Financial Plan PREPARED FOR: John and Jane Smith May 05, 2014 PREPARED BY: Christopher Moser (414) 555-5555
Table of Contents Cover Page Table of Contents Financial Snapshot Net Worth Summary - Net Worth Timeline Comparison Cash Flow Outlook - Assets at Retirement Retirement Goal Coverage Retirement Objective Coverage What Are My Retirement Goal Options? Probability of Goal Success - Probability of Goal Success - Education Goal Coverage What are my Education Goal Options? Current Asset Mix Asset Allocation Portfolio Comparison - Suggested - Action Plan 1 2 3 4 5 6 9 10 11 12 13 14 15 16 17 18 19
Financial Snapshot John and Jane Smith Goal Coverage Retirement Marquette University (Jack) Long Term Care - John Long Term Care - Jane Asset Allocation Rate of Return Standard Deviation Asset Class Cash Large Cap Growth Equity Large Cap Value Equity Mid Cap Equity International Equity International Bonds Short Term Bonds Emerging Markets Equity Intermediate Term Bonds Long Term Bonds Others Insurance Coverage John Term 20 Life Long-term Care Jane Term 20 Life Long-term Care 7.11% 12.40% ($) $308,000 $270,200 $251,200 $161,800 $133,300 $81,000 $55,000 $51,400 $24,900 $20,700 $32,500 $1,390,000 74% 37% 53% 61% (%) 22.16% 19.44% 18.07% 11.64% 9.59% 5.83% 3.96% 3.70% 1.79% 1.49% 2.34% Benefit Amount $450,000 $200/day $250,000 $200/day Your Advisor Christopher Moser (414) 555-5555 Net Worth $1,701,652 Cash Flow $22,685 Probability of Success Retirement Marquette University (Jack) Assumptions Inflation Rate Retire At Life Expectancy John 3.00% 61 90 25% 0% Jane 3.00% 59 90 Prepared by Christopher Moser Page 3 of 19
Net Worth Summary This report displays a summary of your net worth information as of the date of plan analysis. Net worth represents the total value of your assets (what you own) after subtracting your liabilities (what you owe). This figure allows you to get a good picture of your overall financial situation. Your net worth for this plan is: $1,701,652 Net Worth Summary as of 3/3/2014 Assets Non-Qualified Assets Qualified Assets Lifestyle Assets Liabilities John $420,000 $420,000 Jane $450,000 $450,000 Assets Joint $520,000 $350,000 $83,348 $786,652 Liabilities Community Property $45,000 $45,000 Net Worth $520,000 $870,000 $395,000 $83,348 $1,701,652 Prepared by Christopher Moser Page 4 of 19
Net Worth Timeline Comparison This report displays a comparison of net worth data in all selected plan scenarios over time. These projections show end-of-year values beginning with the year of plan analysis and are projected until the death of the last surviving client. Use this report to compare the effects of different plan scenarios on net worth. Prepared by Christopher Moser Page 5 of 19
Cash Flow Outlook This report projects detailed cash flow information over the next five years for the selected plan scenario. Cash inflows and outflows are organized by category and then summarized as aggregate totals; this strategy provides a holistic picture of the projected cash flow situation without sacrificing detailed information. Use this report to analyze the cash flow situation over the next five years for the selected plan scenario. Year Age John/Jane Cash Inflows Earned Income John Salary Jane Salary John Bonus Jane Bonus Non-Qualified Liquidations Marquette University Fund Joint Savings Joint Checking Joint Investments Investment Income *Accrued Income - Interest *Accrued Income - Dividends *Accrued Income - Short Term... Retirement Fund Marquette University Fund Joint Savings Joint Checking Joint Investments Cash Inflows Cash Outflows 2014 55/53 $97,000 $83,000 $8,000 $10,000 $198,000 $25,250 $9,671 $243,947 $278,868 $503 $1,534 $2,983 $58 $36 $2,203 $379 $24,010 $31,706 $508,574 2015 56/54 $99,910 $85,490 $8,000 $10,000 $203,400 $245 $150 $2,689 $354 $25,680 $29,118 $232,518 2016 57/55 $102,907 $88,055 $8,000 $10,000 $208,962 $446 $271 $2,786 $364 $27,073 $30,940 $239,902 2017 58/56 $105,995 $90,696 $8,000 $10,000 $214,691 $1,695 $14,268 $1,373 $25,446 $42,782 $664 $316 $2,220 $310 $27,573 $31,083 $288,556 2018 59/57 $109,174 $93,417 $8,000 $10,000 $220,592 $2,510 $14,797 $1,424 $26,389 $45,120 $895 $324 $1,602 $251 $28,049 $31,122 $296,834 Prepared by Christopher Moser Page 6 of 19
