Personalized Investment Plan

Transcription

1 Personalized Investment Plan October 27, 2014 PREPARED FOR John Sampler and Jane Client PREPARED BY: Randy Schaller Senior Investment Advisor

2 Table Of Contents Personal Information and Summary of Financial Goals 1 Resources Summary 2 Risk Assessment 3 Worksheet Detail - Allocation Comparison 4 Results - Current and Recommended 5-6 Worksheet Detail - Portfolio Probability Matrix 7 Worksheet Detail - Inside the Numbers Final Result 8 Worksheet Detail - Retirement Distribution Cash Flow Chart 9-26 Worksheet Detail - Social Security Maximization 27 Executive Summary Tax and Inflation Assumptions 30 IMPORTANT DISCLOSURE INFORMATION 31-41

3 Personal Information and Summary of Financial Goals John Sampler and Jane Client Needs Retirement - Living Expense John Jane Both Retired ( ) Jane Alone Retired ( ) Health Care Both Medicare ( ) Jane Alone Medicare ( ) 65 / / 2025 $84,000 $72,000 Base Inflation Rate (2.50%) $11,653 $5,750 Base Inflation Rate plus 4.00% (6.50%) Personal Information John Male - born 05/05/1960, age 54 Employed - $95,000 Jane Female - born 07/20/1960, age 54 Employed - $55,000 Married, US Citizens living in KS 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. Page 1 of 41

4 Resources Summary Investment Assets Description Owner Current Value Additions Assign to Goal Account Joint Survivorship $287,000 Fund All Goals Roth IRA - Account Jane $43,600 Fund All Goals Roth IRA - Account John $42,000 Fund All Goals Traditional IRA - Account John $11,400 $6,500 Fund All Goals Total Investment Assets : $384,000 Social Security Description Owner Value File Status Assign to Goal Social Security John $29,124 starting At John's Full Retirement Age Social Security Jane $23,510 starting At Jane's Full Retirement Age Normal Normal Fund All Goals Fund All Goals Retirement Income Description Owner Value Increase Rate Assign to Goal Jane KPERS Jane $21,300 from Jane's Retirement to End of Jane's Plan No Fund All Goals Page 2 of 41

5 Risk Assessment Portfolio Appropriate for Score Moderate Compare Me to my Group Average Age 50 to 64 Bear Market Loss Moderate Portfolio Value Great Recession Return from November 2007 through February 2009 Potential loss of Portfolio Value $384,000-25% -$96,000 Average Return: 8.36% You are a Higher than Average Risk-Taker You selected a Risk Score for your Household of 58. The Bell Curve above shows the normal distribution of risk scores for your group. The average score is 50. Your Score indicates that you are a Higher than Average Risk-Taker (scores 55-62) as compared to other Investors of similar age. Your Score corresponds to a Moderate Portfolio with 65% Stock (includes Alternative). You know that the Moderate Portfolio you selected had a -25% return during the Great Recession and are willing to accept the risk that you could experience a similar or worse result. John Jane Household Risk Score: None Selected None Selected 58 Portfolio Selected: Moderate % Stock (includes Alternative): 65% Average Return: 8.36% Great Recession Return: -25% Bond Bear Market Return: 8% Page 3 of 41

6 Worksheet Detail - Allocation Comparison Scenario: What If Scenario 1 These charts compare your Current Portfolio with the Target Portfolio you selected and show the allocation changes you should consider. Current Portfolio Projected Assumptions 8.01% Total Return 8.36% 2.50% Base Inflation Rate 2.50% 5.51% Real Return 5.86% 10.31% Standard Deviation 9.66% Bear Market Returns -30% Great Recession -25% 10% Bond Bear Market 8% Target Portfolio Moderate Portfolio Comparison with Allocation Changes Current Amount % of Total Asset Class % of Total Target Amount Increase / Decrease $70,000 18% Cash 4% $15,360 -$54,640 $62,000 16% Corporate Bonds 14% $53,760 -$8,240 $0 0% Corp: Floating Rate Bonds 8% $30,720 $30,720 $0 0% High Yield Bonds 6% $23,040 $23,040 $47,500 12% Large Value Stocks 17% $65,280 $17,780 $89,500 23% Large Growth Stocks 17% $65,280 -$24,220 $0 0% Small Value Stocks 5% $19,200 $19,200 $30,000 8% Small Growth Stocks 5% $19,200 -$10,800 $10,000 3% Balanced Funds 3% $11,520 $1,520 $0 0% Real Estate 4% $15,360 $15,360 $75,000 20% International Stocks 11% $42,240 -$32,760 $0 0% International Bonds 3% $11,520 $11,520 $0 0% Commodities 3% $11,520 $11,520 $384,000 $384,000 $0 Page 4 of 41

7 Results - Current and Recommended Results Current Scenario Recommended Scenario Average Return Bad Timing Average Return Bad Timing Estimated % of Goals Funded Likelihood of Funding All Goals 78% 71% 100% 100% Your Confidence Zone: 70% - 90% Probability of Success: < 40% Below Confidence Zone Probability of Success: 82% In Confidence Zone Current Scenario What If Scenario 1 Changes In Value Retirement Retirement Age John 65 in in year later Jane 65 in in year later Planning Age John 90 in in 2050 Jane 92 in in 2052 Goals Needs Retirement - Living Expense Both Retired Jane Alone Retired Health Care Both Medicare Jane Alone Medicare $84,000 $72,000 $11,653 $5,750 $61,688 $52,875 $11,653 $5,750 Decreased $22,312 Decreased $19,125 Total Spending for Life of Plan $2,642,478 $1,950,775 Decreased 26% Page 5 of 41

