Disclosures This statement has been prepared by Robert Young for informational purposes only and does not replace the statement(s) you should receive directly from your investment sponsor(s). The goal of this cash flow analysis is to assist in the development of your current and long-term financial strategy. These strategies are presented to assist you with important decisions regarding savings to meet intended retirement goals. Cash flow needs are based on the information you provided, which represents your situation at one point in time. As your situation changes, suggestions may change. The program is meant to provide representatives and their clients with a quick, yet detailed report of the client s current financial situation and hypothetical cash flow up until whatever age that is desired to be displayed. It is not meant to provide specific investment recommendations or advice. This report is not intended to provide legal or tax advice. For legal and tax matters, it is important that you consult with your legal and tax advisors regarding the affect on your personal situation. Hypothetical returns are for illustrative purposes only based on assumed growth rates for assets over the time period referenced. Assumed growth rates should not be considered indicative of future results. The assumed growth cannot be predicted nor is it guaranteed. This hypothetical illustration of mathematical principles is designed to model and evaluate alternative strategies for addressing your future cash flow needs. Note that the amounts are not intended to be exact. These are assumed figures and should only be used as guidelines and not as guaranteed projections. Projections throughout the report are intended to help you determine amounts you need to save to meet your various financial needs, but they are not a projection of the expected return of any specific assets that you own or purchase. Tax rates and rates of return are used for illustrative purposes only and do not represent a guarantee of actual federal tax rates or the performance of any specific investment. These calculations reflect federal and state income tax only and do not consider the effect of alternative minimum tax. This report has been prepared from data believed to be reliable but no representation is being made as to its accuracy or completeness. The figures presented should not be relied upon for tax purposes. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. Selling bonds prior to maturity may make the actual yield differ from their advertised yield and may involve a loss or gain. Bond values will decline as interest rates rise and are subject to availability and change in price. Investing in real estate/reits involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained. Past performance is no guarantee of future results. The market for all securities is subject to fluctuation such that upon sale an investor may lose principal. CD's are FDIC Insured and offer a fixed rate of return if held to maturity.
HOW TO READ THIS REPORT The goal of this report is to help you understand your current financial situation and assist in the development of your long term financial strategies. It is designed to quickly give you important information for making financial decisions and achieving your retirement goals. The report is based on the information you provided and represents your situation at one point in time. As your situation changes, the suggestions may also change or need to be updated. The reports use color to help you easily view the parts that make up your financial picture. Income, assets, and positive cash flows are shown in green. Investment items are shown in blue. Expenses, liabilities, and negative cash flow items are shown in red. Income & Expenses: This page of the report shows your income now and your estimated income at retirement. It also calculates your current expenses. It arrives at those expenses by taking your current income from all sources and subtracting the cost of taxes and the money you are regularly putting into savings. If money has not been saved, it must have been spent. It also divides the expenses into two types: 1. Expenses of limited duration such as mortgages and loans; 2. Expenses that continue for your lifetime such as food, utilities, gasoline, insurance, property taxes, travel, and entertainment, etc. This last category represents your current standard of living and, with adjustments for inflation, establishes the target amount you will need in retirement to maintain that standard of living. Assets & Liabilities: This page is simply a snapshot of your current financial situation at the point in time the report was prepared. It subtracts your debts and liabilities from your assets to arrive at your net worth. If you sold everything you own tomorrow and paid off all of your debts, this is approximately how much money you would have. It also shows any regular contributions you are making to particular accounts. Target Cash Flow Year-By-Year: These pages of the report project your expenses, adjusted for inflation over your lifetime. With five years shown on each page, this section of the report compares your income from all sources to your projected expenses in each of those years. The bottom line for each year shows if there is a cash flow surplus in green or a cash flow shortfall in red. The last page in this section displays the cash flow surplus or shortfall over your entire life expectancy. If there are shortfalls in any years, the program calculates the amount you would have to invest in a growth investment as a lump sum today, or each year, or each month going forward to meet the projected expenses in the year they are needed. The program does not assume that all surpluses are captured to offset expenses. That is not realistic. It simply calculates the size of the cash flow shortfall, if there is one, and you can then look at the years where there are surpluses and decide how much of it you can capture and invest to meet the shortfalls.
