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    Trumpette investment retirement tax report easy money Trumpette investment retirement tax report easy money Document Transcript

    • PersonalFinancialAnalysisforDon TrumpetteNew Scenario (10/19/2011 3:59:19 PM)Report CoverInformationGoes HereTo EditGo To SettingsReport Defaults 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. 10/19/2011
    • Table of ContentsGeneral 2 Retirement Needs Analysis - C3 52Personal Statistics 3 Retirement Capital Analysis - C4 53Introduction (text) 4 Retirement Capital Notes (text) - C4a 54Goal Based Planning (text) 5 Retirement Estimate Solution - C5 55Objectives - A1 6 Retirement Capital Estimate - C6 56Summary - A2 7 Asset Illustrations (text) - C7 57Retirement Summary - A2a 8 Asset Accounts - C8 58Financial Life Cycle (text) - A3 9 Total Assets - C8a 59Net Worth Graph - A4 10 Monte Carlo - C9 60Net Worth - A5 11 Monte Carlo Details (text) - C10 61Asset Details - A6 12 Standard Deviation (text) - C11 62Personal Property - A7 13 Withdrawal Rates - C12 63Liability Details - A8 14 Withdrawal Rate Graph - C12a 64Life Insurance - A9 15Other Insurance - A10 16Asset Summary - A11 17Liquidity Graph - A12 18Liquidity - A13 19Cash Flow Graph - A14 20Cash Flow - A15 21Income Mgt - A16 22Education Cover 23Saving for College (text) - A18 24Education Graph - A19 25Education Costs - A20 26Education Funding - A21 27Education Separate Accounts - A22 28Education Funding Sources - A23 29Income Tax Cover 30Income Tax 31Income Tax Planning (text) - D1 32Income Tax Graph - D2 33Income Taxes - D3 34Income Taxes Paid - D4 35Tax Favored Investments - D5 36Investments Cover 37Investment 38Asset Management (text) - B1 39Risk (text) - B2 40Asset Pyramid - B3 41Financial Attitudes - B4 42Asset Classes - B5 43Asset Allocation - B6 44Asset Allocation Graph - B7 45Allocation Worksheet - B8 46Investment Returns - B8a 47Retirement Cover 48Retirement 49Retirement Planning (text) - C1 50Retirement Graph - C2 5110/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 1 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • General A summary of the assumptions used in this analysis, description of the purpose of the reports and a listing of assets, insurance and other details. Includes net worth statement, cash flow report, liquidity and education funding if appropriate.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 2 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Personal Statistics 10/19/2011Don Trumpette and Sabrina Trumpette57 Forest StreetTampa Bay, FL 12345Family Member Birth Date AgeDon Trumpette 8/9/1979 32Sabrina Trumpette 8/5/1983 28Yevelle 10/19/2011 0 Employment Don Sabrina This presentation provides a general overview of some aspects of your personal financial position. It is designed to provide educational and/or general information and is not intended for specific legal, accounting, investment, income tax or other professional advice. For specific advice on these aspects of your overall financial plan, consult with your professional advisors. Asset or portfolio earnings and/or returns shown, or used in the presentation, are not intended to predict nor guarantee the actual results of an investment product.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 3 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • IntroductionNew Scenario (10/19/2011 3:59:19 PM)Your Personal Financial Plan has been prepared using techniques and concepts proven over years ofexperience from the disciplines of banking, investments, insurance, economics and finance. The analysis isbased on the information you provided in your confidential questionnaire.As you review the Personal Financial Plan, you will find that some areas of your financial goals are in bettershape than others. The areas that particularly need attention will be identified in the report that follows.The objective of this analysis is to assist you in making proper plans and quality decisions that might helpyou to achieve your financial objectives.Decisions you make about your financial future can be enhanced by an understanding of your personalsituation as described in this report, and through careful review and discussion.After you have reviewed this financial plan and noted areas that need attention, we will assist you inevaluating the various options available for addressing areas of need or opportunities for use of yourfinancial resources.