8 Results - Current and Recommended Savings Qualified $6,500 $6,500 Taxable $0 $10,000 Increased $10,000 Total Savings This Year $6,500 $16,500 Increased $10,000 Portfolios Allocation Before Retirement Current Moderate 8% Less Stock Percent Stock 63% 55% Total Return 8.01% 8.36% Return Adjustment 0.00% -1.50% Adjusted Total Return 8.01% 6.86% Standard Deviation 10.31% 9.66% Great Recession Return 11/07-2/09-30% -25% Bond Bear Market Return 7/79-2/80 10% 8% Allocation During Retirement Current Moderate 8% Less Stock Percent Stock 63% 55% Total Return 8.01% 8.36% Return Adjustment 0.00% -1.50% Adjusted Total Return 8.01% 6.86% Standard Deviation 10.31% 9.66% Great Recession Return 11/07-2/09-30% -25% Bond Bear Market Return 7/79-2/80 10% 8% Inflation 2.50% 2.50% Investments Total Investment Portfolio $384,000 $384,000 Total Investment Assets $384,000 $384,000 Page 6 of 41

9 Worksheet Detail - Portfolio Probability Matrix Portfolio Probability Matrix for What If Scenario 1 Risk Based Portfolio Portfolio used in What If Scenario 1 Both before and during Retirement with same portfolio Probability of Success Results Safety Margin (Current Dollars) Great Recession Return Bear Market Loss Bond Bear Market Return Conservative < 40% $0-4% 4% Conservative < 40% $0-6% 4% Moderately Conservative < 40% $0-8% 4% Moderately Conservative 59% $151,397-15% 6% Moderate 72% $370,801-20% 7% Current 73% $453,934-30% 10% Moderate 82% $591,314-25% 8% Moderately Aggressive 87% $941,314-34% 10% Moderately Aggressive 84% $1,239,185-42% 13% Aggressive 81% $1,454,518-47% 15% Aggressive 80% $1,614,651-51% 15% Page 7 of 41

10 Worksheet Detail - Inside the Numbers Final Result Inside the Numbers - Final Result For What If Scenario 1 The graph below shows the results for a Sample of 100 Monte 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 10,000 Trials, to calculate your Final Result. Your Probability of Success represents the percentage of 10,000 Trials in which you could expect to attain all your Goals. Final Result Simulation Equivalent to 10,000 Trials Probability of Success: 82% In Confidence Zone (70% - 90%) The table below is a numerical representation of the above Sample of 100 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 100 Trials table, the trials are ranked from best to worst (from 1 to 100) based on the End of Plan value. For each trial listed (1st, 25th, 50th, 75th and 100th), the corresponding portfolio values for that trial will be illustrated in the years of the trial that are indicated. Trials Year 5 Year 10 Year 15 Year 20 Year 25 End of Plan Year Money Goes to $0 Best $821,236 $1,573,097 $2,159,028 $2,986,023 $5,542,646 $14,027,221 25th $770,155 $1,140,310 $1,272,398 $1,616,908 $2,024,197 $2,254,074 50th $601,526 $1,110,239 $956,501 $1,145,104 $1,051,754 $1,086,222 75th $697,388 $690,418 $849,636 $851,075 $1,021,948 $200,850 Worst $341,709 $380,689 $242,112 $104,041 $0 $ Page 8 of 41

11 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : Current Scenario using Average Returns Year Age (John / Jane) Retirement and Strategy Income Assign To / / /67 Jane KPERS Fund All Goals 21,300 21,300 21,300 21,300 21,300 21,300 21,300 21,300 Social Security - John Fund All Goals ,147 41,151 42,180 43,234 44,315 45,423 Social Security - Jane Fund All Goals ,409 33,219 34,049 34,900 35,773 36,667 Total Retirement and Strategy Income / / / / /72 21,300 21,300 93,856 95,670 97,529 99, , ,390 Investment Earnings 62,197 57,618 57,519 57,017 56,272 55,132 53,669 51,638 Total Income and Earnings 83,497 78, , , , , , ,029 Cash Used To Fund Goals Estimated % Funded Retirement - Living Expense 78% 110, , , , , , , ,011 Health Care 79% 23,296 24,810 26,423 28,141 29,970 31,918 33,992 36,202 Total Goal Funding (133,511) (137,781) (142,218) (146,830) (151,627) (156,616) (161,808) (167,213) Total Taxes and Tax Penalty (2,894) (2,077) (12,508) (12,113) (11,647) (12,745) (12,332) (14,428) Cash Surplus/Deficit (Net Change in Portfolio) (52,909) (60,940) (3,351) (6,256) (9,473) (14,794) (19,083) (26,613) Portfolio Value Future Dollars Beginning Value 888, , , , , , , ,006 Cash Surplus/Deficit (52,909) (60,940) (3,351) (6,256) (9,473) (14,794) (19,083) (26,613) Investment Asset Additions Ending Value 835, , , , , , , ,393 Current Dollars Ending Value 621, , , , , , , ,988 Cash Surplus/Deficit (39,340) (44,207) (2,372) (4,320) (6,381) (9,722) (12,236) (16,647) Taxes Total Taxes 2,894 2,077 12,508 12,113 11,647 12,745 12,332 14,428 Page 9 of 41

