REPORT PREPARED FOR Client Sample & Co-client Sample

Transcription

1 REPORT PREPARED FOR Client Sample & Co-client Sample by Steve Harvey Steve Harvey LLC Generated on 01/30/2019 Steve Harvey 119 Oronoco Street, Suite 102 Alexandria, Virginia

2 Important Information This report is intended to provide you with an analysis of your financial plan. It is based on the data and assumptions provided by you and your financial advisor including but not limited to asset expected returns, volatility, and inflation assumptions. Detailed information regarding assumptions can be found on the disclosure page of this report. The report shows comparisons of your current plan and a proposed plan. The proposed plan is a recommendation formulated by your financial advisor. The report also shows comparisons of your current asset allocation and a proposed asset allocation. The proposed asset allocation is the recommendation formulated by your advisor. The report shows the Probability of Success of your plan using a Monte Carlo simulation calculated by running the projection 1,000 separate times. Some sequences of returns used in the Monte Carlo simulation will give you better results, and some will give you worse results. These multiple trials provide a range of possible results. RightCapital considers a trial to be successful if, at the end of your planning horizon, your invested assets are greater than zero. The percentage of trials that were successful is the Probability of Success of your plan, with all its underlying assumptions. Detailed disclosure regarding the calculations can be found on the disclosure page of this report.

3 Balance Sheet Just like any well-run business, your personal balance sheet should always be in check. Your net worth is the difference between your assets and your liabilities. Assets are everything you own such as your home and investments, and liabilities are everything you owe such as the balance on your mortgage and other debt. $ 600k Your net worth is $ 455,786 as of 1/30/19 $ 500k $ 400k $ 300k $ 200k $ 100k Assets Liabilities Net worth DETAILS Assets Liabilities Net Worth Bank Invested assets $ 490,786 Real estate assets Life insurance cash value Other assets Total assets $ 490,786 Credit cards $ 35,000 Mortgages Home equities Student loans Other debts Total liabilities $ 35,000 $ 455,786

4 Description Client Co-client Joint Trust Total Cash and Invested Assets Client s Investment Account $ 271,432 $ 271,432 Client s Investment Account $ 51,400 $ 51,400 Co-client s Investment Account $ 167,954 $ 167,954 Total Cash and Invested Assets $ 322,832 $ 167,954 $ 490,786 Other Assets Total Other Assets Liabilities Client s Card $ 35,000 $ 35,000 Total Liabilities $ 35,000 $ 35,000 Total Net Worth $ 287,832 $ 167,954 $ 455,786

5 Liquidity If a job loss or other financial hardship arises, a liquid emergency fund can help pay bills without dipping into savings or using high interest credit or loans. Your emergency fund should include easily accessible funds like cash and money market funds. $ 40k Liquidity analysis $ 20k ($ 20k) ($ 40k) Target Liquidity Actual Liquidity Surplus/Deficit ACTION ITEMS Liquidity target 3 months of living expenses

6 Budgeting The budgeting tool is only available if you link at least one account with transactions.

7 Debt Management Balance of selected debt $ 2.5mm $ 2mm $ 1.5mm $ 1mm Total savings of and debt free 0 months sooner $ 500k 5/2023 9/2027 1/2032 5/2036 9/2040 1/2045 5/2049 9/2053 1/2058 5/2062 Proposed Current ACTION ITEMS Proposed debt strategy Proposed monthly payment Strategy Keep current payment Current total monthly payment Proposed additional monthly payment Include the following debts in the payment strategy Proposed total monthly payment.00 Client s Card $ 35,000

8 Proposed payments for next month Debt Name Balance Interest Rate Minimum Payment Current Payment Proposed Payment Client s Card

9 Student Loans You don t have any student loans. You can add student loans in the Profile Net Worth page.

10 Tasks Below are important tasks that you need to complete. After the tasks are completed, please check off the proper boxes. Status Due date Assigned to Task

11 Asset Allocation Current allocation Target allocation All Accounts Moderate 64% / 36% Equity / Fixed Income 61% U.S. Equities 38.6% 0.4% International Equities 14.5% 0.1% Emerging Markets 4.5% 2.2% Real Estate 2.5% 30.1% U.S. Bonds 29.1% 2.7% International Bonds 4.8% 3.4% Cash 6% 0.1% Other 0% 60% / 40% Equity / Fixed Income Annual return: 8.1% Standard deviation: 11.1% Annual return: 7.9% Standard deviation: 10.2% Current Target Large Growth 28.5% 16% U.S. Equities Large Value 19.9% 16% Mid Cap 9.3% 3.3% Small Cap 3.3% 3.3% International Equities International Equities 0.4% 14.5% Emerging Markets Emerging Markets 0.1% 4.5% Real Estate Real Estate 2.2% 2.5% Government 14.3% 8% U.S. Bonds Municipal 0.2% 1% Corporate 15.6% 16.1% High Yield 0% 4% International Bonds International Bonds 2.7% 4.8% Cash Cash 3.4% 6% Other Other 0.1% 0% -15% -10% -5% 0% 5% 10% 15% 20% Please refer to sections 5 and 8.4 of the disclosure section for more information.

