LIFETIME INCOME CASE STUDY

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1 The High Stakes of Leaving a High-Tax State LIFETIME INCOME CASE STUDY Donald and Sheryl Lotsabucks Registered Investment Advisor Presented by Financial Sense Advisors, Inc.

2 Important Notice: This is a hypothetical illustration based on real life examples. Names and circumstances have been changed. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or strategies may be appropriate for you, consult with a financial advisor prior to investing. Financial Sense Advisors, Inc. Registered Investment Advisor

3 WHO ARE DONALD & SHERYL? Age: 63 & 64 Job: Defense Contractor & Educator - Donald likes idea of staying in the bay area but concerned about CA s high taxes - Sheryl would like to relocate somewhere quieter and slower paced - Seeking a professional to help determine how they can retire most comfortably

4 WHAT IS IMPORTANT TO DONALD? Being able to retire soon Living the lifestyle they desire Donald Managing high taxes

5 WHAT IS IMPORTANT TO SHERYL? Relocating to a more peaceful place Spending more time with family Sheryl Enjoying a better lifestyle in retirement

6 DONALD & SHERYL S CURRENT RISK TOLERANCE? Most Conservative Most Aggressive Current Risk Score Portfolio Risk Score 48 52

7 DONALD & SHERYL S CURRENT BUDGET Income Expenses $260,000 ($230,000) Discretionary 30% Surplus $30,000 Living Expenses 70%

8 DONALD & SHERYL S RETIREMENT BUDGET IF RESIDING IN CALIFORNIA Income Expenses $170,000 ($227,000) Discretionary 28% Shortfall ($57,000) Living Expenses 72%

9 DONALD & SHERYL S RETIREMENT BUDGET IF RELOCATING TO ANOTHER STATE Income Expenses $170,000 ($205,000) Discretionary 32% Shortfall ($35,000) Living Expenses 68%

10 DONALD & SHERYL S BALANCE SHEET + - = Portfolio Liabilities Home Net Worth $1,300,000 $1,712,000 ($359,000) $2,653,000

11 DONALD & SHERYL S ASSET ALLOCATION 35% 15% 2% 48% Asset Allocation Stocks Bonds Cash Hard Assets

12 DONALD & SHERYL S FINANCIAL PLAN CHALLENGES 1. Getting them to agree on where to relocate. 2. Managing expenses in retirement. 3. Closely monitoring taxes.

13 DONALD & SHERYL S RETIREMENT INCOME STRATEGY IF RELOCATING TO ANOTHER STATE Pension + Social Security + = Portfolio $ Total Income $121,000 $49,000 $53,504 $223,504 Investment Portfolio Donald Retire. $1.12M Stocks & 3.2% 1 $35,840 Sheryl s Retire. $282K Stocks & 3.2% 2 $9,024 Taxable Accts. $270K Stocks & 3.2% 3 $8,640 PMs and Cash $40K Expenses Surplus ($205,000) $18,504 1,2 & 3: Yields are for current portfolio yields as of 4/30/18. Please see disclosures at the end of this presentation for security risks.

14 GOAL BASED RECOMMENDATIONS FOR DONALD & SHERYL Deciding a place to retire Vacation to places they would consider living Helped them explore what they want retirement to look like Living lavishly in retirement Sell CA home and purchase cheaper property in different state Relocating would lower living expenses and create additional assets to fund retirement Managing taxes Advised them to work with CPA to determine projected taxes for each state they considered moving to Breaking clean from CA Sell all property and interests in CA Establish residency in new state and update estate plan Work with attorney to tie-up potential loose ends

15 Disclosures: 1. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. 2. The payment of dividend is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time. 3. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Financial Sense Advisors, Inc. Registered Investment Advisor

16 Financial Sense Advisors, Inc. Registered Investment Advisor If you have any specific questions or comments, please give us a call at (858) We re happy to speak with you. Post Office Box San Diego, CA Thornmint Road 2nd Floor - San Diego, CA (888) Toll Free (858) Tel (858) Fax Advisory services offered by Financial Sense Advisors, Inc. An SEC Registered Investment Advisor.