Legacy Maximizer Analysis for: John Doe and Jane Doe Prepared on February 27, 2015 Your Financial Services Professional: Seth Stewart
Getting the most out of your money In today's economy, using your money wisely has never been more important. We are surrounded by a world of uncertainty when it comes to our job, our home, our bank, and our investments. Chances are, if you have not been negatively affected by one of these issues, you know someone that has. This report is designed to take some of the uncertainty out of your future. By leveraging your existing investments and insurance wisely, you can create generational wealth that is well insulated from future tax law changes.
Personalized Data Sheet Client Spouse Name John Doe Jane Doe Date of Birth February 25, 1955 March 01, 1957 Age 60 57 Assumed Age at Death 101 Gender Male Female Tax Type Qualified Current Account $400,000 Assumed Rate of Return 4.00% Owner Tax Rate 28% Beneficiary Tax Rate 28% Annual Distribution Amount $12,000 Age To Start Distributions 60 Age To End Distributions 100
Current Current Portfolio John Doe and Jane Doe Age Beginning RMD Amount Interest Earned at 4.00% Ending 60 400,000 0 16,000 416,000 299,520 61 416,000 0 16,640 432,640 311,501 62 432,640 0 17,306 449,946 323,961 63 449,946 0 17,998 467,943 336,919 64 467,943 0 18,718 486,661 350,396 65 486,661 0 19,466 506,128 364,412 66 506,128 0 20,245 526,373 378,988 67 526,373 0 21,055 547,428 394,148 68 547,428 0 21,897 569,325 409,914 69 569,325 0 22,773 592,098 426,310 70 592,098 21,609 22,820 593,308 427,182 71 593,308 22,389 22,837 593,756 427,504 72 593,756 23,194 22,822 593,385 427,237 73 593,385 24,024 22,774 592,135 426,337 74 592,135 24,880 22,690 589,946 424,761 75 589,946 25,762 22,567 586,751 422,461 76 586,751 26,671 22,403 582,484 419,389 77 582,484 27,476 22,200 577,209 415,590 78 577,209 28,434 21,951 570,726 410,923 79 570,726 29,268 21,658 563,116 405,444 80 563,116 30,113 21,320 554,323 399,113 81 554,323 30,968 20,934 544,290 391,889 82 544,290 31,830 20,498 532,958 383,730 83 532,958 32,697 20,010 520,272 374,596 84 520,272 33,566 19,468 506,174 364,445 85 506,174 34,201 18,879 490,852 353,414 86 490,852 34,812 18,242 474,281 341,483 87 474,281 35,394 17,555 456,443 328,639
Age Beginning RMD Amount Interest Earned at 4.00% Ending 88 456,443 35,940 16,820 437,323 314,872 89 437,323 36,444 16,035 416,914 300,178 90 416,914 36,571 15,214 395,556 284,801 91 395,556 36,626 14,357 373,288 268,767 92 373,288 36,597 13,468 350,159 252,114 93 350,159 36,475 12,547 326,231 234,887 94 326,231 35,850 11,615 301,997 217,438 95 301,997 35,116 10,675 277,556 199,841 96 277,556 34,266 9,732 253,022 182,176 97 253,022 33,292 8,789 228,519 164,533 98 228,519 32,186 7,853 204,186 147,014 99 204,186 30,476 6,948 180,659 130,075 100 180,659 28,676 6,079 158,062 113,805
