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

30 What If Worksheet Key Assumptions Current Scenario odel 6 - Target odel 5 - Risk Based Incl. LTC Premiums Goals Living xpense Retirement Age John Jane John Jane $79,2 $79,2 $79,2 $79,2 $79,2 $79,2 $225, $225, $225, Planning Age John Retired and Jane mployed $79,2 Jane Retired and John mployed $79,2 Both Retired Both Retired $225, One Alone - Retired One Retired $175, $175, $175, $175, John Alone Retired $127,2 $127,2 $127,2 $127,2 $79,2 $79,2 $79,2 $79,2 $79,2 $79,2 $79,2 $79, $26,832 $26,832 $26,832 $26,832 At John's retirement At John's retirement At John's retirement At John's retirement $15, $15, $15, $15, Yes Yes Yes Yes One Alone - mployed John Alone mployed Jane Alone mployed College - Jimmy Year : Years of ducation : Annual Cost : Jane Alone Retired Travel Year : Cost : Is recurring : Years between occurrences : Number of occurrences : 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 25 of 89

31 What If Worksheet Key Assumptions Current Scenario odel 6 - Target odel 5 - Risk Based Incl. LTC Premiums Goals Leave Bequest Cost : $5, $5, $5, $5, $15, $15, $15, $15, John's retirement John's retirement John's retirement John's retirement nd of plan nd of plan nd of plan nd of plan Retirement Income Annual Income : Start Year : Select when income will end : 255 Survivor Benefit : 1% % 1% 1% At FRA At FRA At FRA Normal Normal Normal Age to begin retirement benefits: At John's Full Retirement Age 67 yrs mos At John's Full Retirement Age 67 yrs mos At John's Full Retirement Age 67 yrs mos At John's Full Retirement Age 67 yrs mos Select benefit to use: Use the Program stimate Use the Program stimate Use the Program stimate Use the Program stimate $3,634 $3,634 $3,634 $3,634 $ $ $ $ % % % % Normal Normal Normal Normal Age to begin retirement benefits: At Jane's Full Retirement Age 67 yrs mos At Jane's Full Retirement Age 67 yrs mos At Jane's Full Retirement Age 67 yrs mos At Jane's Full Retirement Age 67 yrs mos Select benefit to use: Social Security Select Social Security Strategy At FRA John Social Security Amount: Widower annual benefit: Reduce benefits by: Jane Select Filing ethod: Select when benefits will begin: Select when benefits will begin: Normal Select Filing ethod: 255 Year to end retirement income : Pension Income Use the Program stimate Use the Program stimate Use the Program stimate Use the Program stimate Social Security Amount: $3,634 $3,634 $3,634 $3,634 Widower annual benefit: $ $ $ $ Reduce benefits by: % % % % 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 26 of 89

32 What If Worksheet Key Assumptions Current Scenario odel 6 - Target odel 5 - Risk Based Incl. LTC Premiums Asset Additions John's 41k 1.% 1.% 1.% 1.% Roth:.%.%.%.% No No No No aximum contribution each year: % Designated as Roth:.%.%.% $23,4 $23,4 $23,4 $23,4 Year additions begin: % 5.% 5.%.%.%.% No No No.% Plan addition amount: Jane's 41k 5.% Roth:.% aximum contribution each year: % Designated as Roth: No.% $25, Year additions begin: 212 Jane - Fund All Goals Joint Investment Account Plan addition amount: John - Fund All Goals.%.%.% $25, $25, $25, $1, $1, $1, $1, Tax-Free Addition: $ $ $ $ $ $ $ $ $ $ John's Roth $ $ $ Jane's Roth $ $ $ John's Tax-Deferred $ $ $ Jane's Tax-Deferred $ $ $ Taxable $ $ $ Year additions begin: Joint - Fund All Goals xtra Savings by Tax Category John's Qualified Jane's Qualified After-Tax Addition: 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 27 of 89

33 What If Worksheet Key Assumptions Current Scenario odel 6 - Target odel 5 - Risk Based Incl. LTC Premiums Stock Options organ Stanley xercise Scenario : Select Special Amount : Vesting Termination Year : Return : Yes Yes Yes Yes xercise Scenario 2 xercise Scenario 2 xercise Scenario 2 xercise Scenario 2 xpected xpected xpected xpected % 9.3% 9.3% 9.3% Yes Yes Yes xpected xpected xpected John's retirement John's retirement John's retirement $5, $5, $5, No No Yes $2/day for 1 years $2/day for 1 years $2/day for 1 years Include in plan : Other Assets When received : Amount of cash received : Insurance Premiums Buy Long Term Care Policy for John Include in Plan? Benefits : Annual Premium : When payments stop : Tax Options Include Tax Penalties : Change Tax Rate? Year To Change : Change Tax Rate by this % (+ or -) : xpected John's retirement $5, Select special amount : Yes Include in Plan : Real state Investment $1, $1, $1, At end of John's Plan At end of John's Plan At end of John's Plan Yes Yes Yes Yes No No No No.%.%.%.% 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 28 of 89

34 Worksheet Detail - Combined Details Scenario : odel 6 - Target using Average Returns These pages provide a picture of how your Investment Portfolio may hypothetically perform over the life of this Plan. The graph shows the effect on the value of your Investment Portfolio for each year. The chart shows the detailed activities that increase and decrease your Investment Portfolio value each year including the funds needed to pay for each of your Goals. Shortfalls that occur in a particular year are denoted with an 'X' under the Goal column. Total Portfolio Value Graph x - denotes shortfall 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 29 of 89

35 Worksheet Detail - Combined Details Scenario : odel 6 - Target using Average Returns Beginning Portfolio Value Additions Other To Assets Additions , 135, ,452 16, , ,12 126,219 95,748 6,172 65,353 7,98 77,92 83,729 9,938 98,768 1,425, 1,589,51 1,765,611 1,956,845 2,163,93 2,387,592 2,63,249 2,993,62 3,336,852 3,652,529 3,994,397 4,364,24 4,764,213 5,196,874 5,664,635 58,4 58,918 59,936 6,954 61,472 62,99 64,8 65,26 65,544 67,62 68,8 69,616 7,634 71, , ,58 126, , , ,12 176,78 191,238 27,74 225, ,1 266,16 289,18 313,92 6,329,745 6,56,727 6,73,926 6,972,491 7,267,964 7,552,236 7,855,9 8,177,913 8,466,38 8,765,152 9,74,168 9,392,928 9,721,289 1,58,36 5, Stock Post Investment Options Retirement arnings Income Taxes Retirement College Jimmy Travel Leave Bequest nding Portfolio Value 95,29 51,351 15, 138, , , ,521 23, ,1 247, , , , , , , ,45 513,35 22,7 24,248 25,881 27,62 29,416 31,329 36,381 4,311 42,813 45,451 48,232 51,163 54,254 57,511 38,16 296,883 33,875 35,97 38,62 4,345 19,792 1,724,813 1,913,62 2,116,992 2,337,866 2,539,713 2,756,468 3,88,81 3,397,24 3,717,882 4,65,377 4,441,116 4,847,942 5,287,812 5,763,43 6,437,17 15, 57,54 57,895 12,57 14,257 16,42 17,863 19,72 111, , , , , ,67 527,78 546,53 566,2 59, , ,31 665,898 69, ,58 741,61 768, , , ,18 33,481 39,885 35,577 42,997 71,889 71,913 72,17 124, ,939 14,692 15, , , ,69 32,82 38, ,54 321, , , ,25 347, ,82 361, , , ,49 391,73 2,188 2,592 21,4 21,424 21,852 22,289 22,735 23,19 23,653 24,127 24,69 25,11 25,63 26,115 6,623,235 6,857,466 7,19,926 7,417,231 7,714,356 8,31,168 8,369,152 8,674,12 8,99,739 9,319,178 9,659,34 1,1,37 1,372,28 1,744,981 Fund All Goals armarked 51/49 52/5 53/51 54/52 55/53 56/54 57/55 58/56 59/57 6/58 61/59 62/6 63/61 64/62 John & Jane Retire 66/64 67/65 68/66 69/67 7/68 71/69 72/7 73/71 74/72 75/73 76/74 77/75 78/76 79/77 Year vent or Ages Funds Used x - denotes shortfall 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 3 of 89

36 Worksheet Detail - Combined Details Scenario : odel 6 - Target using Average Returns Beginning Portfolio Value 34,929 37,283 42, , , , ,66 67,789 66, , , ,73 918, ,634 1,83,531 1,44,52 1,757,243 11,117,351 11,483,222 11,853,471 12,226,267 12,631,51 13,37,72 13,443,43 13,846,753 14,245,762 14,639,62 16,137,496 16,635,721 17,131,94 Additions Other To Assets Additions 1,, Stock Post Investment Options Retirement arnings Income 123,83 125,98 128,199 13, , , ,53 139, , ,3 147,631 82,642 83,995 85,374 86, , , , ,536 1,14,749 1,5,964 1,87,666 1,124,86 1,162,227 1,199,726 1,237,294 1,365,68 1,412,846 1,46,594 1,465,77 Taxes 2, ,97 233, , , , ,19 347, ,8 46,5 437,513 49, , , ,534 Retirement College Jimmy Fund All Goals 8/78 81/79 82/8 83/81 84/82 85/83 86/84 87/85 88/86 89/87 John's Plan nds -/89 -/9 -/91 Jane's Plan nds armarked Year 399,565 47, ,77 424,22 432,52 441, , , , , ,68 386,47 394,135 42,18 41,58 Travel 26,638 27,17 27,714 28,268 28,833 Leave Bequest nding Portfolio Value 5, 11,127,526 11,519,516 11,92,12 12,327,87 12,741,511 13,19,658 13,644,861 14,13,162 14,563,78 15,24,447 15,484,792 17,56,44 17,633,356 18,215,471 18,274,368 vent or Ages Funds Used x - denotes shortfall 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 31 of 89

37 Worksheet Detail - Combined Details Scenario : odel 6 - Target using Average Returns Notes Results may vary with use and over time. The taxes column is a sum of (1) taxes on retirement income, (2) taxes on strategy income, (3) taxes on withdrawals from qualified assets for Required inimum Distributions, (4) taxes on withdrawals from taxable assets' untaxed gain used to fund Goals in that year, (5) taxes on withdrawals from tax-deferred or qualified assets used to fund goals in that year, and (6) taxes on the investment earnings of taxable assets. Tax rates used are detailed in the Tax and Inflation Options page. (Please note, the Taxes column does not include any taxes owed from the exercise of Stock Options or the vesting of Restricted Stock.) Tax Penalties can occur when Qualified and Tax-Deferred Assets are used prior to age 59½. If there is a value in this column, it illustrates that you are using your assets in this Plan in a manner that may incur tax penalties. Generally, it is better to avoid tax penalties whenever possible. The return assumptions used are estimates based on average annual returns for the index used as a proxy for each asset class. The portfolio returns were calculated by weighting individual return assumptions for each asset class according to the portfolio allocation selected by you or your Financial Advisor. The portfolio returns may have also been modified by your Financial Advisor to reflect the outcome of a different return by conducting a Total Return Adjustment or selecting an Alternative Portfolio. For a explanation of the methodology used to calculate returns, please review the Important Disclosure Information and Return ethodology sections. Investment arnings are calculated on all assets after any withdrawals for 'Goal xpense', 'Taxes on Withdrawals' and 'Tax Penalties' are subtracted. IPORTANT: The projections or other information generated by this tool 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 return assumptions in this tool are not reflective of any specific product and do not include any fees or expenses that may be incurred by investing in specific products. The actual returns of a specific product may be more or less than the returns used in this tool. Additions and withdrawals occur at the beginning of the year. No investment strategy or allocation can eliminate risk or guarantee investment results. Other Additions come from items entered in the Other Assets section and any applicable proceeds from insurance policies. Stock Options and Restricted Stock values are after-tax and based on the xercise Scenario selected. Strategy Income is based on the particulars of the Goal Strategies selected. Strategy Income from immediate annuities and 72(t) distributions is pre-tax. Strategy Income from Net Unrealized Appreciation (NUA) is after-tax. These calculations do not incorporate penalties associated with use of 529 Plan withdrawals for non-qualified expenses. Funds for each Goal xpense are used first from armarked Assets. If sufficient funds are not available from armarked Assets, Fund All Goals Assets will be used to fund the remaining portion of the Goal xpense, if available in that year. All funds needed for a Goal must be available in the year the Goal occurs. Funds from armarked Assets that become available after the goal year(s) have passed are not included in the funding of that Goal, and accumulate until the end of the Plan. Ownership of Qualified Assets is assumed to roll over to the surviving spouse at the death of the original owner. It is also assumed the surviving spouse inherits all assets of the original owner. Post Retirement Income includes the following: Social Security, pension, annuity, rental property, royalty, alimony, part-time employment, trust, and any other retirement income as entered in the Plan. If either Social Security Program stimate or Use This Amount and valuate Annually is selected for a participant, the program will default to the greater of the selected benefit or the age adjusted spousal benefit based on the other participant's benefit. x - denotes shortfall 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 32 of 89

