Personal Retirement Plan For January 31, 2016 Prepared by Carolyn B. Settzo Certified Financial Planner carolyn@carolynsettzo.com 203-417-4010 You can't predict but you can prepare This presentation provides a general overview of some aspects of your personal financial position. It is designed to provide educational and / or general information and is not intended to provide specific legal, accounting, investment, tax or other professional advice. For specific advice on these aspects of your overall financial plan, consult with your professional advisors. Asset or portfolio earnings and / or returns shown, or used in the presentation, are not intended to predict nor guarantee the actual results of any investment products or particular investment style. IMPORTANT: The projections or other information generated by Money Tree's Silver regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Additionally, it is important to note that information in this report is based upon financial figures input on the date above; results provided may vary with subsequent uses and over time.
Net Worth Statement January 31, 2016 ASSETS Savings And Investments Money Market Accounts/Funds $20,000 Annuities 30,000 Municipal Bonds and Funds 10,000 Stock Mutual Funds 5,000 Retirement Accounts Qualified Plans-John $100,000 IRA Assets-Mary 14,000 Roth Assets-John 2,000 Roth Assets-Mary 2,000 Other Assets Residence $200,000 Personal Property 20,000 Auto 30,000 LIABILITIES $65,000 $118,000 $250,000 TOTAL ASSETS $433,000 Residence Mortgage $120,000 Credit Card Debt 5,000 Auto Loans 15,000 $140,000 Net Worth (Assets less Liabilities) $293,000 Note: Potential taxes due on unrealized gains or assets in tax-deferred retirement plans are not accounted for in this Net Worth Statement. This asset information is based upon information you provided and sources believed to be reliable. The asset listing herein is not an account statement and does not necessarily include current or complete balances, holdings, and returns. Please review this information for accuracy.
Description Current Amount Asset Worksheet Annual Additions* Addition Period Asset Class Account Taxation Asset Type Cash 20,000 Cash Taxable (J) Money Market Municipal Bond Fund 10,000 Income Tax-Free (J) Muni Bonds & Funds Stock Mutual Funds 5,000 3,000 2016-2031 Inc./Gro. Taxable (J) Mutual Funds (Stock) IRA 14,000 Income IRA (2) Stocks 401k 20,000 1,000 2016-2031 Income Tax-Deferred (1) Bond Mutual Funds 401k 80,000 8,000 2016-2031 Inc./Gro. Tax-Deferred (1) Mutual Funds (Stock) Annuity 30,000 Inc./Gro. Annuity (1) Annuities Roth IRA 2,000 2,000 2016-2031 Cash Roth IRA (1) Money Market Roth IRA 2,000 2,000 2016-2031 Cash Roth IRA (2) Money Market Totals: $183,000 $16,000 *Annual IRA addition amounts used in the analysis are limited to the maximums allowed by law. Note: This asset information is based upon information you provided and sources believed to be reliable. The asset listing herein is not an account statement and does not necessarily include current or complete balances, holdings, and returns. Please review this information for accuracy.
Resources Available for Retirement Funds to meet your goals can come from several sources: Personal Investing, Retirement Plans, Defined Benefit Pensions, Social Security, and Other Income. Here is a summary of your situation. Total Investment Assets $183,000 See Asset Worksheet for detailed annual savings information. Social Security Full Benefit Age Benefit (After-tax) John 62 $23,928 Pension Plans John Pension Amount $5,400* Pension Starting Age 62 Increase Rate Pre-Retirement 0.0% Increase Rate in Retirement 2.0% Survivor Percentage 0% *Annual amount, after taxes. Personal Investments Current Balances Money Market Accounts/Funds $20,000 Annuities 30,000 Municipal Bonds and Funds 10,000 Stock Mutual Funds 5,000 $65,000 Retirement Plans Qualified Plans-John $100,000 IRA Assets-Mary 14,000 Roth IRA/401k Assets-John 2,000 Roth IRA/401k Assets-Mary 2,000 $118,000 Mary 62 $12,432 Mary N/A
Developing A Retirement Plan Retirement Profile Developing a retirement plan means understanding your current situation, deciding among alternatives, and taking appropriate action today. This report will help you define your current retirement goals, identify your current planning, and estimate the results for your review. Your Current Retirement Goals Age: Retirement Age: Years until Retirement: Years of Retirement: Annual Retirement Spending (After-tax): John 48 64 16 21 $57,500 Mary 46 62 16 28 (expressed in today's dollars) Additional Objectives Please see the attached Education Funding Illustration. Other Expenses European vacation: Replace Roof: Redo Kitchen: Assumptions ($20,000)/year starting 2014, increase rate of 3%, for 1 year. ($8,000)/year starting 2016, increase rate of 3%, for 1 year. ($12,000)/year starting 2012, increase rate of 3%, for 1 year. Inflation Rate: Income Tax Rate (Average): Return on Investments (Average): Pre-Retirement 3.0% 25.0% 6.9% Retirement 3.0% 20.0% 6.1% Current residence(s) will be maintained. Related debt will be paid per existing mortgage(s).
