ADVICENT SAMPLE. Financial Plan. Janet Lerner. PREPARED FOR: Frank and Kathy Accumulator May 27, 2014 PREPARED BY:

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1 Financial Plan PREPARED FOR: Frank and Kathy Accumulator May 27, 2014 PREPARED BY: Janet Lerner Lerner, Stevenson & Assoc. Hartford, Connecticut

2 Table of Contents Cover Page Table of Contents Financial Snapshot Net Worth Timeline Comparison Current Year Cash Flow - Current Plan Current Asset Mix Probability of Success - Retirement Education Goal Coverage Summary - Current Plan What Are My Emergency Fund Goal Options? Immediate Needs vs. Available Assets How Much Disability Insurance is Needed? Long-term Care Net Worth Comparison Disclaimer

3 Financial Snapshot Frank and Kathy Accumulator Goal Coverage Retirement College Education - Tasha College Education - James Fifth-Wheel Trailer Survivor Income - Frank Dies Survivor Income - Kathy Dies Survivor Income - Both Die Disability Income - Frank Disability Income - Kathy Long Term Care - Frank Long Term Care - Kathy Emergency Fund Asset Allocation Rate of Return Standard Deviation Asset Class Large Cap Growth Equity Large Cap Value Equity Cash Intermediate Term Bonds Long Term Bonds High Yield Bonds US REITs International Equity Small Cap Equity International Bonds Others Total 6.58% 11.29% ($) $123,550 $108,310 $107,525 $87,400 $84,800 $80,600 $74,000 $41,740 $26,460 $23,700 $23,915 $782,000 91% 60% 74% 35% 92% 82% 100% 94% 78% 72% 90% 29% (%) 15.80% 13.85% 13.75% 11.18% 10.84% 10.31% 9.46% 5.34% 3.38% 3.03% 3.06% Your Advisor Janet Lerner Net Worth $1,102,000 Cash Flow $20,308 Probability of Success Retirement College Education - Tasha College Education - James Fifth-Wheel Trailer Assumptions Inflation Rate Retire At Life Expectancy Frank 3.00% % 0% 0% 0% Kathy 3.00% Prepared by Janet Lerner Page 3 of 16

4 Insurance Coverage Frank Benefit Amount Term 10 Life $275,000 Group STD $900/month Group LTD $1,200/month Long-term Care Kathy Term 10 Life Group STD Group LTD Long-term Care $150/day $225,000 $1,800/month $2,500/month $150/day Prepared by Janet Lerner Page 4 of 16

5 Net Worth Timeline Comparison This report displays a comparison of net worth data in all selected plan scenarios over time. These projections show end-of-year values beginning with the year of plan analysis and are projected until the death of the last surviving client. Use this report to compare the effects of different plan scenarios on net worth. Current Plan Proposed Plan Prepared by Janet Lerner Page 5 of 16

6 Current Year Cash Flow Current Plan This report displays detailed cash flow information over a single year for the selected plan scenario. Cash inflows and outflows are divided into categories to explain their source. Use this report to determine whether a cash flow surplus or deficit exists for the current year for the selected plan scenario. Current Year Cash Flow Inflows Earned Income Non-Qualified Proceeds Total Outflows Lifestyle & Medical Expenses Qualified Contributions Non-Qualified Contributions Other Outflows Taxes Total Surplus/(Deficit) Inflows Frank $75,000 $13,786 $88,786 $46,489 $6,000 $7,245 $2,578 $23,950 $86,261 $2,524 Outflows Kathy $95,000 $8,104 $103,104 $46,489 $4,800 $3,123 $2,398 $28,510 $85,320 $17,784 Surplus/(Deficit) Total $170,000 $21,890 $191,890 $92,978 $10,800 $10,369 $4,975 $52,460 $171,581 $20,308 Prepared by Janet Lerner Page 6 of 16

