Comprehensive Financial Plan

Transcription

1 Sample Client 1 s Comprehensive Financial Plan Prepared by Sample Advisor 1 Sample Financial Services Inc. New York, New York

2 Prepared for Sample Client 1 Contents Basics of Planning... 3 Retirement Planning... 3 Your Plans at a Glance... 5 Short Term Saving Plan... 5 Long Term Saving Plan... 6 Education Plan... 7 Retirement Plan... 8 Your Financial Assumptions... 9 Short Term Saving Plan... 9 Long Term Saving Plan Education Plan Retirement Plan Summary of Your Portfolios Short Term Saving Plan Long Term Saving Plan Education Plan Retirement Plan Your Asset Allocation Short Term Saving Plan Long Term Saving Plan Education Plan Retirement Plan Your Portfolio Risk Analysis Short Term Saving Plan Long Term Saving Plan Education Plan Retirement Plan Your Current Positions Short Term Saving Plan Cash Bonds Equity Long Term Saving Plan Cash Bonds Equity Mutual Funds ETFs Education Plan Page 1 of 51

3 Prepared for Sample Client 1 Cash Bonds Equity Mutual Funds ETFs Retirement Plan Cash Bonds Equity Mutual Funds ETFs Your Projected Short Term Savings Short Term Saving Plan Long Term Saving Plan Education Plan Retirement Plan Your Projected Retirement Income Your Projected Financial Capital Education Plan Retirement Plan Estate Planning Tax Strategies Life Insurance Planning Disability Insurance Planning Your Next Steps Disclosure Page 2 of 51

4 Basics of Planning Prepared for Sample Client 1 Building a solid Financial Plan is considerably helped the more involved an individual becomes with the construction of their plan. Understanding various financial products and managing investment risk in their portfolio will help to ensure that they can achieve their particular financial goals. It is of vital importance to also understand that asset allocation is a key planning strategy. Asset allocation spreads investment risk over a variety of products, such as stocks, bonds and real estate. A strong component of financial planning is also the understanding of how state and federal tax laws affect individuals. There are some additional key issues that must be discussed when creating your plan to ensure that you achieve the best possible outcome. One of the most important variables in planning your financial goals is the Investment Return which you assume for its projections. It may pay off to be more conservative in your estimates of investment returns, as being conservative makes your Financial Plan that much more secure. Proximity of your Financial Goal One critical variable to your plan is how long you will have to save towards your goal; the longer you have the more time you will have to save towards your goal. It is obvious that the sooner you begin planning for your goal the easier and more probable it will be that you will achieve your financial goal. Involving others in your goal is also a major factor in achieving your goal. The more people who can support you in your efforts the better. Retirement Planning Highly sophisticated investors possess an innate financial acumen when it comes to retirement planning, and this intelligence extends to concepts regarding all facets that involve retirement planning. They understand the importance of educating themselves about various financial products and managing investment risk in their portfolios so that they can live comfortably in retirement. It is of vital importance to also understand that asset allocation is a key retirement planning strategy. Asset allocation spreads investment risk over a variety of products, such as stocks, bonds and real estate, to maximize gains. A strong component of retirement preparation is also the understanding how state and federal tax laws affect retirees, and having a better understanding of how to schedule withdrawals from Social Security and 401(k) retirement accounts. Investors who delay withdrawals can receive higher monthly payments over the long term. Retirement planning requires wise investment of a lifetime of savings and hopefully sound investment strategy in order to live comfortably during retirement. There are some additional key issues that must be discussed when creating your retirement plan to ensure that you achieve the best possible retirement. One of the most important variables in planning your retirement is the Investment Return which you assume for its projections. It may pay off to be more conservative in your estimates of investment returns, as being conservative makes the Retirement Plan that much more secure and provides the possibility of money being left over for your dependents. Page 3 of 51

5 Prepared for Sample Client 1 Length of Retirement One critical variable is your length of retirement; the longer you live the more money you will need in your retirement years. The 2009 average life expectancy for the United States was 78.7 years according to the World Bank. This number is growing all the time and so ensures that you project accordingly to account for those additional years of retirement. Thanks to healthier lifestyles and breakthroughs in medical technology, life expectancy for Americans has increased significantly during the past half-century. While it's good news that you can expect to live longer in retirement and have a better quality of life, it also means your investment portfolio may need to last for 30 years Your Retirement Goals What goals do you have in retirement? Like moving south in the winter or travelling around the world or working at a childhood dream or just leisurely being inactive. Any and all of these goals should be factored in so that you re able to fulfill your dreams. If you plan to be very active in travelling or other activities you should plan to provide yourself with a higher percentage of your current income during your retirement years. Your Goal is to retire at age 65. Your Retirement Age is one of the most critical components to your Retirement Plan. The longer you wait to retire, the more time you have to save and the less time you have to spend your savings. This is one of the easiest ways to work within your current budget and still make your Retirement Goal. How much is enough? Before you can create an effective plan to save for your retirement, you have to have a reasonably good estimate of how much you need to save--not just to sustain your lifestyle during retirement, but also to cover the anticipated extra costs to fund your dreams. Moreover, effective planning is the key to preparing for threats like inflation that can jeopardize your retirement nest egg. Page 4 of 51

6 Your Plans at a Glance Prepared for Sample Client 1 Short Term Saving Plan Congratulations! You are well on your way to achieving your particular financial goal. As can be seen in the below graph, your goal is to have $50,000 saved by December It is critical that you maintain a disciplined savings schedule to achieve this goal. Below are the projected annual savings amounts which can be expected based on your plan s assumptions. Projected Short Term Savings $50, $40, $30, $20, $10, $0.00 Sep, 08 Dec, 08 Current Savings Amount: $15,000 Savings Target: $50,000 Required Ongoing Savings: $2,842 per month Page 5 of 51

7 Long Term Saving Plan Prepared for Sample Client 1 Congratulations! You are well on your way to achieving your particular financial goal. As can be seen in the below graph, your goal is to have $500,000 saved by December It is critical that you maintain a disciplined savings schedule to achieve this goal. Below are the projected annual savings amounts which can be expected based on your plan s assumptions. Projected Long Term Savings Taxable Account Non-taxable Account $600, $500, $400, $300, $200, $100, $0.00 Dec, 11 Dec, 13 Dec, 15 Dec, 17 Dec, 19 Dec, 21 Current Savings Amount: $250,000 Savings Target: $500,000 Required Ongoing Savings: $ per month Page 6 of 51