38 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : odel 6 - Target using Average Returns Year Age (John / Jane) Income and arnings / / / / / / / /7 Assign To Fund All Goals 15, 15, 15, 15, 15, 15, 15, 15, Social Security - John Fund All Goals 42,54 42,895 43,753 44,628 45,521 46,431 Social Security - Jane Fund All Goals 43,753 44,628 45,521 46,431 Life Insurance - John Fund All Goals Real state Investment Fund All Goals 5, 513,35 527,78 546,53 566,2 59, , ,31 665,898 1,28,35 542,78 63, ,96 693,81 718, , ,761 32,82 38, ,54 321, , , ,25 2,188 2,592 21,4 21,424 21,852 22,289 22,735 Total Income and arnings Cash Used To Fund Goals Retirement - Living xpense 1% 296,883 Travel 1% 19,792 Leave Bequest 1% (316,675) (323,8) (329,469) (336,58) (342,779) (349,635) (356,627) (363,76) Total Taxes and Tax Penalty (38,16) (33,481) (39,885) (35,577) (42,997) (71,889) (71,913) (72,17) Cash Surplus/Deficit (Net Change in Portfolio) 673, , ,23 252,46 37,35 297, , ,983 Portfolio Value Future Dollars Beginning Value Cash Surplus/Deficit Investment Asset Additions nding Value Total Goal Funding Investment arnings Pension Income 5,763,43 6,437,17 6,623,235 6,857,466 7,19,926 7,417,231 7,714,356 8,31, , , ,23 252,46 37,35 297, , ,983 6,437,17 6,623,235 6,857,466 7,19,926 7,417,231 7,714,356 8,31,168 8,369,152 4,782,798 4,824,668 4,897,345 4,978,81 5,91,416 5,191,54 5,298,77 5,413,494 5,55 135,65 167, ,762 21, ,957 29,25 218,621 38,16 33,481 39,885 35,577 42,997 71,889 71,913 72,17 Current Dollars nding Value Cash Surplus/Deficit Taxes Total Taxes 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 33 of 89

39 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : odel 6 - Target using Average Returns Year Age (John / Jane) / / / / / / /7 25.% 25.% 25.% 25.% 25.% 28.% 28.% 28.% 6.85% 6.85% 6.85% 6.85% 6.85% 6.85% 6.85% 6.85% John Jane Federal arginal Tax Rate State arginal and Local Tax Rate 4.82% 1,114 18, , % 4.1% 3.53% 3.63% 3.57% 3.5% 4.16% Portfolio Withdrawal Rate stimated Required inimum Distribution (RD) Tax Penalty /64 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 34 of 89

40 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : odel 6 - Target using Average Returns Year Age (John / Jane) / / / / / / / /78 Income and arnings Fund All Goals 15, 15, 15, 15, 15, 15, 15, 15, Social Security - John Fund All Goals 47,36 48,37 49,273 5,259 51,264 52,289 53,335 54,42 Social Security - Jane Fund All Goals 47,36 48,37 49,273 5,259 51,264 52,289 53,335 54,42 Life Insurance - John Fund All Goals Real state Investment Fund All Goals 69, ,58 741,61 768, , , ,18 885,532 8,72 827, , , ,46 944, ,688 1,9, ,82 361, , , ,49 391,73 399,565 23,653 24,127 24,69 25,11 25,63 26,115 26,638 Total Income and arnings Cash Used To Fund Goals Retirement - Living xpense 1% 347,845 Travel 1% 23,19 Leave Bequest 1% Total Goal Funding (371,35) (378,456) (386,25) (393,745) (41,62) (49,653) (417,846) (426,23) Total Taxes and Tax Penalty (124,177) (131,939) (14,692) (15,513) (161,153) (173,343) (186,69) (2,589) 34, , , , , ,92 372, ,544 Portfolio Value Future Dollars Beginning Value Cash Surplus/Deficit Investment Asset Additions nding Value Cash Surplus/Deficit (Net Change in Portfolio) Investment arnings Pension Income 8,369,152 8,674,12 8,99,739 9,319,178 9,659,34 1,1,37 1,372,28 1,744,981 34, , , , , ,92 372, ,544 8,674,12 8,99,739 9,319,178 9,659,34 1,1,37 1,372,28 1,744,981 11,127,526 5,5,676 5,589,736 5,68,327 5,772,39 5,864,659 5,957,533 6,5,631 6,143, , ,916 2,194 23,91 25,797 27,867 29, , , ,939 14,692 15, , , ,69 2,589 Current Dollars nding Value Cash Surplus/Deficit Taxes Total Taxes 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 35 of 89

41 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : odel 6 - Target using Average Returns Year Age (John / Jane) / / / / / / /78 33.% 33.% 33.% 33.% 33.% 33.% 33.% 33.% 6.85% 6.85% 7.85% 7.85% 7.85% 7.85% 7.85% 7.85% John 126, ,12 Jane 142,66 154,279 Federal arginal Tax Rate State arginal and Local Tax Rate 3.5% 16, , ,372 2, , ,885 18, , ,17 227,24 245, % 3.31% 3.27% 3.23% 3.19% 3.39% 3.35% Portfolio Withdrawal Rate 148,256 stimated Required inimum Distribution (RD) Tax Penalty /72 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 36 of 89

42 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : odel 6 - Target using Average Returns Year Age (John / Jane) / / / / / / / /86 Income and arnings Fund All Goals 15, 15, 15, 15, 15, 15, 15, 15, Social Security - John Fund All Goals 55,49 56,6 57,732 58,886 6,64 61,265 62,49 63,74 Social Security - Jane Fund All Goals 55,49 56,6 57,732 58,886 6,64 61,265 62,49 63,74 Life Insurance - John Fund All Goals Real state Investment Fund All Goals 916, , ,536 1,14,749 1,5,964 1,87,666 1,124,86 1,162,227 1,42,814 1,77,63 1,111,999 1,147,521 1,186,92 1,225,197 1,264,787 1,34,78 415,77 424,22 432,52 441, , , ,154 27,714 28,268 28,833 Total Income and arnings Cash Used To Fund Goals Retirement - Living xpense 1% 47,556 Travel 1% 27,17 Leave Bequest 1% Total Goal Funding (434,727) (443,421) (452,29) (461,336) (441,152) (449,975) (458,975) (468,154) Total Taxes and Tax Penalty (216,97) (233,145) (251,852) (272,545) (295,792) (321,19) (347,511) (376,8) 391,99 4,497 47, , , ,23 458,31 46,546 Portfolio Value Future Dollars Beginning Value Cash Surplus/Deficit Investment Asset Additions nding Value Cash Surplus/Deficit (Net Change in Portfolio) Investment arnings Pension Income 11,127,526 11,519,516 11,92,12 12,327,87 12,741,511 13,19,658 13,644,861 14,13, ,99 4,497 47, , , ,23 458,31 46,546 11,519,516 11,92,12 12,327,87 12,741,511 13,19,658 13,644,861 14,13,162 14,563,78 6,234,891 6,325,155 6,413,312 6,498,529 6,595,693 6,689,27 6,778,134 6,862, , , ,179 21, , ,661 22, ,3 216,97 233, , , , ,19 347, ,8 Current Dollars nding Value Cash Surplus/Deficit Taxes Total Taxes 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 37 of 89

43 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : odel 6 - Target using Average Returns Year Age (John / Jane) / / / / / / /86 33.% 33.% 35.% 35.% 35.% 35.% 35.% 35.% 7.85% 7.85% 7.85% 7.85% 7.85% 7.85% 8.97% 8.97% John 231, ,156 Jane 263, ,393 Federal arginal Tax Rate State arginal and Local Tax Rate 3.15% 285,45 33, , , ,489 34, ,692 35, , ,89 424, % 2.75% 2.71% 2.68% 2.64% 3.6% 3.2% Portfolio Withdrawal Rate 266,215 stimated Required inimum Distribution (RD) Tax Penalty /8 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 38 of 89

44 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : odel 6 - Target using Average Returns Year Age (John / Jane) 25 89/ / / / / /92 Income and arnings Fund All Goals 15, 15, 15, 15, 15, 15, Social Security - John Fund All Goals 65,15 66,315 Social Security - Jane Fund All Goals 65,15 66,315 67,642 68,995 7,374 71,782 Life Insurance - John Fund All Goals 1,, Real state Investment Fund All Goals 1,199,726 1,237,294 1,365,68 1,412,846 1,46,594 1,465,77 1,344,757 1,384,925 2,448,25 1,496,841 1,545,968 1,552, ,68 386,47 394,135 42,18 41,58 Total Income and arnings Cash Used To Fund Goals Retirement - Living xpense 1% 477,517 Travel 1% Leave Bequest 1% 5, Total Goal Funding (477,517) (487,68) (386,47) (394,135) (42,18) (91,58) Total Taxes and Tax Penalty (46,5) (437,513) (49,591) (525,394) (561,835) (583,534) 46,739 46,345 1,571, , ,115 58,897 Portfolio Value Future Dollars Beginning Value Cash Surplus/Deficit Investment Asset Additions nding Value Cash Surplus/Deficit (Net Change in Portfolio) Investment arnings Pension Income 14,563,78 15,24,447 15,484,792 17,56,44 17,633,356 18,215,471 46,739 46,345 1,571, , ,115 58,897 15,24,447 15,484,792 17,56,44 17,633,356 18,215,471 18,274,368 6,94,517 7,12,914 7,573,58 7,675,873 7,773,794 7,646,9 212,838 28, , ,36 248,429 24,642 46,5 437,513 49, , , ,534 Current Dollars nding Value Cash Surplus/Deficit Taxes Total Taxes 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 39 of 89

45 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : odel 6 - Target using Average Returns Year Age (John / Jane) 25 89/ / / / /92 35.% 35.% 35.% 35.% 35.% 35.% 8.97% 8.97% 8.97% 8.97% 8.97% 8.97% John 384,916 43,389 Jane 451, ,527 Federal arginal Tax Rate State arginal and Local Tax Rate 2.62% 886,44 928, ,597 1,13, % 1.96% 4.69% 2.1% 1.99% Portfolio Withdrawal Rate stimated Required inimum Distribution (RD) Tax Penalty 251 9/88 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 4 of 89