7 Current Asset Mix This report displays the current asset mix-the asset mix in use as of the plan analysis date. This report shows detailed asset information including standard deviation and rate of return for each asset class. Use this report to demonstrate the current asset mix. Asset Class Large Cap Growth Equity Large Cap Value Equity Mid Cap Equity Small Cap Equity US REITs International Equity Emerging Markets Equity Long Term Bonds Intermediate Term Bonds Short Term Bonds High Yield Bonds International Bonds Cash Total Rate of Return % Standard Deviation % Market Value $123,550 $108,310 $12,140 $26,460 $74,000 $41,740 $11,100 $84,800 $87,400 $675 $80,600 $23,700 $107,525 $782,000 % 15.80% 13.85% 1.55% 3.38% 9.46% 5.34% 1.42% 10.84% 11.18% 0.09% 10.31% 3.03% 13.75% 2013 Ibbotson Associates, Inc. All Rights Reserved. Ibbotson is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. Ibbotson develops proprietary asset allocation tools that are used for educational purposes only. Ibbotson has granted to Advicent Solutions, LP a license to use these asset allocation tools. Morningstar and Ibbotson are not affiliated with Advicent Solutions. Prepared by Janet Lerner Page 7 of 16

8 Probability of Success - Retirement The following report displays the results of Monte Carlo simulations run on the current and proposed plans. The results are derived from 150 simulations and the specified retirement cash flow goals. The chart to the right represents the overall likelihood of success in both the current and proposed plan for the retirement goal. In the line graph below, you can see the likelihood of achieving a given net worth-under each selected plan scenario-over time. Value of Investments funding Retirement Current Plan = Current Plan PROBABILITY OF SUCCESS: RETIREMENT Current - 33% LIKELY SOMEWHAT LIKELY UNLIKELY Proposed Plan = Proposed Plan Proposed - 59% Prepared by Janet Lerner Page 8 of 16

9 Education Goal Coverage Summary Current Plan An education is one of the most important things in life; unfortunately, it can be very expensive. Allocating resources to individual goals and saving adequately can help you achieve those goals and prepare your family for future success. The following report shows your complete list of education goals and the current likelihood of achieving each goal. It is useful to compare resource allocation across goals, as sufficient capital at the end of your goal period can be used to cover other goals. Education Goal Coverage Education Goal College Education - Tasha College Education - James Projected Total Cost $84,348 $72,184 Capital at Start of Goal $44,805 $43,738 Capital at End of Goal $1,126 $2,244 Goal Coverage % 60% 74% Prepared by Janet Lerner Page 9 of 16

10 What Are My Emergency Fund Goal Options? The following options will help you achieve 100% success for your emergency fund goal. You can use any of these options alone; or, you can use a combination of several to reach 100% goal coverage. Current Plan Proposed Plan Alter Spending Change annual spending to 28% ($7,738) Goal Coverage is 100%. EMERGENCY FUND GOAL COVERAGE Current - 29% Save Monthly Increase your monthly savings by $19,618 STRONG PARTIAL INSUFFICIENT Save a Lump Sum Save $19,618 Proposed - 100% 1/1/2014 You have the ability to fund 100% of expenses. Extend Savings Period To Prepared by Janet Lerner Page 10 of 16

11 Immediate Needs vs. Available Assets How much have we saved toward our goal if Frank passes away? When a loved one passes they often leave behind liabilities and expenses. It is important to cover these needs in order to adequately cover future cash expenditures. Some or all of these needs can be offset by making assets available. Typically, life insurance is the most important of these assets, although you can make other assets available to help cover costs. Immediate Needs Lump Sum Needs Probate, Admin & Estate Taxes Liabilities Total Immediate Needs Available Assets Life Insurance Held Realizable Assets Total Available Assets CURRENT PLAN NEEDS VS. ASSETS Needs Current Plan $145,858 $10,000 $305,000 $460,858 $275,000 $736,150 $1,011,150 Assets Proposed Plan $145,858 $10,000 $305,000 $460,858 $484,618 $736,150 $1,220,768 Prepared by Janet Lerner Page 11 of 16

12 How Much Disability Insurance is Needed? If Frank becomes disabled Your disability goal coverage is determined by how well your inflows cover cash outflows in the case that a disability occurs. A deficit indicates that additional coverage is needed. However, your approved coverage amount may be different than what is represented here due to calculation differences. The average monthly shortfall equals how much additional cash you would require over the projected 108 month disability period. Inflows vs. Outflows Total Inflows Total Outflows Total Deficit Average Monthly Shortfall Current Plan DISABILITY INCOME GOAL COVERAGE Current - 94% STRONG PARTIAL INSUFFICIENT Current Plan $1,776,304 $1,859,243 ($82,939) $768 Proposed Plan Proposed - 100% Proposed Plan $2,029,930 $2,029,930 $0 $0 Prepared by Janet Lerner Page 12 of 16