Strategies For Addressing Shortfalls: HOW TO READ THIS REPORT (cont.) If the report shows there are shortfalls in the current or future years, don t panic. There are many ways to address shortfalls and the earlier you identify them, the easier they are to address: 1. Increase Savings and Investments - Look at the surpluses for each year and any increases in income you may receive and decide how much you can realistically save or invest. 2. Increase the Returns on your Investments - If most of your investments are in conservative accounts or investments, consider diversifying them to potentially increase returns. 3. Increase Income - Evaluate your current employment. If you do not feel you are earning what you should based on your education and experience, a change of careers or employers may enable you to increase your income. Taking some classes and getting a more advanced degree or professional designation could increase your income. Starting your own business may be an option. 4. Decrease Expenses - Review your expenses and decide if there are any places you can cut back or reduce spending. 5. Work Longer or Part Time - People are living longer and healthier lives. The old concept of totally retiring at age 60 or 65 may not be the most desirable approach for most people. You could work part time for an employer you really like. The shortfall line will tell you how much you would need to work in any given year. You have accumulated valuable experience and knowledge that employers may need in order to train replacements for the baby boom retirees. 6. Sell or Reposition Assets Look at your assets and see if there are any that are generating low or no income that could be repositioned to create a larger income stream. 7. Any or All of the Above It is often difficult to address a shortfall using just one of the strategies listed above. A combination of the strategies listed above is usually the most realistic approach. Probability of Meeting Income Needs: In addition to the strategies for addressing cash flow shortfalls identified above, there is one additional strategy which is to withdraw both principal and income from your retirement accounts, as needed each year, to meet any shortfalls. To be conservative, Retirement in a Nutshell does not assume principal is used to address shortfalls. The buildup of principal in retirement accounts then becomes a back-up source of funds in later years if the other strategies fall short. Invading principal is a critical decision which should be discussed with your advisor before implementing this approach. If principal is invaded too early one could run out of both principal and income. The "Probability of Meeting Income Needs" chart uses probabilistic modeling (Monte Carlo) and statistical analysis of thousands of historical scenarios to determine the chances your assets will last through your retirement years if both principal and income are withdrawn as needed. It examines various withdrawal rates and portfolio allocations over a typical 25 year retirement period and displays the probability, as a percentage, that you will not run out of assets. It is intended to help you evaluate risk and the chances of success in meeting your retirement goals if you do decide to begin utilizing principal. Of course, there is no guarantee that actual future market returns will be consistent with this analysis.