12 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : Current Scenario using Average Returns Year Age (John / Jane) / /66 Tax Penalty Federal Marginal Tax Rate 15.00% 10.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% State Marginal and Local Tax Rate 3.00% 3.00% 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% / / / / / /72 Estimated Required Minimum Distribution (RMD) John ,119 8,736 9,399 Jane Adjusted Portfolio Value 888, , , , , , , ,006 Portfolio Withdrawal Rate 12.95% 14.18% 7.85% 8.20% 8.59% 9.25% 9.82% 10.84% Page 10 of 41

13 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : Current Scenario using Average Returns Year Age (John / Jane) Retirement and Strategy Income Assign To / / /75 Jane KPERS Fund All Goals 21,300 21,300 21,300 21,300 21,300 21,300 21,300 21,300 Social Security - John Fund All Goals 46,559 47,723 48,916 50,139 51,392 52,677 53,994 55,344 Social Security - Jane Fund All Goals 37,584 38,524 39,487 40,474 41,486 42,523 43,586 44,675 Total Retirement and Strategy Income / / / / /80 105, , , , , , , ,319 Investment Earnings 48,336 45,592 42,288 38,362 33,747 28,366 21,957 12,439 Total Income and Earnings 153, , , , , , , ,758 Cash Used To Fund Goals Estimated % Funded Retirement - Living Expense 78% 134, , , , , , , ,625 Health Care 79% 38,555 41,061 43,730 46,572 49,600 52,824 56,257 59,914 Total Goal Funding (172,842) (178,705) (184,815) (191,184) (197,827) (204,757) (211,988) (219,538) Total Taxes and Tax Penalty (24,552) (11,434) (11,723) (12,026) (12,333) (12,668) (15,271) (42,569) Cash Surplus/Deficit (Net Change in Portfolio) (43,615) (37,001) (44,547) (52,936) (62,235) (72,559) (86,422) (128,350) Portfolio Value Future Dollars Beginning Value 695, , , , , , , ,078 Cash Surplus/Deficit (43,615) (37,001) (44,547) (52,936) (62,235) (72,559) (86,422) (128,350) Investment Asset Additions Ending Value 651, , , , , , , ,728 Current Dollars Ending Value 397, , , , , , ,806 86,111 Cash Surplus/Deficit (26,617) (22,030) (25,876) (29,999) (34,408) (39,137) (45,478) (65,895) Taxes Total Taxes 24,552 11,434 11,723 12,026 12,333 12,668 15,271 42,569 Page 11 of 41

14 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : Current Scenario using Average Returns Year Age (John / Jane) / /74 Tax Penalty Federal Marginal Tax Rate 25.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 25.00% State Marginal and Local Tax Rate 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% / / / / / /80 Estimated Required Minimum Distribution (RMD) John 10,110 10,874 11,694 12,574 13,453 14,458 15,456 15,833 Jane Adjusted Portfolio Value 695, , , , , , , ,078 Portfolio Withdrawal Rate 13.22% 12.67% 14.12% 16.01% 18.55% 22.18% 28.33% 47.55% Page 12 of 41

15 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : Current Scenario using Average Returns Year Age (John / Jane) Retirement and Strategy Income Assign To / / /83 Jane KPERS Fund All Goals 21,300 21,300 21,300 21,300 21,300 21,300 21,300 21,300 Social Security - John Fund All Goals 56,727 58,146 59,599 61,089 62,616 64,182 65,786 67,431 Social Security - Jane Fund All Goals 45,792 46,937 48,111 49,313 50,546 51,810 53,105 54,433 Total Retirement and Strategy Income / / / / /88 123, , , , , , , ,164 Investment Earnings 1, Total Income and Earnings 125, , , , , , , ,164 Cash Used To Fund Goals Estimated % Funded Retirement - Living Expense 78% 163,615 x94,599 x83,284 x84,091 x84,886 x85,667 x86,435 x87,187 Health Care 79% 63,808 x38,332 x35,064 x36,786 x38,583 x40,457 x42,413 x44,451 Total Goal Funding (227,423) (132,931) (118,349) (120,877) (123,468) (126,125) (128,847) (131,638) Total Taxes and Tax Penalty (44,597) (14,543) (10,661) (10,826) (10,994) (11,167) (11,344) (11,526) Cash Surplus/Deficit (Net Change in Portfolio) (146,637) (21,091) Portfolio Value Future Dollars Beginning Value 167,728 21, Cash Surplus/Deficit (146,637) (21,091) Investment Asset Additions Ending Value 21, Current Dollars Ending Value 10, Cash Surplus/Deficit (73,447) (10,306) Taxes Total Taxes 44,597 14,543 10,661 10,826 10,994 11,167 11,344 11,526 Page 13 of 41

