LifeView Financial Plan. John and Jane Smith. Prepared by: Morgan Stanley Financial Advisor. December 03, 2012

Transcription

1 LifeView Financial Plan John and Jane Smith Prepared by: organ Stanley Financial Advisor December 3, 212 This is a Sample LifeView Financial Plan only. It is intended to demonstrate the type of analysis your Financial Advisor can create for you. Your actual Financial Plan will be based on information provided by you and will therefore differ from this Sample Plan. CRC# Revised 12/12

2 Table Of Contents 1-8 Summary of Goals and Resources Personal Information and Summary of Financial Goals Net Worth Summary - All Resources Net Worth Detail - All Resources Resources Summary Current Portfolio Allocation state Analysis state Introduction state Assumptions state Analysis Results Combined Summary state Analysis Results Flowchart state Analysis What If Results Combined Summary state Analysis What If Results Flowchart Results Worksheet Detail - Allocation Comparison Results - Current and Recommended What If Worksheet Worksheet Detail - Combined Details Worksheet Detail - Retirement Distribution Cash Flow Chart Worksheet Detail - Sources of Income and arnings Worksheet Detail - Inside the Numbers Final Result Worksheet Detail - Special Asset Test Worksheet Detail - Portfolio Probability atrix Worksheet Detail - Social Security aximization Appendix Risk Assessment Tax and Inflation Assumptions Return ethodology Glossary of Terms Risk and Portfolio Information Target Band mployer Stock Plans Stock Options Stock Options Summary Risk anagement Life Insurance Needs Analysis Life Insurance Needs Analysis Detail Disability Needs Analysis - John Disability Needs Analysis - Jane Long-Term Care Needs Analysis - John IPORTANT DISCLOSUR INFORATION

3 IPORTANT DISCLOSUR INFORATION IPORTANT: The projections or other information generated by LifeView Advisor regarding the likelihood of various investment outcomes (including any assumed rates of return) are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. LifeView Advisor Assumptions and Limitations Information Provided by You very individual s financial circumstances, needs and risk tolerances are different. This LifeView Financial Plan (the "Financial Plan") is based on the information you provided to us, the assumptions you have asked us to make and the other assumptions indicated herein as of the date of the Financial Plan. It is not an official account statement. The purpose of taking the time to organize your financial life is to gain better control of your financial future. This Financial Plan should be considered a working document that can assist you with this objective. You should carefully review the information and suggestions found in this Financial Plan and then decide on future steps. Asset Allocation Information Any asset allocation information presented herein, which may take into account your assets in one or more mployee Retirement Income Security Act of 1974, as amended ("RI")-covered employee benefit plans and/or one or more individual retirement accounts, is for general asset allocation education and information purposes only, and should not be viewed as fiduciary investment advice or specific recommendations with respect to any particular investment or asset allocation mix under the Investment Advisers Act of 194 as amended, RI, the Internal Revenue Code or any other applicable law. In applying any particular asset allocation model to your individual circumstances, you should consider your other assets, income and investments, in addition to any interest(s) you may have in RI-covered employee benefit plans or individual retirement accounts. Thus, it is very important for you to insure that you review this Financial Plan to make sure that it includes all of your assets, income and investments. Your organ Stanley Financial Advisor should have provided you with the ADV brochure, the brochure supplement, and the Privacy Notice at the back of this Financial Plan. Please contact your Financial Advisor if you have not received these disclosure documents. Information that you provided about your assets, financial goals, and personal situation are key assumptions for the calculations and projections in this Financial Plan. Please review all the information thoroughly to ensure that it is correct and complete. In particular, please review the Financial Plan sections titled "Personal Information and Summary of Financial Goals", "Current Portfolio Allocation", and "Tax and Inflation Assumptions" to verify the accuracy of these assumptions. If any of the assumptions are incorrect, you should notify your Financial Advisor. ven small changes in assumptions can have a substantial impact on the results shown in this Financial Plan. The information provided by you should be reviewed periodically and updated when either the information or your circumstances change. organ Stanley has no responsibility and is under no obligation to monitor or update this Financial Plan in the future unless expressly engaged by you to do so at that time. Assumptions and Limitations LifeView Advisor offers several methods of calculating results, each of which provides one outcome from a wide range of possible outcomes. LifeView Advisor does not purport to recommend or implement an investment strategy. Financial forecasts, rates of return, risk, inflation, and other assumptions may be used as the basis for illustrations in LifeView Advisor. They should not be considered a guarantee of future performance or a guarantee of achieving overall financial objectives. All results use simplifying estimates and assumptions that are not tailored to your specific circumstances. No Financial Plan has the ability to accurately predict the future, eliminate risk or guarantee investment results. As investment returns, inflation, taxes, and other economic conditions vary from the LifeView Advisor assumptions, your actual results will vary (perhaps significantly) from those presented in this Financial Plan. The assumed return rates in LifeView Advisor are not reflective of any specific investment and do not include any fees or expenses that may be incurred by investing in specific products. The actual returns of a specific investment may be more or less than the returns used in LifeView Advisor. The return assumptions are based on historic rates of return of securities indices which serve as proxies for the broad asset classes. It is not possible to directly invest in an index. oreover, different forecasts may choose different indices as a proxy for the same asset class, thus influencing the return of the asset class. LifeView Advisor results may vary with each use and over time. LifeView Advisor is powered by oneyguidepro 12/3/212 Prepared by: organ Stanley Page 1 of 89

