Susan & David Example

Cash Flow Analysis for Susan & David Example Asset Advisors Example, LLC A Registered Investment Advisor 2430 NW Professional Drive Corvallis, OR 97330 877-421-9815 www.moneytree.com IMPORTANT: The illustrations or other information generated by 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.

Table of Contents Cash Flow/Debts Cover 1 Disclaimer 2 Cash Flow Planning (text) - A1 3 Cash Flow Management (text) - B1 4 Cash Flow Needed vs Available Graph - B2 5 Sources of Funds Graph - B3 6 Annual Expenses Graph - B4 7 Cash Flow Chart (text) - B5 8 Current Year Cash Flow - B6 9 Future Year Cash Flow - B6a 10 Cash Flow Illustration - B7 11 Annual Expense Illustration - B8 12 Earned Income - B9 13 Pension and SS - B10 14 Other Income/Expense Detail - B11 15 Other Income/Expense - B12 16 Miscellaneous Cash Flow Items - B12a 17 Financial Goals - B13 18 Education Funding - B14 19 Education Funding Sources - B14a 20 Saving For College (text) - B14b 21 Residence Sale - B15 22 Life Insurance Summary - B16 23 Other Ins Premiums - B17 24 Loans 1 - B18 25 Loans 3 - B18b 26 Loans By Owner - B18c 27 Allocation of Cash Flow - B19 28 Page 1

Disclaimer This report is intended to provide you with an analysis of your major financial goals. It is based on the data and assumptions you have provided or instructed us to make. Consequently, the outcome of the analysis will be dependent upon the accuracy of your data and reasonableness of your assumptions. Assumed rates of return may also either be assigned by your Adviser, or if utilizing Asset Allocation, be based on the historical returns of the benchmark indexes for the asset class. Please review all assumptions before reviewing the rest of the report to ensure the accuracy and reasonableness of the assumptions. Inaccurate or unreasonable assumptions may materially impact the results of the plan. It is important to note that actual results may differ due to any number of events. Some events are within your control, such as your spending habits, while other events, such as market performance, interest rates and tax policies, are not. To the extent that any of the referenced assets represent current account holdings there is no guarantee that these rates will be achieved. In addition, we have made no attempt to review your property and liability insurance policies (auto and homeowners, for example). We strongly recommend that in conjunction with this financial plan, you consult with your property and liability agent to review your current coverage to ensure it continues to be appropriate. In doing so, you may wish to review the dollar amount of your coverage, the deductibles, the liability coverage (including an umbrella policy), and the premium amounts. While assumptions are based on historical index data, past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Assumed rates of return are hypothetical which do not reflect the deduction of fees and charges inherent to investing in securities are not representative of any specific securities. Your results will vary. Growth assumptions for business assets and stock options are speculative and should be discussed and agreed upon by you and your financial advisor. Assumed rates of return and standard deviation assumptions used in the Monte Carlo analysis are based on historical asset class return data. LPL Financial does not provide tax or legal advice. The information contained in this report should be used for informational purposes only. The appropriate professionals should be consulted on all legal and accounting matters prior to or in conjunction with implementation of the plan. Page 2

Cash Flow Planning A1 This financial analysis has been prepared with the objective of illustrating your present and future cash flows, integrated with your assets and income taxes. Cash Flow Planning Cash flow planning is designed to account for all sources of income and expense, and to illustrate the impact that any surpluses or shortages might have on the ability of your assets to last through your life expectancy. This method of planning is sometimes referred to as an "optimized" approach. What do we mean by "Optimized" planning? Cash Flow Each year your income sources are compared to your annual expenses. Any surplus of spendable income is automatically added to your savings and investments starting in the first year. If there is a shortage of spendable income, the amount needed to make up the shortage is withdrawn from your asset accounts. This approach is intended to reflect what would happen if you are managing your funds in an optimal manner. Assets Every year your savings and investment accounts will have potential interest, dividends, capital gains or appreciation. The cash flow analysis makes the assumption that, unless otherwise indicated, the entire rate of return is reinvested into the account. This approach optimizes the potential growth of each asset account. Taxes are not charged to the earnings on the account, but instead are added to your personal expenses. Taxes Since income and FICA (Social Security) taxes can represent a substantial part of your annual expenses, the "optimized" planning approach carefully computes your tax burden every year. The analysis uses the actual IRS tax rate tables including annual adjustments for "indexing" the rate breakpoints and standard deductions. For high income taxpayers, itemized deductions and exemptions are phased out. Separate tax treatment is provided for dividends, capital gains, alternate minimum tax, the taxable portion of social security income and other areas where special treatment is required. The result is that, instead of showing a "guesstimate" of your annual taxes, the analysis provides a more accurate yearly indication of future potential taxes. Page 3