16 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : Current Scenario using Average Returns Year Age (John / Jane) / /82 Tax Penalty Federal Marginal Tax Rate 25.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% State Marginal and Local Tax Rate 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% / / / / / /88 Estimated Required Minimum Distribution (RMD) John 9,370 1, Jane Adjusted Portfolio Value 167,728 21, Portfolio Withdrawal Rate 88.36% % % % % % % % Page 14 of 41

17 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : Current Scenario using Average Returns Year Age (John / Jane) Retirement and Strategy Income Assign To / /90 Jane KPERS Fund All Goals 21,300 21,300 21,300 21,300 Social Security - John Fund All Goals 69,117 70, Social Security - Jane Fund All Goals 55,794 57,188 72,616 74,431 Total Retirement and Strategy Income / /92 146, ,333 93,916 95,731 Investment Earnings Total Income and Earnings 146, ,333 93,916 95,731 Cash Used To Fund Goals Estimated % Funded Retirement - Living Expense 78% x87,923 x88,642 x63,692 x64,339 Health Care 79% x46,576 x48,789 x20,969 x22,008 Total Goal Funding (134,499) (137,431) (84,661) (86,347) Total Taxes and Tax Penalty (11,712) (11,902) (9,255) (9,384) Cash Surplus/Deficit (Net Change in Portfolio) Portfolio Value Future Dollars Beginning Value Cash Surplus/Deficit Investment Asset Additions Ending Value Current Dollars Ending Value Cash Surplus/Deficit Taxes Total Taxes 11,712 11,902 9,255 9,384 Page 15 of 41

18 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : Current Scenario using Average Returns Year Age (John / Jane) / /90 Tax Penalty Federal Marginal Tax Rate 15.00% 15.00% 15.00% 15.00% State Marginal and Local Tax Rate 4.90% 4.90% 4.90% 4.90% / /92 Estimated Required Minimum Distribution (RMD) John Jane Adjusted Portfolio Value Portfolio Withdrawal Rate % % % % Page 16 of 41

19 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : Current Scenario using Average Returns Notes 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. When married, if either Social Security Program Estimate or Use This Amount and Evaluate 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. Strategy Income is based on the particulars of the Goal Strategies selected. Strategy Income from immediate annuities, 72(t) distributions, and variable annuities with a guaranteed minimum withdrawal benefit (GMWB) is pre-tax. Strategy Income from Net Unrealized Appreciation (NUA) is after-tax. Stock Options and Restricted Stock values are after-tax. 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 Earnings 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 Minimum 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 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 Ending Value of the Portfolio in Current Dollars is calculated by discounting the Ending 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. When married, ownership of qualified assets is assumed to roll over to the surviving co-client at the death of the original owner. It is also assumed the surviving co-client inherits all assets of the original owner. Portfolio Withdrawal Rate (%) is the percentage withdrawn from the investment portfolio to cover cash deficits. Page 17 of 41

20 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : What If Scenario 1 using Average Returns Year Age (John / Jane) Retirement and Strategy Income Assign To / / /68 Jane KPERS Fund All Goals 21,300 21,300 21,300 21,300 21,300 21,300 21,300 21,300 Social Security - John Fund All Goals ,664 55,006 56,381 57,790 Social Security - Jane Fund All Goals 0 20,094 20,596 21,111 43,308 44,390 45,500 46,637 Total Retirement and Strategy Income / / / / /73 21,300 41,394 41,896 42, , , , ,728 Investment Earnings 64,896 64,214 63,159 61,830 64,530 67,153 69,780 72,404 Total Income and Earnings 86, , , , , , , ,132 Cash Used To Fund Goals Estimated % Funded Retirement - Living Expense 100% 82,964 85,038 87,164 89,343 91,576 93,866 96,212 98,618 Health Care 100% 24,810 26,423 28,141 29,970 31,918 33,992 36,202 38,555 Total Goal Funding (107,774) (111,461) (115,304) (119,312) (123,494) (127,858) (132,414) (137,172) Total Taxes and Tax Penalty (3,617) (6,225) (5,669) (5,046) (18,849) (19,312) (19,775) (20,236) Cash Surplus/Deficit (Net Change in Portfolio) (25,196) (12,078) (15,918) (20,118) 40,458 40,679 40,773 40,724 Portfolio Value Future Dollars Beginning Value 1,032,569 1,007, , , , ,717 1,040,396 1,081,169 Cash Surplus/Deficit (25,196) (12,078) (15,918) (20,118) 40,458 40,679 40,773 40,724 Investment Asset Additions Ending Value 1,007, , , , ,717 1,040,396 1,081,169 1,121,893 Current Dollars Ending Value 730, , , , , , , ,659 Cash Surplus/Deficit (18,277) (8,548) (10,991) (13,552) 26,589 26,082 25,504 24,853 Taxes Total Taxes 3,617 6,225 5,669 5,046 18,849 19,312 19,775 20,236 Page 18 of 41