8 Education Plan Prepared for Sample Client 1 Congratulations! You are well on your way to achieving your particular financial goal. As can be seen in the below graph, your goal is to save for a 4 year education program which costs $45,000 in today s dollars and you want to save for 50% of the cost of this education. This translates into a required ongoing savings amount of $291 per month. Below are the projected annual savings amounts which can be expected based on your plan s assumptions. Projected Education Savings Taxable Account Non-taxable Account $140, $120, $100, $80, $60, $40, $20, $0.00 Feb, 12 Sep, 14 Sep, 16 Sep, 18 Sep, 20 Sep, 22 Projected Financial Capital Taxable Account Non-taxable Account $140, $120, $100, $80, $60, $40, $20, $0.00 Feb, 12 Sep, 14 Sep, 16 Sep, 18 Sep, 20 Sep, 22 Sep, 24 Sep, 26 Page 7 of 51

9 Prepared for Sample Client 1 Retirement Plan Retirement Age: 60 Current Ongoing Savings Amount: $30,000 per Year Projected Surplus: $121,473 Congratulations! Based on your current savings amount and the information you provided, you are well on your way to Retiring comfortably. Your Projected Retirement Income is shown below. Here, you will see the various sources of your Retirement Income. $140, $120, RETIREMENT INCOME GRAPH $100, $80, $60, $40, $20, Social Security Pension Annuity Inheritance Non-taxable Account Taxable Account $ Below is your Projected Financial Capital throughout the course of your life. You will see below how your Projected Financial Capital are comprised of various account and various investment types. This Graph will help you better understand how your Net Worth throughout your Retirement could look like. $1,000, $900, $800, $700, PROJECTED FINANCIAL CAPITAL $600, $500, $400, $300, $200, $100, $ Inheritance Non-taxable Account Taxable Account Page 8 of 51

10 Your Financial Assumptions Prepared for Sample Client 1 Short Term Saving Plan Variable Value Savings Goal A Business Venture Savings Target $50, Target Date 12/08/2012 Saving Frequency Monthly Current Amount Saved $15, Investment Style Balanced Growth Investment Rate of Return 6.00% Portion of Investments in Tax Deferred Accounts 0.00% Investment Tax Rate (on Taxable Accounts) 17.50% Tax Rate on Withdrawals from Tax Deferred Accounts* 17.50% Page 9 of 51

11 Long Term Saving Plan Prepared for Sample Client 1 Variable Value Savings Goal Financial Well-being Savings Target $500, Target Date 12/08/2021 Saving Frequency Monthly Current Amount Saved $250, Investment Style Balanced Growth Investment Rate of Return 6.00% Portion of Investments in Tax Deferred Accounts 0.00% Investment Tax Rate (on Taxable Accounts) 17.50% Tax Rate on Withdrawals from Tax Deferred Accounts* 17.50% Page 10 of 51

12 Education Plan Prepared for Sample Client 1 Variable Value School Harvard University Today's annual costs $45, Portion Being Saved For 50.00% Enrollment Date 09/01/2015 Length of Program Saving Frequency 4 years Monthly Current Amount Saved $30, Investment Style Balanced Growth Investment Rate of Return 6.00% Portion of Investments in Tax Deferred Accounts* 0.00% Investment Tax Rate (on Taxable Accounts) 17.50% Tax Rate on Withdrawals from Tax Deferred Accounts* 17.50% Inflation Rate** 2.00% Page 11 of 51

13 Prepared for Sample Client 1 Retirement Plan Variable Value Current Age 50 Retirement Age 60 Life Expectancy 90 Your Current Income $120, Spouse's Current Income N/A Income Growth Rate 1.50% Income Tax Rate 30.00% Your Retirement Lifestyle Current Lifestyle Spouse's Retirement Lifestyle N/A Inflation Rate 1.50% Current Ongoing Savings Amount $30, Your Current Amount Saved $485, Spouse's Current Amount Saved N/A % of Income saved by Your Company 3.00% % of Spouse's Income saved by Company N/A Portion of Investments in Tax Deferred Accounts 0.00% Investment Tax Rate on Taxable Investments 30.00% Tax Rate on Withdrawals from Tax Deferred Accounts 10.00% Monthly Pension in Retirement Dollars $2, Investment Style Balanced Your Required Savings $952, Saving Frequency Annual Inheritance Amount $100, Year of Inheritance Receipt 2036 * Portion of Investments in Tax Deferred Accounts - Portion of Investments in Tax Deferred Accounts - This refers to the percentage of your investments which grow tax deferred such as 529 plans or IRAs. ** Inflation Rate - Tax Rate on Withdrawals from Tax Deferred Accounts - This refers to the tax rate at which your investments will be taxed when you withdraw them from your Tax Deferred Accounts (e.g. IRAs, 529 plans). Page 12 of 51

14 Summary of Your Portfolios Prepared for Sample Client 1 Short Term Saving Plan Accounts Included: Sample Client Account 1 Schwab IRA Account Sample Client Account 2 Fidelity Trading Account Asset Allocation Activity Summary Portfolio Value on $13, Accrued Interest $ Contributions $2, Withdrawals ($1,405.01) Realized Gains $ Unrealized Gains $ Interest $67.28 Dividends $ Change in Accrued Interest $ Management Fees ($128.13) Portfolio Value on $15, Accrued Interest $ Page 13 of 51

15 Prepared for Sample Client 1 Long Term Saving Plan Accounts Included: Sample Client Account 1 Schwab IRA Account Sample Client Account 2 Fidelity Trading Account Asset Allocation Activity Summary Portfolio Value on $224, Accrued Interest $2, Contributions $42, Withdrawals ($23,416.86) Realized Gains $2, Unrealized Gains $1, Interest $1, Dividends $2, Change in Accrued Interest $2, Management Fees ($2,135.48) Portfolio Value on $250, Accrued Interest $4, Page 14 of 51