13 Long-term Care Net Worth Comparison Frank requires long-term care The following graphs represent the effect that requiring long-term care (LTC) services would have on your net worth in three different scenarios. The first is the case in which LTC is never required. The second is a base case that is meant to reflect an average LTC scenario. The third case indicates what impact relatively early LTC would have on your net worth. Long-term care services can be very expensive, but proper planning can help reduce the risk of prematurely depleting your nest egg. Current Plan Proposed Plan Base Case = LTC at Age Early Onset = LTC at Age Base Case = LTC at Age Early Onset = LTC at Age Prepared by Janet Lerner Page 13 of 16

14 Disclaimer Important: Please read this section carefully. It contains an explanation of some of the limitations of this report. Important: The calculations or other information generated by NaviPlan regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Below is an outline of several specific limitations of the calculations of financial models in general and of NaviPlan specifically. The Calculations Contained in This Report Depend in Part, on Personal Data That You Provide The assumptions used in this analysis are based on information provided and reviewed by you. These assumptions must be reconsidered on a frequent basis to ensure the results are adjusted accordingly. The smallest of changes in assumptions can have a dramatic impact on the outcome of this analysis. Any inaccurate representation by you of any facts or assumptions used in this analysis invalidates the results. This Report is Not a Comprehensive Financial Report and Does Not Include, Among Other Things, a Review of Your Insurance Policies We have made no attempt to review your property and liability insurance policies (auto and homeowners, for example). We strongly recommend that in conjunction with this analysis, you consult with your property and liability agent to review your current coverage to ensure it continues to be appropriate. In doing so, you may wish to review the dollar amount of your coverage, the deductibles, the liability coverage (including an umbrella policy), and the premium amounts. NaviPlan Does Not Constitute Legal, Accounting, or Tax Advice This analysis does not constitute advice in the areas of legal, accounting or tax. It is your responsibility to consult with the appropriate professionals in those areas either independently or in conjunction with this planning process. Circular 230: Any income tax, estate tax or gift tax advice contained within this document was not intended or written to be used for, and cannot be used for, the purpose of avoiding penalties that may be imposed. Discussion of the Limits of Financial Modeling Inherent Limitations in Financial Model Results Investment outcomes in the real world are the result of a near infinite set of variables, few of which can be accurately anticipated. Any financial model, such as NaviPlan, can only consider a small subset of the factors that may affect investment outcomes and the ability to accurately anticipate those few factors is limited. For these reasons, investors should understand that the calculations made in this analysis are hypothetical, do not reflect actual investment results, and are not guarantees of future results. Results May Vary With Each Use and Over Time The results presented in this analysis are not predictions of actual results. Actual results may vary to a material degree due to external factors beyond the scope and control of this analysis. Historical data is used to produce future assumptions used in the analysis, such as rates of return. Utilizing historical data has limitations as past performance is not a guarantee or predictor of future performance. Outline of the Limitations of NaviPlan and Financial Modeling Your Future Resources and Needs May Be Different From the Estimates That You Provide Prepared by Janet Lerner Page 14 of 16