21 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : What If Scenario 1 using Average Returns Year Age (John / Jane) / /67 Tax Penalty Federal Marginal Tax Rate 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% State Marginal and Local Tax Rate 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% / / / / / /73 Estimated Required Minimum Distribution (RMD) John ,525 8,011 8,527 9,075 Jane Adjusted Portfolio Value 1,032,569 1,007, , , , ,717 1,040,396 1,081,169 Portfolio Withdrawal Rate 8.72% 7.57% 7.95% 8.37% 2.51% 2.65% 2.79% 2.93% Page 19 of 41

22 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : What If Scenario 1 using Average Returns Year Age (John / Jane) Retirement and Strategy Income Assign To / / /76 Jane KPERS Fund All Goals 21,300 21,300 21,300 21,300 21,300 21,300 21,300 21,300 Social Security - John Fund All Goals 59,235 60,716 62,234 63,790 65,385 67,019 68,695 70,412 Social Security - Jane Fund All Goals 47,803 48,998 50,223 51,479 52,766 54,085 55,437 56,823 Total Retirement and Strategy Income / / / / /81 128, , , , , , , ,535 Investment Earnings 75,014 77,598 80,142 82,633 85,054 87,387 89,613 91,711 Total Income and Earnings 203, , , , , , , ,246 Cash Used To Fund Goals Estimated % Funded Retirement - Living Expense 100% 101, , , , , , , ,156 Health Care 100% 41,061 43,730 46,572 49,600 52,824 56,257 59,914 63,808 Total Goal Funding (142,144) (147,340) (152,773) (158,455) (164,400) (170,623) (177,139) (183,964) Total Taxes and Tax Penalty (20,694) (21,147) (21,594) (22,020) (22,444) (22,839) (23,214) (23,563) Cash Surplus/Deficit (Net Change in Portfolio) 40,515 40,125 39,533 38,727 37,660 36,329 34,693 32,718 Portfolio Value Future Dollars Beginning Value 1,121,893 1,162,407 1,202,532 1,242,065 1,280,792 1,318,452 1,354,782 1,389,474 Cash Surplus/Deficit 40,515 40,125 39,533 38,727 37,660 36,329 34,693 32,718 Investment Asset Additions Ending Value 1,162,407 1,202,532 1,242,065 1,280,792 1,318,452 1,354,782 1,389,474 1,422,193 Current Dollars Ending Value 692, , , , , , , ,345 Cash Surplus/Deficit 24,122 23,307 22,403 21,411 20,314 19,118 17,811 16,388 Taxes Total Taxes 20,694 21,147 21,594 22,020 22,444 22,839 23,214 23,563 Page 20 of 41

23 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : What If Scenario 1 using Average Returns Year Age (John / Jane) / /75 Tax Penalty Federal Marginal Tax Rate 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% State Marginal and Local Tax Rate 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% / / / / / /81 Estimated Required Minimum Distribution (RMD) John 9,657 10,275 10,930 11,569 12,302 13,011 13,755 14,534 Jane Adjusted Portfolio Value 1,121,893 1,162,407 1,202,532 1,242,065 1,280,792 1,318,452 1,354,782 1,389,474 Portfolio Withdrawal Rate 3.08% 3.22% 3.38% 3.53% 3.70% 3.87% 4.05% 4.25% Page 21 of 41

24 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : What If Scenario 1 using Average Returns Year Age (John / Jane) Retirement and Strategy Income Assign To / / /84 Jane KPERS Fund All Goals 21,300 21,300 21,300 21,300 21,300 21,300 21,300 21,300 Social Security - John Fund All Goals 72,172 73,977 75,826 77,722 79,665 81,656 83,698 85,790 Social Security - Jane Fund All Goals 58,244 59,700 61,192 62,722 64,290 65,897 67,545 69,234 Total Retirement and Strategy Income / / / / /89 151, , , , , , , ,324 Investment Earnings 93,654 95,418 96,972 98,286 99, , , ,385 Total Income and Earnings 245, , , , , , , ,709 Cash Used To Fund Goals Estimated % Funded Retirement - Living Expense 100% 123, , , , , , , ,398 Health Care 100% 67,956 72,373 77,077 82,087 87,423 93,105 99, ,602 Total Goal Funding (191,116) (198,612) (206,472) (214,717) (223,368) (232,449) (241,985) (252,001) Total Taxes and Tax Penalty (23,884) (24,170) (24,417) (24,593) (24,713) (24,767) (24,748) (24,644) Cash Surplus/Deficit (Net Change in Portfolio) 30,371 27,613 24,402 20,720 16,499 11,687 6, Portfolio Value Future Dollars Beginning Value 1,422,193 1,452,564 1,480,176 1,504,578 1,525,298 1,541,797 1,553,483 1,559,712 Cash Surplus/Deficit 30,371 27,613 24,402 20,720 16,499 11,687 6, Investment Asset Additions Ending Value 1,452,564 1,480,176 1,504,578 1,525,298 1,541,797 1,553,483 1,559,712 1,559,776 Current Dollars Ending Value 709, , , , , , , ,214 Cash Surplus/Deficit 14,841 13,164 11,350 9,402 7,304 5,048 2, Taxes Total Taxes 23,884 24,170 24,417 24,593 24,713 24,767 24,748 24,644 Page 22 of 41