16 Prepared for Sample Client 1 Education Plan Accounts Included: Sample Client Account 1 Schwab IRA Account Sample Client Account 2 Fidelity Trading Account Asset Allocation Activity Summary Portfolio Value on $145, Accrued Interest $1, Contributions $27, Withdrawals ($15,166.67) Realized Gains $1, Unrealized Gains $1, Interest $ Dividends $1, Change in Accrued Interest $1, Management Fees ($1,383.11) Portfolio Value on $161, Accrued Interest $2, Page 15 of 51

17 Prepared for Sample Client 1 Retirement Plan Accounts Included: Sample Client Account 1 Schwab IRA Account Sample Client Account 2 Fidelity Trading Account Asset Allocation Activity Summary Portfolio Value on $2,620, Accrued Interest $23, Contributions $498, Withdrawals ($273,000.00) Realized Gains $34, Unrealized Gains $20, Interest $13, Dividends $25, Change in Accrued Interest $25, Management Fees ($24,895.94) Portfolio Value on $2,914, Accrued Interest $49, Page 16 of 51

18 Your Asset Allocation Prepared for Sample Client 1 Short Term Saving Plan Asset Allocation Equity 54% Bonds 43% Cash 3% Geographic Allocation US Equity 49% Canadian Equity 24% European Equity 14% Emerging Markets Equity 13% Equity Investment Style Value Style 59% Growth Style 29% Value& Growth Style 12% Market Capitalization Small Cap 30% Mid Cap 50% Large Cap 20% Industry Allocation Major Banks 14% Accident &Health Insurance 12% Commercial Banks 34% Telecommunications Equipment 24% Others 16% Page 17 of 51

19 Long Term Saving Plan Prepared for Sample Client 1 Asset Allocation Equity 54% Bonds 43% Cash 3% Geographic Allocation US Equity 49% Canadian Equity 24% European Equity 14% Emerging Markets Equity 13% Equity Investment Style Value Style 59% Growth Style 29% Value& Growth Style 12% Market Capitalization Small Cap 30% Mid Cap 50% Large Cap 20% Industry Allocation Major Banks 14% Accident &Health Insurance 12% Commercial Banks 34% Telecommunications Equipment 24% Others 16% Page 18 of 51

20 Education Plan Prepared for Sample Client 1 Asset Allocation Equity 54% Bonds 43% Cash 3% Geographic Allocation US Equity 49% Canadian Equity 24% European Equity 14% Emerging Markets Equity 13% Equity Investment Style Value Style 59% Growth Style 29% Value& Growth Style 12% Market Capitalization Small Cap 30% Mid Cap 50% Large Cap 20% Industry Allocation Major Banks 14% Accident &Health Insurance 12% Commercial Banks 34% Telecommunications Equipment 24% Others 16% Page 19 of 51

21 Retirement Plan Prepared for Sample Client 1 Asset Allocation Equity 54% Bonds 43% Cash 3% Geographic Allocation US Equity 49% Canadian Equity 24% European Equity 14% Emerging Markets Equity 13% Equity Investment Style Value Style 59% Growth Style 29% Value& Growth Style 12% Market Capitalization Small Cap 30% Mid Cap 50% Large Cap 20% Industry Allocation Major Banks 14% Accident &Health Insurance 12% Commercial Banks 34% Telecommunications Equipment 24% Others 16% Page 20 of 51

22 Your Portfolio Risk Analysis Prepared for Sample Client 1 Management Style Selecting the right investment management style is critical to building a long term portfolio that meets your risk and return objectives. The below rates of returns have been calculated by taking your selected portfolio s asset allocation across cash, bonds, and equities and using the historic returns of market indices. The rates of returns shown below provide you with a good idea of what the past returns of your selected investment style have been over various periods in time. We have provided you with the best, worst, and average returns over various periods. Review these to help you determine if your selected investment style is appropriate to your particular objectives. Please know that past performance is no indication of future performance. Short Term Saving Plan Page 21 of 51

23 Prepared for Sample Client 1 Long Term Saving Plan Page 22 of 51

24 Prepared for Sample Client 1 Education Plan Page 23 of 51

25 Prepared for Sample Client 1 Retirement Plan Page 24 of 51

26 Your Current Positions Prepared for Sample Client 1 Short Term Saving Plan Cash Investment Name # of Units List Price Market Value US Dollar 2, $1.00 $2, CA Dollar $0.99 $27.00 Japanese Yen 1, $0.01 $19.42 TOTAL $3, Bonds Investment Name # of Units List Price Market Value DTE ENERGY CO 7.625% 15-May $ $3, TOTAL $3, Equity Investment Name # of Units List Price Market Value WELLS FARGO & CO (ARCA: WFC) 150 $30.04 $4, CITIGROUP INC (ARCA: C) 154 $29.30 $4, TOTAL $8, Long Term Saving Plan Cash Investment Name # of Units List Price Market Value US Dollar 6,860 $1.00 $6, CA Dollar 170 $0.99 $ Japanese Yen 9,324 $0.01 $ TOTAL $7, Page 25 of 51

27 Prepared for Sample Client 1 Bonds Investment Name # of Units List Price Market Value BAC Can Fin 2.726% 21-Feb $99.73 $1, Regeional Div Fd 9.250% 15-Mar $ $1, BOARDWALK PIPELINES LP 5.750% 15-Sep $97.64 $5, US Dept House 6.590% 01-Aug $98.12 $4, Interntl Inc 3.870% 24-Nov $97.62 $2, KCP&L Grt Mis Op 8.270% 15-Nov $95.62 $3, GOLDCORP INC 2.000% 01-Aug $ $3, Michigan Gas 7.060% 01-May $ $3, DTE ENERGY CO 7.625% 15-May $ $4, TOTAL $30, Equity Investment Name # of Units List Price Market Value CHEVRON CORP (ARCA: CVX) 13 $ $1, MICROSOFT CORP (ARCA: MSFT) 189 $28.01 $5, COCA-COLA CO/THE (ARCA: KO) 17 $67.46 $1, INTEL CORP (ARCA: INTC) 43 $25.52 $1, CISCO SYSTEMS INC (ARCA: CSCO) 197 $19.89 $3, INTL BUSINESS MACHINES CORP (ARCA: IBM) 9 $ $1, GENERAL ELECTRIC CO (ARCA: GE) 86 $19.11 $1, MERCK & CO. INC. (ARCA: MRK) 43 $39.29 $1, JOHNSON & JOHNSON (ARCA: JNJ) 9 $64.97 $ GOLDMAN SACHS GROUP INC (ARCA: GS) 51 $ $5, AT&T INC (ARCA: T) 103 $30.36 $3, BOEING CO (ARCA: BA) 40 $75.54 $3, GOOGLE INC-CL A (ARCA: GOOG) 10 $ $6, KELLOGG CO (ARCA: K) 28 $51.18 $1, WELLS FARGO & CO (ARCA: WFC) 182 $30.04 $5, CITIGROUP INC (ARCA: C) 259 $29.30 $7, TOTAL $56, Mutual Funds Investment Name # of Units List Price Market Value Fidelity Balanced Fund 129 $18.34 $2, American Beacon Balanced Fund;Investor 223 $14.15 $3, Templeton Foreign Fund;A 858 $6.12 $5, TMPLETON GLOBAL BOND FUND ADV CL 537 $12.27 $6, Page 26 of 51