4 IPORTANT DISCLOSUR INFORATION The analysis contained in the financial plan is conducted using the organ Stanley Wealth anagement Global Investment Committee s Strategic Return stimates ( GIC stimate ). GIC stimate approved returns are generated based on proprietary formulas which include studying historical return averages of the broad market indices and making strategic adjustments for more recent market conditions and other factors deemed relevant by the forecaster. The Return ethodology section includes a description of the return methodology that has been used to prepare this Financial Plan. The methodology should be carefully considered in evaluating the results presented to you. Hypothetical performance results have inherent limitations. There are frequently large differences between hypothetical and actual performance results subsequently achieved by any particular asset allocation or trading strategy. Hypothetical performance results do not represent actual trading and are generally designed with the benefit of hindsight. They cannot account for all factors associated with risk, including the impact of financial risk in actual trading or the ability to withstand losses or to adhere to a particular trading strategy in the face of trading losses. There are numerous other factors related to the markets in general or to the implementation of any specific trading strategy that cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. Rate of Return ethodology The return assumptions used in this Financial Plan are estimates based on average annual returns for the index used as a proxy for each asset class. The portfolio returns are calculated by weighting individual return assumptions for each asset class according to your portfolio allocation. During the preparation of these analyses, your organ Stanley Financial Advisor may have refined the asset allocation strategy to develop a strategy which optimizes the potential returns that could be achieved with the appropriate level of risk that you would be willing to assume. Asset classes not included may have characteristics similar or superior to those being analyzed. organ Stanley cannot give any assurances that any estimates, assumptions or other aspects of the analyses will prove correct. They are subject to actual known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those shown. These analyses speak only as of the date of this Financial Plan. organ Stanley expressly disclaims any obligation or undertaking to update or revise any statement or other information contained herein to reflect any change in past results, future expectations or circumstances upon which that statement or other information is based. LifeView Advisor is powered by oneyguidepro 12/3/212 Prepared by: organ Stanley Page 2 of 89

5 IPORTANT DISCLOSUR INFORATION Report Is a Snapshot and Does Not Provide Legal, Tax, or Accounting Advice Results Using Class Sensitivity This Report provides a snapshot of your current financial position and can help you to focus on your financial resources and goals, and to create a plan of action. Because the results are calculated over many years, small changes can create large differences in future results. You should use this Report to help you focus on the factors that are most important to you. This Report does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice that is specific to your situation. The Results Using Class Sensitivity are calculated by using different return assumptions for one or more asset classes during the years you select. These results show how your Plan would be affected if the annual returns for one or more asset classes were different than the average returns for a specified period in your Plan. LifeView Advisor ethodology What If Worksheets allow you to review and compare the results of your LifeView Advisor. The Worksheets provide you with tools to consider alternative solutions. LifeView Advisor offers several methods of calculating results, each of which provides one outcome from a wide range of possible outcomes. The methods used are: Average Returns, Bad Timing, Class Sensitivity, and onte Carlo Simulations. Results Using Average Returns The Results Using Average Returns are calculated using one average return for your pre-retirement period and one average return for your post-retirement period. Average Returns are a simplifying assumption. In reality, investment returns can (and often do) vary widely from year to year and vary widely from a long-term average return. Results with Bad Timing onte Carlo simulations are used to show how variations in rates of return each year can affect your results. A onte Carlo simulation calculates the results of your Plan by running it many times, each time using a different sequence of returns. Some sequences of returns will give you better results, and some will give you worse results. These multiple trials provide a range of possible results, some successful (you would have met all your goals) and some unsuccessful (you would not have met all your goals). The percentage of trials that were successful is shown as the probability that your Plan, with all its underlying assumptions, could be successful. In LifeView Advisor, this is the Probability of Success. Analogously, the percentage of trials that were unsuccessful is shown as the Probability of Failure. The Results Using onte Carlo Simulations indicate the likelihood that an event may occur as well as the likelihood that it may not occur. In analyzing this information, please note that the analysis does not take into account actual market conditions, which may severely affect the outcome of your goals over the long-term. What If Scenarios Results Using onte Carlo Simulations Results with Bad Timing are calculated by using low returns in one or two years, and average returns for all remaining years of the Plan. For most Plans, the worst time for low returns is when you begin taking substantial withdrawals from your portfolio. The Results with Bad Timing assume that you earn a low return in the year(s) you select and then an Adjusted Average Return in all other years. This Adjusted Average Return is calculated so that the average return of the Results with Bad Timing is equal to the return(s) used in calculating the Results Using Average Returns. This allows you to compare two results with the same overall average return, where one (the Results with Bad Timing) has low returns in one or two years. LifeView Advisor uses a specialized methodology called Beyond onte Carlo, a statistical analysis technique that provides results that are as accurate as traditional onte Carlo simulations with 1, trials, but with fewer iterations and greater consistency. Beyond onte Carlo is based on Sensitivity Simulations, which re-runs the Plan only 5 to 1 times using small changes in the return. This allows a sensitivity of the results to be calculated, which, when analyzed with the mean return and standard deviation of the portfolio, allows the Probability of Success for your Plan to be directly calculated. LifeView Advisor Presentation of Results The Results Using Average Returns, Bad Timing, and Class Sensitivity display the results using an stimated % of Goal Funded and a Safety argin. The default for the first year of low returns is two standard deviations less than the average return, and the default for the second year is one standard deviation less than the average return. 12/3/212 Prepared by: organ Stanley Page 3 of 89