INCOME & EXPENSES 8/12/2012 CURRENT ANNUAL INCOME INCOME EXPENSES Ben - Gross Income (less employee pension/ss contributions) $84,420 Betty - Gross Income (less employee pension/ss contributions) $47,000 Real Estate & Other Income $2,020 Total Gross Income $133,440 CALCULATION OF CURRENT ANNUAL LIVING EXPENSES Gross Income $133,440 Less Income Tax (23.64 % of gross income excluding retirement contributions) $25,300 Less Retirement and Savings Contributions $26,400 Less Living Expenses/Payments of Limited Duration House Payment (Excl. Insurance and Property Tax) $25,200 Equity Loan Payments $7,200 Net Annual Living Expenses that Continue for Life $49,340 Net Monthly Living Expenses $4,112 RETIREMENT/SOCIAL SECURITY INCOME Age Ben Betty Retirement Plan/Pension (monthly) 65 $0 Social Security (monthly) 65 $1,500 x COLA (2.00 %) $1,760 Retirement Plan/Pension (monthly) 65 $3,333 Social Security (monthly) 65 $0 x COLA (0.00 %) $0
CURRENT ASSETS & LIABILITIES 8/12/2012 CURRENT MARKET MONTHLY ASSETS ASSET TYPE VALUE ADDITIONS Checking Bank Checking $4,000 Savings Emergency Funds $22,000 Residence Residence $350,000 Cabin Vacation Home $150,000 INVESTMENTS INVESTMENT TYPE Ben Betty Elm Street Rental Real Estate $400,000 Ben's 401k Tax Deferred - Qualified - 1 $100,000 $1,700 Betty 457 Tax Deferred - Qualified - 2 $60,000 $500 Betty IRA Tax Deferred - Qualified - 3 $33,000 LIABILITIES LIABILITY TYPE Residence Loan Residence Loan $170,000 Equity Loan Equity Loan $26,000 Rental Real Estate Elm Street Rental $150,000 Total Monthly Additions $2,200 NET WORTH $773,000
CASH FLOW ASSUMPTIONS 8/12/2012 * Assumed Assumed Asset Asset Annual Growth Withdrawal Category Owner Value Additions Rate %/Amt Tax Deferred - Qualified - 1 Client $100,000 $20,400 7% 5.00 % Tax Deferred - Qualified - 2 Spouse $60,000 $6,000 7% 5.00 % Tax Deferred - Qualified - 3 Spouse $33,000 $0 7% 5.00 % Elm Street Rental Joint $400,000 3% 0.51 % Income Taxes as a % of Net Income 23.64 % Inflation Rate 3.00 % Years Until Retirement Client: 8 Spouse: 6 * Hypothetical growth is for illustration purposes only. There is no assurance that these results will be achieved. Actual results will vary.
HYPOTHETICAL CASH FLOW 8/12/2012 2012 2013 2014 2015 2016 Age - Ben / Betty 57 / 59 58 / 60 59 / 61 60 / 62 61 / 63 Ben Salary - Ben $84,420 $86,108 $87,831 $89,587 $91,379 Betty Salary - Betty $47,000 $47,940 $48,899 $49,877 $50,874 Betty Pension - Betty Social Security - Ben Total Non-Investment Income $131,420 $134,048 $136,729 $139,464 $142,253 Elm Street Rental $400,000 $412,000 $424,360 $437,091 $450,204 Income $2,020 $2,536 $3,067 $3,615 $4,179 Client Retirement Assets Tax Deferred - Qualified - 1 $100,000 $127,400 $156,718 $188,088 $221,654 Income Spouse Retirement Assets Tax Deferred - Qualified - 2 $60,000 $70,200 $81,114 $92,792 $105,287 Income Tax Deferred - Qualified - 3 $33,000 $35,310 $37,782 $40,426 $43,256 Income Target Account Values $193,000 $232,910 $275,614 $321,307 $370,198 Target Investment Income $2,020 $2,536 $3,067 $3,615 $4,179 TOTAL INCOME $133,440 $136,584 $139,797 $143,079 $146,432 Invest/Retire Contributions - Client $20,400 $20,400 $20,400 $20,400 $20,400 Invest/Retire Contributions - Spouse $6,000 $6,000 $6,000 $6,000 $6,000 Income Taxes $25,300 $26,043 $26,803 $27,578 $28,371 NET INCOME $81,740 $84,141 $86,594 $89,101 $91,661 Annual Living Expenses $49,340 $50,820 $52,345 $53,915 $55,533 Residence Loan $25,200 $25,200 $25,200 $25,200 $25,200 Equity Loan $7,200 $7,200 $7,200 $7,200 $7,200 Total Annual Expenses $81,740 $83,220 $84,745 $86,315 $87,933 NET CASH FLOW $0 $921 $1,850 $2,785 $3,729 * Hypothetical growth is for illustration purposes only. There is no assurance that these results will be achieved. Actual results will vary.
