Inherited Annuity/IRA Analysis

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Reynold Rice
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1 Phase 1 Income to match your lifestyle and preserve your wealth Phase 2 Continuing income for spousal security and independence Phase 3 A legacy that passes to the next generation Prepared For : Thomas & Mary Stretch IRA Prepared By : Financial Advisor

independence Phase 3 A legacy that passes to the next

2 Table Of Contents This illustration must contain the following: Cover Page Table of Contents & Important Disclosure Initial Account Data, Assumptions & Options Impact of Lump Sum vs Inherited Annuity/IRA Inherited Annuity/IRA Flow Chart Summary Of Inherited Annuity Distribution Detail Ledger Beneficiary Distribution Ledger & Graphs Important Disclosure This report contains very specific computations concerning the value of retirement assets today, the value of retirement assets in the future, and the taxes, which may be assessed against these assets at any given point in time. These computations are based upon assumptions concerning the value of assets today, the rate at which assets may appreciate, life expectancies, and the rates for income and estate taxation. These assumptions are only a "best guess" and must be carefully reviewed to determine if they are reasonable. The actual values, life expectancies, rates of growth and tax rates may be significantly different from those illustrated. The actual taxes due may be significantly greater or smaller than those illustrated. This report demonstrates a planning strategy for retirement assets that are potentially subject to income and estate taxes. There are a number of techniques, which are beyond the scope of this report. One or more of these techniques if appropriate, and if used in conjunction with the techniques explored herein, might reduce taxes below those illustrated by this program. The software used to produce this report has been designed to assist the financial services professional in educating clients on important decisions that may affect their retirement assets. The role of the financial services professional is to help the client meet current and future financial needs. In order to determine the amount of these needs, the financial services professional must discuss with the client certain legal and tax planning concepts. Estate planning for retirement assets involves an in-depth analysis of financial, legal, and tax issues, which should be coordinated with the client's attorney and tax advisors. By using the software that produces this report, financial service professionals can illustrate various planning scenarios to assist the client and their attorney and tax advisors in establishing the most appropriate retirement distribution plan. Since this type of planning involves the application of technical tax laws to a client's unique situation, the client should consult with their tax advisors in determining the suitability of any particular planning technique. The client should also consult an attorney because this type of planning may involve the preparation of legal documents that only an attorney can implement. IAI.2.12

computations concerning the value of retirement assets today, the value of retirement assets in the future, and the taxes, which may be assessed against these assets at any given point in time.

3 Analysis - Initial Data, Assumptions & Options Analysis Info Stretch IRA Analysis Analysis Date : 01/13/2005 Client Info Spouse Info Client : Thomas Stretch Spouse : Mary Stretch DOB/Age : 01/13/1940 / 65 DOB/Age : 08/09/1946 / 59 Illustrate To Age/Yr. : 86 / 2026 Illustrate To Age/Yr. : 85 / 2031 Account Info (Balance(s) as of 12/31/2004), Other Values - First Year Annuity/IRA : Retirement Account Premium Deposit / Bonus : $100,000 + $10,000 (10.00% Premium Bonus) ==> $110,000 Assumed Interest Rate : 6.00% Deposits : $0 First Year Distribution : $0 RMD Methods - Phase 1: Client Distributions Uniform Lifetime Table Based On Client's Age RMD Methods - Phase 2: Spouse Distributions Uniform Lifetime Table Based On Spouse's Age RMD Methods - Inherited Annuity/IRA Phase: Beneficiary Distributions Term Certain Method Based On Beneficiary Age Year after Inheritance Estimate Tax Rates Estate 0.00 Income 0.00 Beneficiary Data Relationship Name Date Of Birth Age Child Thomas 08/09/ Grandchild Karen 08/09/ Grandchild Laura 08/09/ Child Mary 08/09/ Child Sally 08/09/ IAI.3.12

: 85 / 2031 Account Info (Balance(s) as of 12/31/2004), Other Values - First Year Annuity/IRA : Retirement Account Premium Deposit / Bonus : $100,000 + $10,000 (10.