6 IPORTANT DISCLOSUR INFORATION stimated % of Goal Funded For each Goal, the stimated % of Goal Funded is the sum of the assets used to fund the Goal divided by the sum of the Goal s expenses. All values are in current dollars. A result of 1% or more does not guarantee that you will reach a Goal, nor does a result under 1% guarantee that you will not. Rather, this information is meant to identify possible shortfalls in this Plan, and is not a guarantee that a certain percentage of your Goals will be funded. The percentage reflects a projection of the total cost of the Goal that was actually funded based upon all the assumptions that are included in this Plan, and assumes that you execute all aspects of the Plan as you have indicated. Regardless of whether you are using historical or projected returns for all other LifeView Advisor results, the Bear arket Loss and Bear arket Test use returns calculated from historical indices. If you are using historical returns, the indices in the Bear arket Loss and the Bear arket Test may be different from indices used in other calculations. These results are calculated using only three asset classes Cash, Bonds, and Stocks. Alternative asset classes (e.g., real estate, commodities), if applicable, are included in the Stocks asset class. The indices and the resulting returns for the Great Recession and the Bond Bear arket are: Asset Class Bear arket Loss and Bear arket Test Cash Bonds Ibbotson U.S. 3-day Treasury Bills Ibbotson Intermediate-Term Government Bonds Total Return Ibbotson Large Company Stocks Total Return The Safety argin is the estimated value of your assets at the end of this Plan, based on all the assumptions included in this Report. Only you can determine if that Safety argin is sufficient for your needs. Safety argin Index The Bear arket Loss shows how a portfolio would have been impacted during the worst bear market since the Great Depression. Depending on the composition of the portfolio, the worst bear market is either the "Great Recession" or the "Bond Bear arket." Bond Bear arket Return 7/1979 2/ % 7.8% 1.9% -8.89% % 14.61% Because the Bear arket Loss and Bear arket Test use the returns from asset class indices rather than the returns of actual investments, they do not represent the performance for any specific portfolio, and are not a guarantee of minimum or maximum levels of losses or gains for any portfolio. The actual performance of your portfolio may differ substantially from those shown in the Great Recession Return, the Bond Bear arket Return, the Bear arket Loss, and the Bear arket Test. The Great Recession, from November 27 through February 29, was the worst bear market for stocks since the Great Depression. In LifeView Advisor, the Great Recession Return is the rate of return, during the Great Recession, for a portfolio comprised of cash, bonds, and stocks, with an asset mix equivalent to the portfolio referenced. Stocks Great Recession Return 11/27 2/29 The Bond Bear arket, from July 1979 through February 198, was the worst bear market for bonds since the Great Depression. In LifeView Advisor, the Bond Bear arket Return is the rate of return, for the Bond Bear arket period, for a portfolio comprised of cash, bonds, and stocks, with an asset mix equivalent to the portfolio referenced. The Bear arket Loss shows: 1) either the Great Recession Return or the Bond Bear arket Return, whichever is lower, and 2) the potential loss, if you had been invested in this cash-bond-stock portfolio during the period with the lower return. In general, most portfolios with a stock allocation of 2% or more have a lower Great Recession Return, and most portfolios with a combined cash and bond allocation of 8% or more have a lower Bond Bear arket Return. The Bear arket Test, included in the Stress Tests, examines the impact on your Plan results if an identical Great Recession or Bond Bear arket, whichever would be worse, occurred this year. The Bear arket Test shows the likelihood that you could fund your Needs, Wants and Wishes after experiencing such an event. 12/3/212 Prepared by: organ Stanley Page 4 of 89

7 IPORTANT DISCLOSUR INFORATION If your portfolio contains assets which are tax-qualified or tax-deferred under the Internal Revenue Code, you should consider the tax effects of any portfolio withdrawal from such amounts, as opposed to from fully taxable accounts, with your tax and/or legal advisor(s). Generally speaking, the withdrawal of tax-qualified or tax-deferred amounts can result in income tax liability where no such liability would exist if the amounts had been withdrawn from a taxable account. Furthermore, (a) tax penalties can occur when such assets are withdrawn prior to age 59½, (b) such withdrawals can have detrimental effects on specific tax planning strategies (e.g., 72(t) payments ), and (c) certain qualified or tax-deferred assets are eligible for or receive special treatment upon withdrawal (e.g., net unrealized appreciation treatment, eligibility for rollover). In light of the foregoing, we strongly recommend that you consult your tax and/or legal advisors in connection with this Financial Plan and any withdrawals that you make from your portfolio. A Note on Tax-Qualified/Tax-Deferred Assets 12/3/212 Prepared by: organ Stanley Page 5 of 89