Retirement Summary Retirement Capital Illustration The analysis begins at your current age and extends through your life expectancy. It includes all assets, both tax advantaged and taxable, all expenses, including education funding if applicable, other income and expense estimates, defined benefit pensions, and Social Security benefits. The graph illustrates the growth and depletion of capital assets as seen in Retirement Capital Analysis. General Assumptions: Rates of Return Before and After Retirement Used in Illustration: Taxable RORs: Tax Def. RORs: Tax Free RORs: Annuity RORs: 7% 6% 7% 6% 5% 5% 7% 7% Retirement Spending Needs* Survivor Spending Needs* Retirement Age Retirement Age Inflation - Current Inflation - Retirement Tax Rate - Current Tax Rate - Retirement $57,500 $50,000 John - 64 Mary - 62 3% 3% 25% 20% * Spending needs are stated in today's after tax-dollars. See Assumptions page for complete listing of assumptions. Actual future returns, taxes, expenses, and benefits are unknown. This illustration uses representative estimates and assumptions for educational and discussion purposes only. Do not rely on this report for investment analysis. Retirement Capital Illustration Results: It appears you may run out of money before the last life expectancy of age 90. The range of possible options you might consider to improve your situation include the following: Increase the rate of return on your investments. Increase your annual savings by $4,600/year ($383 month). Reduce your retirement spending needs by $4,700 to $52,800/year ($4,401/month). Defer your retirement by about 2 years. Combine any of the above and lower the requirements for each.
Ages* Retirement Spending Needs Retirement Capital Analysis Indv. 1 Sources of Annual Income ** Social Security Pension Income Indv. 2 Indv. 1 Indv. 2 Education & Other Inc/Exp*** Net Surplus or (Shortage) Annual Additions To Assets Retirement Capital $183,000 48 46 (8,000) (8,000) 16,000 203,496 49 47 16,480 234,188 50 48 16,973 267,452 51 49 17,483 303,482 52 50 18,009 342,479 53 51 18,547 384,656 54 52 19,104 430,249 55 53 19,677 479,506 56 54 20,267 532,690 57 55 20,875 590,091 58 56 21,501 652,009 59 57 22,147 718,774 60 58 22,811 790,731 61 59 23,497 868,258 62 60 5,400 5,400 24,201 957,291 63 61 5,508 5,508 24,926 1,053,120 64 R 62 R (92,263) 23,928 12,432 5,993 (49,911) 1,064,169 65 63 (95,030) 24,466 12,711 6,113 (51,740) 1,074,592 66 64 (97,880) 25,017 12,997 6,235 (53,631) 1,084,337 67 65 (100,816) 25,580 13,290 6,360 (55,587) 1,084,182 68 66 (103,840) 26,155 13,589 6,487 (57,609) 1,081,025 69 67 (106,955) 26,744 13,895 6,616 (59,700) 1,071,212 70 68 (110,163) 27,345 14,207 6,749 (61,861) 1,055,838 71 69 (113,467) 27,961 14,527 6,884 (64,096) 1,036,665 72 70 (116,871) 28,590 14,854 7,021 (66,406) 1,013,366 73 71 (120,377) 29,233 15,188 7,162 (68,794) 985,595 74 72 (123,988) 29,891 15,530 7,305 (71,262) 952,981 75 73 (127,707) 30,563 15,879 7,451 (73,813) 915,125 76 74 (131,538) 31,251 16,237 7,600 (76,450) 871,602 77 75 (135,484) 31,954 16,602 7,752 (79,176) 821,958 78 76 (139,548) 32,673 16,975 7,907 (81,992) 765,710 79 77 (143,734) 33,408 17,357 8,065 (84,903) 702,339 80 78 (148,046) 34,160 17,748 8,227 (87,911) 631,294 81 79 (152,487) 34,929 18,147 8,391 (91,020) 551,982 82 80 (157,061) 35,715 18,556 8,559 (94,232) 463,777 83 81 (161,772) 36,518 18,973 8,730 (97,551) 389,797 84 82 (166,625) 37,340 19,400 8,905 (100,981) 309,174 85 L 83 (171,623) 38,180 19,836 9,083 (104,524) 220,064 84 (153,709) 46,010 (107,699) 122,338 85 (158,320) 47,045 (111,275) 15,065 86 (163,069) 48,104 (114,965) 87 (167,961) 49,186 (118,775) 88 (172,999) 50,293 (122,706) 89 (178,188) 51,425 (126,763) 90 L (183,533) 52,582 (130,951) *R=Retirement age, L=Life expectancy.