12 ACTION ITEMS To balance back to your target portfolio U.S. Equities $ 109,936 International Equities $ 69,201 Emerging Markets $ 21,595 Real Estate $ 1,472 U.S. Bonds $ 4,908 International Bonds $ 10,307 Cash $ 12,760 Other $ 491 This page shows a need to increase or decrease the amounts currently represented in these asset classes of the current portfolio.

13 Equity Sector and Style Equity investments can be categorized according to sectors. They are also each assigned a style based on their market cap and valuation. It is important to construct a well-diversified equity portfolio across sectors and styles that balances risk with return, while at the same time meeting your specific financial goals. Sector and Style data is provided by Morningstar. 40% Equity sector comparison 30% 20% 10% 0% Basic Materials Consumer Cyclical Financial Services Real Estate Communication Services Energy Industrials Technology Consumer Defensive Health Care Utilities Not Classified Your portfolio Market index ACTION ITEMS Comparison to a broad market index Amongst the equity sector, you are most overweight in Technology and underweight Energy. Equity style comparison Your portfolio compare to Market index Large 22% 32% 25% Large 24% 24% 24% Market cap Mid 5% 5% 5% Market cap Mid 6% 6% 7% Small 2% 2% 2% Small 3% 3% 3% Value Blend Growth Value Blend Growth Valuation Valuation ACTION ITEMS Comparison to a broad market index Amongst the equity styles, you are most overweight in Large Blend and most underweight in Large Value. * Broad market index refers to the Vanguard Total Stock Market Index. These broad investment categories are not specific securities, funds, or investment products. The assumed rates of return of these broad categories are based on the return of indices. Please refer to section 8.4 of the disclosure section for more information.

14 Concentrated Position A portfolio that is too heavy in just one security poses a substantial downside risk. This is often defined as "putting all your eggs in one basket." Your concentration position is identified as individual stocks that exceed 5% of the entire portfolio. Diversification Concentrated position summary Ticker Value % of total 94% diversified AAPL $ 30, % Concentrated position Other ACTION ITEMS To remove concentrated position Consider liquidating $ 30,936 of AAPL from Client s Investment Account account. The transaction cost of liquidation is not included in the analysis. The liquidation will also result in the loss of future earnings.

15 Tax Allocation Tax deferred asset include assets in your 401(k)/403(b), Traditional IRA, SEP IRA, Simple IRA and other accounts you specified as tax deferred. Tax free assets include assets in your Roth 401(k), Roth IRA, 529, Health saving accounts and other account you specified as tax free accounts. The taxability of the aforementioned are based on a variety of factors. Please consult a qualified tax professional to discuss your individual tax situation. Tax allocation summary Your Portfolio Taxable asset $ 490,786 Tax deferred asset Tax free asset Taxable Tax deferred Tax free ACTION ITEMS

16 Retirement Analysis Use of a detailed retirement analysis tool is important to help determine whether you are on track for a successful retirement. Monte Carlo simulations, stress tests, and viewing specific scenarios can help you evaluate your retirement plans and see the impact of potential changes. Proposed plan Current plan $ 3mm $ 3mm 70% $ 2mm 70% $ 2mm Probability of success $ 1mm 1,959,560 Probability of success $ 1mm 1,959,560 Asset simulation results $ 12.5mm $ 10mm $ 7.5mm $ 5mm $ 2.5mm % Confidence Level 25-75% Confidence Level Median This section of the report displays the results of Monte Carlo simulations run on the current and proposed plans. The results are derived from 1000 simulations and the specified retirement cash flows. The first chart of probability of success represents the overall likelihood of success in both the current and proposed plan. The second chart illustrates the likelihood of achieving a given net worth over time. IMPORTANT: The projections or other information generated by RightCapital regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results are based on return and volatility assumptions from a number of market indices shown in disclosure sections 5, 6 and 8.4. Fees and expenses are not included, and thus, are excluded, including, but not limited to, fund fees, account fees, product fees and advisor fees. Inclusion of those fees results in lower returns, which would affect the probability of achieving any particular outcome. Results may vary with each use and over time. The analysis must be reviewed in conjunction with assumptions, limitations and methodologies in the disclosure section. This report is not complete without the accompanying disclosure page.

17 ACTION ITEMS Financial goals Proposed Current Client s retirement age Co-client s retirement age Retirement Monthly Expense $ 7,600 $ 7,600 Income, savings and expenses Strategies Proposed Current Asset allocation Current allocation Current allocation Social Security Current strategy Current strategy Debt strategy Current payments Current payments Student loan strategy Current payments Current payments Client s Taxable Income strategy $ 0 Select an account Client s 401(k) 6 % 6% Co-client s 401(k) 5 % 5% Property and relocation Pre-retirement Living Expe $ 9,500 $ 9,500 IMPORTANT: The projections or other information generated by RightCapital regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results are based on return and volatility assumptions from a number of market indices shown in disclosure sections 5, 6 and 8.4. Fees and expenses are not included, and thus, are excluded, including, but not limited to, fund fees, account fees, product fees and advisor fees. Inclusion of those fees results in lower returns, which would affect the probability of achieving any particular outcome. Results may vary with each use and over time. The analysis must be reviewed in conjunction with assumptions, limitations and methodologies in the disclosure section. This report is not complete without the accompanying disclosure page.