8 IPORTANT DISCLOSUR INFORATION organ Stanley provides its existing and prospective customers with a number of financial tools that produce certain reports to assist customers in managing their wealth and assets. This LifeView Financial Plan was generated by using a computer software program developed by oneyguidepro, a third party software provider. Results may vary with each use of the software and over time. nhancements and changes to the software may be made in the future. organ Stanley is not responsible for the accuracy of the assumptions made in the Financial Plan, or the calculations in the analysis. Future Financial Plans that are generated may contain information capabilities, and other content, that is more expansive or otherwise different from the content of this Financial Plan. This Financial Plan does not constitute an offer to buy, sell, or recommend any particular investment or asset, nor does it recommend that you engage in any particular investment, manager or trading strategy. It reflects only allocations among broad asset classes. All investments have risks. The decisions as to when and how to invest are solely your responsibility. This Financial Plan will be deemed to create an investment advisory relationship between you and organ Stanley that begins upon delivery of the Financial Plan to you and ends thirty days later, during which time your Financial Advisor is available to review the LifeView Financial Plan with you. This advisory relationship means that the services we offer are governed by different laws and separate contracts than those relating to a brokerage relationship. Our investment advisory relationship is separate and distinct from any brokerage relationship that you may have with organ Stanley on any of your accounts. When organ Stanley is acting in its capacity as your broker, organ Stanley is governed by securities laws which regulate broker-dealers such as the Securities xchange Act of 1934 and the Securities Act of However, when acting in an advisory capacity, organ Stanley will be subject to different laws which govern investment advisers, such as the Investment Advisers Act of 194. For example, investment advisers, unlike brokers, are required to disclose to their advisory clients if any of the investment adviser s affiliates receive any additional compensation as a result of the advisory relationship. Additionally, investment advisers may have an obligation to monitor their clients advisory accounts and to make ongoing recommendations to them, while a broker has no such obligations. When preparing a Financial Plan, organ Stanley may take into consideration assets held in your organ Stanley brokerage accounts. However, those accounts will remain brokerage accounts and will not become advisory accounts as a result of the Financial Plan. That means that organ Stanley will not have advisory duties on those accounts and that you will continue to be responsible for monitoring and making all investment decisions with respect to those accounts. For additional answers to questions about the difference between our investment advisory and brokerage services, please visit our web site at or contact us at IPORTANT NOTS AND DISCLOSURS FRO ORGAN STANLY By providing you this Financial Plan, neither organ Stanley nor your Financial Advisor is acting as a fiduciary for purposes of RI or section 4975 of the Code with respect to any RI-covered employee benefit plan or any individual retirement account in either the planning, execution or provision of this analysis. Unless otherwise provided in a written agreement between you and organ Stanley, organ Stanley, its affiliates and their respective employees, agents and representatives, including your Financial Advisor: (a) do not have discretionary authority or control with respect to the assets in any RI-covered employee benefit plan or any individual retirement account included in this Financial Plan, (b) will not be deemed an "investment manager" as defined under RI, or otherwise have the authority or responsibility to act as a "fiduciary" (as defined under RI) with respect to such assets, and (c) will not provide "investment advice," as defined by RI and/or section 4975 of the Code, as amended, with respect to such assets. 12/3/212 Prepared by: organ Stanley Page 6 of 89

9 IPORTANT DISCLOSUR INFORATION 3) you understand that organ Stanley and your Financial Advisor are not fiduciaries under RI or the Internal Revenue Code with respect to this Financial Plan or your use or our use (on your behalf) of the software which generated this Financial Plan, or your IRA and retirement plan accounts unless otherwise provided in a written agreement between you and organ Stanley. The information in this Financial Plan is provided to you on the understanding that, for purposes of RI and the Code, it is intended to be educational material, will not form a primary basis for any investment decision made by you or on your behalf, and will not be viewed for RI or Code purposes as fiduciary investment advice or specific recommendations with respect to asset allocation or any particular investment, and that (unless otherwise provided in a written agreement) you remain solely responsible for your assets and all investment decisions with respect to your assets; and 4) you understand and accept each of the terms of the attached ngagement Agreement. Powered by oneyguidepro and oneyguidepro are marks of PItech, Inc. organ Stanley is both a registered broker-dealer and investment adviser and its Financial Advisors act in dual capacities as broker-dealer and investment advisory representatives. any organ Stanley Financial Advisors may use the designation Certified Financial Planner or "CFP," a certification mark owned by the Certified Financial Planner Board of Standards, Inc. ach of these Financial Advisors also is licensed to act as a broker-dealer representative on behalf of organ Stanley. When any of these Financial Advisors assists clients by providing them a Financial Plan, he/she is doing so as a CFP and investment advisory representative of organ Stanley. However, in providing other services to customers, such as assisting customers in implementing a Financial Plan once it has been delivered, providing financial tools/reports to customers, or effecting transactions for the customer's brokerage account, the Financial Advisor carrying a CFP designation is only acting as a broker-dealer representative unless the Financial Advisor and client have entered into a written agreement that creates an investment advisory relationship. IPORTANT NOTS AND DISCLOSURS FRO ORGAN STANLY (continued) 212 organ Stanley Smith Barney LLC. ember SIPC. Please keep in mind that organ Stanley is not a tax or legal advisor and this Financial Plan does not constitute tax, legal or accounting advice. You should discuss any tax and legal information outlined in this document with your accounting, tax and legal advisors prior to taking action. Your organ Stanley Financial Advisor can work with you and these advisors to answer your questions and, if you choose, help you implement the options you decide upon. There is no requirement, however, that you implement any strategies at all. In addition, you are not obligated to implement any options shown in this Financial Plan or to otherwise conduct business through organ Stanley or its affiliates. Timing for implementing, monitoring and adjusting your strategies is a critical element in achieving your financial objectives. You are responsible for implementing, monitoring and periodically reviewing and adjusting your investment strategies. By accepting delivery of this Financial Plan, you are deemed to acknowledge and agree that: 1) you have reviewed and accept the information contained within this Financial Plan and understand the disclaimers, assumptions and methods included with it; 2) you believe that all information provided by you is complete and accurate to the best of your knowledge; 12/3/212 Prepared by: organ Stanley Page 7 of 89

