Retirement Analysis Report Prepared for: Your Client

Transcription

1 Retirement Analysis Report Prepared for: Your Client Presented by: Bill O'Quin, CLU, ChFC, RFC Financial Services Online 2651 Kleinert Ave. Baton Rouge, LA Office: (225) Fax: (225) Securities and Investment Advisory Services offered through ABC Broker Dealer, 999 Main Street, Anytown, TX 77777, Member NASD/SIPC May 15, 2010 This report is intended to offer assistance in planning and evaluating your retirement income needs, sources and any shortfalls...an important first step in planning for financial security at your retirement. Table of Contents Will You Be Ready for Retirement? Your Retirement Analysis Profile Retirement Analysis in Today s Dolars Retirement Analysis in Future Dollars Retirement Income Detail: Husband/First Partner Cash Available at Retirement Detail: Husband/First Partner Retirement Income Detail: Wife/Second Partner Cash Available at Retirement Detail: Wife/Second Partner Important Information Page Retirement Analysis Report for Your Client 1

2 Will You Be Ready for Retirement? Unless you expect to work forever, you need to begin planning for retirement now, so that you can enjoy a comfortable retirement in the future. This report is intended to offer assistance in planning and evaluating your retirement income needs, sources and any shortfalls...an important first step in planning for financial security at your retirement. Your Retirement Analysis Profile This is the information that has been used in developing the retirement analysis that follows: Husband/ First Partner Wife/ Second Partner Year of Birth: Current Age: Planned Retirement Age: Years to Retirement: Current Annual Income $180,000 $75,000 Total Current Annual Income: $255,000 Annual Retirement Income Objective: $191,250 Retirement Income Replacement Percentage: 75 % Pre-Retirement Investment Return: 5 % Post-Retirement Investment Return: 5 % Assumed Annual Inflation Rate: 3 % Estimated Social Security Benefit Used in Analysis: 75 % Retirement Analysis Report for Your Client 2

3 Retirement Analysis in Today s Dolars Retirement Income in Today's Dollars: Annual Retirement Income Objective $ 191,250 Sources of Retirement Income Husband/ First Partner Wife/ Second Partner Government Programs $ 22,392 $ 17,429 Employer-Provided Pension Benefits 40,000 0 Personal Sources 5,000 5,000 Total Annual Retirement Income $ 67,392 $ 22,429 Combined Annual Retirement Income Available $ 89,821 Additional Annual Retirement Income Needed $ 101,429 Capital Needed at Retirement in Today's Dollars: Capital Retention (1) (5 %) Capital Liquidation (2) (5 % for 24 years) Capital Needed to Provide Additional Annual Retirement Income $ 2,028,572 $ 1,469,556 Sources of Capital Available at Retirement - 1,332,550-1,332,550 Additional Capital Required to Achieve Your Retirement Income Objective $ 696,022 $ 137,006 Additional Amount You Must Save Each Year Until Your Retirement in 24 Years (5 % Return) $ 15,640 $ 3,079 (1) The capital retention method uses investment return only to provide retirement income. Principal is not liquidated and remains available for heirs. (2) The capital liquidation method withdraws both investment return and a portion of principal each year in order to provide retirement income to your joint life expectancy of 24 years (based on IRS Annuity Table VI), at which time no capital will remain and income will cease. Retirement Analysis Report for Your Client 3

4 Retirement Analysis in Future Dollars Retirement Income in Future Dollars: 3 % Inflation Rate Annual Retirement Income Objective $ 388,771 Sources of Retirement Income Husband/ First Partner Wife/ Second Partner Government Programs $ 45,518 $ 35,430 Employer-Provided Pension Benefits 81,312 0 Personal Sources 10,164 10,164 Total Annual Retirement Income $ 136,994 $ 45,594 Combined Annual Retirement Income Available $ 182,588 Additional Annual Retirement Income Needed $ 206,183 Capital Needed at Retirement in Future Dollars: 3 % Inflation Rate Capital Retention (1) (5 %) Capital Liquidation (2) (5 % for 24 years) Capital Needed to Provide Additional Annual Retirement Income $ 4,123,662 $ 2,987,298 Sources of Capital Available at Retirement - 1,544,136-1,544,136 Additional Capital Required to Achieve Your Retirement Income Objective $ 2,579,526 $ 1,443,162 Additional Amount You Must Save Each Year Until Your Retirement in 24 Years (5 % Return) $ 57,964 $ 32,429 (1) The capital retention method uses investment return only to provide retirement income. Principal is not liquidated and remains available for heirs. (2) The capital liquidation method withdraws both investment return and a portion of principal each year in order to provide retirement income to your joint life expectancy of 24 years (based on IRS Annuity Table VI), at which time no capital will remain and income will cease. Retirement Analysis Report for Your Client 4

