Retirement Planning and Multiple Scenario Analysis Example We ran the following retirement scenarios:. Current Scenario (53% Probability) The first column is your current scenario without making any changes. 2. D3 Recommended Scenario: Retire at 60 (75% Probability) The D3 recommended scenario has Daniel working an additional two years to age 60. By working two additional years, you will be able to meet all of your retirement goals without needing to adjust spending goals or savings. 3. Alternate Scenario: Reduce Expenses (77% Probability) An alternative would be for you to reduce your base living expenses by $25,000 per year and instead saving $25,000 per year until retirement. By making this adjustment to your current lifestyle, you will be able to reach your retirement goals. These examples are for illustrative purposes only and should not be construed as individual advice.
This Worksheet allows you to analyze and compare the results of one or more scenarios that you created by varying the Plan assumptions. Estimated % of Goal Funded Goals Current Scenario Retire at 60 Reduce Expenses Average Return Bad Timing Average Return Bad Timing Average Return Bad Timing Needs 98% 87% 0 0 0 0 0 Retirement 0 Health Care 0 Travel Budget 0 Charitable Gifts 0 St. Joseph Tuition - Susan 0 St. Joseph Tuition - Tommy 0 Benet Academy Tuition - Bobby 0 College - Susan 0 College - Tommy 0 College - Bobby 0 Car Payment Safety Margin (Value at End of Plan) Current dollars (in thousands) : $39 $39 $5,032 $,907 $5,239 $2,068 Future dollars (in thousands) : $,09 $,09 $6,060 $6,085 $6,720 $6,600 Page 2 of 3
Monte Carlo Results Likelihood of Funding All Goals Your Confidence Zone: 7-9 Total Spending : $8,784,5 $8,283,43 $7,99,5 Stress Tests Method(s) Bad Timing Program Estimate Years of bad returns: 2029: -6.4 2030: -5.4 Bad Timing Program Estimate Years of bad returns: 203: -7.6 2032: -5.75% Bad Timing Program Estimate Years of bad returns: 2029: -7.6 2030: -5.75% Funding Order Assets - Ignore Earmarks No No No Retirement Income - Ignore Earmarks No No No Page 3 of 3
Hypothetical Average Rate of Return Before retirement portfolio set : D3 Models D3 Models Portfolio : Current Moderate Moderate Total Return : 5.6% 6.% 6.% Standard Deviation :..86%.86% Total Return Adjustment : 0.0 0.0 0.0 Adjusted Real Return : 3.% 3.6% 3.6% After retirement portfolio set : D3 Models D3 Models Portfolio : Current Moderate Moderate Total Return : 5.6% 6.% 6.% Standard Deviation :..86%.86% Total Return Adjustment : 0.0 0.0 0.0 Adjusted Real Return : 3.% 3.6% 3.6% Base inflation rate : 2.5 2.5 2.5 Tax-Free Options Before Retirement Reallocate a portion of bonds to tax-free: No No No Percent of bond allocation to treat as tax-free: 0.0 0.0 0.0 After Retirement Reallocate a portion of bonds to tax-free: No No No Percent of bond allocation to treat as tax-free: 0.0 0.0 0.0 Page 4 of 3
Goals Basic Living Expense Retirement Age Daniel 58 60 58 Planning Age Daniel 90 90 90 Mary 92 92 92 Both Retired Both Retired $94,592 $94,592 $69,592 One Alone - Retired Mary Alone Retired $55,4 $55,4 $35,4 Daniel Alone Retired One Alone - Employed Daniel Alone Employed Health Care Percentage to increase costs : 0 0 0 Cost determined by Schedule : Travel Budget Year : Cost : Is recurring : Years between occurrences : This goal will end at End of plan. Charitable Gifts Year : Cost : Is recurring : Years between occurrences : See details $25,000 $32,274 See details $25,000 $32,274 See details $25,000 $32,274 This goal will end at End of plan. Page 5 of 3