18 Stress Test Even the best retirement plans will be exposed to various risks. These risks can include market volatility, taxation, low Social Security payments, longevity, inflation, and short and long-term health care expenses. It is important to both anticipate and plan for such risks. Doing so can substantially increase your probability of success. 75% Stress test - probability of success 50% 25% 0% Baseline Market crash Taxes Social security Longevity Inflation Health care ACTION ITEMS Equity markets crash by 20% You (and your spouse) will live 5 years longer Tax expense will be higher by 20% Inflation will be higher by 1% Social Security will be reduced by 20% Health care cost will be higher by 20% This section of the report displays the results of Monte Carlo simulations run on various stressed tests. The results are derived from 1000 simulations and the specified retirement cash flows. The probability of success represents the overall likelihood of success in various stress tests. IMPORTANT: The projections or other information generated by RightCapital regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results are based on return and volatility assumptions from a number of market indices shown in disclosure sections 5, 6 and 8.4. Fees and expenses are not included, and thus, are excluded, including, but not limited to, fund fees, account fees, product fees and advisor fees. Inclusion of those fees results in lower returns, which would affect the probability of achieving any particular outcome. Results may vary with each use and over time. The analysis must be reviewed in conjunction with assumptions, limitations and methodologies in the disclosure section. This report is not complete without the accompanying disclosure page.

19 Optimal Social Security Strategy There are as many as 700 different Social Security filing strategies that can be tested in order to identify the optimal Social Security benefit for your specific retirement needs. Compare your optimal strategy to others to see the potential benefit of optimization. Annual cash flow comparison Compare optimal strategy to Annual Cumulative Current Strategy $ 300k $ 200k $ 100k $ 385,368 more from the optimal Social Security filing strategy than Current Strategy Optimal Strategy Current Strategy ACTION ITEMS To obtain maximum Social Security benefit 1. Client applies own retirement/spousal benefit at age Co-client applies own retirement/spousal benefit at age 70.

20 Medicare It is important to select the Medicare options that meet your needs and enroll in Medicare on time. Delayed enrollment can result in penalties and coverage gaps. Your Medicare Considerations Proposed option Original Medicare, Part A, B, D Location Consideration I spend most of my time at home and visit in-network Dr. in my area Flexibility on doctor choices Health Consideration I m healthy and can work with deductible/copay/coinsurance for lower premiums Deductible/copay Risk Consideration I prefer more predictable cost with an out of pocket limit No out of pocket limit Coverage Analysis Description Hospital Insurance Medical insurance Coverage Covered in Medicare Part A Covered in Medicare Part B Proposed option Original Medicare, Part A, B, D Prescription drug Dental, vision and hearing Long term Care Covered in Medicare Part D Not covered Not covered Medicare Enrollment Period Client Sample Social Security at 65 I will have received retirement benefits by age 65 Group Plan Coverage at 65 I have group coverage from me/spouse. Plan covers more than 20 employees Co-client Sample Social Security at 65 I will have received retirement benefits by age 65 Group Plan Coverage at 65 I have group coverage from me/spouse. Plan covers more than 20 employees

21 Medicare Tips Scenario I m turning 65 I have group retiree benefit or COBRA I missed my enrollment period I enrolled in Medicare I enrolled in Medicare Advantage What s my total health care cost? Tip Medicare enrollment is NOT automatic You still need Medicare You have a LIFETIME penalty of higher premiums. You are likely to have months of a coverage gap You cannot contribute to an HSA You don t need a MediGap policy Varying by plan, premium plus out of pocket expenses range from $5,000 to $8,000 per year. ACTION ITEMS Proposed Medicare Choices Original Medicare, Part A, B, D Original Medicare Part A, B, D covers Hospital insurance, Medical insurance and prescription drugs. Dental and vision is NOT included. Original medicare enables you to see Dr. in any location in U.S. Original Medicare has less predictable costs with deductiables, copays, and no out of pocket limit. Your Enrollment Period Client should talk to the group benefit administrator and ask about signing up for Medicare 3 months before Client s 65th birthday. Client will be auto enrolled in Part A and B. Client can consider declining Part A, B coverage, delaying Medicare enrollment, and continuing to use Group plan coverage. Client needs to enroll in Medicare when Client loses Group plan coverage. Co-client should talk to the group benefit administrator and ask about signing up for Medicare 3 months before Co-client s 65th birthday. Co-client will be auto enrolled in Part A and B. Co-client can consider declining Part A, B coverage, delaying Medicare enrollment, and continuing to use Group plan coverage. Co-client needs to enroll in Medicare when Co-client loses Group plan coverage. Start Enrollment To enroll in Medicare part A and B: To enroll in MediGap, Medicare Advantage and Medicare Part D, you need to compare plans from private insurance companies. Start at