HYPOTHETICAL CASH FLOW 8/12/2012 2017 2018 2019 2020 2021 Age - Ben / Betty 62 / 64 63 / 65 64 / 66 65 / 67 66 / 68 Ben Salary - Ben $93,207 $95,071 $96,972 Betty Salary - Betty $51,892 Betty Pension - Betty $40,000 $40,800 $41,616 $42,448 Social Security - Ben $21,120 $21,543 Total Non-Investment Income $145,098 $135,071 $137,772 $62,736 $63,991 Elm Street Rental $463,710 $477,621 $491,950 $506,708 $521,909 Income $4,760 $5,358 $5,974 $6,608 $7,262 Client Retirement Assets Tax Deferred - Qualified - 1 $257,570 $296,000 $337,120 $381,119 $387,407 Income $19,056 $19,370 Spouse Retirement Assets Tax Deferred - Qualified - 2 $118,658 $132,964 $135,157 $137,388 $139,654 Income $6,648 $6,758 $6,869 $6,983 Tax Deferred - Qualified - 3 $46,284 $49,524 $50,341 $51,172 $52,016 Income $2,476 $2,517 $2,559 $2,601 Target Account Values $422,512 $478,488 $522,619 $569,678 $579,078 Target Investment Income $4,760 $14,482 $15,249 $35,092 $36,216 TOTAL INCOME $149,858 $149,553 $153,021 $97,829 $100,207 Invest/Retire Contributions - Client $20,400 $20,400 $20,400 Invest/Retire Contributions - Spouse $6,000 Income Taxes $29,181 $30,527 $31,346 $23,123 $23,685 NET INCOME $94,277 $98,626 $101,275 $74,706 $76,522 Annual Living Expenses $57,199 $58,915 $60,682 $62,502 $64,378 Residence Loan $25,200 $25,200 $25,200 $25,200 $25,200 Equity Loan $7,200 Total Annual Expenses $89,599 $84,115 $85,882 $87,702 $89,578 NET CASH FLOW $4,679 $14,512 $15,393 ($12,997) ($13,055) * Hypothetical growth is for illustration purposes only. There is no assurance that these results will be achieved. Actual results will vary.
HYPOTHETICAL CASH FLOW 8/12/2012 2022 2023 2024 2025 2026 Age - Ben / Betty 67 / 69 68 / 70 69 / 71 70 / 72 71 / 73 Ben Salary - Ben Betty Salary - Betty Betty Pension - Betty $43,297 $44,163 $45,046 $45,947 $46,866 Social Security - Ben $21,974 $22,413 $22,861 $23,319 $23,785 Total Non-Investment Income $65,271 $66,576 $67,908 $69,266 $70,651 Elm Street Rental $537,567 $553,694 $570,304 $587,413 $605,036 Income $7,935 $8,629 $9,343 $10,079 $10,837 Client Retirement Assets Tax Deferred - Qualified - 1 $393,799 $400,297 $406,902 $413,616 $420,440 Income $19,690 $20,015 $20,345 $20,681 $21,022 Spouse Retirement Assets Tax Deferred - Qualified - 2 $141,959 $144,301 $146,682 $149,102 $151,562 Income $7,098 $7,215 $7,334 $7,455 $7,578 Tax Deferred - Qualified - 3 $52,874 $53,747 $54,634 $55,535 $56,452 Income $2,644 $2,687 $2,732 $2,777 $2,823 Target Account Values $588,633 $598,345 $608,218 $618,253 $628,454 Target Investment Income $37,367 $38,546 $39,754 $40,991 $42,259 TOTAL INCOME $102,638 $105,122 $107,662 $110,257 $112,911 Invest/Retire Contributions - Client Invest/Retire Contributions - Spouse Income Taxes $24,260 $24,847 $25,447 $26,060 $26,688 NET INCOME $78,378 $80,276 $82,215 $84,197 $86,223 Annual Living Expenses $66,309 $68,298 $70,347 $72,457 $74,631 Residence Loan $25,200 $25,200 $25,200 $25,200 $25,200 Equity Loan Total Annual Expenses $91,509 $93,498 $95,547 $97,657 $99,831 NET CASH FLOW ($13,130) ($13,222) ($13,332) ($13,460) ($13,608) * Hypothetical growth is for illustration purposes only. There is no assurance that these results will be achieved. Actual results will vary.