46 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : odel 6 - Target using Average Returns Notes Results may vary with use and over time. Income from Other Assets and proceeds from Insurance Policies are after-tax values. Any remaining asset value after 72(t) distributions have been completed is a pre-tax value. Investment arnings are calculated on all assets after any withdrawals for funding goals, taxes on withdrawals, and tax penalties, if applicable, are subtracted. Shortfalls that occur in a particular year are denoted with an 'x' in the Cash Used to Fund Goals section of the chart. The Total Taxes are a sum of (1) taxes on retirement income, (2) taxes on strategy income, (3) taxes on withdrawals from qualified assets for Required inimum Distributions, (4) taxes on withdrawals from taxable assets' untaxed gain used to fund Goals in that year, (5) taxes on withdrawals from tax-deferred or qualified assets used to fund goals in that year, and (6) taxes on the investment earnings of taxable assets. Tax rates used are detailed in the Tax and Inflation Options page. (Please note, the Total Taxes do not include any taxes owed from the exercise of Stock Options or the vesting of Restricted Stock.) Tax Penalties can occur when Qualified and Tax-Deferred Assets are used prior to age 59½. If there is a value in this row, it illustrates that you are using your assets in this Plan in a manner that may incur tax penalties. Generally, it is better to avoid tax penalties whenever possible. The return assumptions used are estimates based on average annual returns for the index used as a proxy for each asset class. The portfolio returns were calculated by weighting individual return assumptions for each asset class according to the portfolio allocation selected by you or your Financial Advisor. The portfolio returns may have also been modified by your Financial Advisor to reflect the outcome of a different return by conducting a Total Return Adjustment or selecting an Alternative Portfolio. For a explanation of the methodology used to calculate returns, please review the Important Disclosure Information and Return ethodology sections. Stock Options and Restricted Stock values are after-tax and based on the xercise Scenario selected. IPORTANT: The projections or other information generated by this tool 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 return assumptions in this tool are not reflective of any specific product and do not include any fees or expenses that may be incurred by investing in specific products. The actual returns of a specific product may be more or less than the returns used in this tool. No investment strategy or allocation can eliminate risk or guarantee investment results. The values shown for income and investment earnings are estimates based on the assumptions included in this report, such as rates of return, inflation rate, asset values, asset additions, tax rates, income sources and amounts, and goal expenses. Any changes in assumptions will also change these values. Additions and withdrawals occur at the beginning of the year. The Income section includes Retirement Income, Strategy Income, Stock Options, Restricted Stock, Other Assets, proceeds from Insurance Policies, and any remaining asset value after 72(t) distributions have been completed. Retirement Income includes the following: Social Security, pension, annuity, rental property, royalty, alimony, part-time employment, trust, and any other retirement income as entered in the Plan. If either Social Security Program stimate or Use This Amount and valuate Annually is selected for a participant, the program will default to the greater of the selected benefit or the age adjusted spousal benefit based on the other participant's benefit. The Cash Surplus/Deficit is the net change in the Portfolio Value for the specified year. This value is your income and earnings minus what was spent to fund goals minus taxes. The nding Value of the Portfolio in Current Dollars is calculated by discounting the nding Value of the Portfolio in Future Dollars by the Base Inflation Rate for this Plan. The Cash Surplus/Deficit in Current Dollars is calculated by discounting the Cash Surplus/Deficit in Future Dollars by the Base Inflation Rate for this Plan. These calculations do not incorporate penalties associated with use of 529 Plan withdrawals for non-qualified expenses. Ownership of Qualified Assets is assumed to roll over to the surviving spouse at the death of the original owner. It is also assumed the surviving spouse inherits all assets of the original owner. Strategy Income is based on the particulars of the Goal Strategies selected. Strategy Income from immediate annuities and 72(t) distributions is pre-tax. Strategy Income from Net Unrealized Appreciation (NUA) is after-tax. 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 41 of 89

47 Worksheet Detail - Sources of Income and arnings Scenario : odel 6 - Target using Average Returns Notes This graph shows the income sources and earnings available in each year from retirement through the nd of the Plan. IPORTANT: The projections or other information generated by this tool regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. All Retirement Income, Immediate Annuity Strategy Income, 72(t) Strategy Income, the remaining asset value after 72(t) distributions, and Investment arnings are pre-tax, future values. Results may vary with use and over time. NUA Strategy Income, Stock Options, Restricted Stock, Other Assets, and proceeds from Insurance Policies are after-tax future values. Sources of Income can include Retirement Income, Strategy Income, Stock Options, Restricted Stock, Other Assets, proceeds from Insurance Policies, and any remaining asset value after 72(t) distributions have been completed. Investment arnings are calculated on all assets after any withdrawals for funding goals, taxes on withdrawals, and tax penalties, if applicable, are subtracted. If either Social Security Program stimate or Use This Amount and valuate Annually is selected for a participant, the program will default to the greater of the selected benefit or the age adjusted spousal benefit based on the other participant's benefit. 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 42 of 89

48 Worksheet Detail - Inside the Numbers Final Result Inside the Numbers - Final Result For odel 6 - Target The graph below shows the results for a Sample of 1 onte Carlo Trials, but that is not enough Trials to determine your Probability of Success. Your Probability of Success, as shown by the meter, uses a mathematical simulation, equivalent to 1, Trials, to calculate your Final Result. Your Probability of Success represents the percentage of 1, Trials in which you could expect to attain all your Goals. Final Result Simulation quivalent to 1, Trials Probability of Success: 86% In Confidence Zone (7% - 9%) The table below is a numerical representation of the above Sample of 1 trials. It is provided for informational purposes to illustrate the general range of results you might expect. However, neither the graph nor the table reflects the Final Result, which is your Probability of Success as shown by the meter to the right. In the Sample of 1 Trials table, the trials are ranked from best to worst (from 1 to 1) based on the nd of Plan value. For each trial listed (1st, 25th, 5th, 75th and 1th), the corresponding portfolio values for that trial will be illustrated in the years of the trial that are indicated. Trials Year 2 Year 5 Year 1 Year 15 Best $2,915,29 $5,626,61 $11,41,253 25th $2,83,197 $2,361,125 5th $3,293,423 $6,847,228 75th $2,1,362 Worst $1,55,42 Year 25 nd of Plan Year oney Goes to $ $2,628,194 $46,83,532 $247,14,247 $5,458,787 $7,722,823 $12,469,675 $21,956,981 $9,791,39 $1,277,983 $9,354,163 $1,327,37 $3,843,657 $5,75,477 $5,153,942 $5,379,916 $ 255 $1,572,677 $2,25,963 $377,44 $ $ 232 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 43 of 89

49 Worksheet Detail - Special Asset Test Special Asset Test for odel 6 - Target Likelihood of Funding Goals xpected High Probability of Success: 83% Probability of Success: 86% Probability of Success: 87% In Confidence Zone In Confidence Zone In Confidence Zone organ Stanley Cash Schedule: Real state Investment When Sold Future Amounts Low xpected High at John's retirement $3, $5, $7, 218 $71,71 $146,38 $179, $57,22 $95,29 $111, $14,68 $51,351 $67,977 Description Low It is often difficult to predict the value that will be received from the sale of assets in the future. This creates a hidden risk to your plan. These results show your Probability of Success using the three estimates you provided for the amount of after-tax cash you might receive from the sale of each Special Asset shown in the table. For each result calculated, all assets are assumed to receive the Low, xpected or High amount. All other assumptions in the plan remain unchanged. There is a Risk that you will receive the Low values (or less than the Low values). If this causes your Probability of Success to fall below your Confidence Zone, you should consider what adjustments might be necessary. 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 44 of 89

50 Worksheet Detail - Portfolio Probability atrix Portfolio Probability atrix for odel 6 - Target Portfolio used in odel 6 - Target Both before and during Retirement with same portfolio Results Bear arket Loss Probability of Success Safety argin (Current Dollars) Great Recession Return Bond Bear arket Return odel 1 < 4% $24,993 12% -5% odel 2 < 4% $89,861-4% % odel 3 63% $1,53,26-15% 3% Risk Based Portfolio Current odel 5 odel 6 odel 7-29% 1% 88% $3,486,724-22% 5% 88% $5,198,63-28% 7% 86% $7,646,9-38% 1% 82% $1,86,53-51% 15% 82% $11,534,791-51% 15% odel 8 $2,689,52 odel 4 64% 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 45 of 89

51 Worksheet Detail - Social Security aximization Social Security aximization for odel 6 - Target aximization Based on Cash Received Total lifetime benefit in current dollars At age $3,634 $3,634 $26,55 $22,976 $3,634 $3,634 $37,987 $37,987 $37,987 $3,634 $37,987 $15,317 $15,317 $37,987 $1,531,714 $1,393,86 $1,531,714 $1,671,46 $1,623,617 $1,717,358 $1,686, % 86% 86% 86% 86% Break ven Point John Jane N/A N/A Notes 85% aximization Based on Overall Plan Result Probability of success 86% First year benefit in current dollars John Jane At FRA Start age John Jane At retirement Social Security Strategy John begins at John Jane age 7 and files/suspends, files/suspends, Jane begins at Jane restricted John restricted FRA application application Strategy Used in odel 6 Target The Program does not include Social Security benefits prior to a recipient s retirement age. The Start Age for each Social Security Strategy is the earliest the Program will include a Social Security benefit for each recipient. 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 46 of 89

52 mployer Stock Plans

53 Stock Options This section of your report summarizes your Stock Option plan and calculates your current option equity value for all fully vested shares. It also calculates an estimate of the potential future option equity values, that may be available to help fund your goals each year based upon the assumptions you have made. We believe this information is an important step in a financial goal plan. We look forward to helping you make informed decisions regarding your stock option strategy. This Report is for your information only and does not constitute the solicitation to purchase or sell any specific security. General Discussion Nonqualified Stock Options (NQOs) - Unlike ISOs, the spread on NQOs is immediately recognized as compensation income upon exercise, for regular tax purposes, and is therefore subject to federal, and possibly state income tax, as well as edicare and FICA tax. If the stock is held after exercise, any subsequent appreciation is treated as capital gain (long-term, if held for more than one year) when the stock is sold. xercise Scenarios Your stock options can be a significant component of your financial portfolio. Stock options can give you the opportunity to benefit from the potential appreciation in your company's stock. As with any other investments, there are certain risks associated with stock options which you should take into consideration. Therefore, it is critical that you are familiar with your stock options, how they function, and the financial implications they may have on your overall portfolio. Stock options provide employees with the right to buy company stock at a specified price, known as the strike price, within a certain period of time. A company can grant two types of stock options - incentive stock options (ISOs) and non-qualified stock options (NQOs). Although the exercise of an ISO is generally not a taxable event for regular tax purposes, the difference between the strike price and the stock price on the date of exercise is considered a preference item for federal, and possibly state, alternative minimum tax (AT) purposes. Depending on the circumstances, the exercise of ISOs can cause a taxpayer to be subject to the AT and incur a higher tax liability even though shares have not yet been sold and gains have yet to be realized. Introduction to Your Stock Options Incentive Stock Options (ISOs) - One advantage of an ISO is that no regular income tax is recognized upon exercising the option. In addition, if the acquired stock is held for two years from the date of grant and one year from the date of exercise, favorable long-term capital gains rates will apply to all of the appreciation (between the strike price and sale price) upon the subsequent sale of the stock. The sale of any shares prior to satisfying either of these holding period requirements will be treated as a "disqualifying disposition." If the acquired stock is not held for one year from exercise, the bargain element (the difference between the value of the stock on exercise and the strike price, also referred to as "spread") is treated as ordinary income and any post-exercise gain is short-term capital gain. If the stock is held for one year from exercise but not two years from grant, the bargain element (or spread) is ordinary income and any post-exercise gain is long-term capital gain. The future potential after-tax option equity cash flows illustrated in this analysis, for each exercise scenario, were calculated based on selecting one or more Timing ethods and certain assumptions described below: Available Timing ethods All exercise scenarios assume a cashless exercise strategy. Now - All Vested Only - Currently vested options that are in-the-money by any amount are exercised now; all remaining options are lost. Now and As Vested - Currently vested options that equal or exceed the minimum percentage gain are exercised now. Remaining options are either exercised in the first year they are both vested and exceed the minimum percentage gain or are exercised in the year they expire if they are in-the-money by any amount. Now and At xpiration - Currently vested options that equal or exceed the minimum percentage gain are exercised now. All remaining options are exercised in the year they expire if they are in-the-money by any amount. Start Year and As Vested - Beginning in the exercise start year, vested options that equal or exceed the minimum percentage gain are exercised. After the exercise start year, remaining options are either exercised in the first year they are both vested and exceed the minimum percentage gain or are exercised in the year they expire if they are in-the-money by any amount. Start Year and At xpiration - Beginning in the exercise start year, vested options that equal or exceed the minimum percentage gain are exercised. After the exercise start year, remaining options are exercised in the year they expire if they are in-the-money by any amount. At xpiration - Options are exercised in the year they expire if they are in-the-money by any 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 47 of 89