25 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : What If Scenario 1 using Average Returns Year Age (John / Jane) / /83 Tax Penalty Federal Marginal Tax Rate 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% State Marginal and Local Tax Rate 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% 4.90% / / / / / /89 Estimated Required Minimum Distribution (RMD) John 15,350 16,201 17,089 17,892 18,712 19,548 20,396 21,250 Jane Adjusted Portfolio Value 1,422,193 1,452,564 1,480,176 1,504,578 1,525,298 1,541,797 1,553,483 1,559,712 Portfolio Withdrawal Rate 4.45% 4.67% 4.90% 5.16% 5.43% 5.73% 6.06% 6.43% Page 23 of 41

26 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : What If Scenario 1 using Average Returns Year Age (John / Jane) Retirement and Strategy Income Assign To / / /92 Jane KPERS Fund All Goals 21,300 21,300 21,300 Social Security - John Fund All Goals 87, Social Security - Jane Fund All Goals 70,964 90,133 92,387 Total Retirement and Strategy Income 180, , ,687 Investment Earnings 99,904 99,951 99,606 Total Income and Earnings 280, , ,293 Cash Used To Fund Goals Estimated % Funded Retirement - Living Expense 100% 150, , ,132 Health Care 100% 112,467 59,102 62,944 Total Goal Funding (262,525) (190,938) (198,076) Total Taxes and Tax Penalty (24,408) (20,280) (19,339) Cash Surplus/Deficit (Net Change in Portfolio) (6,829) 166 (4,122) Portfolio Value Future Dollars Beginning Value 1,559,776 1,552,947 1,553,113 Cash Surplus/Deficit (6,829) 166 (4,122) Investment Asset Additions Ending Value 1,552,947 1,553,113 1,548,991 Current Dollars Ending Value 622, , ,314 Cash Surplus/Deficit (2,739) 65 (1,573) Taxes Total Taxes 24,408 20,280 19,339 Page 24 of 41

27 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : What If Scenario 1 using Average Returns Year Age (John / Jane) / / /92 Tax Penalty Federal Marginal Tax Rate 15.00% 25.00% 25.00% State Marginal and Local Tax Rate 4.90% 4.90% 4.90% Estimated Required Minimum Distribution (RMD) John 21, Jane 0 22,547 23,149 Adjusted Portfolio Value 1,559,776 1,552,947 1,553,113 Portfolio Withdrawal Rate 6.84% 6.43% 6.68% Page 25 of 41

28 Worksheet Detail - Retirement Distribution Cash Flow Chart Scenario : What If Scenario 1 using Average Returns Notes 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. When married, if either Social Security Program Estimate or Use This Amount and Evaluate 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. Strategy Income is based on the particulars of the Goal Strategies selected. Strategy Income from immediate annuities, 72(t) distributions, and variable annuities with a guaranteed minimum withdrawal benefit (GMWB) is pre-tax. Strategy Income from Net Unrealized Appreciation (NUA) is after-tax. Stock Options and Restricted Stock values are after-tax. 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 Earnings 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 Minimum 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 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 Ending Value of the Portfolio in Current Dollars is calculated by discounting the Ending 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. When married, ownership of qualified assets is assumed to roll over to the surviving co-client at the death of the original owner. It is also assumed the surviving co-client inherits all assets of the original owner. Portfolio Withdrawal Rate (%) is the percentage withdrawn from the investment portfolio to cover cash deficits. Page 26 of 41

29 Worksheet Detail - Social Security Maximization Social Security Maximization for What If Scenario 1 Social Security Strategy Strategy Used in What If Scenario 1 At retirement At FRA At age 70 John begins at age 70 and Jane begins at FRA John files/suspends, Jane restricted application Jane files/suspends, John restricted application Start age John Jane First year benefit in current dollars John Jane $36,150 $14,576 $27,209 $21,958 $29,153 $23,527 $36,150 $29,173 $36,150 $23,527 $36,150 $14,576 $11,763 $29,173 Maximization Based on Cash Received Total lifetime benefit in current dollars $1,487,802 $1,283,607 $1,322,614 $1,444,073 $1,396,079 $1,487,802 $1,479,363 Break Even Point John Jane N/A N/A Maximization Based on Overall Plan Result Probability of success 82% 67% 69% 76% 70% 82% 81% Notes 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. Full Retirement Age ( FRA ) is the age at which a person may first become entitled to full or unreduced retirement benefits. Page 27 of 41

30 Executive Summary Reaching Your Goals Status Probability of Success: 82% In Confidence Zone Results If you implement the following suggestions, there is a 82% likelihood of funding all of the Financial Goals in your Plan. Goals Plan to reduce your Total Goal Spending to $1,950,775 which is $691,703, or 26%, less than your Target. John retires at age 66, in the year This is 1 year(s) later than your retirement age. Jane retires at age 66, in the year This is 1 year(s) later than your retirement age. Your recommended scenario assumes when you are both retired you will spend $61,688 for annual living expenses. John enrolls in Medicare at age 65, in the year Jane enrolls in Medicare at age 65, in the year Goal Amount Changes Needs 10 Retirement - Living Expense Both Retired $61,688 Decreased $22,312 Jane Alone Retired $52,875 Decreased $19, Health Care Both Medicare $11,653 Jane Alone Medicare $5,750 Page 28 of 41