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 4 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Goal Based PlanningNew Scenario (10/19/2011 3:59:19 PM)This comprehensive financial analysis has been prepared with the objective of helping you determinewhether there are possible shortfalls or problems that must be addressed in order to achieve your goals.Goal Based PlanningGoal based planning is designed to identify certain goals, and then determine if what you are now doing mayenable you to accomplish your goals. This differs from a "cash flow" analysis which is used to measure allyour cash inflows and outflows, and then integrate these items with your assets and a careful analysis ofyour income tax burden each year. Goal based planning uses a more conservative "worst case" scenarioapproach.What do we mean by "Worst Case"?Cash Flow When we project your sources of income and expenses, an assumption is made that your income prior to retirement is adequate to cover your spending requirements. We do not illustrate investment of any surplus cash flows prior to retirement, or account for shortages prior to retirement. An exception to this rule applies to items you have indicated as being special income or expenses. These would include an inheritance, pension plans or social security starting prior to retirement age, or special expense items like education funding.Savings If you indicate that you are making deposits to savings, investments or retirement accounts, we use only those deposit amounts that you specify. Even if there might be additional funds available to save or invest, we do not assume that they will be added to your accounts. The objective of Goal Based Planning is to help you evaluate whether what you ARE DOING NOW may come close to allowing you to accumulate the funds necessary to reach your goals. If your savings rate is not sufficient, the report provides an estimate of additional savings or investments or estimated rates of return that might be used to satisfy the shortfall. The suggested amounts may or may not prove to be sufficient depending on various future economic and personal conditions.Taxes When managing your savings and investment portfolio, there will be taxable items such as interest, dividends, investment gains and retirement account distributions which will be subject to income tax. In a worst case analysis we make the assumption that the taxes due on these events will be paid out of the income source and the after-tax balance reinvested. In reality you may have enough earned income or other sources of funds to pay the taxes and reinvest the gross amount prior to retirement. However, if you fail to do this, then the "worst case" illustration will show the results if only the after -tax amounts are reinvested. We also make the assumption that any anticipated appreciation on invested assets is taxed each year as if you turned over your investment portfolio and paid capital gains tax on the realized appreciation. Again, this is illustrating the "worst case" approach to see if you might reach your goals under this type of scenario.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 5 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Objectives A1New Scenario (10/19/2011 3:59:19 PM)Your personal financial plan was prepared with concern for your specific goals and objectives. As you reviewthis report, determine if your goals are obtainable or whether adjustments should be considered. * MonthlyRETIREMENT OBJECTIVES: Expenses in * Inflation Adjusted Age Todays Dollars Expenses Your financial plan is based on the 62 $6,863 $15,030 G4, G12 following income requirements. 74 6,863 20,943 87 6,863 30,220 * Includes basic personal expenses, itemized deductions, insurance, mortgage and debts, savings and investment deposits.SURVIVOR OBJECTIVES: In the event of your premature death, you indicated that your heirs would need the following amounts of monthly income:* Don Sabrina Initial income amount needed: $8,783 $7,992 F6, F4 *Amount of expenses will vary. Refer to Survivor report for details. Includes basic personal expenses, insurance premiums, itemized deductions and loan payments.FINANCIAL ATTITUDES: Your plan has been prepared based on the understanding that your risk tolerance level is that of a moderate investor. Based on your responses about common financial objectives, we have listed the following items and your level of concern for each area rated 1 (low) to 5 (high). A20 Maximum growth potential. 3 Protection from inflation. 3 Reducing income taxes. 3 Liquidity (convert assets to cash). 3 Current spendable income. 3OTHER: Estimates used in the reports are based on a life expectancy age for Don of 96. The life expectancy age for Sabrina is assumed to be 96.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 6 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Personal Financial Summary A2New Scenario (10/19/2011 3:59:19 PM)There are several areas of your financial affairs that can be compared to the goals you have set and to theirprobable achievement. The following areas will give you a brief overview of the progress you have madetoward your goals or alert you to areas that may need attention.RETIREMENT: Income needed and available Annual basic living expenses needed adjusted for inflation * $180,356 Total amount of spendable income needed through life expectancy $12,023,702 Total income expected from Social Security, pensions, etc. ($3,155,614) Additional income requirements to be satisfied by savings, investments $8,868,089 C3 Estimated value of working assets at retirement age 62 $671,035 C4 Your working assets may last only until you reach age 72. *Includes basic living expenses, debt payments, insurance premiums and itemized deductions.SURVIVOR (Insurance): Person to be insured Don Sabrina Insurance needed if death occurs