54 Stock Options The after-tax calculations within the Option quity Schedule and Price Sensitivity Analysis assume that all ISOs are disqualified and the Regular Tax Rate is applied. In addition, the Vesting Schedule does not calculate whether ISO grants meet the $1, limitation. xercise costs for NQOs and ISOs have not been considered nor have any dividends that might have been received from ISOs that are exercised and held for one year. Grants expected to be received in the future are not represented in this Stock Option Summary. Cash Receipt Schedule The future potential after-tax option equity cash flows illustrated in this analysis, for each Cash Receipt Schedule, are the amounts you entered, based on your own calculations. Assumptions The Current Value should represent the current value of all vested stock options in this Stock Option Plan. Other Assumptions Return assumption for this Stock - The projected return for the asset class category selected, unless otherwise indicated by you. If a Stock Option Plan with xercise Scenarios is treated as a Special Asset, the return assumption for this stock includes three growth rates -- labeled Low, xpected and High returns. The Program default for all three returns is the projected return for the asset class category selected, and can be changed by you. This approach can help illustrate financial risk not otherwise reflected in the Plan results. inimum percentage gain to exercise - The minimum percentage gain in the stock price above the exercise price that is required before exercising options. Applying this minimum defers the exercise of options with only relatively small spread between the stock price and the option price. Vesting Termination Year - A year in which it is assumed that vesting ends prematurely. All remaining unvested options are lost. xercise Start Year - A year in which it is expected that you will begin to exercise vested options, if different than the current year. Hold ISO for One Year - If it is indicated that ISO shares are not to be "Held for One Year", then it is assumed that the ISO shares are disqualified and a Regular Tax Rate is applied. If it is indicated that ISO shares are to be "Held for One Year", it is assumed that those shares will have been held for at least two years from the date of grant and over one year from the date of exercise, thus qualifying for long-term capital gains treatment and the Long-Term Tax Rate is applied. The Cash Receipts Table shows expected after-tax amounts for one or more years in the future, based on your own calculations and as entered by you. If a Stock Option Plan with a Cash Receipt Schedule is treated as a Special Asset, the Cash Receipts Table shows the Low, xpected, and High after-tax amounts for each year in the future, based on your own calculation and as entered by you. This approach can help illustrate financial risk not otherwise reflected in the Plan results. General Assumptions The Value if the Owner dies today should represent the value to be paid by the Stock Option Plan if the owner dies today. The Regular Tax Rate is the estimated tax rate applied to the potential option equity on all NQOs exercised and sold and on any ISO shares sold that were not held for one year. This rate should be the total estimate for all applicable taxes, including Federal, State, and Local Income taxes. Unless included in this rate, edicare and FICA taxes are not applied separately to NQO equity. The possible impact of the Alternative inimum Tax (AT) and any other cost and taxes associated with exercising Stock Options are not reflected in any calculations, unless its impact was taken into account, by you, when entering the cash receipt amounts. The Long-Term Tax Rate is the estimated tax rate applied to the potential option equity on any ISO shares sold that were held for more than one year after exercise (as well as two years from date of grant). This rate should be the total estimate for all applicable taxes, including Federal, State, and Local Income taxes. The possible impact of the Alternative inimum Tax (AT) is not reflected in any calculations. Since the exercise of ISOs can have substantial AT consequences, you should consult with your personal tax advisor. 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 48 of 89

55 Stock Options Summary organ Stanley (S) Owner : John Options Outstanding Options Assumptions 2, Vested : 16, Regular Tax Rate : 4.% xercised : Not Vested : 4, Long-Term Tax Rate : 2.% $15, arket Price* : $16.75 on 12/3/212 Asset Class : US Large-Cap Value Stocks Options Vest at Death : Yes Special Asset : Yes Option quity After Tax : Granted : * Security prices included in the stock option analysis are based on the market price that you entered for the date referenced and are included only because the system requires it for analysis purposes. This Report is for your information only and does not constitute the solicitation to purchase or sell any specific security and you should not rely on the information presented when making an investment or liquidation decision. We make no warranty with respect to any security price and do not guarantee that the price listed will be available to you should you choose to exercise your options. The actual price available to you should you choose to exercise your options may be more or less than indicated on the report. Vesting Schedule Name S Vest The Vesting Schedule below is a summary showing the percentage of each option grant that becomes exercisable over time according to the information you have provided. % Vested by Year % 2% 2% 2% 2% % % % % % 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 49 of 89

56 Stock Options Summary Option quity Schedule The Option quity Schedule below shows a summary of your stock option grants and calculates the pre-tax and after-tax option equity value for all vested stock options based on the current market price. These values are calculated using the information you provided for each grant, your tax rate assumption and the current market price of the stock as indicated by you. If your plan includes ISOs, the After Tax Option quity value assumes that all ISOs are immediately disqualified and the regular tax rate is applied. This Report does not constitute the solicitation to purchase or sell any specific security. Name Options Date Price Type xpiration Date Vesting Schedule Granted Outstanding Options xercised Vested Grant Option quity - Vested Only arket Price $16.75 Pre-Tax Tax at 4.% After Tax Not Vested 1/1/27 $14.25 ISO 1/1/217 S Vest 1, 1, $25, $1, $15, 29 Grant 1/1/29 $2. NQO 1/1/219 S Vest 1, 6, 4, $ $ $ 2, 16, 4, $25, $1, $15, 27 Grant Total : Option quity Value if Die Today - All Options Vested at Death The option equity value if John dies today is $25, pre-tax. Based upon a tax rate of 4.%, the after-tax value of the options vested at death is $15,. Price Sensitivity Analysis Grant Name Date Price The Price Sensitivity Analysis shows a summary of your stock option grants and calculates the potential after-tax option equity values for all vested stock options based on the current market price as indicated by you as well as a variety of higher and lower assumed prices. Understanding the impact of potential stock price changes on the after-tax option equity value of particular grants can play an important role in determining option exercise strategies. If your plan includes ISOs, the After Tax Option quity value assumes that all ISOs are immediately disqualified and the regular tax rate is applied. Type xpiration Date Vested Options Option quity Sensitivity - After Tax for Vested Options Only -25% $ % $14.24 arket* $ % $ % $ Grant 1/1/27 $14.25 ISO 1/1/217 1, $ $ $15, $3,75 $4, Grant 1/1/29 $2. NQO 1/1/219 6, $ $ $ $ $3,375 Total : $ $ $15, $3,75 $43,5 Change In Value: -$15, -$15, $ $15,75 $28,5 * Security prices included in the stock option analysis are based on the market price that you entered for the date referenced and are included only because the system requires it for analysis purposes. This Report is for your information only and does not constitute the solicitation to purchase or sell any specific security and you should not rely on the information presented when making an investment or liquidation decision. We make no warranty with respect to any security price and do not guarantee that the price listed will be available to you should you choose to exercise your options. The actual price available to you should you choose to exercise your options may be more or less than indicated on the report. 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 5 of 89

57 Stock Options Summary Full Vesting Schedule The Full Vesting Schedule illustrates the amount of stock options that are currently vested and calculates any additional amounts that vest in future years based on the applicable Vesting Schedule. Grant Name Options Vesting ach Year Date Price Type xpiration Date Vesting Schedule Currently Vested Beyond 1/1/27 $14.25 ISO 1/1/217 S Vest 1, 29 Grant 1/1/29 $2. NQO 1/1/219 S Vest 6, 2, 2, 2, 2, xercise Scenarios 16, Total : 27 Grant The xercise Scenarios show a summary of your stock option grants and, for each scenario, the timing method(s) and other assumptions outlined in the Stock Options Introduction that will be used to calculate future potential after-tax option equity as summarized in the Cash Flow Schedule. Grant Date Price Type xpiration Date Vesting Schedule Vested Name Outstanding Options Scenario 1 Not Vested Timing Scenario 2 Hold ISO? Timing Scenario 3 Hold ISO? Timing Hold ISO? 1/1/27 $14.25 ISO 1/1/217 S Vest 1, Now And As Vested Yes At xpiration Yes Start Year and As Vested Yes 29 Grant 1/1/29 $2. NQO 1/1/219 S Vest 6, 4, Now And As Vested N/A At xpiration N/A Start Year and As Vested N/A 27 Grant Total : Accelerated xpiration Year : inimum percentage gain to exercise : xercise Start Year : 16, 4, % 8.% 8.% Special Growth Rates Since this Stock Option Plan with xercise Scenarios is being treated as a Special Asset, the Growth Rates table shows the Low, xpected and High return assumption applied to each exercise scenario. Growth Rates : Low xpected High 5.% 9.3% 11.% 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 51 of 89

58 Stock Options Summary Cash Flow Schedule The Cash Flow Schedule below shows the future potential after-tax option equity value for each scenario indicated, on a year-by-year basis. These are only estimates based on current information and not guarantees that you will obtain a specific value or tax benefit upon exercise of the Stock Options. This Report does not constitute the solicitation to purchase or sell any specific security. Fund All Goals 213 Fund All Goals 214 Fund All Goals 215 Fund All Goals 216 Fund All Goals 217 Fund All Goals 218 Fund All Goals 219 Fund All Goals 22 Fund All Goals Scenario 2 - Option quity (after-tax) Scenario 3 - Option quity (after-tax) $32,462 $32, Scenario 1 - Option quity (after-tax) $11,228 Assign to Goals Total : Year $43,69 $11,228 $95,29 $51,351 $146,38 $43,69 Important Note on Alternative inimum Tax (AT): If your plan includes ISOs, the possible impact of AT is not reflected in these calculations. Since the exercise of ISOs can have substantial AT consequences, you should consult with your personal tax advisor. Also, the possible impact of the value of ISOs becoming first exercisable during a single year and exceeding the $1, limitation, causing the excess ISOs to be disqualified, is not reflected in these calculations. 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 52 of 89

59 Risk anagement

60 Life Insurance Needs Analysis Scenario : odel 6 - Target Life insurance can be an important source of funds for your family in the event of your premature death. In this section, we analyze whether there are sufficient investment assets and other resources to support your family if you were to die this year and, if there is a deficit, what additional life insurance may be required to provide the income needed by your survivors. If Jane Dies Living xpenses covered until Jane is 92 Living xpenses covered until John is 9 $1,, $1,24,156 Life Insurance Needed $2,24,156 If John Dies xisting Life Insurance Additional Needed $2,187,926 $ $2,187,926 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 53 of 89

61 Life Insurance Needs Analysis Detail Scenario : odel 6 - Target Life Insurance If John Dies If Jane Dies $1,, xisting Life Insurance $ $ Additional Death Benefit $ Liabilities and Final xpenses If Jane Dies Debts Paid Off $1, Final xpenses and state Taxes $ Bequests $ Other Payments Living xpenses for Survivors vent 63 Retirement 92 Plan nds Jane's Age $4, If John Dies $1, $4, If John Dies $ $ John's Age 65 9 If Jane Dies $25,8 92 First Living xpense Annual xpense (current dollars, after-tax) $25,8 Cover expense until Co-Client is this age 9 Second Living xpense $ Annual xpense (current dollars, after-tax) $ Cover expense until Co-Client is this age Financial Goals Checked boxes indicate goals to be funded upon death. If John Dies If Jane Dies College - Jimmy Travel Leave Bequest 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 54 of 89

62 Life Insurance Needs Analysis Detail Scenario : odel 6 - Target Sell Other Assets If John Dies $ If Jane Dies Amount of cash provided by sale of Assets (after tax) $ Your Assets that are not being sold to fund goals are listed below. Current Value NY Home $75, Checked boxes indicate Other Assets that will be included in this analysis and used to fund goals. If Jane Dies If John Dies Description Real state Investment Stock Options and Restricted Stock If John Dies Checked boxes indicate stock options to be included in Life Insurance. If Jane Dies Include John's Stock Options 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 55 of 89

63 Life Insurance Needs Analysis Detail Scenario : odel 6 - Target Other Income (Income other than employment income) If John Dies If Jane Dies $ Annual Other Income Amount $ (current dollars before tax) No Will this amount inflate? No Amount Description $15, Pension Income Tax Rate (stimated average tax rate) Use this Rate Amount $15, Year Federal State Local Current rate % 7.85%.% Change rate in.%.%.% Rate of Return Include Include If Jane Dies If John Dies Use Return in the Plan you selected Rate of Return Dependents 8.61% Name Date of Birth Age Relationship Jimmy 7/7/ Both Are Parents 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 56 of 89