Year Age John/Jane 2014 55/53 2015 56/54 2016 57/55 2017 58/56 2018 59/57 Lifestyle Expenses Aggregate Expenses Mortgage Honda Accord Loan Education Expenses Marquette University Qualified Contributions John's 401k Jane's 401k Non-Qualified Savings Retirement Fund Marquette University Fund Joint Savings Joint Checking Joint Investments Non-Qualified Reinvestments *Income already represented in... Retirement Fund Marquette University Fund Joint Savings Joint Investments Joint Checking Miscellaneous Expenses Residence Group Insurance Group Insurance LTC Insurance LTC Insurance $57,000 $13,200 $5,427 $75,627 $23,000 $17,000 $40,000 $2,025 $1,800 $25,250 $7,500 $188,875 $225,450 $5,020 $34 $20 $534 $42 $5,649 $4,500 $300 $144 $12,144 $58,710 $60,471 $13,200 $13,200 $5,427 $340 $77,337 $74,011 $23,500 $17,000 $40,500 $2,700 $2,400 $5,100 $141 $85 $1,524 $14,783 $198 $16,731 $4,635 $300 $144 $12,279 $24,000 $17,000 $41,000 $2,700 $2,400 $5,100 $321 $193 $1,982 $19,445 $257 $22,197 $4,774 $300 $144 $12,418 $62,285 $13,200 $75,485 $40,100 $40,100 $25,000 $17,000 $42,000 $2,700 $2,400 $5,100 $464 $218 $1,529 $19,244 $211 $21,666 $4,917 $300 $144 $12,561 $64,154 $13,200 $77,354 $42,105 $42,105 $25,500 $17,000 $42,500 $2,700 $2,400 $5,100 $626 $223 $1,103 $19,590 $170 $21,712 $5,065 $300 $144 $12,709 Prepared by Christopher Moser Page 7 of 19
Year Age John/Jane 2014 55/53 2015 56/54 2016 57/55 2017 58/56 2018 59/57 Taxes Federal Income Tax State Income Tax $77,705 $21,526 $29,937 $11,005 $31,198 $11,453 Social Security Tax - Employment $12,276 $12,611 $12,956 Medicare Tax $9,356 $2,949 $3,030 Cash Outflows $120,862 $479,733 $56,502 $208,449 $58,636 $213,362 Surplus/(Deficit) $28,842 $24,069 $34,560 $12,477 $13,311 $3,113 $63,461 $260,374 $35,847 $12,894 $13,677 $3,199 $65,617 $267,097 $26,540 $28,183 $29,737 Prepared by Christopher Moser Page 8 of 19
Assets at Retirement This report displays the total assets available to fund the retirement goal-in the year of retirement-for the selected plan scenarios. The assets shown in this report include those specifically designated for the retirement goal as well as other unallocated assets (i.e. Business and Real Estate Assets). Use this report to determine the total assets available to fund retirement. Asset Summary Non-Qualified Assets Qualified Assets Lifestyle Assets Assets $1,665,449 $417,678 $2,728,489 $645,362 Funding Retirement $637,484 $1,665,449 - $2,302,933 $603,052 $2,788,531 $441,810 $3,833,393 Funding Retirement $594,930 $2,788,531 - $3,383,460 Prepared by Christopher Moser Page 9 of 19
Retirement Goal Coverage This report shows progress towards the retirement goal. That is, your ability to cover expenses, pay taxes, and maintain discretionary spending during your retirement. The chart to the right compares your current situation to the recommended plan. The table below contains a comparison of assumptions, needs, and other goals in both the current situation and in all other situations. Assumptions Retirement Age - Life Expectancy - Retirement Age - Life Expectancy - Inflation Rate 1st Year Retirement Needs* Assets Funding Retirement Current Monthly Savings Additional Monthly Savings Additional Lump Sum Savings Pre-Retirement Rate of Return Retirement Rate of Return Plan Overview Net Worth at Retirement Net Worth at Plan End Year of First Shortfall * = Today's Dollars John John Jane Jane RETIREMENT GOAL COVERAGE Current - 74% STRONG PARTIAL INSUFFICIENT 61 90 59 90 3.00% $154,366 $1,320,000 $4,003 7.34% 7.34% $2,722,107 $981,938 2039 Proposed - 100% 65 90 63 90 3.00% $142,899 $1,207,500 $4,003 $225 8.77% 7.34% $3,833,393 $5,628,896 -- Prepared by Christopher Moser Page 10 of 19