28 Prepared for Sample Client 1 EPIPHANY FFV STRATEGIC INCM FD CL N 170 $10.19 $1, EPIPHANY FFV FOCUSED FD CL N 147 $12.42 $1, GEN ELEC CAP 5.875%33 SENIOR NTS 94 $25.31 $2, MONEY MARKET FUNDS 6036 $1.00 $6, EPIPHANY FFV STRATEGIC INCM FD CL N 466 $10.19 $4, Dunham Corporate/Government Bond Fund;A 475 $14.21 $6, BlackRock National Municipal Fund;Investor C (MFNLX) 355 $10.79 $3, Vanguard Convertible Securities Fund;Investor (VCVSX) 292 $12.35 $3, Fidelity Advisor Overseas Fund;Institutional (FAOIX) 456 $15.60 $7, US Global Investors Global MegaTrends Fund 1819 $7.93 $14, TOTAL $99, ETFs Investment Name # of Units List Price Market Value ishares Dow Jones Select Dividend Index Fund 112 $54.33 $6, First Trust Energy AlphaDEX Fund 94 $19.85 $1, Fidelity NASDAQ Composite Index Tracking Stock 44 $ $4, Vanguard Growth Index Fund;ETF 106 $65.05 $6, ishares FTSE EPRA/NAREIT Developed RE ex-us Idx Fd 150 $26.67 $4, ProShares Ultra Dow 30 ProShares 69 $64.17 $4, SPDR Dow Jones Large Cap Value ETF 67 $61.65 $4, Rydex Russell Top 50 ETF 87 $94.92 $8, Market Vectors High-Yield Municipal Index ETF 81 $30.59 $2, Claymore US Capital Mkts Bond Index ETF (XUBDX) 124 $53.00 $6, ishares MSCI BRIC Index Fund 184 $40.54 $7, TOTAL $56, Page 27 of 51

29 Prepared for Sample Client 1 Education Plan Cash Investment Name # of Units List Price Market Value US Dollar 4, $1.00 $4, CA Dollar $0.99 $ Japanese Yen 6, $0.01 $78.51 TOTAL $4, Bonds Investment Name # of Units List Price Market Value BAC Can Fin 2.726% 21-Feb $99.73 $1, Regeional Div Fd 9.250% 15-Mar $ $ BOARDWALK PIPELINES LP 5.750% 15-Sep $97.64 $3, US Dept House 6.590% 01-Aug $98.12 $2, Interntl Inc 3.870% 24-Nov $97.62 $1, KCP&L Grt Mis Op 8.270% 15-Nov $95.62 $2, GOLDCORP INC 2.000% 01-Aug $ $2, Michigan Gas 7.060% 01-May $ $2, DTE ENERGY CO 7.625% 15-May $ $3, TOTAL $19, Equity Investment Name # of Units List Price Market Value CHEVRON CORP (ARCA: CVX) 8 $ $ MICROSOFT CORP (ARCA: MSFT) 122 $28.01 $3, COCA-COLA CO/THE (ARCA: KO) 11 $67.46 $ INTEL CORP (ARCA: INTC) 28 $25.52 $ CISCO SYSTEMS INC (ARCA: CSCO) 128 $19.89 $2, INTL BUSINESS MACHINES CORP (ARCA: IBM) 6 $ $1, GENERAL ELECTRIC CO (ARCA: GE) 56 $19.11 $1, MERCK & CO. INC. (ARCA: MRK) 28 $39.29 $1, JOHNSON & JOHNSON (ARCA: JNJ) 6 $64.97 $ GOLDMAN SACHS GROUP INC (ARCA: GS) 33 $ $3, AT&T INC (ARCA: T) 67 $30.36 $2, BOEING CO (ARCA: BA) 26 $75.54 $1, GOOGLE INC-CL A (ARCA: GOOG) 7 $ $4, KELLOGG CO (ARCA: K) 18 $51.18 $ Page 28 of 51

30 Prepared for Sample Client 1 WELLS FARGO & CO (ARCA: WFC) 118 $30.04 $3, CITIGROUP INC (ARCA: C) 168 $29.30 $4, TOTAL $36, Mutual Funds Investment Name # of Units List Price Market Value Fidelity Balanced Fund 83 $18.34 $1, American Beacon Balanced Fund;Investor 144 $14.15 $2, Templeton Foreign Fund;A 556 $6.12 $3, TMPLETON GLOBAL BOND FUND ADV CL 348 $12.27 $4, EPIPHANY FFV STRATEGIC INCM FD CL N 110 $10.19 $1, EPIPHANY FFV FOCUSED FD CL N 95 $12.42 $1, GEN ELEC CAP 5.875%33 SENIOR NTS 61 $25.31 $1, MONEY MARKET FUNDS 3909 $1.00 $3, EPIPHANY FFV STRATEGIC INCM FD CL N 302 $10.19 $3, Dunham Corporate/Government Bond Fund;A 308 $14.21 $4, BlackRock National Municipal Fund;Investor C (MFNLX) 230 $10.79 $2, Vanguard Convertible Securities Fund;Investor (VCVSX) 189 $12.35 $2, Fidelity Advisor Overseas Fund;Institutional (FAOIX) 296 $15.60 $4, US Global Investors Global MegaTrends Fund 1178 $7.93 $9, TOTAL $64, ETFs Investment Name # of Units List Price Market Value ishares Dow Jones Select Dividend Index Fund 72 $54.33 $3, First Trust Energy AlphaDEX Fund 61 $19.85 $1, Fidelity NASDAQ Composite Index Tracking Stock 28 $ $3, Vanguard Growth Index Fund;ETF 68 $65.05 $4, ishares FTSE EPRA/NAREIT Developed RE ex-us Idx Fd 97 $26.67 $2, ProShares Ultra Dow 30 ProShares 44 $64.17 $2, SPDR Dow Jones Large Cap Value ETF 43 $61.65 $2, Rydex Russell Top 50 ETF 57 $94.92 $5, Market Vectors High-Yield Municipal Index ETF 52 $30.59 $1, Claymore US Capital Mkts Bond Index ETF (XUBDX) 80 $53.00 $4, ishares MSCI BRIC Index Fund 119 $40.54 $4, TOTAL $36, Page 29 of 51