64 Disability Needs Analysis - John If John is Disabled Length of Disability Income Needed mployment Income $5, $25, 2 year(s) $51,4 5 year(s) $541,22 1 year(s) 15 year(s) Other Income Social Security Group* Benefit Insurance Personal Insurance Surplus or (Shortfall) $ $ $ $ -$25, $255, $ $ $ $ -$255,4 $27,68 $ $ $ $ -$27,612 $597,551 $298,773 $ $ $ $ -$298,778 $659,745 $329,87 $ $ $ $ -$329,875 1 year(s) Disability Insurance can provide an important source of funds during the time when you are unable to work due to a prolonged illness or injury. This section compares your income needs to your income sources for various disability periods. If there is an Income Shortfall, you may want to consider the purchase of a Disability Insurance Policy. * The benefit amount may include an after-tax portion that has been grossed up to reflect its pre-tax 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 57 of 89

65 Disability Needs Analysis - John If John is Disabled Refine Needs Analysis Social Security No Do you want to include Social Security Disability Benefits in the analysis? Income Needed (pre-tax, current dollars) During these years During the first year $41,674 per month Year 2 $41,667 per month $5,4 per year onth 2 & 3 $41,666 per month Year 3-5 $41,667 per month $5,4 per year onth 4 & 5 $41,666 per month Year 6 to Age 65 $41,667 per month $5,4 per year onth 6-12 $41,666 per month Surplus or Shortfall During First Year All amounts in this table are monthly, pre-tax amounts. Income Needed mployment Income Other Income Social Security Group* Benefit Insurance First Year onth onth 1 $41,674 $2,833 2 $41,666 $2,833 3 $41,666 $2,833 $ 4 $41,666 $2,833 $ 5 $41,666 $2,833 6 $41, Surplus or (Shortfall) $ $ $ $ -$2,841 $ $ $ $ -$2,833 $ $ $ -$2,833 $ $ $ -$2,833 $ $ $ $ -$2,833 $2,833 $ $ $ $ -$2,833 $41,666 $2,833 $ $ $ $ -$2,833 $41,666 $2,833 $ $ $ $ -$2,833 9 $41,666 $2,833 $ $ $ $ -$2,833 1 $41,666 $2,833 $ $ $ $ -$2, $41,666 $2,833 $ $ $ $ -$2, $41,666 $2,833 $ $ $ $ -$2,833 1 Personal Insurance * The benefit amount may include an after-tax portion that has been grossed up to reflect its pre-tax 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 58 of 89

66 Disability Needs Analysis - John If John is Disabled Surplus or Shortfall by Age All amounts in this table are annual, pre-tax amounts. Age Income Needed mployment Income Other Income Social Security Group* Benefit Insurance Personal Insurance Surplus or (Shortfall) $51,4 $255, $ $ $ $ -$255,4 53 $52,24 $26,1 $ $ $ $ -$26,14 54 $53,68 $265,32 $ $ $ $ -$265,36 55 $541,22 $27,68 $ $ $ $ -$27, $552,45 $276,2 $ $ $ $ -$276,25 57 $563,86 $281,541 $ $ $ $ -$281, $574,347 $287,171 $ $ $ $ -$287, $585,834 $292,915 $ $ $ $ -$292,92 6 $597,551 $298,773 $ $ $ $ -$298, $69,52 $34,749 $ 62 $621,692 $31, $634,126 $317,6 64 $646,88 $323,42 65 $659,745 $329,87 52 $ $ -$34,753 $ $ $ -$31,849 $ $ $ $ -$317,66 $ $ $ $ -$323,47 $ $ $ $ -$329,875 $ $ * The benefit amount may include an after-tax portion that has been grossed up to reflect its pre-tax value. Notes Disability benefits may be subject to an elimination period or benefit age cap. Income Needed is the amount you have indicated is necessary to maintain your standard of living during the disability period. 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 59 of 89

67 Disability Needs Analysis - Jane If Jane is Disabled Length of Disability Income Needed mployment Income $5, $25, 2 year(s) $51, 5 year(s) $541,216 1 year(s) 17 year(s) Other Income Social Security Group* Benefit Insurance Personal Insurance Surplus or (Shortfall) $ $ $ $ -$25, $255, $ $ $ $ -$255, $27,68 $ $ $ $ -$27,68 $597,546 $298,773 $ $ $ $ -$298,773 $686,393 $343,196 $ $ $ $ -$343,196 1 year(s) Disability Insurance can provide an important source of funds during the time when you are unable to work due to a prolonged illness or injury. This section compares your income needs to your income sources for various disability periods. If there is an Income Shortfall, you may want to consider the purchase of a Disability Insurance Policy. * The benefit amount may include an after-tax portion that has been grossed up to reflect its pre-tax 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 6 of 89

68 Disability Needs Analysis - Jane If Jane is Disabled Refine Needs Analysis Social Security No Do you want to include Social Security Disability Benefits in the analysis? Income Needed (pre-tax, current dollars) During these years During the first year $41,674 per month Year 2 $41,667 per month $5, per year onth 2 & 3 $41,666 per month Year 3-5 $41,667 per month $5, per year onth 4 & 5 $41,666 per month Year 6 to Age 65 $41,667 per month $5, per year onth 6-12 $41,666 per month Surplus or Shortfall During First Year All amounts in this table are monthly, pre-tax amounts. Income Needed mployment Income Other Income Social Security Group* Benefit Insurance First Year onth onth 1 $41,674 $2,833 2 $41,666 $2,833 3 $41,666 $2,833 $ 4 $41,666 $2,833 $ 5 $41,666 $2,833 6 $41, Surplus or (Shortfall) $ $ $ $ -$2,841 $ $ $ $ -$2,833 $ $ $ -$2,833 $ $ $ -$2,833 $ $ $ $ -$2,833 $2,833 $ $ $ $ -$2,833 $41,666 $2,833 $ $ $ $ -$2,833 $41,666 $2,833 $ $ $ $ -$2,833 9 $41,666 $2,833 $ $ $ $ -$2,833 1 $41,666 $2,833 $ $ $ $ -$2, $41,666 $2,833 $ $ $ $ -$2, $41,666 $2,833 $ $ $ $ -$2,833 1 Personal Insurance * The benefit amount may include an after-tax portion that has been grossed up to reflect its pre-tax 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 61 of 89

69 Disability Needs Analysis - Jane If Jane is Disabled Surplus or Shortfall by Age All amounts in this table are annual, pre-tax amounts. Age Income Needed mployment Income Other Income Social Security Group* Benefit Insurance Personal Insurance Surplus or (Shortfall) $51, $255, $ $ $ $ -$255, 51 $52,2 $26,1 $ $ $ $ -$26,1 52 $53,64 $265,32 $ $ $ $ -$265,32 53 $541,216 $27,68 $ $ $ $ -$27,68 54 $552,4 $276,2 $ $ $ $ -$276,2 55 $563,81 $281,541 $ $ $ $ -$281, $574,343 $287,171 $ $ $ $ -$287, $585,83 $292,915 $ $ $ $ -$292, $597,546 $298,773 $ $ $ $ -$298, $69,497 $34,749 $ 6 $621,687 $31, $634,121 $317,6 62 $646,83 $323,42 63 $659, $672, $686,393 5 $ $ -$34,749 $ $ $ -$31,844 $ $ $ $ -$317,6 $ $ $ $ -$323,42 $329,87 $ $ $ $ -$329,87 $336,467 $ $ $ $ -$336,467 $343,196 $ $ $ $ -$343,196 $ $ * The benefit amount may include an after-tax portion that has been grossed up to reflect its pre-tax value. Notes Disability benefits may be subject to an elimination period or benefit age cap. Income Needed is the amount you have indicated is necessary to maintain your standard of living during the disability period. 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 62 of 89

70 Long-Term Care Needs Analysis - John Scenario : odel 6 - Target One of the greatest threats to the financial well-being of many people over 5 is the possible need for an extended period of Long-Term Care, either at home, in an Assisted Living Facility or in a Nursing Home. This Section demonstrates how these expenses could adversely affect your Investment Portfolio and how you might protect it with a Long-Term Care policy. This graph shows what would happen to your portfolio if John enters a Nursing Home at age 8 for 1 years at an annual cost, in Current Dollars, of $13,67 inflating at 6.%. Total Cost of Long-Term Care : $9,332,276 Total of xisting Long-Term Care Policy Benefits : Total Benefits from purchasing a new Long-Term Care Policy* : $ $3,697,56 Amount offset by expense reduction during care period : $486,125 Net Cost of care to be paid from Portfolio : $5,149,95 * Assumptions for new LTC policy are 1 year Benefit Period, 1-day limination Period, $2 Daily Benefit Amount, 1% Home Care Benefit, and Compounded Inflation at 5%. 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 63 of 89

71 state Analysis

72 state Introduction This section of your report provides a general overview of your current estate situation and shows the projected value of your estate at death. It includes an estimate of Federal state taxes, expenses, and the amounts to be received by your beneficiaries. If appropriate, this report also illustrates one or more estate planning strategies that you may want to consider. Important Note: This analysis is intended solely to illustrate potential estate analysis issues. Prior to taking any action, we recommend that you review the legal and/or tax implication of this analysis with your personal legal and/or tax advisor. It is often said that you cannot take your money with you; however, it is somewhat comforting to know that you can determine what happens to it after you're gone. A well-designed estate plan can not only help make sure that your assets go where you want them to, but also make the process simpler, faster, less expensive, and less painful. Such planning followed by an orderly transition of your estate can have a positive impact on the people you care about. You have told us the following about your current state situation; Both John and Jane have Wills. Both John and Jane have Power Of Attorney. Both John and Jane have edical Directives. This state Analysis assumes that you both maintain valid Wills that bequeaths all assets to each other (Simple Will). This state Analysis may not accurately reflect your current estate where one or both of you does not have a Simple Will. It is important that both of you have a Will that is valid and up-to-date. Your Wills should be periodically reviewed by your legal advisor. You should also discuss the appropriateness of a edical Directive and Power of Attorney with your legal advisor. You have indicated that you have not made provisions for a Bypass Trust. When this analysis illustrates the potential benefit of a Bypass Trust, it assumes that your assets will be properly titled and appropriate to fully fund the amount shown. This state Analysis assumes that you both maintain valid Wills that bequeaths all assets to each other (Simple Will). This state Analysis may not accurately reflect your current estate where one or both of you does not have a Simple Will. It is important that both of you have a Will that is valid and up-to-date. Your Wills should be periodically reviewed by your legal advisor. You should also discuss the appropriateness of a edical Directive and Power of Attorney with your legal advisor. You have indicated that you have not made provisions for a Bypass Trust. When this analysis illustrates the potential benefit of a Bypass Trust, it assumes that your assets will be properly titled and appropriate to fully fund the amount shown. The Need for state Planning How Will You Be Remembered? It is often said that you cannot take your money with you; however, it is somewhat comforting to know that you can determine what happens to it after you're gone. A well-designed estate plan can not only help make sure that your assets go where you want See DISCLOSUR INFORATION theexpensive, beginning ofless thispainful. document themiportant to, but also make the process simpler, faster,atless and Suchfor explanations of assumptions, limitations, and methodologies. planning followed by an orderly transition of your estate can have a positive impact on the Prepared by: organ Stanley people you care about. 12/3/212 Page 64 of 89

73 state Introduction Goal Planning is Important When it comes to estate taxes, the tax law seemingly penalizes those who fail to plan properly. Failure to properly plan can sometimes lead to greater estate taxes due. A well-designed estate plan can potentially reduce taxes substantially, and leave more money for your heirs. Probate is the legal process for settling your state, which basically means that all your debts and taxes are paid and remaining assets are distributed. Probate can be time consuming and expensive, and is open to public review. A well-designed estate plan can reduce the costs of probate, save time, and even avoid probate for many assets. Your Beneficiaries - Leaving ore The desire to control the ultimate disposition of that which we accumulate during our lifetime and to provide for those we care about is a strong motivation in most people. In this regard, there are many questions to answer: Who should get the money, and how much? When should they get it - all at once or over time? Who will manage the money? Probate - xpense and Delays Do you want to place restrictions on some assets such as a business or property? How much should go to charity? Who gets important tangible assets (e.g. wedding rings, family heirlooms)? Which assets do you want sold? Which assets should never be sold? Will there be enough liquidity to pay taxes? You - Having nough state Planning focuses on what happens after you die and includes strategies you can employ to increase the amount of your assets that pass to your beneficiaries. Some of these strategies, such as gifting and purchasing life insurance, can cost you a significant amount of money during your lifetime. While this is certainly financially helpful for your heirs, is it financially sound for you? A good estate plan also considers the impact of these strategies on you, while you're alive. You want to make sure that you will have enough money to support your own lifestyle, before spending money to help your heirs. 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 65 of 89