** Pensions & 85% of S.S. reduced 20.00% for income taxes. *** Includes life insurance and education costs. Note: This report is based upon assumed inflation rates of 3.00% and 3.00% (before and after retirement). Actual future inflation rates are unknown.
Monte Carlo Retirement Simulation Results from 10,000 Monte Carlo Simulation Trials * The bold line is the estimated retirement capital value over time using fixed rates. This Monte Carlo Retirement Simulation illustrates possible variations in growth and/or depletion of retirement capital under unpredictable future conditions. The simulation introduces uncertainty by fluctuating annual rates of return on assets. The graph and related calculations do not presuppose or analyze any particular investment or investment strategy. This long-term hypothetical model is used to help show potential effects of broad market volatility and the possible impact on your financial plans. This is not a projection, but an illustration of uncertainty. The simulations begin in the current year and model potential asset level changes over time. Included are all capital assets, both tax advantaged and taxable, all expenses, including education funding if applicable, pension benefits, and Social Security benefits. Observing results from this large number of simulations may offer insight into the shape, trends, and potential range of future retirement plan outcomes under volatile market conditions. Retirement Capital Analysis Results, at Life Expectancy, of 10,000 Monte Carlo Simulations: Percent with funds at last life expectancy 17% Retirement Capital Estimate $0 Percent with funds at age 83 80% Minimum (Worst Case) result $0 Percent with funds at age 73 > 95% Average Monte Carlo result $103,812 Percent with funds at age 64 > 95% Maximum Monte Carlo result $5,628,810 Life insurance proceeds are not included in the final year balances of these calculations. Illustration based on random rates of return which average 6.4%, with a std. dev. of 6.3% (95% of values fall between -6.2% and 19%). IMPORTANT: The projections or other information generated in this report 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 may vary with each report and over time. Results of this simulation are neither guarantees nor projections of future performance. Information is for illustrative purposes only. Do not rely upon the results of this report to predict actual future performance of any investment or investment strategy.
Cash Flow Summary The bars in the above graph represent the amounts available from: Earned income (wages and self-employment) Social Security Qualified plan additions and distributions Investment additions and distributions Misc - (inheritances, sale of residence, retirement account minimum distributions, life insurance) The line illustrates the annual expenses including: Personal living expenses Planned debt expenses Specified special expenses Planned deposits to investment and retirement accounts Miscellaneous expense items Taxes Note: The Cash Flow report provides the actual numbers that create the preceding Cash Flow Summary graph.