Cash Flow Management B1 The management of your annual cash inflows and outflows is based on the following details. The various report pages will provide more specifics about the annual amounts and results. Cash Flow Surplus In any year when there is a cash flow surplus, this surplus will be reinvested into your savings and investment accounts divided as shown below: Before After age 65 age 65 Taxable accounts (savings, CD, money market) 20% 40% Equity and other (stocks, mutual funds, real estate, etc.) 80% 60% Tax-Free accounts (municipal bonds and funds) 0% 0% Tax-Deferred accounts (annuities, non deductible IRAs, etc.) 0% 0% Cash Flow Shortage If in any year the amount of expenses exceeds the spendable income available, the analysis will draw funds from your savings and investment accounts to make up the shortfall. These funds may result in a taxable event if money is taken from your equity and other accounts which have a cost basis less than the current market value, or if it is necessary to take money from your retirement accounts because all other accounts have been depleted. In case of a shortage, funds are drawn from accounts in the following order - taxable, equity and other, tax free, tax deferred, tax deductible retirement accounts, and finally Roth IRA accounts. In some cases assets may be periodically rebalanced between accounts. Interest and dividends Each year the interest and dividends earned is computed on the various accounts, and these amounts are automatically assumed to be reinvested into the account unless an option is elected to take the amounts in cash and added to your spendable cash flow. On the following reports, the cash option will be indicated by a cash distributions in the "Cash Withdrawal" column. Taxable accounts (savings, CD, money market) Equity and other (stocks, mutual funds, real estate, etc.) Tax-Free accounts (municipal bonds and funds) Tax-Deferred accounts (annuities, non deductible IRAs, etc.) Income Taxes The amount you are required to pay for income taxes can vary every year, depending on the sources and amount of your income, and the adjustments and deductions available. In the analysis we have estimated all the various income and deduction items to determine the taxable income each year, including consideration of ordinary taxable income, capital gains, AMT and other significant items. The taxes are computed using real IRS tax rate tables, including indexing of the tax breakpoints using an assumed index rate of 0.00% per year. The amount of federal and state income tax and FICA (Social Security) tax is added to your annual expenses each year. Page 4

Cash Flow B2 The bars in the above graph represent the amounts available from... Earned income (wages & self employment) Pension plans and Social Security Misc - (inheritances, sale of residence, investment account systematic withdrawal plans or interest/dividends taken in cash, scheduled retirement account distributions or required minimum distribution amounts.) The line illustrates the annual expenses including... Personal living expenses Life insurance and other premiums Mortgage and debt repayment Planned deposits to investments and retirement accounts Miscellaneous expense items Taxes If income from various sources exceeds expenses, the excess is reinvested in savings and investment accounts. If expenses are greater than income, it is assumed that funds required to meet such excess expenses will be drawn from savings and investment accounts to make up the shortage. Page 5

Sources of Funds B3 Each year your spendable money will come from several different sources, as shown above. When your income needed exceeds the funds available from earnings, pensions and Social Security, then withdrawals are made from your asset accounts or qualified retirement plans. Earned Pen/SS Invest Retire Other Salaries and self employment income. Defined benefit pension plans and the total income from Social Security benefits. Interest or dividends paid in cash or withdrawals from your investment accounts to meet spending requirements. Distributions from your qualified retirement accounts either to meet your spending needs, scheduled distributions, or distributions made to meet the IRS minimum distribution requirements. Other single year or multiple year sources of funds, excess proceeds from sale of your residence, or life insurance death benefits. Page 6

Annual Expenses B4 Your annual expenses represent a number of different items, including personal needs, life insurance premiums, debt repayment, additions to savings and investments, other miscellaneous expenditures and taxes of various types. The graph should help you visualize the proportionate amount of your total outlay for each of these types of expenditures, and the changing mix over the future years. Page 7

Cash Flow Chart B5 The following flow chart illustrates the logic used in your cash flow report, indicating the methods used to allocate annual surplus and shortages. SURPLUS - If there is a surplus of income after deducting expenses, then the surplus is divided between the Taxable, Equity/Other, Tax-Deferred, and Tax-Free accounts in the percentages shown. SHORTAGE - if there is a cash flow shortage, funds are drawn from the accounts in order starting from the top down. As each account is depleted, then the next account is used. Income >>>>> Earned Income Interest and Dividends Pensions & Social Security Miscellaneous Income Less Expenses Shortage is drawn from accounts in the order shown below Personal Insurance Debt Payments Savings and investment additions Income Taxes >>>>> Surplus is divided as shown below <<<<< Taxable (Until age 65) (After age 65) <<<<< 20% 40% <<<<< Equity & Other <<<<< 80% 60% <<<<< Tax-Free <<<<< <<<<< Tax-Deferred <<<<< <<<<< Qualified Plans * * Mandatory distributions start at age 70.5. Page 8

Current Year Cash Flow INCOME Monthly Annual Percent of Income Salaries & Wages $10,000 $120,000 74.80 B9 Self Employment Income (Sch C) 2,083 25,000 15.58 B9 Interest 239 2,875 1.79 D3 Dividends 216 2,593 1.62 C6a Capital Gains / Losses (Sch D) 213 2,560 1.60 C6a Rental Real Estate 552 6,628 4.13 C 24 Retirement Account Distributions 63 763 0.48 C 13 Total income available $13,366 $160,419 100.00 EXPENDITURES Monthly Annual Percent of Income Federal and State Income Tax $2,167 $26,009 16.21 D3 FICA Taxes 1,059 12,712 7.92 D6 Residence Mortgage 2,400 28,800 17.95 B 18 Credit Cards 100 1,200 0.75 B 18 Life Insurance Premiums 305 3,670 2.29 A7 Homeowners & Other Insurance 65 785 0.49 A8 Auto Insurance 77 930 0.58 A8 Disability Insurance 37 450 0.28 A8 Saving and Investment Additions 261 3,132 1.95 B8 Retirement Account Additions (IRA, 401(k), TSA, etc.) 941 11,296 7.04 B8 Reinvestment of Interest, Dividends and Capital Gains 669 8,028 5.00 C4...C8 Education Fund Deposits 145 1,740 1.08 B 14a Charitable Contributions 166 2,000 1.25 D 10 Property Taxes 511 6,140 3.83 D 10 Medical Expenses 416 5,000 3.12 D 10 Food and Household Expenses 875 10,500 6.55 A9 Utilities 445 5,340 3.33 A9 Auto Operating and Maintenance 366 4,400 2.74 A9 Holidays 166 2,000 1.25 A9 Domestic Help 250 3,000 1.87 A9 Clothing 300 3,600 2.24 A9 Property Improvements/Upkeep 416 5,000 3.12 A9 Vacations 166 2,000 1.25 A9 Pet Expenses 83 1,000 0.62 A9 Books/Subscriptions 41 500 0.31 A9 Total spending and savings $12,427 $149,232 93.03 Cash flow surplus (Income less Spending) $939 $11,187 Note - Some income items may differ from amounts on the Cash Flow Projection report (depending on the cash/reinvestment options.) B6 Page 9