5 Retirement Income Detail: Husband/First Partner Sources of Annual Retirement Income in Today s Dolars Future Dollars (1) Government Programs Social Security: (Age 67 ) (2) $ 22,392 $ 45,518 Civil service benefits 0 0 Veterans benefits 0 0 Other 0 0 Total: $ 22,392 $ 45,518 Employer-Provided Pension Benefits Defined benefit plan(s) Total: $ 40,000 $ 81,312 Personal Sources Investment income $ 5,000 $ 10,164 Other income 0 0 Total: $ 5,000 $ 10,164 Total Annual Income at Retirement Age 67 (24 years) $ 67,392 $ 136,994 (1) Annual retirement income amounts in future dollars reflect the assumed inflation rate of 3 %. (2) Any illustrated Social Security benefits are based on both income earners' current incomes and marital status and are approximate. Actual benefits will depend on such factors as the year you actually retire and your "Average Indexed Monthly Earnings (AIME)," based on a history of your actual earnings at retirement. In addition, the Normal Retirement Age for full Social Security benefits will slowly rise from 65 for people born before 1938 to 67 for people born after Retirement before the Normal Retirement Age for your year of birth will result in reduced benefits, which are approximated above if appropriate for your year of birth and planned retirement age. Conversely, retirement after your Normal Retirement Age may increase your benefits. The larger of the approximate benefits to which you are entitled as a worker or, if married, as a spouse are illustrated. Retirement Analysis Report for Your Client 5

6 Cash Available at Retirement Detail: Husband/First Partner Sources of Capital Available in... Today s Dollars Future Dollars (2) Defined Present Value: $ 100,000 Contribution Ann. Contribution (1) : $ 5,000 Plans (Money Purchase, Investment Return: 5 % Profit Sharing, Inflation Rate: 3 % 401(k), SEP, IRA, TDA) Value at Retirement: $ 545,020 $ 620,586 Retirement Savings (Personal savings earmarked for retirement) Present Value: $ 10,000 Annual Savings (1) : $ 2,000 Investment Return: 5 % Inflation Rate: 3 % Value at Retirement: $ 121,255 $ 151,482 Total Capital Available at Retirement Age 67 (24 years) $ 666,275 $ 772,068 (1) Assumes annual contributions/annual savings are made at the end of the year. (2) Annual defined contribution amounts and annual retirement savings amounts are increased annually by the assumed inflation rate of 3 %. Retirement Analysis Report for Your Client 6

7 Retirement Income Detail: Wife/Second Partner Sources of Annual Retirement Income in Today s Dolars Future Dollars (1) Government Programs Social Security: (Age 66 ) (2) $ 17,429 $ 35,430 Civil service benefits 0 0 Veterans benefits 0 0 Other 0 0 Total: $ 17,429 $ 35,430 Employer-Provided Pension Benefits Defined benefit plan(s) Total: $ 0 $ 0 Personal Sources Investment income $ 5,000 $ 10,164 Other income 0 0 Total: $ 5,000 $ 10,164 Total Annual Income at Retirement Age 66 (24 years) $ 22,429 $ 45,594 (1) Annual retirement income amounts in future dollars reflect the assumed inflation rate of 3 %. (2) Any illustrated Social Security benefits are based on both income earners' current incomes and are approximate. Actual benefits will depend on such factors as the year you actually retire and your "Average Indexed Monthly Earnings (AIME)," based on a history of your actual earnings at retirement. In addition, the Normal Retirement Age for full Social Security benefits will slowly rise from 65 for people born before 1938 to 67 for people born after Retirement before the Normal Retirement Age for your year of birth will result in reduced benefits, which are approximated above if appropriate for your year of birth and planned retirement age. Conversely, retirement after your Normal Retirement Age may increase your benefits. The larger of the approximate benefits to which you are entitled as a worker or, if married, as a spouse are illustrated. Retirement Analysis Report for Your Client 7

8 Cash Available at Retirement Detail: Wife/Second Partner Sources of Capital Available in... Today s Dollars Future Dollars (2) Defined Present Value: $ 100,000 Contribution Ann. Contribution (1) : $ 5,000 Plans (Money Purchase, Investment Return: 5 % Profit Sharing, Inflation Rate: 3 % 401(k), SEP, IRA, TDA) Value at Retirement: $ 545,020 $ 620,586 Retirement Savings (Personal savings earmarked for retirement) Present Value: $ 10,000 Annual Savings (1) : $ 2,000 Investment Return: 5 % Inflation Rate: 3 % Value at Retirement: $ 121,255 $ 151,482 Total Capital Available at Retirement Age 66 (24 years) $ 666,275 $ 772,068 (1) Assumes annual contributions/annual savings are made at the end of the year. (2) Annual defined contribution amounts and annual retirement savings amounts are increased annually by the assumed inflation rate of 3 %. Retirement Analysis Report for Your Client 8

9 Important Information The information, general principles and conclusions presented in this report are subject to local, state and federal laws and regulations, court cases and any revisions of same. While every care has been taken in the preparation of this report, neither VSA, L.P. nor The National Underwriter Company is engaged in providing legal, accounting, financial or other professional services. This report should not be used as a substitute for the professional advice of an attorney, accountant, or other qualified professional. IMPORTANT NOTE: This report is based on assumptions about inflation rates, investment returns, life expectancy and future Social Security benefits that are hypothetical. In addition, no specific products are illustrated, meaning that the fees and expenses associated with any particular investment have not been deducted. Such fees and expenses will reduce the overall investment performance shown in these hypothetical illustrations, resulting in the need for higher contributions and/or investment returns in order to achieve desired retirement objectives. U.S. Treasury Circular 230 may require us to advise you that "any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor." VSA, LP All rights reserved (VSA 3a-12a ed ) Retirement Analysis Report for Your Client 9