4 Impact Of Lump Sum vs Inherited Annuity/IRA Without Inherited Annuity/IRA With Inherited Annuity/IRA $170,300 $697,013 Lump Sum Benefits of Tax Deferral Lost Estate Taxes Due Income Taxes Due Inherited Annuity/IRA Benefits of Tax Deferral Continue Income Taxes On Distributions Only Lifetime Income Provided to Children *Estimated Distributions Subject To Income Tax at the Beneficiary's Tax Rate. Taxes may be reduced by a credit for Estate Taxes attributable to the Annuity. IAI.4.12

Continue Income Taxes On Distributions Only Lifetime Income Provided to Children *Estimated Distributions Subject To

5 Summary of Annuity/IRA Activity: Thomas Stretch, Mary, & Beneficiaries Thomas Stretch Starting Balance (12/31/2004) $110,000 Projected Annuity/IRA Income Over The Years 2005 to 2026 $145,587 Mary Starting Balance (12/31/2026) $171,639 Projected Annuity/IRA Income Over The Years 2027 to 2031 $52,973 Beneficiaries Inherit Annuity/IRA Balance of $170,300 Projected Inherited Annuity/IRA Income Starting In Year % Starting Income To IRA Share Balance Age -- Year Income Thomas , ,616 Karen , ,511 Laura , ,625 Mary , ,681 Sally , ,580 Totals $170,300 $697,013 Total Projected Inherited Annuity/IRA Distributions - $895,573 IAI.5.12

Annuity/IRA Income Starting In Year - 2032 % Starting Income To IRA Share Balance Age -- Year Income Thomas 25.00 42,575 85 -- 2058 105,616 Karen 4.17 7,096 83 -- 2083 48,511 Laura 4.

6 Summary Of Inherited Annuity/IRA Maximize the Benefits of Tax Deferral with the Impact of Compounding Annual Growth 900, , , , , , , , , , , , , ,000 0 IAI.6.12

900,000 895,573 800,000 700,000 697,013 600,000 500,000

7 Annuity/IRA Distribution Detail For Thomas Stretch & Mary Starting Balances (12/31/2004): 110,000 Account Activity Ending Age Interest Distribution Annuity/IRA Client Spouse Earned Lx /RMD Balance , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,560 IAI.7.12

6 6,016 157,244 73 67 9,435 24.7 6,366 160,312 74 68 9,619 23.8 6,736 163,195 75 69 9,792 22.9 7,126 165,861 76 70 9,952 22.0 7,539 168,273 77 71 10,096 21.2 7,937 170,432 78 72 10,226 20.

8 Distributions For Thomas - Allocation of 25.00% Account Activity Account Activity Required Ending Required Ending Interest Life Minimum Annuity/IRA Interest Life Minimum Annuity/IRA Age Earned Exp. Distribution Balance Age Earned Exp. Distribution Balance 59 2, ,631 43, , ,700 31, , ,733 44, , ,109 26, , ,841 45, , ,565 21, , ,957 45, , ,086 16, , ,079 46, ,713 9, , ,210 47, ,597 1, , ,349 47, , , ,497 48,066 63, , , ,656 48, , ,824 48, , ,004 48, , ,196 47, , ,402 47, , ,621 46, , ,857 45, , ,109 44, , ,380 42, , ,672 40, , ,986 37, , ,328 34,769 Cumulative Distributions & Account Balance ` IAI.8.12

1 1,841 45,196 81 1,615 4.1 6,565 21,966 62 2,712 23.1 1,957 45,952 82 1,318 3.1 7,086 16,198 63 2,757 22.1 2,079 46,629 83 972 2.1 7,713 9,457 64 2,798 21.1 2,210 47,217 84 567 1.

9 Distributions For Karen - Allocation of 4.17% Account Activity Account Activity Account Activity Required Ending Required Ending Required Ending Life Minimum Annuity Life Minimum Annuity Life Minimum Annuity Age Exp. Distribution Balance Age Exp. Distribution Balance Age Exp. Distribution Balance , , ,549 17, , , ,651 16, , , ,761 15, , , ,879 14, , , ,007 13, , , ,146 12, , , ,299 10, , , ,468 9, , , ,660 6, , , ,886 4, , , ,182 1, , , , , ,434 48, , ,002 18, , ,065 18, , ,133 18, , ,206 18, , ,283 18, , ,366 18, , ,454 17,661 Cumulative Distributions & Account Balance ` IAI.9.12

Distribution Balance Age Exp. Distribution Balance Age Exp. Distribution Balance 32 51.4 138 7,384 52 31.4 455 14,703 72 11.4 1,549 17,171 33 50.4 146 7,680 53 30.4 484 15,102 73 10.