Cash Flow Ages Cash Flow Sources Less Living Shortage Indv. Earned Retire/Roth Investment Pension/ Other Total Expense or 1 2 Income Accounts* Accounts* Soc Sec. Income Sources & Taxes Surplus 48 46 $120,000 ($13,000) $5,000 ($8,000) $104,000 ($97,750) $6,250 49 47 123,600 (13,390) (1,372) 108,838 (100,682) 8,156 50 48 127,308 (13,790) (1,211) 112,307 (103,703) 8,605 51 49 131,126 (14,205) (1,035) 115,886 (106,813) 9,073 52 50 135,060 (14,632) (842) 119,586 (110,018) 9,568 53 51 139,112 (15,069) (632) 123,411 (113,318) 10,092 54 52 143,285 (15,522) (403) 127,360 (116,718) 10,642 55 53 147,584 (15,987) (155) 131,442 (120,219) 11,223 56 54 152,012 (16,467) 115 135,660 (123,826) 11,834 57 55 156,572 (16,961) 407 140,018 (127,541) 12,477 58 56 161,269 (17,469) 723 144,523 (131,367) 13,155 59 57 166,108 (17,994) 1,064 149,178 (135,308) 13,870 60 58 171,090 (18,534) 1,433 153,989 (139,367) 14,622 61 59 176,224 (19,091) 1,830 158,963 (143,549) 15,415 62 60 181,510 (19,663) 2,399 5,400 169,646 (147,855) 21,791 63 61 186,956 (20,252) 3,152 5,508 175,364 (152,291) 23,074 64 R 62 R 49,911 42,352 92,263 (92,263) 65 63 51,740 43,290 95,030 (95,030) 66 64 53,631 44,249 97,880 (97,880) 67 65 42,380 21,682 45,229 109,291 (109,292) 68 66 66,599 46,231 112,830 (112,830) 69 67 72,536 47,255 119,791 (119,792) 70 68 77,326 48,302 125,628 (125,628) 71 69 80,119 49,372 129,491 (129,490) 72 70 83,007 50,465 133,472 (133,472) 73 71 85,992 51,583 137,575 (137,575) 74 72 89,077 52,726 141,803 (141,803) 75 73 92,266 53,894 146,160 (146,160) 76 74 95,562 55,088 150,650 (150,650) 77 75 98,969 56,308 155,277 (155,277) 78 76 102,490 57,556 160,046 (160,046) 79 77 106,128 58,831 164,959 (164,959) 80 78 109,889 60,135 170,024 (170,023) 81 79 113,774 61,467 175,241 (175,241) 82 80 117,789 62,829 180,618 (180,618) 83 81 98,840 64,221 163,061 (163,062) 84 82 100,980 65,644 166,624 (166,625) 85 L 83 104,523 67,099 171,622 (171,623) 84 107,698 46,010 153,708 (153,709) 85 111,274 47,045 158,319 (158,320) 86 15,503 48,104 63,607 (163,069) (99,462) 87 49,186 49,186 (167,961) (118,775) 88 50,293 50,293 (172,999) (122,706) 89 51,425 51,425 (178,188) (126,763) 90 L 52,582 52,582 (183,533) (130,951) *Scheduled distributions, interest, or cash dividends or amounts taken to meet the IRS minimum distribution requirements. Note: Earned Income is reduced by qualified retirement account contributions in calculating the effect of income taxes. Pension, Social Security, and Other Income cash flow items are net of income taxes. The tax rate used is the average tax rate entered in the input.