31 Prepared for Sample Client 1 Retirement Plan Cash Investment Name # of Units List Price Market Value US Dollar 79, $1.00 $79, CA Dollar 1, $0.99 $1, Japanese Yen 108,700 $0.01 $1, TOTAL $83, Bonds Investment Name # of Units List Price Market Value BAC Can Fin 2.726% 21-Feb $99.73 $20, Regeional Div Fd 9.250% 15-Mar $ $12, BOARDWALK PIPELINES LP 5.750% 15-Sep $97.64 $68, US Dept House 6.590% 01-Aug $98.12 $49, Interntl Inc 3.870% 24-Nov $97.62 $29, KCP&L Grt Mis Op 8.270% 15-Nov $95.62 $40, GOLDCORP INC 2.000% 01-Aug $ $40, Michigan Gas 7.060% 01-May $ $36, DTE ENERGY CO 7.625% 15-May $ $55, TOTAL $353, Equity Investment Name # of Units List Price Market Value CHEVRON CORP (ARCA: CVX) 150 $ $15, MICROSOFT CORP (ARCA: MSFT) 2200 $28.01 $61, COCA-COLA CO/THE (ARCA: KO) 200 $67.46 $13, INTEL CORP (ARCA: INTC) 500 $25.52 $12, CISCO SYSTEMS INC (ARCA: CSCO) 2300 $19.89 $45, INTL BUSINESS MACHINES CORP (ARCA: IBM) 100 $ $18, GENERAL ELECTRIC CO (ARCA: GE) 1000 $19.11 $19, MERCK & CO. INC. (ARCA: MRK) 500 $39.29 $19, JOHNSON & JOHNSON (ARCA: JNJ) 100 $64.97 $6, GOLDMAN SACHS GROUP INC (ARCA: GS) 600 $ $64, AT&T INC (ARCA: T) 1200 $30.36 $36, BOEING CO (ARCA: BA) 470 $75.54 $35, GOOGLE INC-CL A (ARCA: GOOG) 122 $ $77, KELLOGG CO (ARCA: K) 330 $51.18 $16, Page 30 of 51

32 Prepared for Sample Client 1 WELLS FARGO & CO (ARCA: WFC) 2120 $30.04 $63, CITIGROUP INC (ARCA: C) 3020 $29.30 $88, TOTAL $654, Mutual Funds Investment Name # of Units List Price Market Value Fidelity Balanced Fund 1500 $18.34 $27, American Beacon Balanced Fund;Investor 2599 $14.15 $36, Templeton Foreign Fund;A $6.12 $61, TMPLETON GLOBAL BOND FUND ADV CL $12.27 $79, EPIPHANY FFV STRATEGIC INCM FD CL N $10.19 $20, EPIPHANY FFV FOCUSED FD CL N $12.42 $21, GEN ELEC CAP 5.875%33 SENIOR NTS 1100 $25.31 $27, MONEY MARKET FUNDS $1.00 $70, EPIPHANY FFV STRATEGIC INCM FD CL N $10.19 $55, Dunham Corporate/Government Bond Fund;A 5540 $14.21 $78, BlackRock National Municipal Fund;Investor C (MFNLX) 4140 $10.79 $44, Vanguard Convertible Securities Fund;Investor (VCVSX) 3400 $12.35 $41, Fidelity Advisor Overseas Fund;Institutional (FAOIX) 5320 $15.60 $82, US Global Investors Global MegaTrends Fund $7.93 $168, TOTAL $1,159, ETFs Investment Name # of Units List Price Market Value ishares Dow Jones Select Dividend Index Fund 1302 $54.33 $70, First Trust Energy AlphaDEX Fund 1100 $19.85 $21, Fidelity NASDAQ Composite Index Tracking Stock 510 $ $56, Vanguard Growth Index Fund;ETF 1230 $65.05 $80, ishares FTSE EPRA/NAREIT Developed RE ex-us Idx Fd 1750 $26.67 $46, ProShares Ultra Dow 30 ProShares 800 $64.17 $51, SPDR Dow Jones Large Cap Value ETF 780 $61.65 $48, Rydex Russell Top 50 ETF 1020 $94.92 $96, Market Vectors High-Yield Municipal Index ETF 940 $30.59 $28, Claymore US Capital Mkts Bond Index ETF (XUBDX) 1440 $53.00 $76, ishares MSCI BRIC Index Fund 2140 $40.54 $86, TOTAL $663, Page 31 of 51

33 Your Projected Short Term Savings Prepared for Sample Client 1 Short Term Saving Plan As can be seen in the below graph, your goal is to have $50,000 saved by December Below are the projected annual savings amounts which can be expected based on your plan s assumptions. Equally as important as maintaining your ongoing savings amount is the structure of your investment portfolio. Time must be taken to properly analyze your current investments to ensure that they match with your particular financial goals. Projected Short Term Savings $50, $40, $30, $20, $10, $0.00 Sep - 11 Jul - 12 Current Savings Amount: $15,000 Savings Target: $50,000 Required Ongoing Savings: $2,842 per month Page 32 of 51