Retirement Objective Coverage This report compares retirement income needs to retirement incomes and assets. Under the current plan, 74% of your retirement income needs are met, under the proposed plan 100% of these needs are met. Prepared by Christopher Moser Page 11 of 19
What Are My Retirement Goal Options? This report displays a list of possible options for each plan scenario that if undertaken will help to achieve the retirement goal. The figures presented in this report are based on the assumptions entered in the plan. Since market fluctuations play a significant role in planning for a successful goal, you may need to adjust your plan assumptions to address these fluctuations. Use this report to analyze possible methods to fully achieve the retirement goal. Alter Spending Alter annual spending by 82% ($118,080) Goal Coverage is 100% RETIREMENT GOAL COVERAGE Current - 74% Save Monthly Increase your monthly savings by $7,143 STRONG PARTIAL INSUFFICIENT Save a Lump Sum Save $418,895 Proposed - 100% Retire In John retires in 6/2024 at age 65 Jane retires in 2/2024 at age 63 Prepared by Christopher Moser Page 12 of 19
Probability of Goal Success Understanding the potential success or failure of your financial goals is an important step in reaching those goals. You must first determine the current likelihood of reaching your goals in order to know what actions, if any, are needed. The results below are based on 500 trials. For more details on the Monte Carlo projections for each goal, see the report within the relevant goal section. Probability of Success GOAL SUCCESS: ALL GOALS Prepared by Christopher Moser Page 13 of 19
Probability of Goal Success Understanding the potential success or failure of your financial goals is an important step in reaching those goals. You must first determine the current likelihood of reaching your goals in order to know what actions, if any, are needed. The results below are based on 500 trials. For more details on the Monte Carlo projections for each goal, see the report within the relevant goal section. Probability of Success GOAL SUCCESS: ALL GOALS Prepared by Christopher Moser Page 14 of 19
Education Goal Coverage Marquette University (Jack) This report reflects how successful your education goal is projected to be under the current plan and how successful you may be given other scenarios. This education goal is for Jack, and it begins at age 18. There are many strategies that can help achieve this education goal. Understanding where you are today is just the starting point for achieving this goal. Costs Estimated Cost per Year (Today's $) Annual Cost Index Rate Start Year of Education Duration of Goal Expense % Coverage Estimated Cost Resources Capital Available Today Capital Return Rate Year of First Shortfall Current Monthly Savings Additional Monthly Savings (AMS) AMS Index Rate AMS Start Date Additional Lump Sum Savings Lump Sum Savings Date Projected Abilities at Goal Date EDUCATION GOAL COVERAGE Current - 37% STRONG PARTIAL INSUFFICIENT $34,640 5.00% 2017 4 100% $172,837 $62,500 1.66% 2018 0.00% 4/1/2014 4/1/2014 $40,100 Proposed - 100% $34,640 5.00% 2017 4 100% $172,837 $175,000 5.69% Never $200 0.00% 4/1/2014 4/1/2014 $40,100 Prepared by Christopher Moser Page 15 of 19