10 IPORTANT DISCLOSUR INFORATION This agreement is designed to provide you with information that will ensure that you understand the nature of your financial planning relationship with organ Stanley Smith Barney LLC ( SSB ). There are certain items that reflect limitations on the duration of your financial planning relationship, which are designed to ensure that SSB will be able to continue to service your brokerage or other advisory needs with maximum flexibility. If any of these items do not reflect your understanding, you should immediately contact your Financial Advisor or PW Private Wealth Advisor (together referred to herein as your Financial Advisor ) as applicable. The LifeView Financial Plan is a financial planning service for which SSB may charge a fee as agreed to by you and your Financial Advisor. If a fee is charged, you will be provided with a Financial Planning Fee Consent Form that will set forth the fee amount and payment options for the LifeView Financial Plan. In order to ensure that your brokerage accounts remain as such, and thus you can take advantage of the full range of services and investment products offered through those accounts, please understand that if the assets of any RI-covered employee benefit plan, Keogh Plan or IRA ( Retirement Assets ) are taken into account in the LifeView Financial Plan, all information and materials provided in the LifeView Financial Plan are (a) as noted above, based upon the information provided by you, and various assumptions, (b) intended for educational purposes only, and (c) provided to you by SSB with the understanding that, for the purposes of RI and the Internal Revenue Code, the reports are general in nature, and will not form a primary basis for any investment decision made by you or on your behalf. These understandings are designed to ensure that SSB and its Financial Advisors, in providing this product, are not and will not be viewed (by you or anyone else) as fiduciary investment advice or specific recommendations with respect to asset allocation or any particular investment for those Retirement Assets, and thus SSB and its Financial Advisors will not be acting as a fiduciary under either RI or the Internal Revenue Code with respect to such assets. ngagement Agreement for your LifeView Financial Plan The LifeView Financial Plan is reliant on the information you provide to SSB. The quality of the plan SSB prepares for you is dependent on the completeness and accuracy of this information. Furthermore, your Financial Advisor and SSB will only be responsible for correcting and updating the information you provided and/or the LifeView Financial Plan (e.g., to reflect future changes in your life, financial situation, goals, and market or economic conditions) if you engage them to do so. As a result, the LifeView Financial Plan may very well become outdated or inaccurate as these factors change over time, unless you take steps to work with your Financial Advisor to correct and update the LifeView Financial Plan. You understand that SSB and its Financial Advisors do not provide tax or legal advice, and that you should consult with your personal advisors with respect to the tax and legal implications of the LifeView Financial Plan, as appropriate. An assignment of this ngagement Agreement and financial planning relationship to a new investment adviser firm will not be made without your prior consent, which may be obtained by providing you at least seven days prior notice of the assignment. You have sole responsibility for making all investment decisions with respect to the implementation of the LifeView Financial Plan. You may implement the LifeView Financial Plan at SSB or at another firm. If you engage or have engaged SSB, it will act as your broker, unless you ask it, in writing, to act as your investment adviser on any particular account. An investment advisory relationship is created between you and SSB that begins upon delivery of the financial plan to you and ends thirty days later, during which time your Financial Advisor is available to review the LifeView Financial Plan with you. This advisory relationship is separate from the relationship(s) created by other accounts and services that you may have with SSB. You and your Financial Advisor can reopen the planning relationship at any time. As noted above, if the foregoing does not reflect your understanding of your relationship with SSB and your Financial Advisor and the nature of the firm s financial planning services, including the services that are provided to in connection with the preparation of your LifeView Financial Plan, you should immediately contact your Financial Advisor. All investments have risks. The performance and attainment of financial objectives is not guaranteed. All estimates and assumed data, including returns, are hypothetical and do not represent a guarantee or promise of future results. 212 organ Stanley Smith Barney LLC. ember SIPC. When preparing the LifeView Financial Plan, SSB may consider assets held in your SSB brokerage accounts. However, those accounts will remain brokerage accounts and will not become advisory accounts as a result of the LifeView Financial Plan. You will continue to be responsible for monitoring and making all investment decisions for those accounts. 12/3/212 Prepared by: organ Stanley Page 8 of 89