Ages 1 & 2 Taxable Savings & Investment Accounts Account Additions Annual Growth Income Tax On Account* From Tax-Advantaged Assets Distributions Income Tax Paid out or received for cash flow Account Balance** $25,000 48 46 3,000 1,575 (394) (8,000) 21,181 49 47 3,090 1,591 (398) 25,463 50 48 3,183 1,894 (473) 30,066 51 49 3,278 2,219 (555) 35,008 52 50 3,377 2,569 (642) 40,311 53 51 3,478 2,944 (736) 45,996 54 52 3,582 3,345 (836) 52,087 55 53 3,690 3,775 (944) 58,607 56 54 3,800 4,236 (1,059) 65,583 57 55 3,914 4,728 (1,182) 73,043 58 56 4,032 5,254 (1,314) 81,014 59 57 4,153 5,816 (1,454) 89,529 60 58 4,277 6,417 (1,604) 98,618 61 59 4,406 7,058 (1,764) 108,317 62 60 4,538 7,930 (1,983) 5,400 124,201 63 61 4,674 9,050 (2,263) 5,508 141,170 64 R 62 R 6,973 (1,395) (49,911) 96,837 65 63 4,258 (852) (51,740) 48,503 66 64 1,421 (284) 3,991 (53,631) 67 65 64,063 (8,476) (55,587) 68 66 66,599 (8,990) (57,609) 69 67 72,537 (12,837) (59,700) 70 68 77,327 (15,465) (61,861) 71 69 80,119 (16,024) (64,096) 72 70 83,007 (16,601) (66,406) 73 71 85,993 (17,199) (68,794) 74 72 89,078 (17,816) (71,262) 75 73 92,267 (18,453) (73,813) 76 74 95,563 (19,113) (76,450) 77 75 98,970 (19,794) (79,176) 78 76 102,490 (20,498) (81,992) 79 77 106,129 (21,226) (84,903) 80 78 109,889 (21,978) (87,911) 81 79 113,775 (22,755) (91,020) 82 80 117,790 (23,558) (94,232) 83 81 98,841 (1,290) (97,551) 84 82 100,981 (100,981) 85 L 83 104,524 (104,524) 84 107,699 (107,699) 85 111,275 (111,275) 86 15,504 (114,965) 87 (118,775) 88 (122,706) 89 (126,763) 90 L (130,951) * Estimated taxes include tax due on income and on sales of assets. Starting cost basis is estimated at 100.00%. ** This report is based on assumed growth rates of 7.00% and 6.00%, and inflation rates of 3.00% and 3.00% (before and after retirement). Account additions are calculated to increase at 3.00% per year for each individual.
Ages 1 & 2 Tax-Deferred Annuities Account Annual Account Balance* Cumulative Taxable Income Additions Growth Withdrawals $30,000 Growth Withdrawal Tax Due 48 46 2,100 32,100 2,100 49 47 2,247 34,347 4,347 50 48 2,404 36,751 6,751 51 49 2,573 39,324 9,324 52 50 2,753 42,077 12,077 53 51 2,945 45,022 15,022 54 52 3,152 48,173 18,173 55 53 3,372 51,546 21,546 56 54 3,608 55,154 25,154 57 55 3,861 59,015 29,015 58 56 4,131 63,146 33,146 59 57 4,420 67,566 37,566 60 58 4,730 72,295 42,295 61 59 5,061 77,356 47,356 62 60 5,415 82,771 52,771 63 61 5,794 88,565 58,565 64 R 62 R 6,200 94,764 64,764 65 63 6,634 101,398 71,398 66 64 7,098 108,496 78,496 67 65 6,111 (42,381) 72,226 84,607 42,381 (8,476) 68 66 2,725 (66,599) 8,352 44,951 44,951 (8,990) 69 67 282 (8,634) 282 282 (56) 70 68 71 69 72 70 73 71 74 72 75 73 76 74 77 75 78 76 79 77 80 78 81 79 82 80 83 81 84 82 85 L 83 84 85 86 87 88 89 90 L * This report is based on assumed growth rates of 7.00% and 7.00%, with inflation rates of 3.00% and 3.00% (before and after retirement). Starting Cost basis is 100.00%. Account additions are calculated to increase 3.00% per year.