HYPOTHETICAL CASH FLOW 8/12/2012 2027 2028 2029 2030 2031 Age - Ben / Betty 72 / 74 73 / 75 74 / 76 75 / 77 76 / 78 Ben Salary - Ben Betty Salary - Betty Betty Pension - Betty $47,804 $48,760 $49,735 $50,730 $51,744 Social Security - Ben $24,261 $24,746 $25,241 $25,746 $26,261 Total Non-Investment Income $72,064 $73,506 $74,976 $76,475 $78,005 Elm Street Rental $623,187 $641,883 $661,139 $680,973 $701,402 Income $11,617 $12,421 $13,249 $14,102 $14,980 Client Retirement Assets Tax Deferred - Qualified - 1 $427,378 $434,429 $441,597 $448,884 $456,290 Income $21,369 $21,721 $22,080 $22,444 $22,815 Spouse Retirement Assets Tax Deferred - Qualified - 2 $154,063 $156,605 $159,189 $161,816 $164,486 Income $7,703 $7,830 $7,959 $8,091 $8,224 Tax Deferred - Qualified - 3 $57,383 $58,330 $59,292 $60,271 $61,265 Income $2,869 $2,916 $2,965 $3,014 $3,063 Target Account Values $638,824 $649,364 $660,079 $670,970 $682,041 Target Investment Income $43,558 $44,889 $46,253 $47,650 $49,082 TOTAL INCOME $115,623 $118,395 $121,229 $124,126 $127,087 Invest/Retire Contributions - Client Invest/Retire Contributions - Spouse Income Taxes $27,329 $27,984 $28,654 $29,338 $30,038 NET INCOME $88,294 $90,411 $92,575 $94,787 $97,049 Annual Living Expenses $76,870 $79,176 $81,552 $83,998 $86,518 Residence Loan $25,200 $25,200 $25,200 $25,200 $25,200 Equity Loan Total Annual Expenses $102,070 $104,376 $106,752 $109,198 $111,718 NET CASH FLOW ($13,776) ($13,965) ($14,176) ($14,411) ($14,669) * Hypothetical growth is for illustration purposes only. There is no assurance that these results will be achieved. Actual results will vary.
HYPOTHETICAL CASH FLOW 8/12/2012 2032 2033 2034 2035 2036 Age - Ben / Betty 77 / 79 78 / 80 79 / 81 80 / 82 81 / 83 Ben Salary - Ben Betty Salary - Betty Betty Pension - Betty $52,779 $53,835 $54,911 $56,010 $57,130 Social Security - Ben $26,786 $27,321 $27,868 $28,425 $28,994 Total Non-Investment Income $79,565 $81,156 $82,779 $84,435 $86,124 Elm Street Rental $722,444 $744,118 $766,441 $789,435 $813,118 Income $31,065 $31,997 $32,957 $33,946 $34,964 Client Retirement Assets Tax Deferred - Qualified - 1 $463,819 $471,472 $479,252 $487,159 $495,197 Income $23,191 $23,574 $23,963 $24,358 $24,760 Spouse Retirement Assets Tax Deferred - Qualified - 2 $167,200 $169,959 $172,763 $175,614 $178,511 Income $8,360 $8,498 $8,638 $8,781 $8,926 Tax Deferred - Qualified - 3 $62,276 $63,303 $64,348 $65,410 $66,489 Income $3,114 $3,165 $3,217 $3,270 $3,324 Target Account Values $693,295 $704,734 $716,362 $728,182 $740,197 Target Investment Income $65,730 $67,234 $68,775 $70,355 $71,974 TOTAL INCOME $145,295 $148,390 $151,554 $154,790 $158,098 Invest/Retire Contributions - Client Invest/Retire Contributions - Spouse Income Taxes $34,342 $35,073 $35,821 $36,586 $37,368 NET INCOME $110,953 $113,316 $115,733 $118,204 $120,730 Annual Living Expenses $89,114 $91,787 $94,541 $97,377 $100,298 Residence Loan $25,200 Equity Loan Total Annual Expenses $114,314 $91,787 $94,541 $97,377 $100,298 NET CASH FLOW ($3,361) $21,530 $21,192 $20,827 $20,432 * Hypothetical growth is for illustration purposes only. There is no assurance that these results will be achieved. Actual results will vary.