22 Summary Proposed plan Cash Inflows Cash Outflows Year Age Income Inflows Planned Distribution Other Inflows Total Inflows Expenses Goals Tax Payment Planned Savings Total Outflows Spend Unsaved Cash Flows Net Flows /48 190, , , ,712 10, ,012 13, /49 195, , ,695 23,374 55,248 10, ,132 0 (12,432) /50 201, , ,662 24,543 57,079 11, ,424 0 (12,853) /51 207, , ,704 25,770 58,783 11, ,730 0 (13,112) /52 213, , ,822 27,058 60,726 11, ,424 0 (13,577) /53 220, , , ,188 12, ,378 18, /54 226, , , ,820 12, ,650 14, /55 233, , , ,924 12, ,487 15, /56 240, , , ,094 13, ,486 16, /57 247, , , ,332 13, ,650 17, /58 255, , , ,689 14, ,034 18, /59 263, , , ,139 14, ,614 19, /60 270, , , ,667 14, ,376 20, /61 279, , , ,274 15, ,325 21, /62 287, , , ,963 15, ,468 22, /63 296, , , ,250 16, ,322 24, /64 304, , , ,099 16, ,854 26, /65 190, , , ,048 7, ,480 0 (11,232) /66 202, , , ,815 7, ,571 0 (4,017) /67 92, , , , ,376 0 (105,129) /68 101,388 69, , , , ,756 0 (31,631) /69 103,923 73, , , , ,063 0 (30,331) /70 106, , , , , , , /71 109, , , , , , , /72 111, , , , , , , /73 114, , , , , , , /74 117, , , , , , , /75 120, , , , , , , /76 123, , , , , , , /77 126, , , , , , , /78 129, , , , , , , /79 133, , , , , , , /80 136, , , , , , , /81 139, , , , , , , /82 143, , , , , , , /83 146, , , , , , , /84 150, , , , , , , /85 154, , , , , , , /86 158, , , , , , , /87 162, , , , , ,061 0 (171,830) /88 166, , , , , ,928 0 (183,197) /89 83, , , , , ,299 0 (203,375) /90 85, , , , , ,059 0 (216,695)

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24 Projection Details of Income Inflows Proposed plan Year Age Salary Selfemployment Social Security Pension Annuity Business Distribution Trust Income Other Income Total Income Inflows /48 190, , /49 195, , /50 201, , /51 207, , /52 213, , /53 220, , /54 226, , /55 233, , /56 240, , /57 247, , /58 255, , /59 263, , /60 270, , /61 279, , /62 287, , /63 296, , /64 304, , /65 148, , , /66 153, , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , , / , ,315

25 Projection Details of Other Inflows Proposed plan Year Age Rental Income Sale of Real Estate Sale of Businesses Sale of Other Assets Options and RSU Insurance Death Benefit Life Insurance Distribution Disability Insurance Benefit LTC Insurance Benefit Total Other Inflows / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /

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27 Projection Details of Expenses Proposed plan Year Age Living Expense Housing Debt Health Care Insurance Premium Rental Outflows Vacation Home Outflows Other Expense Total Expense /48 114, , , /49 116, , , /50 119, , , /51 122, , , /52 125, , , /53 128, , , /54 132, , , /55 135, , , /56 138, , , /57 142, , , /58 145, , , /59 149, , , /60 153, , , /61 157, , , /62 161, , , /63 165, , , /64 169, , , /65 138, ,006 1, , /66 142, ,606 1, , /67 145, , , /68 149, , , /69 153, , , /70 157, , , /71 160, , , /72 164, , , /73 169, , , /74 173, , , /75 177, , , /76 182, , , /77 186, , , /78 191, , , /79 196, , , /80 200, , , /81 206, , , /82 211, , , /83 216, , , /84 221, , , /85 227, , , /86 233, , , /87 238, , , /88 244, , , /89 213, , , /90 218, , ,668

28 Projection Details of Other Expenses Proposed plan Year Age Property Purchase Annuity Purchase Business Purchase Other Asset Purchase Option Exercise All Other Expense Total Other Expense / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /

29 Projection Details of Financial Goals Proposed plan Year Age College Car Vacation Wedding Legacy Other Goals Total Goals / /49 23, , /50 24, , /51 25, , /52 27, , / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /

30 Projection Details of Taxes Proposed plan Year Age Federal State FICA Local Total /48 25,443 9,734 14, , /49 30,255 10,037 14, , /50 31,250 10,349 15, , /51 32,221 10,743 15, , /52 33,302 11,077 16, , /53 29,887 11,421 16, , /54 36,689 11,776 17, , /55 37,906 12,141 17, , /56 39,163 12,518 18, , /57 40,460 12,907 18, , /58 41,799 13,307 19, , /59 43,182 13,720 20, , /60 44,610 14,146 20, , /61 46,083 14,585 21, , /62 47,604 15,037 22, , /63 48,688 15,503 23, , /64 50,297 15,984 23, , /65 24,144 6,493 11, , /66 24,496 6,701 11, , /67 22,238 2, , /68 22,650 2, , /69 23,275 2, , /70 28,655 3, , /71 30,822 4, , /72 33,175 5, , /73 35,777 5, , /74 38,484 6, , /75 41,259 6, , /76 44,329 7, , /77 47,311 8, , /78 50,555 9, , /79 53,835 9, , /80 57,241 10, , /81 60,732 11, , /82 64,382 12, , /83 67,832 13, , /84 71,290 13, , /85 74,602 14, , /86 77,826 15, , /87 26,883 17, , /88 25,275 17, , /89 18,027 20, , /90 15,358 20, ,391