now $684,429 $1,197,698 F4, F6 Maximum insurance needed if death occurs in the future 2,873,631 2,979,787 Present Insurance Coverage $85,000DISABILITY:In the event of long term disability, funds will be required to pay for living expenses, debts and insurancepremiums. Person disabled Don Sabrina Monthly income needed $8,383 $8,383 F8 Monthly income available (long term) 5,325 3,386 Percent available - vs - needed 64% 40%INCOME TAXES: Your estimated gross income this year $95,194 D3 Your estimated taxable income this year 52,370 Total income and social security taxes 14,483 Marginal tax rate (highest Federal & State tax rate) 15%ESTATE COSTS: First death estimated estate expenses and debts now $183,386 E4 Second death taxes & expenses after 10 years $301,823 E7 (adjusted for estate growth) Estate settlement costs as percent of future estate values 82% (assuming second death in 10 years)10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 7 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Retirement Summary A2aNew Scenario (10/19/2011 3:59:19 PM)The following table summarizes the goals, assumptions and variables used in the Retirement Planninganalysis. Moderate PortfolioRETIREMENT GOALS: Don Sabrina Retirement Age 62 62 Life Expectancy 96 96 Retirement Living Expenses (after-tax) Todays $ / Inflated $58,860 $142,869 G4 Standard of Living Inflation Rate 3.00% G4RETIREMENT CAPITAL: Rate of Return - Pre-Retirement (pre-tax) 6.84% C4 Total assets available for retirement $52,876 C4 Annual additions to Other Accounts $4,800 H1...H4RETIREMENT INCOME (pre-tax): Don Sabrina Social Security Starting Age 62 62 Social Security Benefit $22,480 $24,003 Social Security COLA 2.00%OTHER INCOME/EXPENSE ITEMS (pre-tax): Post-Retirement Earnings $744,195 G8 Rental Real Estate Income B15 Balloon Payment / Life Insurance 85,000 G8INCOME TAXES: Your marginal tax rate (Federal & State) is 15.00% D3 Your effective tax rate is 15.69% D3RETIREMENT ANALYSIS: Amount Needed for Retirement $2,690,000 C4 Retirement Assets at Age 100 $0 Age When Your Retirement Assets are Depleted 72 Additional Lump Sum Needed at Retirement $2,018,965 C4 Increased Rate of Return needed for Remaining Life 10.50% C4 Additional Monthly Savings Required at 5.00% (after-tax) $1,900 C4 Additional Monthly Savings Required at 7.00% (after-tax) $900 C4 Additional Monthly Savings Required at 9.00% (after-tax) $400 C410/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 8 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Financial Life Cycle A3New Scenario (10/19/2011 3:59:19 PM)Every person during his or her life goes through a similar economic life cycle. Your success in the final phaseof the cycle is determined by your preparation and planning in the earlier phases.The phases can be described as:During the early years when you are a "consumer", depending on your parents for support and learning skillsneeded for the future, you have the opportunity to prepare yourself for the earning years. Successfulpreparation in the form of education and development of social skills and earning capability can be greatlyresponsible for the level of success in the "Earning" phase.Interestingly enough, the amount of wages or income received in the second or "Earning" phase is not thefactor that determines the results of the last phase - "Spending" or "Yearning". The key in this phase is howwell a person has managed his/her income.A person with low to medium income who regularly saves and prudently invests part of each paycheck caneasily achieve a more successful financial result than high income earners who fail to set aside part of theirwealth for the time when they can no longer work for a living.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 9 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Net Worth A4New Scenario (10/19/2011 3:59:19 PM)The Net Worth graph illustrates the amount of your assets, including savings, investments, retirementaccounts, and personal assets, less liabilities such as mortgages, loans, credit card balances, etc. Assets: $378,476 A5 Ordinary income accounts $4,880 Investment accounts 0 Retirement accounts 48,596 Real estate 285,000 Personal assets 40,000 Less Debts ($334,766) Net Worth $43,710Your objective should be to measure your net worth on a regular schedule in order to assure that you areimproving your financial strength.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 10 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Net Worth Statement A5New Scenario (10/19/2011 3:59:19 PM)ASSETSOrdinary Interest Accounts: Amount Percent of Assets Checking accounts, cash $1,980 0.52% Savings accounts 2,300 0.61% Insurance Cash Value and Dividends 600 0.16% Total Ordinary Interest Assets $4,880 1.29%Retirement Accounts: 401(k) accounts 22,699 6.00% IRA accounts 25,897 6.84% Total Retirement Accounts $48,596 12.84%Personal Use Assets: Autos 40,000 10.57% Total Personal Use Assets $40,000 10.57%Real Estate Assets: Residence 285,000 75.30% Total Real Estate Assets $285,000 75.30% TOTAL ASSETS $378,476 100.00%LIABILITIES Amount Percent of Assets Residence mortgage ($307,114) 81.14% Auto loans (27,652) 7.31% TOTAL LIABILITIES ($334,766) 88.45% NET WORTH (Assets less Liabilities) $43,710 Note: Assets held in a Revocable Trust are included in the grantors assets.