34 Prepared for Sample Client 1 Date Taxable Account Non-taxable Account Sep-11 $15, $2, Oct-11 $15, $5, Nov-11 $15, $8, Dec-11 $15, $10, Jan-12 $16, $13, Feb-12 $16, $16, Mar-12 $16, $19, Apr-12 $16, $22, May-12 $17, $25, Jun-12 $17, $28, Jul-12 $17, $32, Page 33 of 51

35 Long Term Saving Plan Prepared for Sample Client 1 As can be seen in the below graph, your goal is to have $500,000 saved by December Below are the projected annual savings amounts which can be expected based on your plan s assumptions. Equally as important as maintaining your ongoing savings amount is the structure of your investment portfolio. Time must be taken to properly analyze your current investments to ensure that they match with your particular financial goals. Projected Long Term Savings Taxable Account Non-taxable Account $600, $500, $400, $300, $200, $100, $0.00 Dec, 11 Dec, 13 Dec, 15 Dec, 17 Dec, 19 Dec, 21 Current Savings Amount: $250,000 Savings Target: $500,000 Required Ongoing Savings: $1, per month Page 34 of 51

36 Prepared for Sample Client 1 Year Taxable Account Non-taxable Account 2011 $250, $16, $254, $34, $258, $51, $263, $69, $267, $87, $272, $105, $277, $124, $282, $143, $287, $162, $292, $182, $297, $202, Page 35 of 51

37 Education Plan Prepared for Sample Client 1 Congratulations! You are well on your way to achieving your particular financial goal. As can be seen in the below graph, your goal is to save for a 4 year education program which costs $45,000 in today s dollars and you want to save for 50% of the cost of this education. Below are the projected annual savings amounts which can be expected based on your plan s assumptions. Projected Education Savings Taxable Account Non-taxable Account $140, $120, $100, $80, $60, $40, $20, $0.00 Feb, 12 Sep, 14 Sep, 16 Sep, 18 Sep, 20 Sep, 22 Current Savings Amount: $30,000 Today s Annual Costs: $45,000 Required Ongoing Savings: $291 per month Page 36 of 51

38 Prepared for Sample Client 1 Year Taxable Account Non-taxable Account 2012 $48, $5, $49, $11, $50, $17, $51, $23, $52, $29, $52, $35, $53, $42, $54, $48, $55, $55, $56, $62, $57, $68, Page 37 of 51

39 Retirement Plan Prepared for Sample Client 1 Congratulations! Based on your current savings amount, the information you provided, and assuming you begin to save an additional $300 per month, you are well on your way to Retiring comfortably. Your Projected Retirement Income is shown below. Here, you will see the various sources of your Retirement Income. Projected Retirement Savings $1,400, $1,200, $1,000, $800, $600, $400, $200, $ Taxable Account Non-taxable Account Variable Annuity It is recommended that you regularly update your Retirement Plan to keep it as current as possible. By keeping your plan current the likelihood of achieving your Retirement Goal is significantly increased. It is also recommended that you monitor the sources of your projected financial capital to be aware of any potential tax planning that may be required. Page 38 of 51

40 Prepared for Sample Client 1 Your Age Taxable Account Non-taxable Account Variable Annuity 50 $485, $30, $27, $494, $60, $54, $502, $92, $82, $511, $124, $110, $520, $157, $139, $529, $191, $167, $539, $226, $196, $548, $262, $225, $558, $298, $254, $567, $336, $284, Page 39 of 51

41 Your Projected Retirement Income Prepared for Sample Client 1 The below graph illustrates your projected retirement income. It also breaks outs the various sources of your retirement income. This will provide with a very clear understanding of how your retirement lifestyle will be maintained and which source of income will provide for the lifestyle. $140, PROJECTED RETIREMENT INCOME $120, $100, $80, $60, $40, $20, $ Taxable Account Non-taxable Account Inheritance Annuity Pension Social Security A key component to maintaining your retirement lifestyle is to ensure that your income stays up with inflation. As the above graph factors inflation into the equation it is a positive sloping graph throughout your retirement years. Page 40 of 51

42 Prepared for Sample Client 1 Your Age Taxable Accounts Non-taxable Accounts Inheritance Annuity Pension Social Security 61 $30, $0.00 $0.00 $12, $24, $18, $30, $0.00 $0.00 $12, $24, $18, $31, $0.00 $0.00 $12, $24, $18, $31, $0.00 $0.00 $12, $25, $18, $32, $0.00 $0.00 $12, $25, $19, $33, $0.00 $0.00 $12, $25, $19, $33, $0.00 $0.00 $12, $26, $19, $34, $0.00 $0.00 $12, $26, $19, $35, $0.00 $0.00 $12, $27, $20, $36, $0.00 $0.00 $12, $27, $20, $36, $0.00 $0.00 $12, $27, $20, $37, $0.00 $0.00 $12, $28, $21, $38, $0.00 $0.00 $12, $28, $21, $38, $0.00 $0.00 $12, $29, $21, $39, $0.00 $0.00 $12, $29, $22, $40, $0.00 $0.00 $12, $30, $22, $41, $0.00 $0.00 $12, $30, $22, $42, $0.00 $0.00 $12, $30, $23, $42, $0.00 $0.00 $12, $31, $23, $4, $39, $0.00 $12, $31, $23, $0.00 $44, $0.00 $12, $32, $24, $0.00 $45, $0.00 $12, $32, $24, $0.00 $46, $0.00 $12, $33, $24, $0.00 $47, $0.00 $12, $33, $25, $0.00 $48, $0.00 $12, $34, $25, $0.00 $48, $0.00 $12, $34, $26, $0.00 $49, $0.00 $12, $35, $26, $0.00 $50, $0.00 $12, $35, $26, $0.00 $51, $0.00 $12, $36, $27, $0.00 $52, $0.00 $12, $36, $27, Page 41 of 51

43 Your Projected Financial Capital Prepared for Sample Client 1 Education Plan The below graph illustrates how your financial capital is expected to accumulate over time and then be used to fuel your financial goal. The capital is then further divided across taxable and non-taxable assets. The financial capital is expected to be used exclusively for this financial goal for planning purposes. Projected Financial Capital Taxable Account Non-taxable Account $140, $120, $100, $80, $60, $40, $20, $0.00 Feb, 12 Sep, 14 Sep, 16 Sep, 18 Sep, 20 Sep, 22 Sep, 24 Sep, 26 Current Savings Amount: $30,000 Today s Annual Costs: $45,000 Required Ongoing Savings: $291 per month Page 42 of 51