Future Year Cash Flow at Susan's Age 65 INCOME Monthly Annual Percent of Income Interest $206 $2,477 4.76 C4,C5,C7 Dividends 305 3,664 7.04 C6a Capital Gains / Losses (Sch D) 263 3,165 6.08 C6a Rental Real Estate 814 9,775 18.77 C 24 Pension Income 200 2,400 4.61 B 10 Retirement Account Distributions 97 1,164 2.24 C 13 Social Security 2,452 29,428 56.51 B 10 Total income available $4,337 $52,073 100.00 EXPENDITURES Monthly Annual Percent of Income Federal and State Income Tax $830 $9,960 19.13 D6 Residence Mortgage 2,400 28,800 55.31 B 18 Credit Cards 100 1,200 2.30 B 18 Life Insurance Premiums 405 4,865 9.34 B 16 Homeowners & Other Insurance 83 1,005 1.93 B 17 Auto Insurance 99 1,191 2.29 B 17 Reinvestment of Interest, Dividends and Capital Gains 775 9,306 17.87 C4...C8 Education Fund Deposits 100 1,200 2.30 B 14a Charitable Contributions 204 2,459 4.72 D 10 Property Taxes 587 7,052 13.54 D 10 Medical Expenses 586 7,035 13.51 D 10 Other Expense (Stock Options, Educations Costs, etc.) 4,762 57,154 109.76 B 12 Miscellaneous Expense 1,280 15,370 29.52 Food and Household Expenses 800 9,606 18.45 Utilities 570 6,840 13.14 Auto Operating and Maintenance 405 4,867 9.35 Holidays 213 2,561 4.92 Domestic Help 320 3,842 7.38 Clothing 256 3,074 5.90 Property Improvements/Upkeep 533 6,404 12.30 Vacations 320 3,842 7.38 Pet Expenses 106 1,280 2.46 Books/Subscriptions 53 640 1.23 Total spending and savings $15,787 $189,553 364.01 Cash flow surplus (Income less Spending) ($11,450) ($137,480) Note - Some income items may differ from amounts on the Cash Flow Projection report (depending on the cash/reinvestment options.) B6a Page 10

Cash Flow Illustration B7 Ages Earned Income Scheduled Cash flow sources and Required Minimum Distributions Retire/Roth Accounts * Investment Accounts * Pension/ SocSec Other Income Total Sources Less Living Expense & Taxes Surplus (Shortage) 1 2 3 4 5 6 7 8 58 60 $145,000 $763 $6,628 $152,391 ($141,204) $11,187 59 61 149,350 810 7,078 157,238 (146,103) 11,135 60 62 164,441 860 165,301 (168,735) (3,434) 61 63 169,373 913 9,087 179,373 (195,645) (16,272) 62 64 180,082 970 8,373 189,425 (186,800) 2,625 63 65 92,742 1,030 10,170 103,942 (147,051) (43,109) 64 66 95,524 1,095 9,299 105,918 (156,433) (50,515) 65 67 1,164 31,829 9,775 42,768 (180,258) (137,490) 66 68 1,238 32,466 10,262 43,965 (155,882) (111,917) 67 69 1,317 59,179 82,464 142,960 (128,334) 14,626 68 70 1,402 60,363 84,404 146,169 (131,231) 14,938 69 71 9,592 61,570 86,382 157,544 (137,814) 19,730 70 72 10,194 62,802 124,647 197,643 (123,937) 73,706 71 73 23,587 64,058 12,843 100,488 (151,267) (50,779) 72 74 25,001 65,339 13,391 103,730 (160,900) (57,170) 73 75 26,523 66,645 13,949 107,118 (168,815) (61,697) 74 76 25,976 67,978 14,519 108,473 (173,912) (65,439) 75 77 27,443 69,338 238,244 335,025 (235,936) 99,089 76 78 29,046 70,724 99,770 (154,814) (55,044) 77 79 30,587 72,139 102,726 (167,209) (64,483) 78 80 32,291 73,582 105,873 (173,015) (67,142) 79 81 33,980 75,054 109,034 (179,008) (69,974) 80 82 35,742 76,554 112,296 (185,224) (72,928) 81 83 37,578 78,086 115,664 (191,668) (76,004) 82 84 39,490 79,648 119,138 (198,290) (79,152) 83 85 41,356 81,241 122,597 (205,062) (82,465) 84 86 43,279 82,865 126,144 (211,974) (85,830) 85 87 45,079 84,522 129,601 (219,048) (89,447) 86 88 46,907 86,213 133,120 (197,840) (64,720) 87 89 48,752 87,937 136,689 (204,997) (68,308) 88 90 50,417 89,696 140,113 (212,383) (72,270) 89 91 52,058 47,335 99,393 (183,229) (83,836) 90 92 53,388 48,281 101,669 (176,210) (74,541) 91 93 54,638 49,247 103,885 (188,675) (84,790) 92 94 B9 C10..C11a C4..C8 B10 B12, B12a B8 * Scheduled distributions, interest or dividends taken in cash or amounts taken to meet the IRS minimum distribution requirements. Page 11