11 Summary of Goals and Resources

12 Personal Information and Summary of Financial Goals John and Jane Smith Needs 1 Retirement - Living xpense 65 / / 226 $225, $175, Base Inflation Rate (2.%) College - Jimmy Wants 7 Travel Wishes 3 Leave Bequest nd of Jane's plan When John retires Recurring every year for a total of 2 times $26,832 Base Inflation Rate plus 4.% (6.%) 4 years starting in 216 Attending College - Average All 8 John Jane Both Retired ( ) Jane Alone Retired ( ) $15, Base Inflation Rate (2.%) $5, No Inflation See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 9 of 89

13 Personal Information and Summary of Financial Goals Personal Information John Participant Name Date of Birth Age Relationship Jimmy 7/7/ Child Charity ABC Charity ale - born 5/1/1961, age 51 mployed - $25, Jane Female - born 1/5/1963, age 49 arried, US Citizens living in NY This section lists the Personal and Financial Goal information you provided, which will be used to create your Report. It is important that it is accurate and complete. mployed - $25, See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 1 of 89

14 Net Worth Summary - All Resources This is your Net Worth Summary as of 12/3/212. Your Net Worth is the difference between what you own (your Assets) and what you owe (your Liabilities). To get an accurate Net Worth statement, make certain you have entered all of your Assets and Liabilities. Description Total Investment Assets mployer Retirement Plans $65, Individual Retirement Accounts $75, $125, Taxable and/or Tax-Free Accounts $7, College Saving Plans $1,55, Total Investment Assets: Other Assets $1,55, + Total Assets Total Liabilities Net Worth Investment Assets $1,375, $2,925, - Other Assets $4, Personal Asset : $75, Business and Property : $4, Cash Value Life : $2, Stock Options $25, Total Other Assets: $1,375, Liabilities Personal Real state Loan: $4, Total Liabilities: $4, Net Worth: $2,525, $2,525, See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 11 of 89

15 Net Worth Detail - All Resources This is your Net Worth Detail as of 12/3/212. Your Net Worth is the difference between what you own (your Assets) and what you owe (your Liabilities). To get an accurate Net Worth statement, make certain you have entered all of your Assets and Liabilities. Description John Jane Joint Total Investment Assets $35, Jane's 41k $3, Jane's IRA John's Investments $2, Real state Investment Life Insurance - John organ Stanley Total Other Assets: Liabilities ortgage Total Liabilities: Net Worth: $375, NY Home $675, $75, $125, $2, $5, $5, $5, $1,55, $75, $75, $4, $4, $2, $2, $25, $25, Other Assets $125, Total Investment Assets: $3, $75, Jimmy's 529 Plan Joint Investment Account $35, John's 41k $225, $ $ $ $1,15, $1,375, $4, $4, $4, $4, $2,525, See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 12 of 89

16 Resources Summary Investment Assets Description Owner Jane's 41k Jane Account Total Jane College - Jimmy $125, John $35, $2, $1, $5, Toronto-Dominion Bank $5, Joint Survivorship Taxable Account Total $23,4 $5, $5, Fund All Goals $1, Fund All Goals $1,55, Total Investment Assets : Fund All Goals $35, John organ Stanley Other Assets Fund All Goals $125, Cash Joint Investment Account Fund All Goals $75, Account Total John's Investments $25, $75, John Account Total John's 41k $3, Assign to Goal $3, Account Total Jimmy's 529 Plan Additions Jane's IRA Current Value Description Owner NY Home Joint $75, Not Funding Goals Real state Investment Joint $4, $5, at John's retirement Fund All Goals Life Insurance - John John $2, Not Funding Goals Total of Other Assets : Current Value Future Value Assign to Goal $1,35, See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 13 of 89

17 Resources Summary Insurance Policies Description Owner Insured Beneficiary Cash Value Life Insurance Policies Summary (included in Assets) Life Insurance - John John John Other Asset Annual Premium Co-Client of Insured - 1% Cash Value $1,2 $2, Total Death Benefit of All Policies : Death Benefit Premium Paid $1,, For 1 years $1,, If the assets include a Variable Life Investment Asset, the value shown for this policy in the Premium column reflects only the assumed annual increase in the cash value of the insurance policy and not the total premium. Owner Value File Status Assign to Goal Social Security John $3,634 starting At John's Full Retirement Age Normal Fund All Goals Social Security Jane $3,634 starting At Jane's Full Retirement Age Normal Fund All Goals Value Increase Rate Assign to Goal $15, from John's Retirement to nd of Plan (1% to Survivor) No Fund All Goals Retirement Income Owner Pension Income John Liabilities Type Description 1st ortgage ortgage Description Description Social Security Owner Joint Total Outstanding Balance : Outstanding Balance Interest Rate onthly Payment $4, 6.% $1,5 $4, See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 14 of 89