Goals St. Joseph Tuition - Susan Year : 206 206 206 Cost : $3,972 $3,972 $3,972 Is recurring : Years between occurrences : Number of occurrences : 3 3 3 St. Joseph Tuition - Tommy Year : 206 206 206 Cost : $2,800 $2,800 $2,800 Is recurring : Years between occurrences : Number of occurrences : 9 9 9 Benet Academy Tuition - Bobby Year : 207 207 207 Cost : $2,000 $2,000 $2,000 Is recurring : Years between occurrences : Number of occurrences : 2 2 2 College - Susan Year : 2022 2022 2022 Years of Education : 4 4 4 Annual Cost : $50,000 $50,000 $50,000 College - Tommy Year : 2028 2028 2028 Years of Education : 4 4 4 Annual Cost : $50,000 $50,000 $50,000 College - Bobby Year : 208 208 208 Page 6 of 3
Goals Years of Education : 4 4 4 Annual Cost : $50,000 $50,000 $50,000 Car Payment Year : 206 206 206 Cost : $7,00 $7,00 $7,00 Is recurring : Years between occurrences : Number of occurrences : 5 5 5 Retirement Income Pension Income (Daniel) Annual Income : Start Year : Select when income will end : Year to end retirement income : Survivor Benefit : Social Security Select Social Security Strategy Daniel Filing Method : Age to File Application : Age Retirement Benefits begin : First Year Benefit : Mary Filing Method : Age to File Application : Age Retirement Benefits begin : First Year Benefit : Reduce Benefits By : $8,555 Daniel's retirement End of Daniel's Plan Current $3,668 $5,834 $8,555 Daniel's retirement End of Daniel's Plan Current $3,668 $5,834 $8,555 Daniel's retirement End of Daniel's Plan Current $3,668 $5,834 Page 7 of 3
Asset Additions Daniel 40(k) Maximum Maximum Maximum Roth: N/A N/A N/A Maximum contribution each year: % Designated as Roth: 0.0 0.0 0.0 Plan addition amount: $28,600 $28,600 $28,600 207 207 207 Frank - Fund All Goals Daniel Fidelity TOD Brokerage Account $00,000 Inflating $00,000 Inflating $00,000 Inflating 207 207 207 Frank - Fund All Goals Additional Savings After Susan's 529 $6,000 Inflating $6,000 Inflating $6,000 Inflating 2022 2022 2022 Joint - Fund All Goals Additional Savings After Private School Ends $8,772 Inflating $8,772 Inflating $8,772 Inflating 207 207 207 Joint - Fund All Goals Additional Savings After Tommy's 529 $6,000 Inflating $6,000 Inflating $6,000 Inflating Joint - Fund All Goals Additional Savings After Bobby's 529 208 208 208 Page 8 of 3
Asset Additions $6,000 Inflating $6,000 Inflating $6,000 Inflating 2028 2028 2028 Joint - Fund All Goals Additional Savings after Car Payment Ends $7,00 Inflating $7,00 Inflating $7,00 Inflating 202 202 202 Joint - Fund All Goals Additional Tax Savings After RSU's End $30,000 $30,000 $30,000 2020 2020 2020 Frank - Fund All Goals Susan's 529 Plan $6,000 $6,000 $6,000 207 207 207 Frank - College - Susan Tommy's 529 Plan $6,000 $6,000 $6,000 207 207 207 Frank - College - Tommy Bobby's 529 Plan $6,000 $6,000 $6,000 Frank - College - Bobby 207 207 207 Page 9 of 3
Extra Savings by Tax Category Daniel's Qualified Mary's Qualified Daniel's Roth Mary's Roth Daniel's Tax-Deferred Mary's Tax-Deferred Taxable $0 $25,000 Stock Options Company Stock Include in plan : Stock Options Scenario : Vesting Scenario Scenario Scenario Termination Year : Return : 2026 2026 2026 7.0 7.0 7.0 Restricted Stock Company Stock Include in plan : Restricted Stock Scenario : Scenario Scenario Scenario Last year shares will vest : 2026 2026 2026 Return : 7.0 7.0 7.0 Tax Options Include Tax Penalties : Change Tax Rate? No No No Year To Change : Change Tax Rate by this % (+ or -) : 0.0 0.0 0.0 These examples are for illustrative purposes only and should not be construed as individual advice. Page 0 of 3