Proposed Proposed Portfolio with Enhancement of Life Insurance John Doe and Jane Doe Age Beginning Interest Earned at 4.00% Withdrawal Minus Tax of 28% Net Withdrawal Ending Life Insurance Premium *RMD withdrawal begins at age 70 if amount is greater than requested withdrawal amount. Life Insurance Death Benefit 60 400,000 15,333 16,667 4,667 12,000 398,667 287,040 12,000 613,060 900,100 61 398,667 15,280 16,667 4,667 12,000 397,280 286,042 12,000 613,060 899,102 62 397,280 15,225 16,667 4,667 12,000 395,838 285,003 12,000 613,060 898,063 63 395,838 15,167 16,667 4,667 12,000 394,338 283,923 12,000 613,060 896,983 64 394,338 15,107 16,667 4,667 12,000 392,778 282,800 12,000 613,060 895,860 65 392,778 15,044 16,667 4,667 12,000 391,156 281,632 12,000 613,060 894,692 66 391,156 14,980 16,667 4,667 12,000 389,469 280,418 12,000 613,060 893,478 67 389,469 14,912 16,667 4,667 12,000 387,714 279,154 12,000 613,060 892,214 68 387,714 14,842 16,667 4,667 12,000 385,890 277,841 12,000 613,060 890,901 69 385,890 14,769 16,667 4,667 12,000 383,992 276,474 12,000 613,060 889,534 70 383,992 14,693 16,667 4,667 12,000 382,018 275,053 12,000 613,060 888,113 71 382,018 14,614 16,667 4,667 12,000 379,966 273,575 12,000 613,060 886,635 72 379,966 14,532 16,667 4,667 12,000 377,831 272,038 12,000 613,060 885,098 73 377,831 14,447 16,667 4,667 12,000 375,611 270,440 12,000 613,060 883,500 74 375,611 14,358 16,667 4,667 12,000 373,302 268,777 12,000 613,060 881,837 75 373,302 14,265 16,667 4,667 12,000 370,901 267,048 12,000 613,060 880,108 76 370,901 14,162 16,859 4,721 12,139 368,203 265,106 12,000 613,060 878,166 77 368,203 14,033 17,368 4,863 12,505 364,868 262,705 12,000 613,060 875,765 78 364,868 13,876 17,974 5,033 12,941 360,770 259,755 12,000 613,060 872,815 79 360,770 13,691 18,501 5,180 13,321 355,960 256,291 12,000 613,060 869,351 80 355,960 13,477 19,035 5,330 13,705 350,402 252,289 12,000 613,060 865,349 81 350,402 13,233 19,576 5,481 14,094 344,059 247,723 12,000 613,060 860,783 82 344,059 12,958 20,120 5,634 14,487 336,897 242,566 12,000 613,060 855,626 83 336,897 12,649 20,668 5,787 14,881 328,877 236,792 12,000 613,060 849,852 84 328,877 12,306 21,218 5,941 15,277 319,966 230,375 12,000 613,060 843,435 85 319,966 11,934 21,619 6,053 15,566 310,280 223,402 12,000 613,060 836,462 86 310,280 11,531 22,006 6,162 15,844 299,805 215,860 12,000 613,060 828,920
Age Beginning Interest Earned at 4.00% Withdrawal Minus Tax of 28% Net Withdrawal Ending Life Insurance Premium Life Insurance Death Benefit 87 299,805 11,097 22,374 6,265 16,109 288,529 207,741 12,000 613,060 820,801 88 288,529 10,632 22,719 6,361 16,358 276,443 199,039 12,000 613,060 812,099 89 276,443 10,136 23,037 6,450 16,587 263,542 189,750 12,000 613,060 802,810 90 263,542 9,617 23,118 6,473 16,645 250,041 180,030 12,000 613,060 793,090 91 250,041 9,076 23,152 6,483 16,669 235,965 169,895 12,000 613,060 782,955 92 235,965 8,513 23,134 6,477 16,656 221,344 159,368 12,000 613,060 772,428 93 221,344 7,932 23,057 6,456 16,601 206,219 148,478 12,000 613,060 761,538 94 206,219 7,342 22,661 6,345 16,316 190,900 137,448 12,000 613,060 750,508 95 190,900 6,748 22,198 6,215 15,982 175,450 126,324 12,000 613,060 739,384 96 175,450 6,152 21,661 6,065 15,596 159,942 115,158 12,000 613,060 728,218 97 159,942 5,556 21,045 5,893 15,152 144,452 104,006 12,000 613,060 717,066 98 144,452 4,964 20,345 5,697 14,649 129,071 92,931 12,000 613,060 705,991 99 129,071 4,392 19,264 5,394 13,870 114,199 82,223 12,000 613,060 695,283 100 114,199 3,843 18,127 5,076 13,051 99,915 71,939 12,000 613,060 684,999 *RMD withdrawal begins at age 70 if amount is greater than requested withdrawal amount.