44 Prepared for Sample Client 1 Year Taxable Account Non-taxable Account 2012 $48, $5, $49, $11, $50, $17, $51, $23, $52, $29, $52, $35, $53, $42, $54, $48, $55, $55, $56, $62, $57, $68, $44, $53, $30, $36, $15, $18, $0.00 $0.00 Page 43 of 51

45 Retirement Plan Prepared for Sample Client 1 The below graph illustrates your projected financial capital during retirement. This is helpful in determining how much you can expect to pass on to your beneficiaries throughout various stages of your retirement. $1,000, PROJECTED FINANCIAL CAPITAL $900, $800, $700, $600, $500, $400, $300, $200, $100, $ Taxable Account Non-taxable Account Inheritance The type of financial capital is also clearly noted as to which is taxable versus non-taxable. Optimizing your tax situation is recommended as part of this process so as to minimize the amount of taxes paid during your retirement years and at the point of your estate transfer. Page 44 of 51

46 Prepared for Sample Client 1 Your Age Taxable Account Non-taxable Account Inheritance 50 $485, $30, $ $494, $60, $ $502, $92, $ $511, $124, $ $520, $157, $ $529, $191, $ $539, $226, $ $548, $262, $ $558, $298, $ $567, $336, $ $577, $374, $ $557, $383, $ $537, $393, $ $515, $403, $ $492, $413, $ $468, $423, $ $443, $434, $ $417, $445, $ $389, $456, $ $361, $467, $ $331, $479, $ $300, $491, $ $268, $503, $ $234, $516, $ $200, $529, $ $163, $542, $ $126, $555, $100, $87, $569, $101, $46, $584, $102, $4, $598, $103, $0.00 $569, $104, $0.00 $534, $105, $0.00 $497, $106, $0.00 $458, $107, $0.00 $417, $108, $0.00 $374, $109, $0.00 $329, $110, $0.00 $282, $111, $0.00 $233, $112, $0.00 $181, $113, $0.00 $127, $114, Page 45 of 51

47 Estate Planning Prepared for Sample Client 1 Estate Planning is an essential component to a solid retirement plan by preparing a set of tasks that serve to manage an individual's asset base in the event of their death, including such items as the bequest of assets to heirs and the settlement of estate taxes. Lack of adequate estate planning can cause undue financial burdens to loved ones with estate taxes running higher than 40%, so at the very least a will should be set up even if the taxable estate is not large. Some of the more major Estate Planning tasks include the following: 1. Creating a will 2. Limiting estate taxes by setting up trust accounts in the name of beneficiaries 3. Establishing a guardian for living dependents 4. Naming an executor of the estate to oversee the terms of the will 5. Creating or updating beneficiaries on plans such as life insurance, IRAs and 401(k)s 6. Setting up funeral arrangements 7. Establishing annual gifting to reduce the taxable estate 8. Setting up a durable power of attorney (POA) to direct other assets and investments The below graph illustrates your projected Financial Capital which will be available to your beneficiaries at various points in time. $1,000, $900, $800, $700, $600, $500, $400, $300, $200, $100, PROJECTED FINANCIAL CAPITAL $ Taxable Account Non-taxable Account Inheritance Page 46 of 51

48 Tax Strategies Prepared for Sample Client 1 When it comes to retirement and building a strong tax strategy, there s a lot to consider. Retirees often receive income from a variety of sources, including Social Security benefits, and distributions from pensions, annuities, IRAs and other retirement plans. With the right planning today, you can make the choices that can help you save money on taxes and help protect your retirement income stream. A little planning ahead can go a long way to keeping your taxes as low as possible in retirement. In order to plan ahead properly, you'll need to understand how your retirement income will be taxed. Based on that, you can choose the right strategies to keep your tax bill as low as possible. Social Security Benefits Your Social Security benefits may be completely tax-free or partially tax-free, depending on your total income. Figuring out how much of your benefits will be included as taxable income is essential in reducing your overall tax bill. For planning purposes, you should have an idea of whether your retirement income will cause some of your Social Security benefits to be taxed. Pension and Annuity Income Your pension or annuity may be fully or partially taxable. If all contributions to the pension were tax-deferred, then your distribution will be fully taxable. If you contributed some after-tax dollars to fund your plan, then you have some cost basis in the plan contract. Part of your distributions will be a tax-free recovery of your cost basis, and the remainder will be taxable income. Publication 575, Pension and Annuity Income, provides comprehensive information about determining the taxable amount. IRA Distributions Distributions from your individual retirement account may be fully taxable, partially taxable, or completely tax-free depending on the type of IRA you have. If you have a deductible Traditional IRA, your distributions will be fully taxable. You contributed funds using tax-deductible dollars, and tax is deferred on both the contributions and the earnings until they are withdrawn. If you have any cost basis in a non-deductible Traditional IRA, your distributions will be partially taxable. A portion of your distribution represents a return of your non-deductible investment, and that portion is recovered tax-free. Distributions from Roth IRAs are completely tax free as long as you meet two basic requirements. Your first Roth IRA contribution was made at least five years prior to any distribution and the funds are distributed after you reach age 59 and a half. Page 47 of 51

49 Prepared for Sample Client 1 Life Insurance Planning Long before you give notice to your employer, assess your insurance needs in retirement. Compare the existing insurance which you have while working to what insurance you will still have access to after retirement. To the extent that you have holes in your insurance coverage, determine the amount needed in additional insurance and arrange at in a timely manner. While many companies now offer portability of workplace life insurance policies, taking advantage may not always be advisable. Whereas a young parent nearly always requires life insurance, those older Americans without anyone relying on their income may not need much in the way of life insurance. Still, if you are covered by a pension that would cease at your death yet are taking care financially of another person (e.g., your spouse), life insurance may be a way to ensure your survivor is financially secure should you pass prematurely. Purchasing a term life insurance or whole life insurance policy privately (separate from your employer) is frequently an option at retirement, and is something definitely worth examining. For most individuals health insurance ends on or shortly after their last day at work before retiring. Fortunately, you will in all likelihood have access to your workplace retirement plan via COBRA for up to 18 months after you retire. Keep in mind, however, that under COBRA you must pay the entire health insurance premium (not just the amount you paid while you were working), plus a relatively small administrative fee. Consequently, your portion of health insurance costs may increase if you seek to retain the same plan you had while working. Page 48 of 51