HYPOTHETICAL CASH FLOW 8/12/2012 2037 2038 2039 2040 2041 Age - Ben / Betty 82 / 84 83 / 85 84 / 86 85 / 87 86 / 88 Ben Salary - Ben Betty Salary - Betty Betty Pension - Betty $58,272 $59,438 $60,627 $61,839 $63,076 Social Security - Ben $29,574 $30,165 $30,768 $31,384 $32,011 Total Non-Investment Income $87,846 $89,603 $91,395 $93,223 $95,087 Elm Street Rental $837,511 $862,637 $888,516 $915,171 $942,626 Income $36,013 $37,093 $38,206 $39,352 $40,533 Client Retirement Assets Tax Deferred - Qualified - 1 $503,368 $511,674 $520,116 $528,698 $537,422 Income $25,168 $25,584 $26,006 $26,435 $26,871 Spouse Retirement Assets Tax Deferred - Qualified - 2 $181,457 $184,451 $187,494 $190,588 $193,732 Income $9,073 $9,223 $9,375 $9,529 $9,687 Tax Deferred - Qualified - 3 $67,586 $68,701 $69,835 $70,987 $72,158 Income $3,379 $3,435 $3,492 $3,549 $3,608 Target Account Values $752,411 $764,826 $777,445 $790,273 $803,312 Target Investment Income $73,634 $75,335 $77,078 $78,866 $80,699 TOTAL INCOME $161,480 $164,938 $168,473 $172,089 $175,786 Invest/Retire Contributions - Client Invest/Retire Contributions - Spouse Income Taxes $38,167 $38,985 $39,820 $40,675 $41,549 NET INCOME $123,312 $125,953 $128,653 $131,414 $134,237 Annual Living Expenses $103,307 $106,406 $109,598 $112,886 $116,273 Residence Loan Equity Loan Total Annual Expenses $103,307 $106,406 $109,598 $112,886 $116,273 NET CASH FLOW $20,005 $19,547 $19,055 $18,528 $17,964 * Hypothetical growth is for illustration purposes only. There is no assurance that these results will be achieved. Actual results will vary.
HYPOTHETICAL CASH FLOW 8/12/2012 2042 2043 2044 2045 Age - Ben / Betty 87 / 89 88 / 90 89 / 91 90 / 92 Ben Salary - Ben Betty Salary - Betty Betty Pension - Betty $64,337 $65,624 $66,937 $68,275 Social Security - Ben $32,652 $33,305 $33,971 $34,650 Total Non-Investment Income $96,989 $98,929 $100,908 $102,926 Elm Street Rental $970,905 $1,000,032 $1,030,033 $1,060,934 Income $41,749 $43,001 $44,291 $45,620 Client Retirement Assets Tax Deferred - Qualified - 1 $546,289 $555,303 $564,465 $573,779 Income $27,314 $27,765 $28,223 $28,689 Spouse Retirement Assets Tax Deferred - Qualified - 2 $196,929 $200,178 $203,481 $206,839 Income $9,846 $10,009 $10,174 $10,342 Tax Deferred - Qualified - 3 $73,349 $74,559 $75,789 $77,040 Income $3,667 $3,728 $3,789 $3,852 Target Account Values $816,567 $830,040 $843,736 $857,658 Target Investment Income $82,577 $84,503 $86,478 $88,503 TOTAL INCOME $179,566 $183,432 $187,386 $191,429 Invest/Retire Contributions - Client Invest/Retire Contributions - Spouse Income Taxes $42,442 $43,356 $44,291 $45,246 NET INCOME $137,124 $140,076 $143,095 $146,183 Annual Living Expenses $119,761 $123,354 $127,055 $130,866 Residence Loan Equity Loan Total Annual Expenses $119,761 $123,354 $127,055 $130,866 NET CASH FLOW $17,363 $16,722 $16,041 $15,316 * Hypothetical growth is for illustration purposes only. There is no assurance that these results will be achieved. Actual results will vary.