18 Current Portfolio Allocation This page shows how your Investment Assets are currently allocated among the different Asset Classes. It includes only those Assets you have identified to fund Goals in this Plan. Projected Assumptions 7.19% Base Inflation Rate 2.% Real Return 5.19% Standard Deviation 9.31% Bear arket Returns Total Stock 61% Total Return Great Recession November 27 thru February 29 Bond Bear arket July 1979 thru February 198 Asset Class Rate of Return 3.% 1% Investment Portfolio Value % of Total Assets $478,75 31% 5.6% $125, 8% 9.3% $498,75 32% 9.3% $25, 2% 9.9% $113,75 7% 1.3% $82,5 5% 1.3% $31,25 2% Developed arkets ex US Stocks (unhedged) 8.9% $142,5 9% Global merging arket Stocks (unhedged) 11.1% $52,5 3% Total : $1,55, 1% Global Corporate/Securitized Bonds (hedged to USD) US Large-Cap Value Stocks US id-cap Value Stocks US Small-Cap Value Stocks US Small-Cap Growth Stocks US Large-Cap Growth Stocks Cash - USD (9-day Tbills) -29% ffect of Stock Options Value of Vested Stock Options (before tax) Value of Portfolio with Vested Stock Options Total Stock Including Stock Options $25, $1,575, 62% See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 15 of 89

19 Current Portfolio Allocation Tax-Free Rates of Return 2.3% Global Govt / Govt-Related Bonds (hedged to USD) 3.9% Global Short-Term Government Bonds (hedged to USD) 3.1% Cash - USD (9-day Tbills) See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 16 of 89

20 Risk and Portfolio Information

21 Target Band The Risk-Based Portfolio was selected from this list of odel Portfolios, based upon the answers you provided in your Risk Tolerance Questionnaire. The Target Portfolio was selected based on your investment objectives and risk tolerance. The Target Portfolio will be the same as the Risk Based Portfolio unless you choose a Alternative Portfolio or odel Portfolio. The Average Real Return is equal to the Average Total Return minus the inflation rate of 2.%. Average Return Target Name Band Cash Bond Stock Alternative Total Real Standard Deviation 25% 75% % % 4.47% 2.47% 2.19% 13% 6% 16% 11% 5.91% 3.91% 4.5% odel 3 8% 48% 28% 16% 6.84% 4.84% 6.18% Current 31% 8% 61% % 7.19% 5.19% 9.31% odel 4 5% 4% 35% 2% 7.42% 5.42% 7.79% 3% 32% 44% 21% 7.97% 5.97% 9.53% 2% 18% 58% 22% 8.61% 6.61% 11.67% % % 75% 25% 9.27% 7.27% 13.75% % % 75% 25% 9.39% 7.39% 14.1% odel 5 odel 6 odel 7 odel 8 Return vs. Risk Graph odel 1 odel 2 Risk Based Current When deciding how to invest your money, you must determine the amount of risk you are willing to assume to pursue a desired return. The Return versus Risk Graph reflects a set of portfolios that assume a low relative level of risk for each level of return, or conversely an optimal return for the degree of investment risk taken. The graph also shows the position of the Current, Target, Risk-Based, and Alternative Portfolios. The positioning of these portfolios illustrates how their respective risks and returns compare to each other as well as the optimized level of risk and return represented by the Portfolios. This graph shows the relationship of return and risk for each Portfolio in the chart above. See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 17 of 89

22 Results

23 Worksheet Detail - Allocation Comparison Scenario: odel 6 - Target These charts compare your Current Portfolio with the Target Portfolio you selected and show the allocation changes you should consider. Target Portfolio odel 6 Current Portfolio Projected Assumptions Total Return 8.61% 2.% Base Inflation Rate 2.% 5.19% Real Return 6.61% 9.31% Standard Deviation 11.67% 7.19% -29% 1% Bear arket Returns Great Recession -38% Bond Bear arket 1% Portfolio Comparison with Allocation Changes $478,75 31% $ % $125, 8% $ % $ % $ % $498,75 $25, Asset Class % of Total Target Amount Increase / (Decrease) Cash - USD (9-day Tbills) 2% $31, -$447,75 Global Govt / Govt-Related Bonds (hedged to USD) Global Corporate/Securitized Bonds (hedged to USD) Global Short-Term Government Bonds (hedged to USD) Global High Yield Bonds (hedged to USD) 2% $31, $31, 1% $15,5 -$19,5 3% $46,5 $46,5 6% $93, $93, % of Total Current Amount 4% $62, $62, 32% Global merging arkets Local Debt (unhedged) US Large-Cap Value Stocks 1% $155, -$343,75 2% US Large-Cap Growth Stocks 1% $155, $13, $113,75 7% US id-cap Value Stocks 2% $31, -$82,75 $ % US id-cap Growth Stocks 2% $31, $31, $82,5 5% US Small-Cap Value Stocks 2% $31, -$51,5 $31,25 2% US Small-Cap Growth Stocks 2% $31, -$25 $142,5 9% Developed arkets ex US Stocks (unhedged) 23% $356,5 $214, See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 18 of 89

24 Worksheet Detail - Allocation Comparison Scenario: odel 6 - Target Portfolio Comparison with Allocation Changes $52,5 3% $ $ % of Total Target Amount Increase / (Decrease) Global merging arket Stocks (unhedged) 7% $18,5 $56, % Global RITs (unhedged) 4% $62, $62, % Commodities 3% $46,5 $46,5 $ % Global Inflation-Linked Securities (unhedged) 2% $31, $31, $ % Broad Fund of Hedge Funds 1% $155, $155, $ % anaged Futures 5% $77,5 $77,5 $1,55, $1,55, Asset Class % of Total Current Amount See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 19 of 89