31 Net Worth Proposed plan Year Age Non- Qualified Assets Qualified Assets Options and RSUs Primary and Vacation Homes Investment Properties Business Assets Trust Assets Other Assets Mortgages Other Loans Net Worth / , , , / , , , / , , , / , , , / , , , / , , , / , , , /55 0 1,035, , , /56 0 1,140, ,528 1,057, /57 0 1,253, ,781 1,163, /58 0 1,377, ,859 1,277, /59 0 1,511, ,845 1,401, /60 0 1,655, ,829 1,534, /61 0 1,811, ,912 1,678, /62 0 1,980, ,204 1,833, /63 0 2,161, ,824 2,000, /64 0 2,356, ,906 2,179, /65 0 2,539, ,597 2,345, /66 0 2,743, ,057 2,529, /67 0 2,847, ,462 2,612, /68 0 2,961, ,009 2,702, /69 0 3,079, ,910 2,794, /70 12,161 3,181, ,401 2,880, /71 28,366 3,280, ,741 2,963, /72 49,117 3,374, ,215 3,044, /73 74,813 3,462, ,136 3,119, /74 105,884 3,543, ,850 3,190, /75 142,463 3,616, ,735 3,253, /76 185,280 3,679, ,208 3,309, /77 233,988 3,731, ,729 3,355, /78 289,153 3,772, ,802 3,389, /79 350,689 3,799, ,982 3,411, /80 418,705 3,812, ,880 3,417, /81 493,150 3,809, ,168 3,408, /82 574,132 3,789, ,585 3,379, /83 660,710 3,752, ,081,944 3,330, /84 752,459 3,697, ,190,138 3,259, /85 848,473 3,623, ,309,152 3,163, /86 948,968 3,535, ,440,067 3,044, /87 828,935 3,431, ,584,074 2,676, /88 690,420 3,312, ,742,481 2,260, /89 524,262 3,181, ,916,729 1,789, /90 335,825 3,039, ,108,402 1,266,496

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33 Invested Assets Proposed plan Year Age Beginning Balance Planned Saving Employer Match Planned Distribution Net Cash Flows Annuity Adjustment Portfolio Return Ending Balance /48 490,788 10,500 5, , , /49 546,812 10,815 5,871 0 (12,432) 0 44, , /50 595,527 11,139 6,047 0 (12,853) 0 48, , /51 648,362 11,474 6,229 0 (13,112) 0 52, , /52 705,831 11,818 6,415 0 (13,577) 0 57, , /53 768,107 12,172 6, , , /54 849,640 12,538 6, , , /55 938,425 12,914 7, ,699 1,035, /56 1,035,048 13,301 7, ,440 1,140, /57 1,140,010 13,700 7, ,765 1,253, /58 1,253,912 14,111 7, ,686 1,377, /59 1,377,369 14,534 7, ,246 1,511, /60 1,511,040 14,970 8, ,445 1,655, /61 1,655,582 15,420 8, ,323 1,811, /62 1,811,695 15,882 8, ,883 1,980, /63 1,980,083 16,359 8, ,121 2,161, /64 2,161,443 16,849 9, ,071 2,356, /65 2,356,510 7,438 4,463 0 (11,232) 0 182,717 2,539, /66 2,539,895 7,661 4,597 0 (4,017) 0 195,413 2,743, /67 2,743, (105,129) 0 209,308 2,847, /68 2,847, (69,737) (31,631) 0 215,305 2,961, /69 2,961, (73,809) (30,331) 0 221,787 3,079, /70 3,079, (125,935) 12, ,223 3,193, /71 3,193, (134,526) 15, ,117 3,308, /72 3,308, (143,719) 18, ,704 3,423, /73 3,423, (153,420) 22, ,945 3,537, /74 3,537, (163,504) 25, ,746 3,649, /75 3,649, (173,604) 29, ,045 3,758, /76 3,758, (184,636) 33, ,394 3,864, /77 3,864, (195,013) 36, ,061 3,965, /78 3,965, (206,145) 39, ,954 4,061, /79 4,061, (217,099) 42, ,024 4,150, /80 4,150, (228,220) 45, ,197 4,230, /81 4,230, (239,340) 48, ,411 4,302, /82 4,302, (250,748) 51, ,652 4,363, /83 4,363, (260,995) 52, ,812 4,412, /84 4,412, (270,953) 53, ,911 4,449, /85 4,449, (280,017) 53, ,939 4,472, /86 4,472, (288,667) 53, ,176 4,484, /87 4,484, (297,146) (171,830) 0 244,776 4,260, /88 4,260, (303,593) (183,197) 0 229,643 4,003, /89 4,003, (309,690) (203,375) 0 215,782 3,705, /90 3,705, (314,048) (216,695) 0 199,758 3,374,898

