Needs plus Insurance Details


Costs

Living Expenses

@3.00% Total

Expenses

Income Applied

Towards Needs

Capital Withdrawal

to Meet Needs

2015 50 $600,000 $0 $60,000 $660,000 $90,000 $570,000 2016 51 0 0 61,800 61,800 61,800 0 2017 52 0 0 63,654 63,654 63,654 0 2018 53 0 0 65,564 65,564 65,564 0

2019 54 0 40,148 67,531 107,679 107,679 0 2020 55 0 84,289 69,556 153,845 115,642 38,203 2021 56 0 86,818 71,643 158,461 119,111 39,350 2022 57 0 89,423 73,792 163,215 110,689 52,526

2023 58 0 46,919 76,006 122,925 114,009 8,916 2024 59 0 0 78,286 78,286 78,286 0 2025 60 0 0 80,635 80,635 80,635 0 2026 61 0 0 83,054 83,054 83,054 0

2027 62 0 0 85,546 85,546 85,546 0 2028 63 0 0 88,112 88,112 88,112 0 2029 64 0 0 90,755 90,755 90,755 0 2030 65 0 0 93,478 93,478 93,478 0

2031 66 0 0 96,282 96,282 26,314 69,968 2032 67 0 0 99,171 99,171 27,103 72,068 2033 68 0 0 102,146 102,146 27,916 74,230 2034 69 0 0 105,210 105,210 28,754 76,456

2035 70 0 0 108,367 108,367 29,617 78,750 2036 71 0 0 111,618 111,618 30,505 81,113 2037 72 0 0 114,966 114,966 31,420 83,546 2038 73 0 0 118,415 118,415 32,362 86,053

2039 74 0 0 121,968 121,968 33,334 88,634 2040 75 0 0 125,627 125,627 34,333 91,294 2041 76 0 0 129,395 129,395 35,364 94,031 2042 77 0 0 133,277 133,277 36,424 96,853

2043 78 0 0 137,276 137,276 37,517 99,759 2044 79 0 0 141,394 141,394 38,643 102,751 2045 80 0 0 145,636 145,636 39,802 105,834 2046 81 0 0 150,005 150,005 40,996 109,009

2047 82 0 0 154,505 154,505 42,226 112,279 2048 83 0 0 159,140 159,140 43,493 115,647 2049 84 0 0 163,914 163,914 44,797 119,117 2050 85 0 0 168,832 168,832 46,141 122,691

2051 86 0 0 173,897 173,897 47,526 126,371 2052 87 0 0 179,114 179,114 48,952 130,162 2053 88 0 0 184,487 184,487 50,420 134,067 2054 89 0 0 190,022 190,022 51,933 138,089

2055 90 0 0 195,722 195,722 53,491 142,231

5,667,395 2,407,397 3,259,998






Analysis Result Summary This report summarizes the results of the analyses for John and Katie Traditional. It provides the information that is the basis for the "takeaway" message. All of the details concerning the process of how these results were arrived at are contained in the specific chapters for each selected analysis.

Family Information

Client: John and Katie Traditional

Address: Not Available [email protected]

Client: John Traditional Date of Birth: 1/1/1965 Current Age: 50

Spouse: Katie Traditional Date of Birth: 1/1/1968 Current Age: 47

Children Gender Age Date of Birth

Amanda Traditional Female 14 12/13/2000 Peter Traditional Male 12 6/6/2002

Analysis Performed Financial Statements Analysis

Retirement Analysis


Life Insurance Analysis for: Premature Client Death for: Premature Spouse Death

Financial Statements

Financial statements help you to see your current financial situation at a glance. The net worth statement determines your current net worth once liabilities are subtracted from your assets. Cash flow compares your current year income to your current year expenses. Emergency reserves helps to show your “readily available” resources in the event something unforeseen occurs that may require quick access to cash.

Net Worth

Total Assets

$1,585,170

Total Liabilities

($600,000)

Total Net Worth

$985,170

Cash Flow

Total Income

$182,000

Total Expenses

($178,970)

Net Cash Flow

$3,030

Emergency Reserves

Emergency Reserves

$10,000

Total Emergency Need

$21,702

Emergency Reserve Deficit

$11,702






Result Summary


$6,424,947

Total Retirement Income Sources

$2,410,835

Total Capital Withdrawals

$3,507,917

Shortfall

$506,195

Unfunded Years

1

Percent Funded by Income

38%

This retirement analysis looks at the projected cost of your retirement, and compares that to your expected income sources, and the capital resources you may be accumulating for retirement. Based upon your assumptions for retirement age and duration, the analysis determines whether or not you are projected to have enough resources to cover your assumed cost of retirement. Based upon the assumptions utilized in this analysis, your current retirement goal is projected to have a shortfall. This projected shortfall is estimated to result in 1 unfunded years in retirement. Changes to your retirement goal assumptions may be necessary. There are several options which may - by themselves or in combination with each other - allow you to achieve your retirement goals, they include:

Increase Monthly Savings by $357 (to $2,757 per month)

Reduce Monthly Expenses by $232 (to $6,935 per month)

Delay Retirement 1 year (until age 67 )






Asset Allocation

Asset Allocation is a term used to define how an investor distributes their investments across multiple classes of assets. Risk analysis, often through the use of a questionnaire, is used to determine an asset allocation that fits the investor's needs and willingness to take on risk for potentially better returns. The charts below define your allocation today as well as a recommended allocation based upon the answers you provided concerning risk tolerance.

There is no assurance that the recommended portfolio will perform any better than your current holdings. In fact, there could be unfavorable consequences for liquidating certain assets prior to maturity and no action should be taken prior to consulting with your financial advisors.






Result Summary

Total Years to Fund

44


5

Unfunded Years

39


to Cover Shortfall

$1,192,000

The life insurance analysis looks at the impact of an unexpected

premature death to John. It compares the survivors' expected needs to the income and capital resources that may be available. If a shortfall exists, the required amount of life insurance needed to cover the shortfall is calculated.

Based upon the assumptions utilized in this analysis, John is projected

to have a funding shortfall based upon the survivor needs expected

with a premature death in 2015. This projected shortfall is estimated to

result in 39 unfunded years. The amount of new life insurance necessary

to cover all assumed survivor needs is $1,192,000.

Result Summary

Total Years to Fund

41


21

Unfunded Years

20

Additional Insurance Needed to Cover Shortfall

$485,000

The life insurance analysis looks at the impact of an unexpected

premature death to Katie. It compares the survivors' expected needs to the income and capital resources that may be available. If a shortfall exists, the required amount of life insurance needed to cover the shortfall is calculated.

Based upon the assumptions utilized in this analysis, Katie is projected

to have a funding shortfall based upon the survivor needs expected

with a premature death in 2015. This projected shortfall is estimated to

result in 20 unfunded years. The amount of new life insurance necessary

to cover all assumed survivor needs is $485,000.






Information Summary The following financial information and assumptions were used in the preparation of this analysis.

Family Information

Client: John and Katie Traditional

Address: Not Available [email protected]

Client: John Traditional Date of Birth: 1/1/1965 Current Age: 50

Spouse: Katie Traditional Date of Birth: 1/1/1968 Current Age: 47

Children Gender Age Date of Birth

Amanda Traditional Female 14 12/13/2000 Peter Traditional Male 12 6/6/2002






Financial Statements

Basic Assumptions Analysis for: John and Katie Traditional Current Year: 2015

Current Income Sources

Income Source Annual Amount

John's Salary $120,000 Katie's Salary $50,000 Rental Income $12,000

Total Income $182,000

Current Expenses Expense Annual Amount

Living Expenses $63,000

Liability Expenses not included in Living Expenses

Home Mortgage ($400,000) $28,992 Rental Mortgage ($200,000) $17,028

Insurance Premiums not included in Living Expenses

Disability Policy from Work $450

Tax Payments (25.0% of $182,000) $45,500

Savings Toward Goals

Total Expenses $178,970

Emergency Reserve Assumptions Months of Emergency Reserves: 3 months Amount of Living Expenses: $9,042 per month Percent of Expenses to Fund: 80.0% Total Expenses to Fund: $21,702 Cash Currently Available: $10,000






Retirement Analysis

Basic Assumptions Analysis for: John Traditional

Date of Birth: 1/1/1965 Retirement Begins at Age: 66 (2031) Current Age: 50 Retirement Ends at Age: 90 (2058)

Financial Assumptions

Assets Grow at: 5.00% Withdrawals are Taxed at: 25.0% Income is Indexed at: 3.00% Income is Taxed at: 25.0% Expenses Grow at: 3.00% Retirement Living Expenses: $7,167/month Savings Increase by: 3.00% ($86,004/yr)

Assets & Savings Qualified Assets Current Value

John's 401K (Qualified Retirement - Traditional 401(k))

$203,955 Katie's Roth 403b (Qualified Retirement - Roth 403(b))

$78,965

Katie's Roth IRA (converted) (Roth IRA)

$84,392

Total $367,312

Non-Qualified Assets Current Value

Cash Reserve (Cash Equivalent - Cash)

$10,000 John's Annuity (Annuity - Variable)

$100,000

Merrill Lynch Account (Taxable Investment)

$167,858 Vanguard Money Market (Taxable Investment)

$40,000

Total $317,858

Annual Pre-Retirement Savings

Qualified Savings $24,000 Qualified Employer Contributions $4,800 Non-Qualified Savings $0

Total: $28,800

Income Sources From Until Annual Amount

John's Social Security 2031 2058 $21,864 Katie's Social Security 2034 2058 $17,340 Rental Income 2031 2058 $12,000


Risk Tolerance Questionnaire 1. What is your age?