Annual Expense Illustration B8 Ages Personal Expenses * Life & Misc. Ins. Premiums Debt Payments Asset Account Deposits Retirement Account Deposits Other Expense & Stock Opt. Itemized Deductions** Income Tax Total Expenses 1 2 3 4 5 6 7 8 9 58 60 $39,080 $5,835 $30,000 $3,132 $11,296 $13,140 $38,721 $141,204 59 61 40,424 5,897 30,000 3,161 11,649 13,573 41,400 146,103 60 62 41,817 5,961 30,000 3,190 12,861 15,015 14,022 45,869 168,735 61 63 43,260 6,027 30,000 3,220 13,262 34,520 14,489 50,867 195,645 62 64 44,214 7,291 30,000 3,251 14,125 17,912 14,975 55,032 186,800 63 65 45,763 7,362 30,000 2,490 7,419 17,083 15,479 21,455 147,051 64 66 47,367 7,435 30,000 2,522 7,642 17,796 16,003 27,667 156,433 65 67 59,533 7,062 30,000 57,155 16,548 9,961 180,258 66 68 60,433 7,141 30,000 33,052 17,115 8,142 155,882 67 69 62,608 4,908 30,000 12,796 17,704 318 128,334 68 70 64,862 4,993 29,356 13,052 18,317 651 131,231 69 71 67,197 5,081 28,800 13,313 18,954 4,468 137,814 70 72 69,616 5,172 5,828 13,579 19,618 10,125 123,937 71 73 72,122 5,266 24,070 13,850 22,714 13,245 151,267 72 74 74,719 5,364 24,070 14,127 23,481 19,140 160,900 73 75 77,409 5,465 24,070 14,410 24,278 23,183 168,815 74 76 80,195 5,570 24,070 14,698 25,106 24,272 173,912 75 77 83,082 5,679 24,070 25,968 97,137 235,936 76 78 86,073 5,791 24,070 26,864 12,015 154,814 77 79 89,172 5,908 24,070 27,796 20,262 167,209 78 80 92,382 6,029 24,070 28,766 21,767 173,015 79 81 95,708 6,154 24,070 29,776 23,300 179,008 80 82 99,154 6,284 24,070 30,826 24,890 185,224 81 83 102,723 6,418 24,070 31,920 26,536 191,668 82 84 106,421 6,558 24,070 33,059 28,183 198,290 83 85 110,252 6,702 24,070 34,244 29,794 205,062 84 86 114,221 6,851 24,070 35,479 31,352 211,974 85 87 118,333 7,006 24,070 36,765 32,873 219,048 86 88 122,593 7,167 13 38,105 29,962 197,840 87 89 127,007 7,333 39,501 31,157 204,997 88 90 131,579 7,505 40,955 32,344 212,383 89 91 109,053 5,537 42,471 26,168 183,229 90 92 112,979 5,668 44,051 13,513 176,210 91 93 117,046 5,803 45,698 20,128 188,675 92 94 B16 B18b C4..C8 C10..C11a B12 D10 Note - it is assumed that the various tax reduction act changes are extended past 2010. See Income Tax Calculations report for details. * Personal expenses include education fund deposits. ** Itemized deductions do not include mortgage interest, state tax, and medical insurance premiums are adjusted for phaseouts. D6 Page 12

Earned Income Schedule B9 Age Susan Annual Salary Self Employment Age Annual Salary Self Employment Total Earned Income 1 2 3 4 5 6 58 $65,000 60 $55,000 $25,000 $145,000 59 66,950 61 56,650 25,750 149,350 60 79,568 62 58,350 26,523 164,441 61 81,955 63 60,100 27,318 169,373 62 90,041 64 61,903 28,138 180,082 63 92,742 65 92,742 64 95,524 66 95,524 65 67 66 68 67 69 68 70 69 71 70 72 71 73 72 74 73 75 74 76 75 77 76 78 77 79 78 80 79 81 80 82 81 83 82 84 83 85 84 86 85 87 86 88 87 89 88 90 89 91 90 92 91 93 92 94 David Page 13

Pension and Social Security Age Susan David Client Pension 2 Client Pension 1 SocSec* Spouse Pension 1 Spouse Pension 2 SocSec * $21,809 Age $2,400 $25,620 Total Pension & Social Security 1 2 3 4 5 6 7 8 58 60 59 61 60 62 61 63 62 64 63 65 64 66 65 67 2,400 29,429 31,829 66 68 2,448 30,018 32,466 67 26,064 69 2,497 30,618 59,179 68 26,586 70 2,547 31,230 60,363 69 27,117 71 2,598 31,855 61,570 70 27,660 72 2,650 32,492 62,802 71 28,213 73 2,703 33,142 64,058 72 28,777 74 2,757 33,805 65,339 73 29,353 75 2,812 34,481 66,645 74 29,940 76 2,868 35,170 67,978 75 30,538 77 2,926 35,874 69,338 76 31,149 78 2,984 36,591 70,724 77 31,772 79 3,044 37,323 72,139 78 32,408 80 3,105 38,070 73,582 79 33,056 81 3,167 38,831 75,054 80 33,717 82 3,230 39,608 76,554 81 34,391 83 3,295 40,400 78,086 82 35,079 84 3,361 41,208 79,648 83 35,781 85 3,428 42,032 81,241 84 36,496 86 3,496 42,872 82,865 85 37,226 87 3,566 43,730 84,522 86 37,971 88 3,638 44,605 86,213 87 38,730 89 3,710 45,497 87,937 88 39,505 90 3,785 46,407 89,696 89 47,335 91 47,335 90 48,281 92 48,281 91 49,247 93 49,247 92 94 B10 * Less earned income reduction if applicable Page 14