What Are My Education Goal Options? Marquette University (Jack) The following options will help you to achieve 100% success for your education goal. Reducing expenses, saving more each month, and saving a lump sum amount today are all strategies that can help you reach your education goals. You can use any of these options alone; or, you can use a combination of several to reach 100% goal coverage. Alter Spending Alter annual spending by 36% ($12,745) Goal Coverage is 100% EDUCATION GOAL COVERAGE Current - 37% Save Monthly STRONG PARTIAL INSUFFICIENT Increase your monthly savings by $1,554 Proposed - 100% Save a Lump Sum Save $103,694 Prepared by Christopher Moser Page 16 of 19
Current Asset Mix This report displays the current asset mix-the asset mix in use as of the plan analysis date. This report shows detailed asset information including standard deviation and rate of return for each asset class. Use this report to demonstrate the current asset mix. Asset Class Large Cap Growth Equity Large Cap Value Equity Mid Cap Equity Small Cap Equity International Equity Emerging Markets Equity Long Term Bonds Intermediate Term Bonds Short Term Bonds High Yield Bonds International Bonds Cash Rate of Return - 7.11% Standard Deviation - 12.40% Market Value $270,200 $251,200 $161,800 $19,000 $133,300 $51,400 $20,700 $24,900 $55,000 $13,500 $81,000 $308,000 $1,390,000 % 19.44% 18.07% 11.64% 1.37% 9.59% 3.70% 1.49% 1.79% 3.96% 0.97% 5.83% 22.16% 2013 Ibbotson Associates, Inc. All Rights Reserved. Ibbotson is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. Ibbotson develops proprietary asset allocation tools that are used for educational purposes only. Ibbotson has granted to Advicent Solutions, LP a license to use these asset allocation tools. Morningstar and Ibbotson are not affiliated with Advicent Solutions. Prepared by Christopher Moser Page 17 of 19
Asset Allocation Portfolio Comparison - Suggested This report compares your current asset mix to your suggested asset mix for your entire portfolio. Asset Class Large Cap Growth Equity Large Cap Value Equity Mid Cap Equity Small Cap Equity US REITs International Equity Emerging Markets Equity Long Term Bonds Intermediate Term Bonds Short Term Bonds High Yield Bonds International Bonds Cash Current Asset Mix Investor Profile: Current - Rebalanced Rate of Return - 7.11% Standard Deviation - 12.40% Current Market Value $270,200 $251,200 $161,800 $19,000 $133,300 $51,400 $20,700 $24,900 $55,000 $13,500 $81,000 $308,000 $1,390,000 % 19.44% 18.07% 11.64% 1.37% 0.00% 9.59% 3.70% 1.49% 1.79% 3.96% 0.97% 5.83% 22.16% Suggested Asset Mix Investor Profile: Moderate Rate of Return - 7.34% Standard Deviation - 11.93% Suggested Market Value $152,900 $194,600 $125,100 $83,400 $41,700 $194,600 $41,700 $55,600 $180,700 $125,100 $69,500 $83,400 $41,700 $1,390,000 % 11.00% 14.00% 9.00% 6.00% 3.00% 14.00% 3.00% 4.00% 13.00% 9.00% 5.00% 6.00% 3.00% Change -8.44% -4.07% -2.64% 4.63% 3.00% 4.41% -0.70% 2.51% 11.21% 5.04% 4.03% 0.17% -19.16% 2013 Ibbotson Associates, Inc. All Rights Reserved. Ibbotson is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. Ibbotson develops proprietary asset allocation tools that are used for educational purposes only. Ibbotson has granted to Advicent Solutions, LP a license to use these asset allocation tools. Morningstar and Ibbotson are not affiliated with Advicent Solutions. *Note: Modifications have been made to the suggested asset mix. As a result, the implemented asset mix will be used. Prepared by Christopher Moser Page 18 of 19
Action Plan For: John and Jane Asset Allocation Actions Retirement: Defer retirement for John & Jane by 4 years Reduce travel expenses by 30% in retirement years Save an additional $225 per month towards retirement Reallocate overall portfolio to Moderate Aggressive during pre-retirement years Reallocate overall portfolio to Moderate during retirement years Education: Cover 100% of Marquette tuition Save an additional $200 per month towards tuition Change goal funding of Joint Investment account reserving 25% for tuition and the remainder for retirement Due Date Completed Prepared by Christopher Moser Page 19 of 19