15 This analysis is intended to help you in making decisions on your financial future based, in part, on information that you have provided and reviewed. The suggested asset allocation presented in this analysis is based, in part, on your answers to a risk tolerance questionnaire and may represent a more aggressive and therefore more risky investment strategy than your current asset allocation mix. The calculations contained in the report utilize the information that you have provided and reviewed including, but not limited to, your age, tolerance for investment risk, income, assets, liabilities, anticipated expenses, and likely retirement age. Some of this information may change in unanticipated ways in the future and those changes may make NaviPlan less useful. NaviPlan Considers Investment in Only a Few Broad Investment Categories NaviPlan utilizes this information to estimate your future needs and financial resources and to identify an allocation of your current and future resources, given your tolerance for investment risk, to a few broad investment categories: large-cap equity, mid-cap equity, small-cap equity, international equity, emerging equity, bonds, and cash. In general, NaviPlan favors the investment categories that have higher historical and expected returns. The extent of the recommended allocation to these favored investment categories is limited by the investor s disclosed tolerance for risk. In general, higher returns are associated with higher risk. These broad investment categories are not specific securities, funds, or investment products and NaviPlan is not an offer or solicitation to purchase any securities or investment products. The assumed rates of return of these broad categories are based on the returns of indices. These indices do not include fees or operating expenses and are not available for investment. These indices are unmanaged and the returns are shown for illustrative purposes only. It is important to note that the broad categories that are used are not comprehensive and other investments that are not considered may have characteristics that are similar or superior to the categories that are used in NaviPlan. Refer to the Asset Allocation section of this report for details on return rate assumptions used throughout this analysis. NaviPlan Calculates Investment Returns Far Into the Future Using Ibbotson Data For all asset class forecasts, Ibbotson uses the building block approach to generate expected return estimates. The building block approach uses current market statistics as its foundation and adds historical performance relationships to build expected return forecasts. This approach separates the expected return of each asset class into three components: the real risk-free rate, expected inflation, and risk premia. The real risk-free rate is the return that can be earned without incurring any default or inflation risk. Expected inflation is the additional reward demanded to compensate investors for future price increases, and risk premia measures the additional reward demanded for accepting uncertainty associated with investing in a given asset class. Any calculation of future returns of any asset category, including any calculation using historical returns as a guide, has severe limitations. Changes in market conditions or economic conditions can cause investment returns in the future to be very different from returns in the past. Returns realized in the future can, in fact, be much lower, or even negative, for all or some of these asset categories and, if so, the calculations in NaviPlan will be less useful. Any assets, including the broad asset categories considered in NaviPlan, that offer potential profits also entail the possibility of losses. Furthermore, it is significant that the historical data for these investment categories does not reflect investment fees or expenses that an investor would pay when investing in securities or investment products. The fees and expenses would significantly reduce net investment returns and a calculation taking account of fees and expenses would result in lower expected asset values in the future. Refer to the Asset Allocation section of this report for details on return rate assumptions used throughout this analysis. NaviPlan Calculations Include Limited Accounting for Taxes Prepared by Janet Lerner Page 15 of 16

16 The federal and state income tax laws are extremely complex and subject to continuous change. NaviPlan has limited capability to model any individual tax liability, and future tax laws may be significantly different from current tax laws. Any changes in tax law may affect returns for any given investment and make the calculations produced by NaviPlan less useful. The calculations contain limited support for the tax impact on transfers of money or redemptions of funds. NaviPlan Calculations Do Not Include Fees and Expenses The calculations utilize return data that do not include fees or operating expenses. If included, fees and other Recommendations included in the calculations to redeem funds from certain investments or transfer money to others do not account for fees and charges that may be incurred. NaviPlan Calculations May Include Variable Products Variable life insurance policies or deferred variable annuities are inherently risky and may be included in the calculations. The return rate assumptions used throughout this analysis do not relate to the underlying product illustrated. These returns should not be used as a proxy for actual performance as they may exaggerate the performance potential of the underlying investment accounts (subaccounts). Any calculations incorporating variable products are hypothetical and intended to show how the performance of the underlying subaccounts could affect the value and death benefit of the variable products; these calculations are not intended to predict or project investment results. The rates of return have not been adjusted to include mortality and expense fees attributable to variable annuities. These fees, and their effects on asset growth, are accounted for as a monthly expense of the annuity contract and can be observed in applicable net worth reports. Included in this report is an overview page containing a 0.00% rate of return scenario on variable products funding the retirement goal is included for the Current Plan and Recommended Plan. The rate of return on variable annuities may be lower than 0.00% if one or more of the variable annuities contain a mortality and expense fee. If a variable annuity included in this analysis contains a guaranteed minimum withdrawal rider, it is important to understand that if the contract value is greater than the guaranteed minimum withdrawal benefit once withdrawals begin, as an investor you will have paid for the rider and not actually used it. Income taxes during the annuitization phase are accounted for in the calculations. See the section titled NaviPlan Calculations Include Limited Accounting for Taxes in this Disclaimer for further information on the tax methodology used. Prepared by Janet Lerner Page 16 of 16