Other Income/Expense Detail B11 Single Year Description Start Age Stop Age (today's $)* Increase Rate (prior) Increase Rate (after) (future $)* Ordinary Taxable Percent Taxable Dollar Multiple Year Description Start Age Stop Age (today's $)* Increase Rate (prior) Increase Rate (after) (future $)* Ordinary Taxable Percent Taxable Dollar Extended travel (10k/yr first 10 yr of ret 65 75 (10,000) 3.00% 2.00% (12,299) 0.00% 0 Sale of equipment 67 70 60,000 2.00% 2.00% 71,706 0.00% 0 * Negative numbers indicate cash outflow, positive numbers represent income. Page 15

Other Income (Expense) B12 Other Income and Expense Totals Ages Life Insurance Income Taxable % Expense Taxable % Stock Options Residence sale Education Other goals Other Income Other Expenses Taxable s 1 2 3 4 5 6 7 8 9 58 60 59 61 27 27 832 60 62 (1,690) (1,690) 61 63 1,163 (34,520) 1,163 (34,520) 1,163 62 64 (17,912) (17,912) 63 65 1,338 (17,083) 1,338 (17,083) 64 66 (17,796) (17,796) 65 67 (12,299) (44,856) (57,155) 66 68 (12,545) (20,507) (33,052) 67 69 71,706 (12,796) 71,706 (12,796) 68 70 73,140 (13,052) 73,140 (13,052) 69 71 74,602 (13,313) 74,602 (13,313) 70 72 (13,579) 112,341 112,341 (13,579) 71 73 (13,850) (13,850) 72 74 (14,127) (14,127) 73 75 (14,410) (14,410) 74 76 (14,698) (14,698) 75 77 76 78 77 79 78 80 79 81 80 82 81 83 82 84 83 85 84 86 85 87 86 88 87 89 88 90 S 89 91 90 92 91 93 C 92 94 B11 B11 B11 B11 C12 B15 B13, B14a 10 Note - c = Susan's life expectancy age. s = David's life expectancy age. *Residence sale = Sale price less sale cost less down payment on new home. Page 16

Miscellaneous Cash Flow Items B12a Ages Sched D Capital G/L Sched E Passive G/L Increase (decrease) Fed/State Income AMT Preference Income Rental Real Estate Inc/(Exp) Other Taxable Income Other Non Taxable Income Total Other CashFlow Items 58 60 $6,628 $6,628 59 61 7,051 7,051 60 62 (13,325) (13,325) 61 63 7,924 7,924 62 64 8,373 8,373 63 65 8,831 8,831 64 66 9,299 9,299 65 67 9,775 9,775 66 68 10,262 10,262 67 69 10,758 10,758 68 70 11,264 11,264 69 71 11,780 11,780 70 72 12,306 12,306 71 73 12,843 12,843 72 74 13,391 13,391 73 75 13,949 13,949 74 76 14,519 14,519 75 77 238,244 238,244 76 78 77 79 78 80 79 81 80 82 81 83 82 84 83 85 84 86 85 87 86 88 87 89 88 90 89 91 90 92 91 93 92 94 Page 17

Financial Goals It is important to plan ahead for financial goals like purchasing a home, a business opportunity or other special needs. If you indicated any special goals, the following table shows the amount of money needed for those items. The costs shown below are included in your projection of Other Income and Expense. B13 Funding methods at 8.00% Inflated after tax Description: Age Needed Inflation Rate % Needed Needed Lump Sum Deposit Monthly Deposit Retirement trip 61 6.00% $15,000 $17,865 $14,182 $438 Sail boat 65 4.00% 20,000 26,319 15,357 233 In order to achieve a future financial goal, such as a major purchase or investment, you should plan to have funds available at the right time. Two methods are illustrated: pre-funding with a lump sum of money dedicated to the future goal, or pre-funded with an accumulation account where funds are deposited each month. Lump Sum Using this method, a calculation is done to determine what amount of money would need to be set aside now at an after-tax rate of return that would grow to the required amount at the time the funds are needed. The initial lump sum deposit would be held in a separate account and then used to pay for the expense. Monthly Deposits If a lump sum amount is not available to set aside for the future expense, you might consider using a separate account where monthly deposits are contributed to accumulate the funds required. The amount shown above as "Monthly Deposit" would be anticipated to grow at the after-tax rate shown, and when needed would be used to pay for the goal specified. The above funding amounts and rates are used for illustration only and do not represent any particular investment program. Results are not guaranteed. Note: The expenses for these goals are included in the projection of personal expenses. Page 18