CASH FLOW AT A GLANCE Hypothetical Year Client/Spouse Age Surplus/Shortfall Amount 2012 57/59 $0 2013 58/60 $921 2014 59/61 $1,850 2015 60/62 $2,785 2016 61/63 $3,729 2017 62/64 $4,679 2018 63/65 $14,512 2019 64/66 $15,393 2020 65/67 ($12,997) 2021 66/68 ($13,055) 2022 67/69 ($13,130) 2023 68/70 ($13,222) 2024 69/71 ($13,332) 2025 70/72 ($13,460) 2026 71/73 ($13,608) 2027 72/74 ($13,776) 2028 73/75 ($13,965) 2029 74/76 ($14,176) 2030 75/77 ($14,411) 2031 76/78 ($14,669) 2032 77/79 ($3,361) 2033 78/80 $21,530 2034 79/81 $21,192 2035 80/82 $20,827 2036 81/83 $20,432 2037 82/84 $20,005 2038 83/85 $19,547 2039 84/86 $19,055 2040 85/87 $18,528 2041 86/88 $17,964 2042 87/89 $17,363 2043 88/90 $16,722 2044 89/91 $16,041 2045 90/92 $15,316 * Hypothetical growth is for illustration purposes only. There is no assurance that these results will be achieved. Actual results will vary.
HYPOTHETICAL SHORTFALL ANALYSIS 8/12/2012 Cash Flow Surplus Before Retirement * Lump Sum - One Time: or Annual Available: or Monthly Available: Surplus Surplus Surplus Contributions Needed to Meet Cash Flow (Shortfall) After Retirement * Lump Sum - One Time: $53,490 or Annual Contributions: $8,866 or Monthly Contributions: $756 * Using a 7% hypothetical growth rate ** Hypothetical growth is for illustration purposes only. There is no assurance that these results will be achieved. Actual results will vary.
OPTIONS FOR THE NEXT GENERATION 8/12/2012 2046 2051 2061 2071 2081 Option 1: Lump Sum $857,658 Taxes 40% $343,063 Net Lump Sum Invested at 8% Taxable (6% After Taxes) * $514,595 $532,859 $571,357 $612,635 $656,896 Annual W/D of 5%/Yr. $25,730 $26,643 $28,568 $30,632 $32,845 Total Withdrawals $1,718,124 Option 2: Lump Sum $857,658 Withdrawal of 25% $214,414 Taxes 40% $85,766 Net after Tax $128,649 Balance Invested at 8% Tax Deferred * $643,243 $816,117 $1,211,331 $1,426,457 $513,269 Annual W/D using remaining Life Exp. $18,378 $25,504 $55,060 $118,871 $256,635 Total Withdrawals $3,507,407 Option 3: Withdrawals over Lifetime of 35 Years $857,658 Balance Invested at 8% Tax Deferred * $857,658 $1,088,156 $1,615,107 $1,901,943 $684,359 Annual W/D using remaining Life Exp. $24,505 $34,005 $73,414 $158,495 $342,179 Total Withdrawals $4,676,543 This report is only intended to illustrate the power of a beneficiary "stretching" the withdrawals from your tax deferred accounts over their life expectancy rather than taking a lump sum up front and paying a large portion to the government off the top. The difference in total withdrawals over a 35 year life expectancy of the beneficiary is dramatic. Multi-generational withdrawal strategy may not be appropriate for investors who will rely upon investments for retirement income. Furthermore, changes in tax rates may make the scenario portrayed less favorable. * Hypothetical growth is for illustration purposes only. There is no assurance that these results will be achieved. Actual results will vary.