31 Executive Summary Save and Invest Savings Consider the following changes in order to increase your savings by $10,000 to a total of $16,500 per year. Status Increase taxable additions by $10,000. Make this change in Tax Reductions Your marginal tax bracket in 2014 for Federal is 25.00% and for Kansas is 4.90%. This means that each new dollar of interest income from taxable bonds is costing you about 30 cents in additional tax. Consider converting to tax-exempt bonds to reduce your tax liability. Estate Estate Strategies Have a Durable Power of Attorney drafted or reviewed by an estate planning attorney. In a Durable Power of Attorney, you name another person (also called attorney-in-fact) to perform certain acts, such as manage your financial affairs on your behalf, if you become incapacitated. Status Have a Health Care Proxy/Living Will drafted or reviewed by an estate planning attorney. In a Health Care Proxy/Living Will, you can specify your medical wishes and designate someone to make health-related decisions for you, if you are not able to give informed consent or are incapacitated. Review the ownership (titling) of your assets to ensure conformance with your estate planning documents and strategies. Ensure that the beneficiary designations of all qualified plans are current and contingent beneficiaries are named. Page 29 of 41

32 Tax and Inflation Assumptions Base Inflation Rate Inflation rate : 2.50% Social Security Inflation rate : 2.50% Tax Assumption Inflation rate : 2.50% Marginal Tax Rates Before Retirement Tax Penalty Include penalties in Plan? : Tax Free Earnings - Options Use Tax-Free returns by Asset Class, Marginal Tax Rate to use during Retirement is 40.00% Yes Federal Tax Rates : 25.00% Untaxed Gain on Taxable Earnings - Before Retirement What portion of your Annual Taxable Investment Earnings will not be taxed until withdrawn? Long Term Capital Gains (LTCG) - Before Retirement State 4.90% 0.00% Local 0.00% What portion of your Taxable Investment Earnings will be taxed at the LTCG rate? Long Term Capital Gains rate : 20.00% Use Program estimate Tax Rates During Retirement Let the Program calculate taxes each year Local rate : 0.00% Deduction estimate : Use standard deductions Untaxed Gain on Taxable Earnings - During Retirement What portion of your Annual Taxable Investment Earnings will not be taxed until withdrawn? 0.00% Long Term Capital Gains (LTCG) - During Retirement What portion of your Taxable Investment Earnings will be taxed at the LTCG rate? Long Term Capital Gains rate : 20.00% Use Program estimate Taxation of Social Security What portion of Social Security will be taxed? 85.00% Page 30 of 41

33 IMPORTANT DISCLOSURE INFORMATION IMPORTANT: The projections or other information generated by MoneyGuidePro 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 MoneyGuidePro 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 MoneyGuidePro. It is not possible to directly invest in an index. Financial forecasts, rates of return, risk, inflation, and other assumptions may be used as the basis for illustrations. They should not be considered a guarantee of future performance or a guarantee of achieving overall financial objectives. Past performance is not a guarantee or a predictor of future results of either the indices or any particular investment. MoneyGuidePro results may vary with each use and over time. Much research went into the fund and allocation recommendations used in preparing this investment plan. The following pages present a plan designed specifically for you. At its heart is a proposed asset allocation- a plan for how to divide your portfolio across various types of assets. Along with that is a recommendation of specific mutual funds to use in implementing the strategy. The plan proposed considers your financial objectives, time horizon, risk tolerance and present financial situation, among other factors. This personalized investment plan offers you a disciplined and systematic way to achieve a diversified investment mix based on your unique circumstance. Diversification is important because gains in one investment class may help offset losses in another. Throughout this plan, you will see references to projected returns. The projected returns shown are forecasts of what returns might occur under certain assumptions. They are not a guarantee of future returns. MoneyGuidePro offers several methods of calculating results, including Monte Carlo Simulations which are used to show how variations in rates of return each year can affect your returns. The simulations may provide a probability of success and the probably of failure. The simulations take into consideration other assets you may hold in addition to the assets The Mutual Fund Store may manage. While the securities not managed by TMFS may be included in the illustration, TMFS is not responsible for the management of those assets. Results projected as part of this plan are for a certain point in time and may be impacted by any future changes to all or some of your current holdings and future holdings, including securities not managed by TMFS. Please note that changes will impact the results from the original plan and changes will necessitate a new plan and projection be calculated. The impact of advisory fees, compounded over a period of years, could have a material effect on returns. In order to show the impact of such, the advisory fee assessed by TMFS is reflected on the report as a return adjustment. Advisory fees that are currently assessed by your current investment company may also be entered as a return adjustment. The current investment company s advisory fee must be provided by you in order for the current advisory fee to be reflected. If you do not know the exact percentage of your current advisory firm s management fee, you understand that an estimate may be used as agreed upon by both parties. In addition to advisory fees, there may be other fees associated with investing. While such fees are not reflected in the report, as only the advisory fee is included, the impact of these additional fees, if applicable, could also have an effect on returns. For example, individual mutual fund companies may impose a contingent redemption fee if a client redeems mutual fund shares within a fund s stated timeframe for imposition of such a fee. Account custodians may also impose a short term redemption fee. Accounts that provide the ability to trade individual securities may have commissions or trading costs. Accounts which may include securities not managed by TMFS may have fees that are greater than that of TMFS s advisory fees. See your Advisor for more information on how these fees may impact your portfolio. The data herein is deemed to be reliable but not guaranteed, as the illustration is produced by software licensed from a third party provider. Based on your personal situation such as your financial objectives, time horizon, risk tolerance, your portfolio will be fit one of the following allocations: Conservative: Based on your answers, you appear to be a Conservative Investor. That means you are nearing retirement or you want to focus on preserving your savings with less need for investment growth. A Conservative portfolio will typically include mostly fixed income and some stock-based investments. If this doesn't sound like an accurate description of you as an investor, you may want to go back and modify some of your answers to the Risk Profile survey. Moderately Conservative: Based on your answers, you appear to be a Moderately Conservative Investor. That means you look to preserve your savings and can accept moderate risk of portfolio loss in exchange for the potential of limited investment growth. A Moderately Conservative portfolio will typically focus on fixed income with some stock-based investments. If this doesn't sound like an accurate description of you as an investor, you may want to go back and modify some of your answers to the Risk Profile survey. Moderate: Page 31 of 41