10 Distributions For Laura - Allocation of 4.17% Account Activity Account Activity Account Activity Required Ending Required Ending Required Ending Life Minimum Annuity Life Minimum Annuity Life Minimum Annuity Age Exp. Distribution Balance Age Exp. Distribution Balance Age Exp. Distribution Balance , , ,484 19, , , ,580 19, , , ,683 18, , , ,794 17, , , ,913 16, , , ,042 15, , , ,181 14, , , ,332 13, , , ,499 11, , , ,684 9, , , ,893 7, , , ,142 4, , , ,476 1, , , , , ,023 19,913 52, , ,088 20, , ,157 20, , ,231 20, , ,310 19, , ,394 19,731 Cumulative Distributions & Account Balance ` IAI.10.12

Distribution Balance Age Exp. Distribution Balance Age Exp. Distribution Balance 30 53.3 133 7,388 50 33.3 439 15,044 70 13.3 1,484 19,431 31 52.3 141 7,690 51 32.3 466 15,481 71 12.

11 Distributions For Mary - Allocation of 33.33% Account Activity Account Activity Required Ending Required Ending Interest Life Minimum Annuity/IRA Interest Life Minimum Annuity/IRA Age Earned Exp. Distribution Balance Age Earned Exp. Distribution Balance 49 3, ,617 58, , ,446 81, , ,717 60, , ,796 80, , ,823 62, , ,170 79, , ,936 63, , ,571 77, , ,056 65, , ,001 75, , ,183 67, , ,463 72, , ,319 69, , ,960 68, , ,463 70, , ,496 64, , ,616 72, , ,078 59, , ,779 74, , ,712 53, , ,953 75, , ,409 45, , ,137 77, , ,185 37, , ,334 78, , ,073 27, , ,543 79, , ,142 16, , ,765 80, ,648 2, , ,002 81, , , ,255 81, , , , ,525 82, , ,812 82, , ,119 82,236 Cumulative Distributions & Account Balance ` IAI.11.12

1 1,823 62,149 71 4,850 13.1 6,170 79,511 52 3,729 32.1 1,936 63,942 72 4,771 12.1 6,571 77,710 53 3,837 31.1 2,056 65,723 73 4,663 11.1 7,001 75,372 54 3,943 30.1 2,183 67,483 74 4,522 10.

12 Distributions For Sally - Allocation of 33.33% Account Activity Account Activity Account Activity Required Ending Required Ending Required Ending Life Minimum Annuity Life Minimum Annuity Life Minimum Annuity Age Exp. Distribution Balance Age Exp. Distribution Balance Age Exp. Distribution Balance ,273 58, , , ,968 58, ,351 61, , , ,116 45, ,434 63, , , ,455 30, ,522 65, , , ,157 13, ,616 67, , , , ,715 70, , , , ,820 72, , , ,933 75, , , ,052 77, , , ,178 80, , , ,313 82, , , ,456 85, , , ,608 87, , , ,769 89, , , ,941 92, , , ,123 94, ,695 98, ,317 97, ,412 92, ,523 99, ,186 85, , , ,028 78, , , ,950 68,855 Cumulative Distributions & Account Balance ` IAI.12.12

Distribution Balance Age Exp. Distribution Balance Age Exp. Distribution Balance 39 44.6 1,273 58,900 59 24.6 4,224 105,919 79 4.6 14,968 58,018 40 43.6 1,351 61,083 60 23.6 4,488 107,786 80 3.

IRA, Roth & Saving Account(s) Stretch Summary Illustration

IRA, Roth & Saving Account(s) Stretch Summary Illustration Phase 1 Income to match your lifestyle and preserve your wealth Phase 2 Continuing income for spousal security and independence Prepared For :