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 11 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Asset Detail A6New Scenario (10/19/2011 3:59:19 PM) Account Monthly Rate of ReturnName Value Additions Inter. Div. CapG. Appr. Owner Liquid Group Class Type RetChecking Account $1,980 200 / 0 5.00 Joint Checking Taxable YesIndiv 1 401(k) 22,699 0/0 7.00 Don MF-Stock Retire YesIndiv 1 IRA 25,897 0/0 7.00 Don MF-Stock Retire YesSavings Account 2,300 200 / 0 5.00 Joint Savings Taxable Yes10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 12 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Personal Property A7New Scenario (10/19/2011 3:59:19 PM) AppreciationDescription Value Owner RateResidence $285,000 Joint 2.00Vehicles $40,000 Joint (10.00) Total $325,00010/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 13 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Liabilities A8New Scenario (10/19/2011 3:59:19 PM) Monthly Interest BalloonDescription Owed to Owed by Balance Payment Rate AgeAuto Joint $27,652 $437 4.38%Residence Joint 307,114 2,064 6.45% Totals $334,766 $2,50110/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 14 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Life Insurance A9New Scenario (10/19/2011 3:59:19 PM) Face Annual Cash LoanInsured Description Company Owner Beneficiary Amount Premium Value AmountDon Permanent Lif Don $25,000 $2,000 $600Don Term Life Don 60,000 400 Face Annual Cash Loan Totals Amount Premium Value Amount Don $85,000 $2,400 $600 Sabrina10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 15 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Other Insurance A10New Scenario (10/19/2011 3:59:19 PM) AnnualCompany Type Insured Description Premium Auto Don Auto Insurance $2,300 Homeowners, P&C, Other Don Home Owners 2,700 Medical Don Medical 4,800 Total Premiums: $9,80010/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 16 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Asset Summary A11New Scenario (10/19/2011 3:59:19 PM)This view looks at your retirement assets by the way they are treated for income taxes (the retirementestimate report uses this grouping for illustrating future values). Account Percent of Weighted Average*Assets by TYPE: Value Total Rate of Return C8 Taxable $4,280 8.09% 5.00% Equity/Other Tax-Deferred Tax-Free Retirement accounts 48,596 91.91% 7.00% Roth accounts $52,876 100% 6.84%* Weighted average rate excludes assets which were not intended to be used for retirement. Note: The Weighted Average Rate of Return is derived from the asset rates provided by you as shown on the Asset Detail report page. The effective return from each asset is computed and summed by type, and that sum is divided by the total value of that typeasset. The resulting weighted average reflects an estimated portfolio rate of return for that asset type. The rates used are assumed to be net of all fees and expenses.This view is focused on the asset classes. It should be used to help you determine if your assets are positionedin concert with your own goals. Savings & Retirement Percent ofAssets by CLASS: Investments Accounts Total B8This view is concerned with the amount of liquid funds available. Refer to the Liquidity report for a moregraphic illustration. Savings & Retirement Percent ofAssets by LIQUIDITY: Investments Accounts Total Cash and Reserves Liquid Non-Liquid Other Note: Some of the assets listed here may have been excluded from the retirement projection. Refer to the Asset Detail report for specifics. Assets listed include only "working" assets, not residence and personal property assets or insurance cash values.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 17 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Liquidity A12New Scenario (10/19/2011 3:59:19 PM)The above graph illustrates the liquidity level of your working assets, measuring the ability to convertworking assets to cash if needed.If you have too much of your money in "non-liquid" investments you may someday find yourself in a positionwhere you need to have quick cash, but are unable to convert enough of your assets quickly. Total Assets** Working Assets* A13 Cash & Reserves $0 $0 Liquid 0 0 Non-Liquid 325,600 0 Other 0 0Your total liquidity level including your residence and personal property is 0%.Your working asset liquidity ratio (cash and liquid assets divided by all working* assets) is 0%This level of working asset liquidity is very low and could prove troublesome when cash is needed. * Excluding residence and personal assets. Includes retirement accounts and rental real estate. ** Includes residence and personal assets in non-liquid category.