74 state Assumptions This analysis makes a number of assumptions that could significantly affect your results including, but not limited to, the following: Both of you are U.S. Citizens. All Qualified Retirement Plans, IRAs and Tax-deferred Annuities are assumed to have the spouse as the Beneficiary and its value is available to fund goals after the first death. The contingent Beneficiary is the estate. State inheritance, estate or gift taxes have not been incorporated. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 21 ("the Act") modified several provisions of the Federal state & Gift Tax for 211 and 212. As specified in the Act, this analysis incorporates the 35% estate tax rate, the $5 million per person applicable exclusion amount, and the unification of the Gift Tax and state Tax systems for the $5 million exclusion amount. In addition, the portability of the deceased spouse s unused estate exclusion amount (DSUA) to the surviving spouse is reflected in this analysis. If Congress amends or extends the Act, or amends other provisions of the Federal state & Gift Tax, any analysis for future years should be reviewed by you and your tax advisors. Gift taxes are not calculated every year, but are totaled and settled at the death of the donor. Generation-skipping taxes, if applicable, have not been calculated. All custodial accounts (UGA and/or UTA) are not included in the estate calculations. Important Information on Assumptions All amounts contributed to 529 Savings Plans are treated as completed gifts and there is no recapture provision for any 5-year pre-funding contribution elections. Prior gifts above the annual exclusion and for which no taxes have been paid are included in your Taxable state. Prior gifts above the annual exclusion and for which taxes have been paid are not included in your Taxable state. Financial Goals such as "Gift or Donation" or "Leave a Bequest" are not reflected in the state Analysis. Bequests stipulated in your will, including charitable bequests, are not reflected in the state Analysis. If applicable, reverted gifts and/or life insurance proceeds transferred to a Trust or third-party within three years of death are included in your Gross state and Taxable state. In certain calculations, the Bypass Trust may not be fully funded to the available estate exemption equivalent amount due to prior gifts, titling of assets, insufficient resources, and/or other bequests. The current values of vested stock options are included in the gross estate. The current values of unvested stock options are included if you indicated, on the Stock Options page, that the options vest at death. In the event Qualified Retirement Plans, IRAs, and Tax-deferred Annuities are used to fund the Bypass Trust, the program assumes the spouse has disclaimed the assets and the contigent beneficiary is a 'qualified' trust. In the event Other Assets, such as a Primary Residence or Personal Property, are used to fund the Bypass Trust, the program assumes these assets have a specific value and can in fact be used to fund the Bypass Trust. If applicable, the value of any payment that continues past death created by the Immediate Annuity Goal Strategy is not included in the estate calculations. 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 66 of 89

75 state Analysis Results Combined Summary Using odel 6 - Target - Both Die at life expectancy - John Predeceases Jane xisting state Will without Bypass Trust Will with Bypass Trust Amount to Heirs : Additional Value to Heirs : Amount to Heirs Net state Value : Bypass Trust : Other Life Insurance : Life Insurance in Trust : Total : Cash Needed to Pay Tax and xpenses Shortfall at First Death : Shortfall at Second Death : $18,877,218 $9,773,467 $9,41,53 $478,55 $48,975 $8,625,21 $9,427,189 state xpenses : $81,989 $8,625,21 $8,35,72 $ $1,391,487 $ $ $ $ $8,625,21 $9,427,189 $ $ $ $ $ $ Federal state Tax** : $18,877,218 Total state : xisting state Bypass Trust Funding Funding Shortfall : ** State state Taxes are not included. In some states, the tax may be substantial. 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 67 of 89

76 state Analysis Results Combined Summary Using odel 6 - Target - Both Die at life expectancy - John Predeceases Jane Notes The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 21 ("the Act") modified several provisions of the Federal state & Gift Tax for 211 and 212. As specified in the Act, this analysis incorporates the 35% estate tax rate, the $5 million per person applicable exclusion amount, and the unification of the Gift Tax and state Tax systems for the $5 million exclusion amount. In addition, the portability of the deceased spouse s unused estate exclusion amount (DSUA) to the surviving spouse is reflected in this analysis. If Congress amends or extends the Act, or amends other provisions of the Federal state & Gift Tax, any analysis for future years should be reviewed by you and your tax advisors. Prior gifts are not included in the amount to heirs. 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 68 of 89

77 state Analysis Results Flowchart xisting state without Bypass Trust using odel 6 - Target - Both Die at life expectancy - John Predeceases Jane John's Gross state $1,46,436 1st Death Taxes and xpenses Bypass Trust Other Life Insurance arital Deduction $32,867 Transfer : $ $1,13,568 $ Jane's Gross state 2nd Death Taxes and xpenses $1,219,15 ILIT Policies Owned by Other $ $18,844,35 To Heirs : $ Total Amount to Heirs $8,625,21 + $ + = $ + $ $8,625,21 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 69 of 89

78 state Analysis Results Flowchart Notes Gross state amounts may include the value of reverted gifts. Other Life Insurance includes policies where the first person to die is the owner and insured and the beneficiary of the policy is not the co-client or estate. Gross state amounts do not include the value of prior gifts. The Bypass Trust may not be fully funded to the available estate exemption equivalent amount due to prior gifts, titling of assets, insufficient resources, and/or other bequests. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 21 ("the Act") modified several provisions of the Federal state & Gift Tax for 211 and 212. As specified in the Act, this analysis incorporates the 35% estate tax rate, the $5 million per person applicable exclusion amount, and the unification of the Gift Tax and state Tax systems for the $5 million exclusion amount. In addition, the portability of the deceased spouse s unused estate exclusion amount (DSUA) to the surviving spouse is reflected in this analysis. If Congress amends or extends the Act, or amends other provisions of the Federal state & Gift Tax, any analysis for future years should be reviewed by you and your tax advisors. 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 7 of 89

79 state Analysis Results Flowchart xisting state with Bypass Trust using odel 6 - Target - Both Die at life expectancy - John Predeceases Jane John's Gross state $1,46,436 1st Death Taxes and xpenses Bypass Trust Other Life Insurance arital Deduction $32,867 Transfer : $1,, $9,13,568 $ Jane's Gross state 2nd Death Taxes and xpenses $9,417,161 ILIT Policies Owned by Other $ $17,452,863 To Heirs : $1,391,487 Total Amount to Heirs $8,35,72 + $1,391,487 = + $ + $ $9,427,189 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 71 of 89

80 state Analysis Results Flowchart Notes Gross state amounts may include the value of reverted gifts. Other Life Insurance includes policies where the first person to die is the owner and insured and the beneficiary of the policy is not the co-client or estate. Gross state amounts do not include the value of prior gifts. The Bypass Trust may not be fully funded to the available estate exemption equivalent amount due to prior gifts, titling of assets, insufficient resources, and/or other bequests. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 21 ("the Act") modified several provisions of the Federal state & Gift Tax for 211 and 212. As specified in the Act, this analysis incorporates the 35% estate tax rate, the $5 million per person applicable exclusion amount, and the unification of the Gift Tax and state Tax systems for the $5 million exclusion amount. In addition, the portability of the deceased spouse s unused estate exclusion amount (DSUA) to the surviving spouse is reflected in this analysis. If Congress amends or extends the Act, or amends other provisions of the Federal state & Gift Tax, any analysis for future years should be reviewed by you and your tax advisors. 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 72 of 89

81 state Analysis What If Results Combined Summary Using odel 6 - Target - Both Die at life expectancy - John Predeceases Jane $18,877,218 Additional Value to Heirs : Amount to Heirs and Charities Net state Value : Bypass Trust : Other Life Insurance : Life Insurance in Trust : Total : Cash Needed to Pay Tax and xpenses Shortfall at First Death : Shortfall at Second Death : $19,784,444 $9,773,467 $8,988,412 $478,55 $43,937 $8,625,21 $1,392,95 Amount to Heirs : state xpenses : Total state : Federal state Tax** : state Scenario 1 xisting state $1,766,895 $8,625,21 $ $ $ $8,,68 $1,391,487 $ $1,, $8,625,21 $1,392,95 $ $ $ $ $ $ Bypass Trust Funding Funding Shortfall : If you include in your state What-If scenario a change in ownership strategy where the insurance death benefit will not revert at death, the Gross and Taxable state will not include the death benefits from life insurance policies that were transferred within three years of death this option is for illustrative and comparison purposes only. 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 73 of 89

82 state Analysis What If Results Combined Summary Using odel 6 - Target - Both Die at life expectancy - John Predeceases Jane Results for your Goal Plan include the state Strategies selected as shown below. stimated % of Goal Funded xisting state state Scenario 1 N/A 1% 1% 1% Second to Die Policy Retirement - Living xpense Buy Long Term Care Policy for John N/A 134% Travel 1% Leave Bequest 1% Safety argin (Value at nd of Plan) Current dollars : Strategy Description $7,67,124 $18,181,43 Second to Die Policy Second to Die - $1,, $5 premium per year Wealth Transfer (ILIT) 1% $7,646,9 Include Bypass Trust 1% $18,274,368 Future dollars : N/A 134% College - Jimmy Goal Include ** State state Taxes are not included. In some states, the tax may be substantial. Notes Prior gifts are not included in the amount to heirs. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 21 ("the Act") modified several provisions of the Federal state & Gift Tax for 211 and 212. As specified in the Act, this analysis incorporates the 35% estate tax rate, the $5 million per person applicable exclusion amount, and the unification of the Gift Tax and state Tax systems for the $5 million exclusion amount. In addition, the portability of the deceased spouse s unused estate exclusion amount (DSUA) to the surviving spouse is reflected in this analysis. If Congress amends or extends the Act, or amends other provisions of the Federal state & Gift Tax, any analysis for future years should be reviewed by you and your tax advisors. 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 74 of 89

83 state Analysis What If Results Flowchart xisting state without Bypass Trust using odel 6 - Target - Both Die at life expectancy - John Predeceases Jane John's Gross state $1,46,436 1st Death Taxes and xpenses Bypass Trust Other Life Insurance arital Deduction $32,867 Transfer : $ $1,13,568 $ Jane's Gross state 2nd Death Taxes and xpenses $1,219,15 ILIT Policies Owned by Other $ $18,844,35 To Heirs : $ Total Amount to Heirs $8,625,21 + $ + = $ + $ $8,625,21 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 75 of 89

84 state Analysis What If Results Flowchart Notes Gross state amounts may include the value of reverted gifts. Other Life Insurance includes policies where the first person to die is the owner and insured and the beneficiary of the policy is not the co-client or estate. Gross state amounts do not include the value of prior gifts. The Bypass Trust may not be fully funded to the available estate exemption equivalent amount due to prior gifts, titling of assets, insufficient resources, and/or other bequests. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 21 ("the Act") modified several provisions of the Federal state & Gift Tax for 211 and 212. As specified in the Act, this analysis incorporates the 35% estate tax rate, the $5 million per person applicable exclusion amount, and the unification of the Gift Tax and state Tax systems for the $5 million exclusion amount. In addition, the portability of the deceased spouse s unused estate exclusion amount (DSUA) to the surviving spouse is reflected in this analysis. If Congress amends or extends the Act, or amends other provisions of the Federal state & Gift Tax, any analysis for future years should be reviewed by you and your tax advisors. 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 76 of 89

85 state Analysis What If Results Flowchart state Scenario 1 using odel 6 - Target - Both Die at life expectancy - John Predeceases Jane John's Gross state $1,5,123 1st Death Taxes and xpenses Bypass Trust Other Life Insurance arital Deduction $32,447 Transfer : $1,, $8,972,676 $ Jane's Gross state 2nd Death Taxes and xpenses $9,359,92 ILIT Policies Owned by Other $1,, $17,36,51 To Heirs : $1,391,487 Total Amount to Heirs $8,,68 + $1,391,487 = + $ + $1,, $1,392,95 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 77 of 89