50 Prepared for Sample Client 1 Disability Insurance Planning Preparing for your financial goals also means protecting your financial security against unexpected losses in your earning capacity. Hardships such as a disability can have a dramatic impact on your ability to earn income and provide for your family. As a result, examine closely the impact of a reduction in your income on the lifestyles of those around you. This will require looking closely at not only pension plans but also any savings accounts and other resources that can be used to allow you to create and maintain an equitable standard of living. Analyze Your Current and Expected Income Levels Make some reasonable assumptions about your projected income levels. Be sure to factor in any goals you might have of starting your own business and how that may impact your future income levels as well. Having a good sense of how much you expect to bring in for your family is critical in assessing the amount of risk a disability could play on your family s wellbeing. Determine Your Family s Income Needs Examine how much your family needs in ongoing income to comfortably maintain its standard of living. This is not the time to be overly optimistic with these numbers either. You should take a very conservative view of how much it would cost to ensure all family members are well taken care of, including yourself. Be diligent in running various scenarios with respect to your children and your spouse and any of their future goals which require cash outlays. Protect Against Any Shortfalls Disability insurance protects against the loss in income which may result after a disability and bases the amount of protection as a percentage of your pre-disability income. When you compare how you re your family s income needs compare with the amount of your current income level, the resulting percentage of your income is how much you should consider to protect against with disability insurance. Page 49 of 51

51 Your Next Steps Prepared for Sample Client 1 1. Optimize Your Investments Whether you are opting for active management using money managers or passive management using Exchange Trade Funds (ETFs), consider both maximizing the returns for a given level of risk and minimizing risk for a given level of return. This will help ensure that you keep the gains created by your retirement savings as much as possible. Your strategy will be heavily influenced by the management style and the asset allocation preferences you noted earlier. However, optimizing your investments is a logical next step after completing a Retirement Plan. 2. Optimize your Insurance Needs Assess your future insurance needs currently and what you expect them to be in retirement. Analyze what insurance you will still have access to after retirement. To the extent that you may have holes in your coverage now and later, determine the amount required to fill those voids and purchase the necessary amounts of insurance. 3. Optimize your Tax Planning Minimizing your tax bill in the present and future is always a good idea to do. Sitting down with a professional to ensure you are making the most out of all potential tax strategies is highly recommended. The difference some basic tax planning is always surprising as to how much it could mean in improving your current and expected lifestyle. Page 50 of 51

52 Disclosure This projection has been based on information which you have provided. Prepared for Sample Client 1 The information has neither been reviewed nor otherwise attempted to be verified as to its accuracy or completeness. This Projection is not a substitute for a comprehensive financial plan, and should not be relied upon as your sole or primary means for making financial planning decisions. No record of this interaction or its results will be maintained. Strategies that may be appropriate at one stage of life or point in time can become inappropriate in the future. Changing needs and circumstances, including changes to the economy and securities markets in general, make it prudent to determine whether your strategy should be updated. Although every reasonable effort has been made to ensure accurate calculations, they cannot be guaranteed in any way. The projection can assist you in evaluating your current financial situation and determine your ability to achieve your objectives in the future. However, all final decisions relating to your investment strategies, cash flow management and/or any recommendations in the report are yours. This projection provides general recommendations, based on the information provided by you or gathered from third parties upon your consent and the assumptions made regarding inflation, saving rates, interest rates and investment returns. This report is not a financial plan and is not intended as a solicitation or advice to purchase specific investments. Assumptions The rate of return on your investment in many cases is assumed to be a constant rate and depends on the investment style you selected. The expected rate of return of the investment style selected is an estimate based on historical returns that may or may not include reinvested dividends and capital gains. The projection assumes a diversified portfolio which is rebalanced on a regular basis. However, the projection and likelihood of the investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Taxes are taken into account at the tax rate provided. The information you provided is assumed to be true and constant over time. This includes the assumption that you will make all contributions over the time frame specified. The projections are also based on the dates you enter and do not consider the impact on your savings should you live longer or shorter than the period you enter. This projection assumes that you and your spouse or partner(if applicable) were born on June 30 unless you entered an exact date of birth. Therefore, actual results may vary. The Income Growth Rate is assumed to be the same between you and your spouse or partner, if applicable. The Company Savings Plans are assumed to be all tax deferred plans. The allocation between tax deferred and non tax deferred plans is constant throughout time and across spouses. The tax rate entered by you may be considered constant for the duration of the projection. The tax rate and selected investment style may be used to project your future income from all taxable and non-taxable at the same corresponding constant rates. Your Pension may be assumed to grow at the same rate as inflation. The interest is assumed to be compounded annually for Company Savings and at the selected Saving Frequency for the rest of the investments. All dollar amounts that presently exist are in current dollars. All deposits, withdrawals and account balances projected for the future at a specific age or time are in future dollars. Limitations Unexpected market movements may occur resulting in significant changes in rates of returns. The degree of uncertainty normally increases with the length of the future period covered. The projections and other information regarding various investment outcomes are hypothetical in nature, do not reflect actual results and are not guarantees of the future results. This projection does not consider all asset classes and in fact excludes, as an example, certain assets such as real estate, precious metals, and currencies. This projection does not consider transaction costs, portfolio management, and servicing fees. This projection may not include all taxes applicable to your situation and any changes in tax laws. The inflation in many cases is assumed to be constant. This projection is not intended to predict the future value of actual investments or actual holdings in your portfolio. It is also not intended to predict the current and future values of actual lifetime income levels. This projection should not be used as the primary basis for any investment or tax-planning decisions. The primary objective is to help you identify a strategy. This material is provided for general and educational purposes only and is not intended to provide legal, tax or investment advice. IMPORTANT: The projections or other information generated by this report regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. The simulations are based on assumptions. There can be no assurance that the projected or simulated results will be achieved or sustained. The charts present only a range of possible outcomes. Actual results will vary with each use and over time, and such results may be better or worse than the simulated scenarios. Individuals should be aware that the potential for loss (or gain) may be greater than demonstrated in the simulations. Page 51 of 51