Educational Funding Requirements Child Per Year Lump Sum* Monthly ** Bonnie $15,100 $53,047 $693 Andy $16,400 $62,415 $1,461 Totals $115,461 $2,154 B14 to be Paid by Parents 100.00% 2015 2016 17,040 17,040 17,040 2017 17,704 17,704 17,704 2018 18,395 18,395 18,395 2019 19,112 19,112 19,112 2020 18,283 18,283 18,283 2021 18,996 18,996 18,996 2022 19,737 19,737 19,737 2023 20,507 20,507 20,507 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Funding education costs with a lump sum investment now: Lump sum needed today to fund future costs Funds now available for college expenses. Additional lump sum needed now Monthly funding with level payments through the last year of college: Total level monthly payments to fund costs Payments needed considering $25,500 available now Additional needed with $25,500 and $145 current deposits $115,461 25,500 $89,961 $1,509 1,176 $1,031 Note: If education funds do not earn at the rate illustrated, it would require either a larger amount of initial lump sum investment, larger monthly deposits to the education fund, or education loans to finance the costs. *Lump sum is the dollar amount needed today to fund the expenses assuming a 6.00% after tax or tax free return on education funds. **Monthly deposit needed to fund the expenses from now through the last year of school. Note: The parents' share of education costs is included in personal expenses. Note: Education expenses are assumed to inflate at 3.9%. Page 19

Education Funding Sources B14a Ages Year Education Fund Balance (begin year) Annual Additions Annual Annual Growth at Costs 6.00% From Educ Funds Sources of Funds From Assets 1 2 3 4 6 7 58 60 2015 $25,500 $1,740 $1,579 59 61 2016 28,819 1,740 (17,040) 755 17,040 60 62 2017 14,274 1,740 (17,704) 16,014 1,690 61 63 2018 1,740 (18,395) 1,740 16,655 62 64 2019 1,200 (19,112) 1,200 17,912 63 65 2020 1,200 (18,283) 1,200 17,083 64 66 2021 1,200 (18,996) 1,200 17,796 65 67 2022 1,200 (19,737) 1,200 18,537 66 68 2023 (20,507) 20,507 67 69 68 70 69 71 70 72 71 73 72 74 73 75 74 76 75 77 76 78 77 79 78 80 79 81 80 82 81 83 82 84 83 85 84 86 85 87 86 88 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Note: The parents' share of education costs is included in personal expenses. Note: Education expenses are assumed to inflate at 3.90%. Page 20

Saving For College B14a Recent changes in income tax regulations have provided a variety of opportunities that should make saving for your child's education expenses more palatable. In some cases current education expenses can result in current tax savings, and putting aside money for future costs can be much more tax-friendly than in the pas 529 Plans: Section 529 of the Revenue code has enabled states to establish special college savings funds where parents or grandparents can make deposits to an account to accumulate money for tuition and in some cases other expenses. The terms and benefits of each state vary, but generally include the following features: Tax savings - starting in 2002 the earnings on the accounts will not only be accumulated without federal income tax, but withdrawals will also be tax free so long as they are used for qualified educational expenses. Some states will also allow withdrawals free of state taxation and many states will allow you to take a deduction for some portion of the money deposited but the rules of each state vary. Also, if you withdraw money from a 529 plan and do not use it on qualified educational expenses, you will generally be subject to both federal and state taxation as well as a 10% tax penalty. Control - unlike other accounts sometimes used to accumulate money for the child, you, the donor, stay in control of the assets. You decide when withdrawals are taken and for what purpose. And in most cases you can even reclaim the funds, particularly if the child elects not to attend college. (There may be a penalty for "non-qualified" withdrawals.) Simple - once you select which state plan to use, a simple enrollment form is completed, and deposits may even be made by automatic checking account withdrawals. The account is managed by the state or an investment manager hired by the state. Everyone eligible - generally there are no special eligibility requirements, and the amounts you can contribute in many states are substantial (in some cases as much as $250,000 or more.) Other education plans: The following items are effective with the 2001 tax act: Deduction of higher education expenses up to $4,000 may be deductible (subject to income limitations.) This deduction continues to be renewed by Congress, but may not be available in future years. Coverdell Education Savings Accounts - the nondeductible contribution may be used for "qualified higher education" or "qualified elementary and secondary education expenses", including private institutions. The maximum allowable contribution is $2,000 subject to certain income limitations. The plan is integrated with the HOPE and Lifetime Learning Credit programs. Employer provided assistance - the $5,250 contribution level now extends the exclusion to graduate courses and makes the exclusion for undergraduate and graduate courses permanent. Student Loan Interest Deduction - the availability for this benefit has been broadened and the earnings limits raised. For more information about these plans or to compare your state 529 plan with other states, go on the internet to : www.savingforcollege.com Page 21

Residence Sale Worksheet B15 Combined amounts for residences schedule for sale. Ages Residence Values* Mortgage Payoff Cost of Sale New Home Down Net Proceeds 58 60 $307,000 59 61 313,140 60 62 319,403 61 63 325,791 62 64 332,307 63 65 338,953 64 66 345,732 65 67 352,646 66 68 359,699 67 69 366,893 68 70 374,231 69 71 381,716 70 72 389,350 23,361 253,648 112,341 71 73 517,443 72 74 527,792 73 75 538,347 74 76 549,114 75 77 560,097 76 78 571,298 77 79 582,724 78 80 594,379 79 81 606,267 80 82 618,392 81 83 630,760 82 84 643,375 83 85 656,242 84 86 669,367 85 87 682,755 86 88 696,410 87 89 710,338 88 90 724,545 89 91 739,036 90 92 753,816 91 93 768,893 92 94 784,270 93 95 94 96 95 97 96 98 97 99 98 100 99 101 100 102 101 103 102 104 103 105 104 106 105 107 106 108 107 109 108 110 109 111 110 112 111 113 Description Current value Appreciation rate Sale age Value at sale Percent sale cost Total sales cost Mortgage payoff Corvallis home $307,000 2.00% 70 $389,350 6.00% $23,361 New Home $400,000 Appreciated cost $507,297 Percent financed 50.00% Mortgage rate 5.00% Number of years 15 Down payment $253,648 New mortgage $253,648 *Replacement residence value is shown at the end of the first year. Page 22