34 Accounts Ending balance by accounts Proposed plan Year Age Taxable 401(k)/403(b) Roth 401(k)/403(b) Traditional IRA Health Roth IRA 529 Saving Account Qualified Annuity Non- Qualified Annuity Pension Total / , , / , , / , , / , , / , , / , , / , , /55 0 1,035, ,035, /56 0 1,140, ,140, /57 0 1,253, ,253, /58 0 1,377, ,377, /59 0 1,511, ,511, /60 0 1,655, ,655, /61 0 1,811, ,811, /62 0 1,980, ,980, /63 0 2,161, ,161, /64 0 2,356, ,356, /65 0 2,539, ,539, /66 0 2,743, ,743, /67 0 2,847, ,847, /68 0 2,961, ,961, /69 0 3,079, ,079, /70 12,161 3,181, ,193, /71 28,366 3,280, ,308, /72 49,117 3,374, ,423, /73 74,813 3,462, ,537, /74 105,884 3,543, ,649, /75 142,463 3,616, ,758, /76 185,280 3,679, ,864, /77 233,988 3,731, ,965, /78 289,153 3,772, ,061, /79 350,689 3,799, ,150, /80 418,705 3,812, ,230, /81 493,150 3,809, ,302, /82 574,132 3,789, ,363, /83 660,710 3,752, ,412, /84 752,459 3,697, ,449, /85 848,473 3,623, ,472, /86 948,968 3,535, ,484, /87 828,935 3,431, ,260, /88 690,420 3,312, ,003, /89 524,262 3,181, ,705, /90 335,825 3,039, ,374,898

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36 You don t have any options. Shares Cash Flows Taxes

37 Life Insurance Analysis Most financial plans are considered incomplete without life insurance protection. The need for life insurance is analyzed by projecting all future cash flows for an individual s survivors. The objective is to provide a life insurance coverage level so that the survivors have a positive portfolio value at the end of the planning horizon. What-if scenario - Client dies next year What-if scenario - Co-client dies next year $ 600k $ 600k $ 400k $ 400k $ 200k $ 200k Current Proposed Current Proposed ACTION ITEMS Proposed additional coverage for Client Current life insurance coverage Proposed additional coverage Proposed additional coverage for Co-client Current life insurance coverage Proposed additional coverage

38 Disability Insurance Analysis According to the Social Security Administration, the chance of becoming disabled before you retire is 1 in 4 - and for most people, disability will result in a lower living standard due to the loss of income. Having a disability insurance policy can replace lost earnings. Client s disability coverage analysis Co-client s disability coverage analysis 45% coverage 33% coverage Current monthly income cove Proposed additional coverage Uninsured monthly income Current monthly income cove Proposed additional coverage Uninsured monthly income ACTION ITEMS Select additional coverage for Client Proposed income replacement ratio 80% Select additional coverage for Co-client Proposed income replacement ratio 80% Target monthly income coverage $ 6,666 Current monthly income coverage $ 3,000 Proposed additional coverage Target monthly income coverage $ 6,000 Current monthly income coverage $ 2,000 Proposed additional coverage

39 Long-Term Care Insurance Analysis U.S. Department of Health and Human Services indicates that 70% of people turning age 65 can expect to use some form of long-term care during their lives. Longterm care insurance may help you offset some of the cost. LTC s impact on your invested assets $ 6mm $ 4mm $ 2mm Proposed coverage results in higher ending invested assets Assets w/o LTC expense Assets w/ltc expense & existing insurance Impact of proposed LTC insurance Client s total LTC cost is $ 569,033 Co-client s total LTC cost is $ 627,358 0% coverage 0% coverage Current coverage Uninsured coverage Proposed additional coverage Current coverage Uninsured coverage Proposed additional coverage

40 ACTION ITEMS Proposed additional coverage for Client Current long term care daily coverage Proposed additional daily coverage Proposed additional coverage for Co-client Current long term care daily coverage Proposed additional daily coverage Proposed benefit period 2 years Proposed benefit period 2 years Proposed elimination period None Proposed elimination period None Proposed inflation adjustment 0% Proposed inflation adjustment 0% Proposed inflation type Compound Proposed inflation type Compound Proposed annual premium Proposed annual premium The LTC cost is calculated based on estimated LTC cost today adjusted by health inflation assumption. The LTC cost today used is documented in the Summary of User Input page. The health inflation assumption used is documented in section 7 of the disclosure page.

41 Tax Estimate Taxes can have a significant impact on your future and are an important factor in financial planning. Estimated taxes below are based on your inputs and your proposed retirement plan, using current tax rates and methodologies. 40% Estimated Effective Tax Rate 30% 20% 10% 0% FICA tax rate Local tax rate State tax rate Federal tax rate

42 Distribution and Conversion Adjusted taxable income and tax bracket Tax bracket Key tax components $ 800k $ 600k $ 400k $ 200k Proposed Strategy $ 906,518 more tax adjusted ending portfolio than a pro-rata withdrawal strategy w/o conversion Adjusted taxable income w/ conversion Adjusted taxable income w/o conversion 10% tax bracket 12%/15% tax bracket 22%/25% tax bracket 24%/28% tax bracket Comparison to strategy w/o conversion Tax adjusted ending wealth Withdrawal Account balance Proposed strategy Sequential withdrawal w/o conversion 0% Tax free 0% Tax free Taxable Tax deferred Tax free $ 2,919,037 ending portfolio value Taxable Tax deferred Tax free $ 2,919,037 ending portfolio value ACTION ITEMS Proposed distribution strategy 1. Withdrawal strategy Sequential withdrawal Withdraw from taxable accounts first; then tax deferred accounts; lastly tax free accounts. 2. Roth IRA conversion Fill up the tax bracket 0% Estimated terminal tax rate 15%