Comparison Comparison of Current vs Life Insurance Enhancement Option John Doe and Jane Doe Age Current Portfolio Proposed Life Insurance Enhancement Advantage Ending Ending Death Benefit Enhancement 60 416,000 299,520 398,667 287,040 613,060 900,100 600,580 61 432,640 311,501 397,280 286,042 613,060 899,102 587,601 62 449,946 323,961 395,838 285,003 613,060 898,063 574,102 63 467,943 336,919 394,338 283,923 613,060 896,983 560,064 64 486,661 350,396 392,778 282,800 613,060 895,860 545,464 65 506,128 364,412 391,156 281,632 613,060 894,692 530,280 66 526,373 378,988 389,469 280,418 613,060 893,478 514,489 67 547,428 394,148 387,714 279,154 613,060 892,214 498,066 68 569,325 409,914 385,890 277,841 613,060 890,901 480,987 69 592,098 426,310 383,992 276,474 613,060 889,534 463,224 70 593,308 427,182 382,018 275,053 613,060 888,113 460,931 71 593,756 427,504 379,966 273,575 613,060 886,635 459,131 72 593,385 427,237 377,831 272,038 613,060 885,098 457,861 73 592,135 426,337 375,611 270,440 613,060 883,500 457,162 74 589,946 424,761 373,302 268,777 613,060 881,837 457,076 75 586,751 422,461 370,901 267,048 613,060 880,108 457,647 76 582,484 419,389 368,203 265,106 613,060 878,166 458,778 77 577,209 415,590 364,868 262,705 613,060 875,765 460,175 78 570,726 410,923 360,770 259,755 613,060 872,815 461,892 79 563,116 405,444 355,960 256,291 613,060 869,351 463,908 80 554,323 399,113 350,402 252,289 613,060 865,349 466,237 81 544,290 391,889 344,059 247,723 613,060 860,783 468,894 82 532,958 383,730 336,897 242,566 613,060 855,626 471,896 83 520,272 374,596 328,877 236,792 613,060 849,852 475,256 84 506,174 364,445 319,966 230,375 613,060 843,435 478,990 85 490,852 353,414 310,280 223,402 613,060 836,462 483,048 86 474,281 341,483 299,805 215,860 613,060 828,920 487,437
Current Portfolio Proposed Life Insurance Enhancement Advantage 87 456,443 328,639 288,529 207,741 613,060 820,801 492,162 88 437,323 314,872 276,443 199,039 613,060 812,099 497,227 89 416,914 300,178 263,542 189,750 613,060 802,810 502,632 90 395,556 284,801 250,041 180,030 613,060 793,090 508,289 91 373,288 268,767 235,965 169,895 613,060 782,955 514,187 92 350,159 252,114 221,344 159,368 613,060 772,428 520,314 93 326,231 234,887 206,219 148,478 613,060 761,538 526,651 94 301,997 217,438 190,900 137,448 613,060 750,508 533,070 95 277,556 199,841 175,450 126,324 613,060 739,384 539,544 96 253,022 182,176 159,942 115,158 613,060 728,218 546,042 97 228,519 164,533 144,452 104,006 613,060 717,066 552,532 98 204,186 147,014 129,071 92,931 613,060 705,991 558,977 99 180,659 130,075 114,199 82,223 613,060 695,283 565,209 100 158,062 113,805 99,915 71,939 613,060 684,999 571,194
Comparison Chart
DEFINITIONS AND DISCLOSURES Purpose Arbitrage Insurance Arbitrage Immediate Annuity Deferred Annuity Annuitization After-tax Income Death Benefit Legacy Amount Annuity Value After-tax Annutiy Maximizer Enhancement Life Insurance Assumptions To illustrate the benefits of partitioning a portion of your retirement nest egg to create your legacy. This allows for peace of mind knowing that your family's financial future is secure as your legacy lives on. A risk free transaction in which one profits from price disparities The process of turning a deferred annuity into a lifelong series of payments and reinvesting those payments into a life insurance contract An annuity which pays you a stream of income for the life of the owner An annuity that grows tax deferred The process of taking a deferred annuity or lump sum of money and converting it into an immediate income stream Income received after taxes are paid Income tax free death benefit which beneficiaries will inherit after the passing of the owner Life insurance death benefit Annuity value growing at a predetermined interest rate while owner is living Beneficiary inheritance value after tax Life insurance death benefit The difference in inheritance values the beneficiary will receive. It is determined by subtracting the after-tax value of the annuity from the life insurance death benefit. Benefits are based on returns to beneficiaries. Death Benefit numbers determined by using a universal life policy guaranteed to age 120 issued at a standard rate. The numbers are generic. An actual company illustration will be needed to determine exact values on a specific case. All numbers are generic and specific quotes will need to be generated to determine specific personalized values. Report is for illustration purposes only. Values do not include any estate taxes.