56 and over 2. What is your primary financial goal?

Wealth preservation 3. What is the time frame for you to achieve your financial goals?

0 – 5 years 4. Which of the following best describes your financial goals?






Preserving principal and earning a moderate amount of current income 5. How do you expect your standard of living five years from now to compare to your standard of living

today?

The same as it is today 6. Five years from today, you expect your portfolio value to be:

Portfolio value is not my primary concern; I am more concerned with current income 7. Generating current income from your portfolio is:

A primary concern (only if you are about to retire) 8. With the income generated from your portfolio, you plan to:

Use it for living expenses 9. You have just received a windfall of $50,000. How would you invest it?

I would invest in something that offered moderate current income and was very conservative 10. Which of the following statements would best describe your reaction if the value of your portfolio were

to suddenly decline by 15%?

I would be very concerned because I cannot accept fluctuations in the value of my portfolio 11. Which of the following investments would you feel most comfortable owning?

Certificates of deposit 12. Which of the following investments would you least like to own?

Stocks of new growth companies 13. Which of the following investments do you feel are the most ideal for your portfolio?

Certificates of deposit 14. How optimistic are you about the long-term prospects for the economy?

Unsure 15. Which of the following best describes your attitude about investments outside the U.S.?

Unsure






Assets Asset Type Current Value

529 Plan for Amanda 529 Plan $95,000 529 Plan for Peter 529 Plan $65,000 Cash Reserve Cash Equivalent $10,000 John's 401K Qualified Retirement $0 John's Annuity Annuity $100,000 Katie's Roth 403b Qualified Retirement $0 Katie's Roth IRA (converted) Roth IRA $0 Merrill Lynch Account Taxable Investment $0 Term Life on Jon Life Insurance $0 Term Policy for Katie Life Insurance $0 Vanguard Money Market Taxable Investment $40,000

Total: $310,000

Information Summary

Basic Assumptions

Analysis for: John Traditional Date of Birth: 1/1/1965 Premature Death Occurs in: 2015 Current Age: 50 Analysis Ends in: 2058


Assets Grow at: 5.00% before retirement

5.00% after retirement

Income is Indexed at: 3.00% Expenses Grow at: 3.00%

Withdrawals are Taxed at: 25.0% Income is Taxed at: 25.0%

Survivor's Living Expenses: $5,000/month ($60,000/yr)

Existing Life Insurance Policy Name Type Insured Death Benefit

Term Life on Jon Group Life

John Traditional

$150,000

Total $150,000

Assets Asset Current Value


$10,000 John's 401K (Qualified Retirement - Traditional 401(k))

$203,955

John's Annuity (Annuity - Variable)


$78,965


$84,392 Merrill Lynch Account (Taxable Investment)

$167,858

Vanguard Money Market (Taxable Investment)

$40,000

Total $685,170


John's Social Security 2030 2058 $21,864 Katie's Social Security 2033 2058 $17,340 Surviving Child Benefit per child $22,128 Katie's Salary 2015 2031 $50,000






Information Summary

Basic Assumptions Analysis for: Katie Traditional Date of Birth: 1/1/1968 Premature Death Occurs in: 2015 Current Age: 47 Analysis Ends in: 2055


Assets Grow at: 5.00% before retirement

5.00% after retirement

Income is Indexed at: 3.00% Expenses Grow at: 3.00%

Withdrawals are Taxed at: 25.0% Income is Taxed at: 25.0%

Survivor's Living Expenses: $5,000/month ($60,000/yr)

Existing Life Insurance Policy Name Type Insured Death Benefit

Term Policy for Katie Group Life

Katie Traditional

$75,000

Total $75,000

Assets Asset Current Value


$10,000 John's 401K (Qualified Retirement - Traditional 401(k))

$203,955

John's Annuity (Annuity - Variable)


$78,965


$84,392 Merrill Lynch Account (Taxable Investment)

$167,858

Vanguard Money Market (Taxable Investment)

$40,000

Total $685,170


John's Social Security 2030 2055 $21,864 Katie's Social Security 2033 2055 $17,340 Surviving Child Benefit per child $19,368 John's Salary 2015 2031 $120,000

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