Life Insurance Summary Age Group or Term Susan Permanent (Net of Loans) Premiums Cash Values Age Group or Term David Permanent (Net of Loans) Premiums 1 2 3 4 5 6 7 8 58 $200,000 $97,500 $1,900 $12,450 60 $75,000 $60,000 $1,770 59 200,000 97,500 1,900 18,529 61 75,000 60,000 1,770 60 200,000 97,500 1,900 24,607 62 75,000 60,000 1,770 61 200,000 97,500 1,900 30,686 63 75,000 60,000 1,770 62 200,000 97,500 1,900 36,764 64 75,000 60,000 2,965 63 200,000 97,500 1,900 42,843 65 75,000 60,000 2,965 64 200,000 97,500 1,900 48,921 66 75,000 60,000 2,965 65 97,500 1,900 55,000 67 75,000 60,000 2,965 66 97,500 1,900 56,286 68 75,000 60,000 2,965 67 97,500 1,900 57,571 69 68 97,500 1,900 58,857 70 69 97,500 1,900 60,143 71 70 97,500 1,900 61,429 72 71 97,500 1,900 62,714 73 72 97,500 1,900 64,000 74 73 97,500 1,900 65,286 75 74 97,500 1,900 66,571 76 75 97,500 1,900 67,857 77 76 97,500 1,900 69,143 78 77 97,500 1,900 70,429 79 78 97,500 1,900 71,714 80 79 97,500 1,900 73,000 81 80 97,500 1,900 74,286 82 81 97,500 1,900 75,571 83 82 97,500 1,900 76,857 84 83 97,500 1,900 78,143 85 84 97,500 1,900 79,428 86 85 97,500 1,900 80,714 87 86 97,500 1,900 82,000 88 87 97,500 1,900 83,286 89 88 97,500 1,900 84,571 90 89 97,500 1,900 85,857 91 90 97,500 1,900 87,143 92 91 97,500 1,900 88,428 93 92 94 Cash Values $2,850 4,279 5,708 7,136 8,565 9,994 11,423 12,851 14,280 15,709 17,138 18,566 19,995 21,424 22,853 24,281 25,710 27,139 28,568 29,996 31,425 32,854 34,283 35,711 37,140 38,569 39,998 41,426 42,855 44,284 45,713 B16 Page 23

Misc. Insurance Premiums Ages Susan Auto Disability Medical LTC David Disability Medical LTC Homeowners Prop & Casualty 1 2 3 4 5 6 7 8 9 58 60 $430 $450 $500 $785 59 61 445 450 518 813 60 62 462 450 537 843 61 63 478 450 556 873 62 64 495 450 576 904 63 65 513 450 597 937 64 66 532 450 618 971 65 67 551 640 1,006 66 68 571 664 1,042 67 69 591 687 1,079 68 70 612 712 1,118 69 71 634 738 1,158 70 72 657 764 1,200 71 73 681 792 1,243 72 74 706 820 1,288 73 75 731 850 1,334 74 76 757 880 1,382 75 77 784 912 1,432 76 78 813 945 1,484 77 79 842 979 1,537 78 80 872 1,014 1,592 79 81 904 1,051 1,650 80 82 936 1,089 1,709 81 83 970 1,128 1,771 82 84 1,005 1,168 1,834 83 85 1,041 1,210 1,900 84 86 1,079 1,254 1,969 85 87 1,117 1,299 2,040 86 88 1,158 1,346 2,113 87 89 1,199 1,394 2,189 88 90 1,242 1,445 2,268 89 91 1,287 2,350 90 92 1,333 2,434 91 93 1,381 2,522 92 94 Auto B17 Total Misc Premiums 10 $2,165 2,227 2,291 2,357 2,426 2,497 2,570 2,197 2,276 2,358 2,443 2,531 2,622 2,716 2,814 2,915 3,020 3,129 3,241 3,358 3,479 3,604 3,734 3,868 4,008 4,152 4,301 4,456 4,617 4,783 4,955 3,637 3,768 3,903 Page 24

Loans - Mortgage, Auto, Credit Card Ages Residence Mortgage Balance Interest Principal Balance Auto Interest Principal Balance Credit Card Interest 1 2 3 4 5 6 7 8 9 B18 Principal 58 60 $272,000 $11,545 $17,255 $6,640 $894 $306 59 61 254,745 10,775 18,025 6,334 849 351 60 62 236,720 9,971 18,829 5,984 798 402 61 63 217,891 9,132 19,668 5,582 739 461 62 64 198,223 8,255 20,545 5,121 672 528 63 65 177,678 7,339 21,461 4,592 594 606 64 66 156,216 6,382 22,418 3,987 505 695 65 67 133,798 5,382 23,418 3,292 404 796 66 68 110,380 4,338 24,462 2,496 287 913 67 69 85,918 3,247 25,553 1,583 153 1,047 68 70 60,365 2,108 26,692 536 20 536 69 71 33,673 918 27,882 70 72 5,791 37 5,791 71 73 253,648 12,419 11,651 72 74 241,997 11,823 12,247 73 75 229,750 11,196 12,874 74 76 216,876 10,537 13,533 75 77 203,343 9,845 14,225 76 78 189,118 9,117 14,953 77 79 174,165 8,352 15,718 78 80 158,446 7,548 16,522 79 81 141,924 6,702 17,368 80 82 124,556 5,814 18,256 81 83 106,300 4,880 19,191 82 84 87,109 3,898 20,172 83 85 66,937 2,866 21,205 84 86 45,732 1,781 22,290 85 87 23,443 640 23,430 86 88 13 0 13 87 89 88 90 89 91 90 92 91 93 92 94 93 95 Page 25