25 Results - Current and Recommended Results stimated % of Goals Funded Current Scenario Recommended Scenario Average Return Bad Timing Average Return Bad Timing 1% 1% 1% 1% Retirement Ages John Jane Planning Ages John Jane Retirement Probability of Success: 86% Below Confidence Zone In Confidence Zone Current Scenario odel 6 - Target Results Probability of Success: 64% 65 in in in in in in in in 255 Your Confidence Zone: 7% - 9% Likelihood of Funding All Goals Change In Value See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 2 of 89

26 Results - Current and Recommended Results Current Scenario odel 6 - Target Needs 1 Retirement - Living xpense Both Retired Jane Alone Retired $225, $175, $225, $175, 8 College - Jimmy Years of School Start Year $26, $26, Change In Value Total Spending for Life of Plan Savings Qualified Taxable Total Savings This Year $15, At John's retirement 1 2 $5, nd of Jane's plan Wishes 3 Leave Bequest Starting $15, At John's retirement 1 2 $7,457,328 Wants 7 Travel Starting Years between occurrences Number of occurrences Goals $5, nd of Jane's plan $7,457,328 $48,4 $48,4 $1, $1, $58,4 $58,4 See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 21 of 89

27 Results - Current and Recommended Results Current Scenario odel 6 - Target $1,55, $1,55, Current odel 6 61% 58% Total Return 7.19% 8.61% Standard Deviation 9.31% Great Recession Return 11/7-2/9-29% Bond Bear arket Return 7/79-2/8 1% Change In Value Investments Percentage Stock 11.67% -38% 1% Current odel 6 61% 58% Total Return 7.19% 8.61% Standard Deviation 9.31% 11.67% Percentage Stock Great Recession Return 11/7-2/9 Bond Bear arket Return 7/79-2/8-29% -38% 1% 1% 2.% 2.% 3% Less Stock Inflation Allocation During Retirement 3% Less Stock Allocation Before Retirement Portfolio Value See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 22 of 89

28 What If Worksheet This Worksheet allows you to analyze and compare the results of one or more scenarios that you created by varying the Plan assumptions. stimated % of Goal Funded Goals Current Scenario odel 6 - Target odel 5 - Risk Based Incl. LTC Premiums Average Return Bad Timing Average Return Bad Timing Average Return Bad Timing Average Return Bad Timing 1% 1% 1% 1% 1% 1% 1% 1% N/A N/A N/A N/A N/A N/A 1% 1% 124% 124% 134% 134% 13% 13% 134% 134% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 9 LTC for John 8 College - Jimmy Wants 7 Travel 3 Leave Bequest Safety argin (Value at nd of Plan) $2,689 Future dollars (in thousands) : $6,427 onte Carlo Results Your Confidence Zone: 7% - 9% $248 $7,646 $5,57 $5,199 $3,284 $7,57 $5,345 $592 $18,274 $13,162 $12,425 $7,849 $18,93 $12,775 Current dollars (in thousands) : Wishes 1 Retirement Needs Likelihood of Funding All Goals Probability of Success: 64% Probability of Success: 86% Probability of Success: 88% Probability of Success: 85% Below Confidence Zone In Confidence Zone In Confidence Zone In Confidence Zone Indicates different data between the Scenario in the first column and the Scenario in any other column. See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 23 of 89

29 What If Worksheet Key Assumptions Current Scenario odel 6 - Target Bad Timing Program stimate Years of bad returns: 226: % 227: -2.12% Bad Timing Program stimate Years of bad returns: 226: % 227: -3.6% odel 5 - Risk Based Incl. LTC Premiums Stress Tests ethod(s) Bad Timing Program stimate Years of bad returns: 226: -11.9% 227: -1.56% Bad Timing Program stimate Years of bad returns: 226: % 227: -3.6% Funding Order No Retirement Income - Ignore armark No Current Total Return : 7.19% Standard Deviation : 9.31% Total Return Adjustment :.% Adjusted Real Return : 5.19% Current After Retirement : No No No No No odel 6 odel 5 odel % 7.97% 8.61% 11.67% 9.53% 11.67%.%.%.% 6.61% 5.97% 6.61% odel 6 odel 5 odel 6 Hypothetical Average Rate of Return Before Retirement : No Assets - Ignore armark 7.19% 8.61% 7.97% 8.61% Standard Deviation : 9.31% 11.67% 9.53% 11.67% Total Return Adjustment :.%.%.%.% 5.19% 6.61% 5.97% 6.61% 2.% 2.% 2.% 2.% No No No No.%.%.%.% No No No No.%.%.%.% Adjusted Real Return : Base inflation rate : Tax-Free Options Before Retirement Reallocate a portion of bonds to tax-free: Total Return : Percent of bond allocation to treat as tax-free: After Retirement Reallocate a portion of bonds to tax-free: Percent of bond allocation to treat as tax-free: Indicates different data between the Scenario in the first column and the Scenario in any other column. See IPORTANT DISCLOSUR INFORATION at the beginning of this document for explanations of assumptions, limitations, and methodologies. 12/3/212 Prepared by: organ Stanley Page 24 of 89