IMPORTANT DISCLOSURES Important Disclosures Regarding this Report This report is conceptual in nature and all interest rates and performance numbers used are hypothetical and do not guarantee performance. Past performance is no guarantee of future performance. Diversification and asset allocation does not assure or guarantee better performance and cannot eliminate the risk of loss. The report is designed to illustrate concepts and all specific product information must be presented with an appropriate company/custodian illustration and should accompany this report. It is important to review and understand each product/investment's features, risks, charges, withdrawal penalties and expenses before making any financial decisions. Consult your Financial Services Professional ("FSP") to determine which products/investments align with your time horizon, risk tolerance and overall financial needs. This report is for informational purposes only and should not be used as a substitute for official account statements or reports, official tax filing documents, insurance company illustration or custodial reports. This report outlines different options available to the client, and its timely implementation may be critical to achieving specific goals or objectives. This report is not entirely comprehensive. It is intended to address specific objectives, as outlined by the FSP. The FSP is an independent insurance agent, registered representative or investment advisor representative. The foregoing conceptual report was created for, and at the direction, of the FSP. The FSP is solely responsible for proper licensure and registration to discuss and present the concepts herein. The recommendations and information herein are provided solely and exclusively by the FSP. The report is based solely upon information obtained from the FSP, and is dependent on complete and accurate information. This report reflects information provided at the time the report was created. The FSP is responsible for submitting third-party documentation when appropriate. It is the responsibility of the client and FSP to verify all information used in the report. The client is responsible for updating the FSP about any changes in circumstances. Tax Considerations Any references to income taxes are estimates only and should not be relied upon when completing income tax returns. Tax laws are subject to change and may differ from this analysis and may affect the options and information presented. The sale of appreciated assets may result in current tax liabilities not reflected in this report and may reduce actual investable assets. All income tax calculations are assumed based on the incremental tax rate input. This rate could differ materially given your particular tax perspective. State income taxes are not included in this example. Beginning with age 70 1/2, you are required by law to withdraw a certain minimum amount from your IRA each year. After your death your beneficiaries are also required to withdraw a minimum amount from their inherited IRA. The report may not reflect your specific RMD schedule or tax situation. Withdrawals of earnings from certain tax-deferred accounts will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty. You should consider your personal investment horizon and income tax bracket, both current and anticipated, when making an investment decision as they make further impact the results. You should choose your annuity, or investment product, based on its features and benefits and whether you can satisfy the conditions for the features and benefits, not its tax benefits alone. Buying an annuity within an IRA or other tax-deferred plan or account does not give you any additional tax benefits. IRS Circular 230 Notice As required by U.S. Treasury Regulations, any tax information contained in the report is not provided or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code. Income Rider Calculation When withdrawing from an annuity product with an income rider, companies vary on the amount taken from the Income Rider Accumulation Value. This presentation takes out the withdrawals equally from the Accumulated Value, and proportionally from the Income Rider Value. The proportion is based on the difference between the Accumulated Value and the Income Rider Value. The other method is taking withdrawals dollar for dollar, meaning it s taken equally from both values. The report is designed to illustrate concepts and all specific product information must be presented with an appropriate company/custodian illustration. Actual Results May Vary Unless otherwise noted, the assumed rates of return used to calculate various projections are static. The actual variability of returns can impact a portfolio s value. Rate assumptions do not take into account any advisory fees, brokerage or other commissions, or any other expenses, which if taken into account would reduce performance.
IMPORTANT DISCLOSURES Limitations on the Scope of the Report Konnexme, LLC is a software company. It does not provide any legal, tax, investment or accounting advice. The report should not be construed as any such advice. An individual must consult with his or her own personal attorney, FSP, accountant or tax advisor for this advice, and should carefully consider each recommendation before deciding on a specific course of action. The information, data and opinions herein include confidential and proprietary information and may not be copied or redistributed.