Loans - RE, Other, Totals Ages Investment Real Estate Balance Interest Principal Balance Other Liabilities Interest Principal Loan Balances Total of all liabilities Interest Principal 1 2 3 4 5 6 10 8 9 11 B18b Annual payments 58 60 $278,640 $12,439 $17,561 $30,000 59 61 261,079 11,625 18,375 30,000 60 62 242,703 10,769 19,231 30,000 61 63 223,473 9,871 20,129 30,000 62 64 203,344 8,926 21,074 30,000 63 65 182,270 7,933 22,067 30,000 64 66 160,203 6,887 23,113 30,000 65 67 137,090 5,786 24,214 30,000 66 68 112,876 4,625 25,375 30,000 67 69 87,501 3,400 26,600 30,000 68 70 60,901 2,128 27,228 29,356 69 71 33,673 918 27,882 28,800 70 72 5,791 37 5,791 5,828 71 73 253,648 12,419 11,651 24,070 72 74 241,997 11,823 12,247 24,070 73 75 229,750 11,196 12,874 24,070 74 76 216,876 10,537 13,533 24,070 75 77 203,343 9,845 14,225 24,070 76 78 189,118 9,117 14,953 24,070 77 79 174,165 8,352 15,718 24,070 78 80 158,446 7,548 16,522 24,070 79 81 141,924 6,702 17,368 24,070 80 82 124,556 5,814 18,256 24,070 81 83 106,300 4,880 19,191 24,070 82 84 87,109 3,898 20,172 24,070 83 85 66,937 2,866 21,205 24,070 84 86 45,732 1,781 22,290 24,070 85 87 23,443 640 23,430 24,070 86 88 13 0 13 13 87 89 88 90 89 91 90 92 91 93 92 94 93 95 A6 Page 26

Loans By Owner Ages Loan Balances (by owner) Loan Payments (by owner) Total Trust & Total Balances Susan David Joint C. Prop. Other Payments Susan David Joint 58 60 $278,640 $6,640 $272,000 $30,000 $1,200 59 61 261,079 6,334 254,745 30,000 1,200 60 62 242,703 5,984 236,720 30,000 1,200 61 63 223,473 5,582 217,891 30,000 1,200 62 64 203,344 5,121 198,223 30,000 1,200 63 65 182,270 4,592 177,678 30,000 1,200 64 66 160,203 3,987 156,216 30,000 1,200 65 67 137,090 3,292 133,798 30,000 1,200 66 68 112,876 2,496 110,380 30,000 1,200 67 69 87,501 1,583 85,918 30,000 1,200 68 70 60,901 536 60,365 29,356 556 69 71 33,673 33,673 28,800 70 72 5,791 5,791 5,828 71 73 253,648 253,648 72 74 241,997 241,997 73 75 229,750 229,750 74 76 216,876 216,876 75 77 203,343 203,343 76 78 189,118 189,118 77 79 174,165 174,165 78 80 158,446 158,446 79 81 141,924 141,924 80 82 124,556 124,556 81 83 106,300 106,300 82 84 87,109 87,109 83 85 66,937 66,937 84 86 45,732 45,732 85 87 23,443 23,443 86 88 13 13 13 13 87 89 88 90 89 91 90 92 91 93 92 94 C. Prop. $28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 28,800 5,828 B18c Trust & Other Page 27

Allocation of Cash Flow Surplus or (Shortage) B19 Ages Taxable % Equity/Other Tax-Free Tax-Deferred Retirement Accounts Roth Accounts % % % 1 2 3 4 5 6 7 8 9 58 60 20 $2,237 80 $8,950 59 61 20 2,227 80 8,908 60 62 na (3,434) na na na 61 63 na (16,272) na na na 62 64 20 525 80 2,100 63 65 na (38,276) na (4,833) na na 64 66 na na (50,515) na na 65 67 na na (137,490) na na 66 68 na na (111,917) na na 67 69 40 5,850 60 8,776 68 70 40 5,975 60 8,963 69 71 40 7,892 60 11,838 70 72 40 29,482 60 44,223 71 73 na (50,793) na (225) na na 72 74 na na (57,113) na na 73 75 na na (61,701) na na 74 76 na na (65,443) na na 75 77 40 39,636 60 59,440 76 78 na (40,155) na (14,900) na na 77 79 na na (64,489) na na 78 80 na na (67,148) na na 79 81 na na (69,981) na na 80 82 na na (72,935) na na 81 83 na na (76,012) na na 82 84 na na (79,160) na na 83 85 na na (82,474) na na 84 86 na na (85,839) na na 85 87 na na (89,455) na na 86 88 na na (64,730) na na 87 89 na na (68,319) na na 88 90 na na (72,280) na na 89 91 na na (77,782) na (6,399) na 90 92 na na na (74,541) na 91 93 na na na (71,894) na (12,147) 92 94 40 60 C4 C5 C7 C8 C10..C10e C11, C11a 10 Page 28