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 18 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Liquidity Analysis A13New Scenario (10/19/2011 3:59:19 PM)Liquidity is a measure of the ability to convert assets to cash. This can be important in two major instances...FIRST - In times of economic disruption, cash is king. If a substantial portion of your net worth is held in assetsthat are not readily convertible to cash, you may find their value rapidly fluctuating. This could severelyhamper your ability to move them to a "safe haven" if needed.SECOND - In the event of loss of income due to death or disability, there may be a need to reposition some ofthe assets to change from a growth oriented to a more income oriented asset position. If too much of your assetsare positioned in non-liquid accounts, you may find it impossible to make the changes required without payingsubstantial penalties or taxes, or you may find it difficult or impossible to make the changes at all. All Working Assets* Assets**CASH and RESERVES $0 $0 These are generally assets that can quickly be taken in cash without significant delay and without substantial loss of value. Included in this group are your checking, savings, US savings bond accounts, and money market funds.LIQUID INVESTMENTS $0 $0 These accounts can be converted to cash in a reasonable length of time, but they may suffer an unpredictable loss due to market fluctuations, liquidation penalties or other complications. Some assets like annuities, CDs and retirement accounts may be subject to liquidation penalties and/or taxes which may make liquidation less attractive. Included in this category are Govt T-Bills and bonds, corporate bonds, tax-advantaged municipal bonds, fixed or variable annuities, variable life insurance, certificates of deposit, mutual funds, stocks and other securities.NON-LIQUID ASSETS $325,600 $0 These accounts are considered non-liquid, meaning that even if you want to sell or dispose of them, there may not be a ready buyer for the asset. This includes real estate, partnerships, mortgages and notes. Residence, personal property and cash values are included in "All Assets" category.OTHER ASSETS $0 $0 Items in this category are most likely to be non-liquid or may suffer substantial loss if they must be sold quickly. They include business interests, other ventures, and tangibles. Total of all assets $325,600 $0 Liquid assets (Cash, Reserves and Liquid investments) $0 $0 Liquidity ratio (Liquid assets divided by Total Assets) 0% 0% *Includes residence, all types of personal property, insurance cash values, savings, investments and retirement assets. **Includes only savings, investment, rental real estate and retirement account assets.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 19 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Cash Flow A14New Scenario (10/19/2011 3:59:19 PM)The graph above shows the relationship of your expenditures to your available income. The expendituresgroup includes your personal expenses as well as taxes, insurance premiums, debt and mortgage payments,savings and investments deposits. Monthly Annual Income available $7,932 $95,194 A15 Less: Savings and Investments (427) (5,124) Living Expenses (5,846) (70,160) Taxes (1,206) (14,482) Insurance (1,016) (12,200) Mortgage (2,064) (24,768) Loan payments (437) (5,244) Total spending ($10,996) ($131,978) Spendable income surplus ($3,064) ($36,784)The information you provided for this analysis indicates that your expenses exceed your available incomesources.You should carefully evaluate your spending in order to reduce expenses where appropriate.You should regularly review your cash flow to determine if there are changes required in your spendinghabits.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 20 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Cash Flow A15New Scenario (10/19/2011 3:59:19 PM) Monthly Annual Percent ofINCOME Amount Amount Income Salaries & Wages $3,989 $47,870 50.29% D3 Self employment income (Sch C) 3,916 47,000 49.37% H8 Interest 27 324 0.34% H1...H4 Total income available $7,932 $95,194 100.00% Monthly Annual Percent ofEXPENSES Amount Amount Income Federal and State income tax $500 $6,005 6.30% D3 FICA taxes 706 8,477 8.90% D3 Residence mortgage 2,064 24,768 26.02% K1 Auto Loans 437 5,244 5.51% K1 Life insurance 200 2,400 2.52% J1 Homeowners & other insurance 225 2,700 2.84% G15 Auto insurance 191 2,300 2.41% G15 Medical insurance 400 4,800 5.04% G15 Saving and Investment additions 400 4,800 5.04% G12 Reinvestment of Interest, Dividends and Capital Gains 27 324 0.34% H1...H4 Charitable contributions 83 1,000 1.05% D3 Property tax 575 6,900 7.25% D3 Medical expenses 283 3,400 3.57% D3 Misc 150 1,800 1.89% Clothing 500 6,000 6.30% Transportation 240 2,880 3.03% Utilities 515 6,180 6.49% Household 400 4,800 5.04% Children 900 10,800 11.35% Personal 600 7,200 7.56% Gifts/Vacation 700 8,400 8.83% Food 900 10,800 11.35% Total spending and savings $10,996 $131,978 138.63%Cash flow shortage (spending in excess of income) ($3,064) ($36,784)Note: Items on this report represent only current year income and expenses. Amounts will vary in future years.