Tax-Deferred Retirement Accounts Individual 1 Accounts Individual 2 Accounts Account Annual Withdrawals Balance* Account Annual With- Balance* Age Additions Growth $100,000 Age Additions Growth drawals $14,000 48 9,000 7,315 116,315 46 980 14,980 49 9,270 8,467 134,052 47 1,049 16,029 50 9,548 9,718 153,318 48 1,122 17,151 51 9,835 11,077 174,230 49 1,201 18,352 52 10,130 12,551 196,911 50 1,285 19,637 53 10,433 14,149 221,493 51 1,375 21,012 54 10,746 15,881 248,120 52 1,471 22,483 55 11,069 17,756 276,945 53 1,574 24,057 56 11,401 19,785 308,131 54 1,684 25,741 57 11,743 21,980 341,854 55 1,802 27,543 58 12,095 24,353 378,302 56 1,928 29,471 59 12,458 26,917 417,677 57 2,063 31,534 60 12,832 29,687 460,196 58 2,207 33,741 61 13,217 32,676 506,089 59 2,362 36,103 62 13,613 35,903 555,605 60 2,527 38,630 63 14,022 39,383 609,010 61 2,704 41,334 64 R 36,541 645,551 62 R 2,480 43,814 65 38,733 684,284 63 2,629 46,443 66 41,057 725,341 64 2,787 49,230 67 43,521 768,862 65 2,954 52,184 68 46,132 814,994 66 3,131 55,315 69 46,983 (63,903) 798,074 67 3,319 58,634 70 45,565 (77,327) 766,312 68 3,518 62,152 71 43,575 (80,119) 729,768 69 3,729 65,881 72 41,368 (80,603) 690,533 70 3,881 (2,404) 67,357 73 38,929 (83,451) 646,011 71 3,965 (2,542) 68,780 74 36,169 (86,391) 595,789 72 4,046 (2,687) 70,140 75 33,065 (89,427) 539,427 73 4,123 (2,840) 71,424 76 29,589 (92,562) 476,454 74 4,195 (3,001) 72,618 77 25,713 (95,799) 406,369 75 4,262 (3,171) 73,709 78 21,408 (99,140) 328,637 76 4,322 (3,350) 74,681 79 16,640 (102,606) 242,671 77 4,375 (3,523) 75,534 80 11,375 (106,168) 147,878 78 4,420 (3,721) 76,234 81 5,577 (109,866) 43,589 79 4,457 (3,909) 76,781 82 1,270 (44,859) 80 2,419 (72,931) 6,269 83 81 183 (6,452) 84 82 85 L 83 84 85 86 87 88 89 90 L * This report is based on assumed growth rates of 7.00% and 6.00%, and inflation rates of 3.00% and 3.00% (before and after retirement). Account deposits are calculated to increase 3.00% and 3.00% per year (Individual 1 and 2). Company contributions to Roth 401k accounts show as account additions to Tax Deferred accounts.
Indv 1 Tax-Free Accounts Combined ROTH IRA Accounts Other Tax Free Assets Age Indv 2 Additions Indv. 1 Additions Indv. 2 Annual Growth Withdrawals Balance* $4,000 Account Additions Annual Growth Withdrawals Balance* $10,000 48 46 2,000 2,000 420 8,420 500 10,500 49 47 2,060 2,060 734 13,272 525 11,025 50 48 2,121 2,121 1,078 18,590 551 11,576 51 49 2,185 2,185 1,454 24,414 579 12,154 52 50 2,251 2,251 1,867 30,782 608 12,761 53 51 2,318 2,318 2,317 37,734 638 13,399 54 52 2,388 2,388 2,809 45,318 670 14,068 55 53 2,459 2,459 3,344 53,580 703 14,771 56 54 2,533 2,533 3,928 62,572 739 15,509 57 55 2,609 2,609 4,563 72,352 775 16,284 58 56 2,687 2,687 5,253 82,978 814 17,098 59 57 2,768 2,768 6,002 94,516 855 17,952 60 58 2,851 2,851 6,816 107,032 898 18,849 61 59 2,937 2,937 7,698 120,602 942 19,791 62 60 3,025 3,025 8,654 135,304 990 20,780 63 61 3,115 3,115 9,689 151,222 1,039 21,819 64 R 62 R 9,073 160,294 1,091 22,909 65 63 9,618 169,910 1,145 24,054 66 64 10,195 180,104 1,103 (3,991) 21,166 67 65 10,806 190,910 516 (21,682) 68 66 11,455 202,364 69 67 12,142 214,504 70 68 12,870 227,374 71 69 13,642 241,016 72 70 14,461 255,476 73 71 15,329 270,804 74 72 16,248 287,052 75 73 17,223 304,274 76 74 18,256 322,530 77 75 19,352 341,880 78 76 20,513 362,392 79 77 21,744 384,134 80 78 23,048 407,182 81 79 24,431 431,612 82 80 25,897 457,508 83 81 24,679 (92,389) 389,797 84 82 20,358 (100,981) 309,174 85 L 83 15,415 (104,524) 220,064 84 9,973 (107,699) 122,338 85 4,002 (111,275) 15,065 86 439 (15,504) 87 88 89 90 L * Roth growth rates: 7.00% and 6.00%, Tax-Free: 5.00% and 5.00%, inflation rates: 3.00% and 3.00% (before and after retirement). Account deposits are calculated to increase 3.00% and 3.00% per year (Individual 1 and 2).