86 state Analysis What If Results Flowchart Notes Gross state amounts may include the value of reverted gifts. Other Life Insurance includes policies where the first person to die is the owner and insured and the beneficiary of the policy is not the co-client or estate. Gross state amounts do not include the value of prior gifts. The Bypass Trust may not be fully funded to the available estate exemption equivalent amount due to prior gifts, titling of assets, insufficient resources, and/or other bequests. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 21 ("the Act") modified several provisions of the Federal state & Gift Tax for 211 and 212. As specified in the Act, this analysis incorporates the 35% estate tax rate, the $5 million per person applicable exclusion amount, and the unification of the Gift Tax and state Tax systems for the $5 million exclusion amount. In addition, the portability of the deceased spouse s unused estate exclusion amount (DSUA) to the surviving spouse is reflected in this analysis. If Congress amends or extends the Act, or amends other provisions of the Federal state & Gift Tax, any analysis for future years should be reviewed by you and your tax advisors. 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 78 of 89

87 Appendix

88 Risk Assessment Updated : 11/29/ What is your primary purpose for investing in this account? Investment Account Lump Sum ajor Purchase 1-5 years ducational Planning 6-1 years Current Income 11-2 years Other Over 2 years Do you need current income (that is, will you take regular withdrawals from this account)? Yes No Greater than 6% 3. Greater than 4%, but less than 6% Which of the following statements best describes your attitude towards the trade-off between risk and return? I am willing to accept moderate risk and chance of loss in order to achieve moderate returns. Limiting risk and maximizing return are of equal importance to me. I am primarily concerned with maximizing the returns of my investments. I am willing to accept high risk and high chance of loss to maximize my investment return potential. Greater than 2%, but less than 4% 5. I am most concerned with limiting risk. I am willing to accept lower expected returns in order to limit my chance of loss. If yes, approximately what percentage of the accounts current value do you need annually? Less than 2% Retirement 2. Once you begin to withdraw funds for your primary investment objective, over how long a period do you anticipate the withdrawals to continue? In approximately how many years will you begin withdrawing funds for your investment objective? Immediately 1-5 years 6-1 years 11-2 years Over 2 years 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 79 of 89

89 Risk Assessment Updated : 11/29/ The following graphs show the historical year by year returns for three hypothetical portfolios over a 2 year period. The average annual return over the 2-year period is also indicated. Again, please note that these are examples only, actual results may vary. Given your investment goals for this account, which portfolio would you choose? Portfolio X Portfolio Y Portfolio Y Average Annual Return=9% Portfolio Z Average Annual Return=11% 7. Portfolio X Average Annual Return=6% Portfolio Z The risk of a portfolio suffering a decrease in value (having a negative return) is often a primary concern for investors. To achieve potentially higher returns, however, an investor must be willing to accept greater risk. The following table portrays four different hypothetical $1, portfolios. For each portfolio, the expected value at the end of 1 year is shown along with the probabilities of suffering a decline that year, rather than a gain. Given your investment objective, in which of the 4 hypothetical portfolios would you be most comfortable investing? Portfolio A Portfolio xpected value of $1, after 1 year Chance of losing money after 1 year Portfolio A $17, 19% Portfolio B $18, 23% Portfolio C $19, 26% Portfolio D $11, 28% Portfolio B Portfolio C Portfolio D 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 8 of 89

90 Risk Assessment Updated : 11/29/212 ach bar below shows a range of possible one-year ending values for a $1, initial investment in one of four hypothetical portfolios. The assumed value of the average return for that portfolio is shown in the center of the bar. For example, at the end of a given year, Portfolio A could have an ending value anywhere between $115, (a return of 15%) and $93, (-7% return). The average ending value is approximately $17, (7% return). It is important to remember that the hypothetical portfolios are more likely to achieve the average return over long-term holding periods. The four bars represent the four hypothetical portfolios. (Please note that these are only examples -actual results will vary). Given the possible average, best, and worst outcomes for each portfolio, please indicate which of the four options would be most suitable for this account: Portfolio A Portfolio C I prefer portfolio returns that are expected to return substantially more than inflation over the long run and I am willing to accept large short-term fluctuations in value (and a greater potential for loss) to achieve this goal. I prefer a portfolio that is expected to moderately exceed inflation over the long run and I am willing to accept moderate short-term fluctuations in value (and a moderate potential for loss) to achieve this goal. I prefer to minimize short-term fluctuations in portfolio value (and the potential for loss) as much as possible, even if it means that my portfolio is expected to only keep pace with or slightly exceed inflation. 1. Sometimes investment losses are permanent, sometimes they are prolonged, and sometimes they are short-lived. How might you respond when you experience investment losses? Portfolio D Inflation can greatly erode the return on your investments, especially over time. For example, in a typical year with a 3.5% inflation rate, a 6% return before inflation would have a real return of only 2.5% (6% - 3.5% = 2.5%). Please specify which of the following best summarizes your attitudes regarding investing and inflation. Portfolio B I would sell my investments immediately if they suffered substantial declines. Although declines in investment value make me uncomfortable, I would wait one to two quarters before adjusting my portfolio. I can endure significant declines in the value of my investments and would wait at least one year before adjusting my portfolio. ven if my investments suffered a significant decline over several years, I would continue to follow my long-term investment strategy and not adjust my portfolio. 11. What is your current level of investable assets? Less than $1,, $1,, to $19,999,999 Greater than $2,, 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 81 of 89

91 Tax and Inflation Assumptions Base Inflation Rate Tax Penalty Inflation rate : 2.% Include penalties in Plan? : Social Security Inflation rate : 2.% Tax Relief Acts of 21/21 - Options Tax Assumption Inflation rate : 2.% Use the new Tax Rates for the entire Plan. arginal Tax Rates Before Retirement Tax Free arnings - Options Federal State Local 35.% 7.85%.% Use Tax-Free returns by Asset Class, arginal Tax Rate to use during Retirement is 4.% What portion of your Annual Taxable Investment arnings will not be taxed until withdrawn?.% Long Term Capital Gains (LTCG) - Before Retirement Untaxed Gain on Taxable arnings - Before Retirement 2.% Long Term Capital Gains rate : Use Program estimate What portion of your Taxable Investment arnings will be taxed as Long Term Capital Gains? Tax Rates During Retirement Let the Program calculate taxes each year Deduction estimate : Tax Rates : Local rate : Yes.% Use standard deductions Untaxed Gain on Taxable arnings - During Retirement What portion of your Annual Taxable Investment arnings will not be taxed until withdrawn?.% Long Term Capital Gains (LTCG) - During Retirement What portion of your Taxable Investment arnings will be taxed as Long Term Capital Gains? 2.% Long Term Capital Gains rate : Use Program estimate Taxation of Social Security What portion of Social Security will be taxed? 85.% 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 82 of 89

92 Return ethodology This tool incorporates a methodology for making hypothetical financial projections approved by the organ Stanley Wealth anagement Global Investment Committee. Opinions expressed in this presentation may differ materially from those expressed by other departments or divisions or affiliates of organ Stanley. About Strategic Return stimates, Rate of Return, Standard Deviation, and Asset Class Indices Strategic Return stimates (SRs) What are SRs? How are SRs derived? These assumptions are made using a proprietary methodology using a building block approach. Our SRs reflect expectations for a number of long-term economic and market-related factors we expect to influence capital market returns, such as population growth, productivity, earnings expectations, etc. Index returns are used for calculation of volatility and correlations. For most indices we use data since 199. Regarding several types of alternative investments such as hedge funds, private equity and real estate, we apply significant statistical adjustments to historical returns in order to correct for distortions such as survivorship biases, selection biases and price staleness. What else is important to know? It is important to remember that future rates of return can't be predicted with certainty and that investments that may provide higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time. This includes the potential loss of principal on your investment. 1 Indices illustrate the investment performance of instruments that have certain similar characteristics and are intended to reflect broad segments of an asset class. Indices do not represent the actual or hypothetical performance of any specific investment, including any individual security within an index. Although some indices can be replicated, it is not possible to directly invest in an index. It is important to remember the investment performance of an index does not reflect deductions for investment charges, expenses, or fees that may apply when investing in securities and financial instruments such as commissions, sales loads, or other applicable fees. Also, the stated investment performance assumes the reinvestment of interest and dividends at net asset value without taxes, and also assumes that the portfolio is consistently rebalanced to the initial target weightings. 1 Asset allocations which deviate significantly from the initial weightings can significantly affect the likelihood of achieving the projected investment performance. These Strategic Return stimates (SRs) represent one set of assumptions regarding rates of return for specific asset classes approved by the organ Stanley Wealth anagement Global Investment Committee. However, this tool allows you to modify the SRs in what-if scenarios and/or stress testing to include your own assumptions about the rates of return you may expect to receive on various asset classes. Changing these assumptions can change the program results. Investors should carefully consider several important factors when making asset allocation decisions using projected investment performance data based on assumed rates of return of indices: organ Stanley Wealth anagement Global Investment Committee Strategic Return stimates ethodology Another important factor to keep in mind when considering the historical and projected returns of indices is that the risk of loss in value of a specific asset, such as a stock, a bond or a share of a mutual fund, is not the same as, and does not match, the risk of loss in a broad asset class index. As a result, the investment performance of an index will not be the same as the investment performance of a specific instrument, including one that is contained in the index. Such a possible lack of investment performance correlation may also apply to the future of a specific instrument relative to an index. For these reasons, the ultimate decision to invest in specific instruments should not be premised on expectations that the historical or projected returns of indices will be the same as those for specific investments made. Rates of Return, Standard Deviation, and Asset Class Indices Standard deviation is a common risk measurement that estimates how much an investment s return will vary from its predicted average. Generally, the higher an investment s standard deviation, the more widely its returns will fluctuate, implying greater volatility. In the past, asset classes that have typically provided the highest returns have also carried greater risk. For purposes of this report, the standard deviation for the asset classes shown below are calculated using data going back to 199. Rebalancing describes the discipline of selling assets and buying others to match the target weightings of an asset allocation model. Because assets increase and decrease in value over time, the percentage amounts of assets invested in each class will tend to vary from their original target weightings. 12/3/212 Prepared by: organ Stanley Page 83 of 89

93 Return ethodology It is important to note that the rates of return of the listed indices may be significantly different than the SR or your own assumptions about the rates of return used in the report. As always, keep in mind that past performance is no guarantee of future results. SRs are for illustrative purposes only and are not indicative of the future performance of any specific investment. Performance of an asset class within a portfolio is dependent upon the allocation of securities within the asset class and the weighting or the percentage of the asset class within that portfolio. Potential for a portfolio s loss is exacerbated in a downward trending market. A well-diversified portfolio is less vulnerable in a falling market. Asset allocation and diversification, however, do not assure a profit or protect against loss in a declining market. While organ Stanley Wealth anagement has not designed its forecasting methodologies to match or address its inventory as a broker-dealer of financial products, an appearance of a conflict of interest could exist in which the organ Stanley Wealth anagement forecasts, if followed, guide investors in directions that support organ Stanley Wealth anagement's inventory. To the extent this is a concern to customers, they should request that a forecast be prepared using a different third party methodology, either alone or in conjunction with a organ Stanley Wealth anagement model for comparison purposes. A organ Stanley Financial Advisor is available to explain the different methodologies and can compare and contrast different models upon request. organ Stanley Wealth anagement Global Investment Committee Strategic Return stimates ethodology (continued) Asset class returns and standard deviations of returns projections are based on reasoned estimates of drivers of capital market returns and historical relationships. As with any forecasting discipline, the assumptions and inputs underlying organ Stanley Wealth anagement s forecasting process may or may not reconcile with, or reflect, each investor s individual investment horizon, risk tolerance, capital markets outlook, and world view. For these reasons, and because forecasting methods are complicated, investors are encouraged to discuss forecasting with a organ Stanley Financial Advisor. As described, financial forecasting involves developing a methodology for extracting expected returns and standard deviations of returns from historical data. ach forecasting methodology is developed by selecting objective and subjective factors that vary among those developing the forecast model. organ Stanley Wealth anagement has formulated several different methodologies and makes its forecasts available to organ Stanley customers. Customers may choose one of organ Stanley Wealth anagement's forecasting models or, instead, if using a different financial planning tool, a forecasting methodology developed by a third party. Differences exist between the various methodologies because different objective and subjective factors are incorporated into each methodology. These differences can include: the indices used as proxies for various asset categories and classes, the length of time historical index data is input into the calculations, and the resulting expected returns and volatility for each asset class. ach model may cover a greater or lesser number of asset classes than other models, the indices used as asset class representations may be different for certain classes of assets in the models, and organ Stanley Wealth anagement has more asset classes in the Alternative Investments asset category than are available in other models. Additionally, other differences may develop in the future as these methodologies are dynamic in nature and are likely to change over time. 12/3/212 Prepared by: organ Stanley Page 84 of 89