43 Year Age Conversion amount Income from taxable account Income from tax deferred account Income from tax free account Taxable account balance Tax deferred account balance Tax free account balance / , / , , / , , / , , / , , / , / , / ,035, / ,140, / ,253, / ,377, / ,511, / ,655, / ,811, / ,980, / ,161, / ,356, / , ,539, / , ,743, / , ,847, / , ,961, / , ,079, / , ,161 3,181, / , ,366 3,280, / , ,117 3,374, / , ,813 3,462, / , ,884 3,543, / , ,463 3,616, / , ,280 3,679, / , ,988 3,731, / , ,153 3,772, / , ,689 3,799, / , ,705 3,812, / , ,150 3,809, / , ,132 3,789, / , ,710 3,752, / , ,459 3,697, / , ,473 3,623, / , ,968 3,535, / , , ,935 3,431, / , , ,420 3,312, / , , ,262 3,181, / , , ,825 3,039,073 0

44 Conversion refers to a process converting assets in a Traditional IRA or 401k account to a Roth IRA account. It is important to evaluate whether a conversion is appropriate for your specific financial circumstances and evaluate any consequences and tax implications of this strategy. Tax Cuts and Jobs Act repeals the rules permitting recharacterizations of Roth conversions, effective starting in 2018.

45 Estate Planning To protect and control the financial future of your family and loved ones, keep track of your progress on creating important estate planning documents. Important estate planning tasks Will Power of Attorney Beneficiary Designations Living Will Living Trust Health Care Proxy Client Co-client ACTION ITEMS

46 Estate Planning Effective use of living trust strategies can reduce taxes and expenses so that more of your assets are passed on to heirs or charity. Estate flow chart Estate Out of Estate Client s net worth $ 605,408 Client s estate $ 605,408 Estate to heirs Heirs assets CRT to charity Life insurance Taxes and fees $ 144,245 Inheritance $ 461,163 CST to heirs ILIT to heirs Co-client s net worth $ 1,122,251 Co-client s estate $ 1,122,251 Estate to heirs $ 926,706 Other insurance Life insurance Taxes and fees $ 195,544 Total tax and fees $ 339,789 Total to heirs $ 926,706 Total to charity Estate planning analysis $ 1mm Proposed strategy results in $ 750k $ 500k $ 250k To Heirs To Charity Taxes and Fees more to heirs more to charity less in taxes and fees Current Proposed Retirement income $ 800k $ 600k $ 400k $ 200k Social Security Pension Annuity Other Income Saving Withdrawal Shortage income shortage 40% income is stable

47 Client s Estate Investment $ 2,347,890 Real estate Other assets Annuities Debt $ 1,742,481 Mortgage Insurance Gross estate $ 605,408 Co-client s Estate Investment $ 3,230,653 Real estate Other assets Annuities Debt $ 2,108,402 Mortgage Insurance Gross estate $ 1,122,251 Out of Estate Heirs assets Credit shelter trust Charitable remainder trust Irrevocable insurance trust Other owned insurance Funeral expense $ 26,851 Probate $ 117,394 Estate tax Total taxes and expenses $ 144,245 Funeral expense $ 28,210 Probate $ 167,334 Estate tax Total taxes and expenses $ 195,544 Net estate $ 461,163 Net estate $ 926,706 To heirs To co-client $ 461,163 To heirs $ 926,706 To heirs To charity ACTION ITEMS Basic Information Trust Strategy Funeral expense $ 10,000 Credit Shelter Trust Probate expense 5 % Charitable Remainder Trust Irrevocable Life Insurance Trust Please refer to sections 8.6 and 8.7 of the disclosure section for more information.

48 Summary of User Input Family Date of Birth Planning Horizon Relationship Trust Trust Client Jan 1, Client Co-client Jan 1, Co-client Child Jun 30, 2002 Child Income Annual Amount Starting Ending Annual Increase Client s Salary $ 100,000 Already started Client s retirement 3% Co-client s Salary $ 90,000 Already started Co-client s retirement 3% Client s Social Security Estimated using Salary 65 Co-client s Social Security Estimated using Salary 65 Savings Annual Amount Starting Ending Annual Increase Client s Taxable Already started Client s retirement 0% Client s 401(k) 6% Already started Client s retirement Co-client s 401(k) 5% Already started Co-client s retirement Expenses Monthly Amount Starting Ending Annual Increase Pre-retirement Living Expenses $ 9,500 Already started Goals Retirement age Annual retirement Health care Annual retirement Long term care Long term care duration Client 67 $ 5,238 $ 41,400 2 Co-client 67 $ 5,238 $ 41,400 2 Amount Starting Ending Frequency Retirement Monthly Expense $ 7,600 Client s retirement End of both plans Every 1 year Child s College Goal $ 22, Every 1 year Insurance Type Owner Benefit Client s Group Life Group Life Client Co-client s Group Life Group Life Co-client Client s Group Disability Group Disability Client $ 3,000 Co-client s Group Disability Group Disability Co-client $ 2,000