34 IMPORTANT DISCLOSURE INFORMATION Based on your answers, you appear to be a Moderate Investor. That means you look to balance risk of portfolio loss with the potential of moderate investment growth. A Moderate portfolio will typically include a diverse mix of fixed income and stock-based investments. If this doesn't sound like an accurate description of you as an investor, you may want to go back and modify some of your answers to the Risk Profile survey. Moderately Aggressive: Based on your answers, you appear to be a Moderately Aggressive Investor. That means you have a longer timeframe to invest or you can accept a greater risk of portfolio loss for the potential of higher investment returns. A Moderately Aggressive portfolio will typically focus on a diverse mix of stock-based investments. If this doesn't sound like an accurate description of you as an investor, you may want to go back and modify some of your answers to the Risk Profile survey. Aggressive: Based on your answers, you appear to be an Aggressive Investor. That means you have a longer timeframe to invest or you can accept significant risk of portfolio loss for an extended period of time in exchange for the potential of higher investment growth. An Aggressive portfolio will typically include a diverse mix of stock-based investments. If this doesn't sound like an accurate description of you as an investor, you may want to go back and modify some of your answers to the Risk Profile survey. The Mutual Fund Store is a nationwide system of registered investment advisers, which include affiliated companies and independently owned and operated franchises. Individual Stores are SEC or state registered investment advisers. Each Store can offer investment advisory services to prospective and existing clients in the state where the Store is located, while a number of Stores may also offer advisory services in nearby or other states. The adviser may not transact business in states where it is not appropriately registered, excluded or exempted from registration. Adam Bold is Founder and Chairman of the company stores, including The Mutual Fund Research Center. Chris Bouffard is Chief Investment Officer of The Mutual Fund Research Center. The Mutual Fund Research Center is an SEC registered investment adviser which provides asset allocation and mutual fund recommendations, as well as market and economic research to each Store in The Mutual Fund Store organization and their advisors. This includes the Store that provides you with advisory services. The Mutual Fund Store advisors provide independent, fee based, investment advisory and asset management services, which include developing and implementing customized portfolios for clients based on their unique financial situation and ability to tolerate risk associated with investments in securities. MoneyGuidePro Assumptions and Limitations Information Provided by You Information that you provided about your assets, financial goals, and personal situation are key assumptions for the calculations and projections in this Report. Please review the Report sections titled "Personal Information and Summary of Financial Goals", "Current Portfolio Allocation", and "Tax and Inflation Options" to verify the accuracy of these assumptions. If any of the assumptions are incorrect, you should notify your financial advisor. Even small changes in assumptions can have a substantial impact on the results shown in this Report. The information provided by you should be reviewed periodically and updated when either the information or your circumstances change. All asset and net worth information included in this Report was provided by you or your designated agents, and is not a substitute for the information contained in the official account statements provided to you by custodians. The current asset data and values contained in those account statements should be used to update the asset information included in this Report, as necessary. Assumptions and Limitations MoneyGuidePro offers several methods of calculating results, each of which provides one outcome from a wide range of possible outcomes. All results in this Report are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. All results use simplifying assumptions that do not completely or accurately reflect your specific circumstances. No Plan or Report has the ability to accurately predict the future. As investment returns, inflation, taxes, and other economic conditions vary from the MoneyGuidePro assumptions, your actual results will vary (perhaps significantly) from those presented in this Report. All MoneyGuidePro calculations use asset class returns, not returns of actual investments. The projected return assumptions used in this Report are estimates based on average annual returns for each asset class. The portfolio returns are calculated by weighting individual return assumptions for each asset class according to your portfolio allocation. The portfolio returns may have been modified by including adjustments to the total return and the inflation rate. The portfolio returns assume reinvestment of interest and dividends at net asset value without taxes, and also assume that the portfolio has been rebalanced to reflect the initial recommendation. No portfolio rebalancing costs, including taxes, if applicable, are deducted from the portfolio value. No portfolio allocation eliminates risk or guarantees investment results. MoneyGuidePro does not provide recommendations for any products or securities. Page 32 of 41