94 Return ethodology Asset Class Return Index Cash - USD (9-day Tbills) Bloomberg US Generic Government 3 onth Yield Global Govt/Govt-Related Bonds (hedged to USD) Barclays Capital Global Aggregate: Govt/Govt-Related (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) Barclays Capital Global Aggregate: Corporate/Securitized (hedged to USD) Global merging arkets Local Debt (unhedged) JP GBI- Global Diversified Composite (unhedged USD) US Large-Cap Value Stocks Russell 1 Value US Large-Cap Growth Stocks Russell 1 Growth US id-cap Value Stocks Russell id Cap Value US id-cap Growth Stocks Russell id Cap Growth US Small-Cap Value Stocks Russell 2 Value US Small-Cap Growth Stocks Russell 2 Growth Developed-arket ex US Stocks (unhedged) SCI World ex US II Global merging arket Stocks (unhedged) SCI F II Global RITs (unhedged) FTS PRA NARIT Global Total Return Commodities DJ/UBS Commodity Total Return Broad Fund of Hedge Funds anaged Futures US Private quity US Private Real state Funds Barclays Capital Global High Yield (hedged to USD) Global Inflation-Linked Securities (unhedged) Barclays Capital Global Treasury (1-3 Year) (hedged to USD) Barclays Capital Universal Govt Inflation-Linked All aturities (unhedged) S AIP, HFRI Fund of Funds Composite Barclay BTop5 Venture conomics NCRIF Townsend Source: organ Stanley Wealth anagement Global Investment Committee 12/3/212 Prepared by: organ Stanley Page 85 of 89

95 Glossary of Terms Adjusted Real Return Stocks Adjusted Real Return is the Real Return minus the Total Return Adjustment. Stocks are equity securities of domestic and foreign corporations. (See "Stocks" in the "Key Asset Class Risk Considerations" section of this report for a summary of the risks associated with investing in stocks.) Your Alternative Portfolio is a modification of the Risk Based Portfolio. In order for the Alternative Portfolio to be selected as the Target Portfolio, it must fall within the defined constraints. Asset Allocation Asset Allocation is the process of determining what portions of your portfolio holdings are to be invested in the various asset classes. Asset Class is a standard term that broadly defines a category of investments. The three basic asset classes are Cash, Bonds, and Stocks. Bonds and Stocks are often further subdivided into more narrowly defined classes. Some of the most common asset classes are defined below. Cash Cash and Cash Alternatives are investments of high liquidity and safety with a known market value and a very short-term maturity. xamples are treasury bills and money market funds. (See "oney arket Funds" in the "Key Asset Class Risk Considerations" section of this report for a summary of the risks associated with investing in oney arket Funds.) Bonds Bonds are either domestic (U.S.) or global debt securities issued by either private corporations or governments. (See Fixed Income" in the "Key Asset Class Risk Considerations" section of this report for a summary of the risks associated with investing in bonds. Bonds are also called fixed income securities. ) Domestic government bonds are backed by the full faith and credit of the U.S. Government and have superior liquidity and, when held to maturity, safety of principal. Domestic corporate bonds carry the credit risk of their issuers and thus usually offer additional yield. Domestic government and corporate bonds can be sub-divided based upon their term to maturity. Short-term bonds have an approximate term to maturity of 1 to 5 years; intermediate-term bonds have an approximate term to maturity of 5 to 1 years; and, long-term bonds have an approximate term to maturity greater than 1 years. 12/3/212 Large cap, mid cap and small cap may be further sub-divided into "growth" and "value" categories. Growth companies are those with an orientation towards growth, often characterized by commonly used metrics such as higher price-to-book and price-to-earnings ratios. Analogously, value companies are those with an orientation towards value, often characterized by commonly used metrics such as lower price-to-book and price-to-earnings ratios. Asset Class Domestic stocks are equity securities of U.S. corporations. Domestic stocks are often sub-divided based upon the market capitalization of the company (the market value of the company's stock). "Large cap" stocks are from larger companies, "mid cap" from the middle range of companies, and "small cap" from smaller, perhaps newer, companies. Generally, small cap stocks experience greater market volatility than stocks of companies with larger capitalization. Small cap stocks are generally those from companies whose capitalization is less than $5 million, mid cap stocks those between $5 million and $5 billion, and large cap over $5 billion. Alternative Portfolio International stocks are equity securities from foreign corporations. International stocks are often sub-divided into those from "developed" countries and those from "emerging markets." The emerging markets are in less developed countries with emerging economies that may be characterized by lower income per capita, less developed infrastructure and nascent capital markets. These "emerging markets" usually are less economically and politically stable than the "developed markets." Investing in international stocks involves special risks, among which include foreign exchange volatility and risks of investing under different tax, regulatory and accounting standards. Asset ix Asset ix is the combination of asset classes within a portfolio, and is usually expressed as a percentage for each asset class. Bear arket Loss The Bear arket Loss shows how a portfolio would have been impacted during the Great Recession (November 27 through February 29) or the Bond Bear arket (July 1979 through February 198). 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. See Bear arket Test, Great Recession Return, and Bond Bear arket Return. Prepared by: organ Stanley Page 86 of 89

96 Glossary of Terms Fund All Goals The Bear arket Test, included in the Stress Tests, examines the impact on your Plan results if a Bear arket Loss occurred this year. The Bear arket Test shows the likelihood that you could fund your Needs, Wants and Wishes after experiencing such an event. See Bear arket Loss. Fund All Goals is one of two ways for your assets and retirement income to be used to fund your goals. The other is armark, which means that an asset or retirement income is assigned to one or more goals, and will be used only for those goals. Fund All Goals means that the asset or income is not earmarked to fund specific goals, and can be used to fund any goal, as needed in the calculations. The {} default is Fund All Goals, except for 529 Plans and Coverdell IRAs, which are generally used only for college goals. Fund All Goals is implemented as either Importance Order or Time Order funding. Importance Order means that all assets are used first for the most important goal, then the next most important goal, and so on. Time Order means that all assets are used first for the goal that occurs earliest, then the next chronological goal, and so on. Bond Bear arket Return Cash Receipt Schedule A Cash Receipt Schedule consists of one or more years of future after-tax amounts received from the anticipated sale of an Other Asset, exercising of Stock Options grants, or proceeds from Restricted Stock grants. Concentrated Position Current Dollars The Results of LifeView Advisor calculations are in Future Dollars. To help you compare dollar amounts in different years, we also express the Results in Current Dollars, calculated by discounting the Future Dollars by the sequence of inflation rates used in the Plan. Current Portfolio Your Current Portfolio is comprised of all the investment assets you currently own (or a subset of your assets, based on the information you provided for this Plan), categorized by Asset Class and Asset ix. 12/3/212 The Great Recession Return is the rate of return for a cash-bond-stock portfolio during the Great Recession (November 27 through February 29), the worst bear market for stocks since the Great Depression. LifeView Advisor shows a Great Recession Return for your Current, Risk-based, and Target Portfolios, calculated using historical returns of three broad-based asset class indices. See Bond Bear arket Return. See onte Carlo Confidence Zone. Future Dollars are inflated dollars. The Results of LifeView Advisor calculations are in Future Dollars. To help you compare dollar amounts in different years, we discount the Future Dollar amounts by the inflation rates used in the calculations and display the Results in the equivalent Current Dollars. Great Recession Return A Concentrated Position is when your portfolio contains a significant amount (as a percentage of the total portfolio value) in individual stock or bonds. Concentrated Positions have the potential to increase the risk of your portfolio. Confidence Zone Future Dollars The Bond Bear arket Return is the rate of return for a cash-bond-stock portfolio during the Bond Bear arket (July 1979 through February 198), the worst bear market for bonds since the Great Depression. LifeView Advisor shows a Bond Bear arket Return for your Current, Risk-based, and Target Portfolios, calculated using historical returns of three broad-based asset class indices. See Great Recession Return. Bear arket Test Inflation Rate The Inflation Rate is the percentage increase in the cost of goods and services for a specified time period. A historical measure of inflation is the Consumer Price Index (CPI). Liquidity Liquidity is the ease with which an investment can be converted into cash. odel Portfolio These five portfolios (Conservative, oderate Conservative, oderate, oderate Aggressive, Aggressive) are the available models as a result of the risk questions answered in the Risk Tolerance Questionnaire. Prepared by: organ Stanley Page 87 of 89

97 Glossary of Terms onte Carlo Confidence Zone Probability of Success / Probability of Failure The onte Carlo Confidence Zone is the range of probabilities that you (and/or your financial advisor) have selected as your target range for the onte Carlo Probability of Success in your Plan. The Confidence Zone reflects the onte Carlo Probabilities of Success with which you would be comfortable, based upon your Plan, your specific time horizon, risk profile, and other factors unique to you. See onte Carlo Probability of Success / Probability of Failure. onte Carlo Simulations In LifeView Advisor, you choose an importance level from 1 to 1 (where 1 is the highest) for each of your financial goals. ach importance level is defined to be a Need, Want, or Wish. Needs are the goals that you consider necessary for your lifestyle, and are the goals that you must fulfill. Wants are the goals that you would really like to fulfill, but could live without. Wishes are the dream goals that you would like to fund, although you won t be too dissatisfied if you can t fund them. In LifeView Advisor, Needs are your most important goals, then Wants, then Wishes. Portfolio Set A Portfolio Set is a group of portfolios that provides a range of risk and return strategies for different investors. Portfolio Total Return A Portfolio Total Return is determined by weighting the return assumption for each Asset Class according to the Asset ix. Also see xpense Adjustments. 12/3/212 Risk is the chance that the actual return of an investment, asset class, or portfolio will be different from its expected or average return. Risk Based Portfolio Your Risk Based Portfolio is based on the results of your Risk Tolerance Questionnaire. You are scored into one of the odel Portfolios. Standard Deviation Standard Deviation is a statistical measure of the volatility of an investment, an asset class, or a portfolio. It measures the degree by which an actual return might vary from the average return, or mean. Typically, the higher the standard deviation, the higher the potential risk of the investment, asset class, or portfolio. 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). Needs Risk The onte Carlo Probability of Success is the percentage of trials of your Plan that were successful. If a onte Carlo simulation runs your Plan 1, times, and if 6, of those runs are successful (i.e., all your goals are funded and you have at least $1 of Safety argin), then the Probability of Success for that Plan, with all its underlying assumptions, would be 6%, and the Probability of Failure would be 4%. The Real Return is the Total Return of your portfolio minus the Inflation Rate. onte Carlo Probability of Success / Probability of Failure Real Return Target Portfolio Your Target Portfolio is the portfolio you have selected based upon your investment objectives and your risk tolerance. The Target Portfolio will be the same as the Risk Based Portfolio unless you choose an Alternative Portfolio or a odel Portfolio. Time Horizon Time Horizon is the period from now until the time the assets in this portfolio will begin to be used. Total Return Total Return is the assumed growth rate of your portfolio for a specified time period. The Total Return is either (1) determined by weighting the return assumption for each Asset Class according to the Asset ix or (2) is entered by you or your financial advisor (on the What If Worksheet). Also see Real Return. Total Return Adjustment Total Return Adjustment allows you and your Financial Advisor to model hypothetical What-If scenarios by decreasing the Total Return without adjusting the Target Portfolio or the Standard Deviation. This may be a useful part of the analysis to help you understand the impact of a lower Total Return. Prepared by: organ Stanley Page 88 of 89

98 Glossary of Terms Unclassified Securities Unclassified Securities are not included in any of the pre-defined asset class categories that serve as proxies for modeling asset allocation. Wants See "Needs". Wishes See "Needs". In LifeView Advisor, in addition to specifying Target Goal Amounts, a Target Savings Amount, and Target Retirement Ages, you also specify a Willingness to adjust these Target values. The Willingness choices are Very Willing, Somewhat Willing, Slightly Willing, and Not at All. Willingness 12/3/212 Prepared by: organ Stanley Page 89 of 89