49 Disclosure 1. No Warranties. RightCapital makes no warranties, expressed or implied, as to accuracy, completeness, or results obtained from any information on (the Platform ). The Platform uses simplifies assumptions derived and/or obtained from historical data that are used to create assumptions about potential investment returns. 2. Advice. RIGHTCAPITAL DOES NOT PROVIDE LEGAL, TAX, ACCOUNTING, INVESTMENT OR FINANCIAL ADVICE. RIGHTCAPITAL DOES NOT PROVIDE RECOMMENDATIONS FOR ANY PRODUCTS OR SECURITIES. Your advisor may not provide tax or legal advice. The appropriate professionals should be consulted on all legal and accounting matters prior to or in conjunction with implementation of any strategy. Use prospectus for any discussions about securities. 3. Data provided by you or your advisor for your assets, liabilities, goals, accounts, and other assumptions are key inputs for the calculations at RightCapital. The information should be reviewed periodically and updated whenever there is a change in information or circumstances. 4. Monte Carlo Simulation methodology. RightCapital generated Monte Carlo simulations calculating the results of your plan by running the projection 1000 times. 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. RightCapital considers a trial to be successful if at the end of the planning horizon your invested assets are greater than zero. The percentage of trials that were successful is the Probability of Success of your plan, with all its underlying assumptions. 5. Asset classes used in Monte Carlo simulation RightCapital uses only a few asset classes. The default return and volatility assumptions of the asset classes are estimated based on the historical return data of indices, which serve as proxies for their respective asset classes. They are not returns of actual investments. The historical return data used to derive returns for all asset classes are: U.S. Large Growth, U.S. Large Value and Other: S&P500 Total Return Index - 12/ /2017 U.S. Mid Cap: Russell 1000 total return index - 12/ /2017 Small Cap: Russell 2000 total return index - 12/ /2017 International Equities: EAFE Total return (USD return) - 12/ /2017 Emerging Markets Equity: MSCI Emerging market index (USD return) - 12/ /2017 Real Estate: MSCI US REIT Index - 12/ /2017 U.S. Government: Treasury bonds - 12/ /2017 Municipal: Barclay Muni Bond Index - 12/ /2017 U.S. Corporate and International Bonds: Barclay Corporate Bond Index - 12/ /2017 High Yield: BofA Merrill Lynch US High Yield Index - 12/ /2017 Cash: 3 Month Treasury returns - 12/ /2017 Note: The S&P500 Total Return Index is made up of both large cap growth and large cap value stocks. This index return and volatility data is used for both large cap growth and large cap value asset classes in the RightCapital system as it is an appropriate benchmark for both. RightCapital uses the S&P500 total return index as the best proxy for any unclassified assets labeled as Other 6. Return and volatility assumptions used in Monte Carlo simulations Asset Class Total Return Volatility Large Growth 9.87% 16.1% Large Value 9.87% 16.1% Mid Cap 9.87% 16.1% Small Cap 10.91% 21.9% International Equities 9.02% 18.5% Emerging Markets 11.31% 27.1% Asset Class Total Return Volatility Real Estate 9.87% 16.3% Government 5.22% 5.1% Municipal 5% 3.95% Corporate 5.29% 5.1% High Yield 7.3% 5.1% International Bonds 5.22% 5.1% Asset Class Total Return Volatility Cash 2.08% 1.9% Other 9.87% 16.1% 7. Tax and Inflation assumptions used in Monte Carlo simulations Starting federal and state standard deductions, exemptions and the tax brackets used in projections are as of The following inflation assumptions are used in the projection: General inflation 2.5%; Education inflation 5%; Tax inflation 2.5%; Social Security inflation 2.5%; Health inflation: 5% 8. Assumption and calculation limitations of Monte Carlo Simulations 8.1 Your resources and goals may be different from the estimates that you provided: The report is intended to help you in making decisions on your financial future based, in part, on information that you have provided and reviewed including, but not limited to, your age, income, assets, liabilities, anticipated expenses and retirement age. Some of this information may change in unanticipated ways in the future and those changes may make this RightCapital projection less useful. 8.2 Inherent limitations in RightCapital financial model results: Investment outcomes in the real world are the results of a near infinite set of variables, few of which can be accurately anticipated. Any financial model, such as RightCapital, can only consider a small subset of the factors that may affect investment outcomes and the ability to accurately anticipate those few factors is limited. For these reasons, investors should understand that the calculations made in this report are hypothetical, do not reflect actual investment results, and are not guarantees of future results. 8.3 Results may vary with each use and over time: The results presented in this report are not predictions of actual results. Actual results may vary to a material degree due to external factors beyond the scope and control of this report. As investment returns, inflation, taxes, and other economic conditions vary from the assumptions, your actual results will vary from those presented in RightCapital. Small changes in these inputs and assumptions may have a significant impact on the results. 8.4 RightCapital considers investments in only a few Broad Investment Categories: RightCapital utilizes U.S. Large Growth, U.S. Large Value, U.S. Mid Cap, U.S. Small Cap, Real Estate, International Equities, Emerging Markets Equity, U.S. Government, U.S. Corporate, U.S. High Yield, International Bonds and Cash. These broad