LIFETIME INCOME CASE STUDY

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1 Passing Along More Than Just a Legacy LIFETIME INCOME CASE STUDY Barry & Audrey Stamper Registered Investment Advisor Presented by Financial Sense Advisors, Inc.

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

3 WHO ARE BARRY & AUDREY? Ages: 65 & 62 Jobs: Business Owner & Homemaker - Barry likes idea of retiring soon but wants to ensure business is left in good hands - Audrey wants to retire knowing that their nest egg is secure and that their legacy is passed on smoothly - Seeking a professional to help determine how they can hand-off their business and retire

4 WHAT IS IMPORTANT TO BARRY? Developing a plan to pass off the business Being able to retire soon Barry Maximizing retirement income

5 WHAT IS IMPORTANT TO AUDREY? Reducing investment risks Simplifying their tax situation & estate plan Audrey Protecting their nest egg

6 BARRY & AUDREY S CURRENT RISK TOLERANCE? Most Conservative Most Aggressive Current Risk Score Portfolio Risk Score 51 72

7 BARRY & AUDREY S CURRENT BUDGET Income Expenses $340,000 ($183,000) Discretionary 29% Surplus $157,000 Living Expenses 71%

8 BARRY & AUDREY S RETIREMENT BUDGET Income Expenses $95,000 ($159,000) Discretionary 34% Shortfall ($64,000) Living Expenses 66%

9 BARRY & AUDREY S BALANCE SHEET Real Estate + - = Portfolio Liabilities Net Worth $11,050,000 $3,060,000 ($280,000) $13,830,000

10 BARRY & AUDREY S ASSET ALLOCATION 70% 1% 15% 5% 10% Asset Allocation Stocks Bonds Cash Real Estate Hard Assets

11 BARRY & AUDREY S FINANCIAL PLAN CHALLENGES 1. Managing estate taxes. 2. Maximizing potential benefit of their assets. 3. Liquidity concerns. 4. Update allocation to focus on preserving wealth.

12 BARRY & AUDREY S RETIREMENT INCOME STRATEGY Rental Income + Social Security + = Portfolio $ Total Income $40,000 $45,000 $93,568 $178,568 Investment Portfolio Barry s Retire. $2.08M Stocks & 3.2% 1 $66,560 Audrey s Retire. $320K Stocks & 3.2% 2 $10,240 Joint/ROS Acct $524K Stocks & 3.2% 3 $16,768 PMs and Cash $136K Expenses Surplus ($159,000) $19,568 1,2 & 3: Yields are for current portfolio yields as of 4/30/18. Please see disclosures at the end of this presentation for security risks.

13 GOAL BASED RECOMMENDATIONS FOR BARRY & AUDREY Minimizing taxes Looking for a simpler solution that lowers their tax liability We recommended establishing a 2nd to Die life insurance policy placed into an ILIT Meeting liquidity needs Begin to sell some of their real estate to create more liquidity in order to meet their goals and needs Maximizing value of estate Use IRA assets to meet legacy planning goals to charities and non-profits Non-qualified assets could be left to family who would receive step-up in cost basis Asset allocation Update investments to reflect more conservative mix of dividend paying stocks and bonds Create more diversification to reduce portfolio volatility

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

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