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 21 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Income Management A16New Scenario (10/19/2011 3:59:19 PM)The 10/20/70 Income Management Plan explained below will help you establish a system for currentincome management and for accumulation of capital for future financial independence. $7,906 Gross income available per month. D3 (1,207) Less Income Tax and FICA. (83) Less charitable contributions. $6,616 Amount left for the 10/20/70 plan. DISTRIBUTION OF FUNDS FOR 10/20/70 PROGRAM PUT and KEEP 10% $662 This amount is used for investment to create capital for future use. 20% $1,323 PUT and TAKE Use these amounts for cash reserves or for reducing debt. Keep these funds in a money market or savings account. SPEND Use this for your living expenses - monthly 70% $4,631 bills, food, etc. These funds should be deposited to a checking account where they can be easily used as needed, but with careful control of expenditures and good records for tracking use of funds.The effectiveness of this plan can be enhanced by using automatic checking deposit and withdrawalprograms where possible.Check at your place of employment to see if you can have your paycheck automatically deposited toyour checking account.See if your bank will automatically transfer the 20% PUT and TAKE amount into a savings or moneymarket account.Consider investment programs like mutual funds or annuities which have automatic bank-draft plans forthe 10% investment program each month.This plan and the percents indicated above are general guidelines and may need to be adjusted to fit yourparticular situation.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 22 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • PersonalEducationAnalysisforDon TrumpetteNew Scenario (10/19/2011 3:59:19 PM)Report CoverInformationGoes HereTo EditGo To SettingsReport Defaults 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. 10/19/2011
    • Saving For College A18New Scenario (10/19/2011 3:59:19 PM)Recent changes in income tax regulations have provided a variety of opportunities that should make savingfor your childs education expenses more palatable. In some cases current education expenses can result incurrent tax savings, and putting aside money for future costs can be much more tax-friendly than in the past.529 Plans:Section 529 of the Revenue code has enabled states to establish special college savings funds where parentsor grandparents can make deposits to an account to accumulate money for tuition and in some cases otherexpenses. 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: ● 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.com10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 24 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Education Funding A19New Scenario (10/19/2011 3:59:19 PM)The "Parents Share" bars indicate the parents share of the needed annual expenditures for the yearswhen each child is in school. The "Balance" line indicates the cumulative account value of monthlydeposits to the education fund. The "Lump Sum" line represents the initial deposit of a single lumpsum to an education fund and the projected growth or consumption of the account.Funding education costs with a lump sum investment now: Lump sum needed today to fund future costs $0 (No current educational funds available.) $0 Your education needs are overfunded $0 A21Monthly funding with level payments through the last year of college: Total level monthly payments to fund costs $0 With $0 available, no additional funding is required. NA Total deposits needed to fund college costs NA A2110/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 25 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Education Costs A20New Scenario (10/19/2011 3:59:19 PM)Providing educational funds can be one of lifes greatest financial burdens. Fortunately, it is an expense thatcan be planned. The following illustration uses a rate of return of 6.50% for computing both a lump-sum anda monthly deposit funding method. Parents Total CostsStudents Number Starting Annual Todays Inflated at Funding Amount RequiredName Age of Years Year Costs Dollars 5.50% Lump Sum Per MonthYevelle 2011 Totals $0 $0 $0Lump Sum:This is the amount of money that would need to be set aside immediately to cover all costs assuming that thefunds are spent at the beginning of each year. It is assumed that interest is added each year on the unusedbalance.Monthly Deposits:Instead of pre-funding the education costs with a lump sum deposit, you could elect to accumulate funds bymaking monthly additions to a savings or investment account. In this case a required monthly deposit iscomputed that would provide enough funds to cover costs through the last year of education expenses.Method #1 - Separate accounts for each child:The benefit of separate account funding method is that the funds may be segregated and identified for eachchild. The disadvantage is that this method generally will require a much larger monthly deposit in the earlyyears and smaller deposits in the later years. For example, if there are three children starting school atdifferent years, the deposits might look like this: Period 1 (The chart below is an example only and does not relate to your plan.) Child 1 = $400 per month Period 2 Child 1 = $350 per month Period 3 Child 1 = $300 per month Total deposits per month $1,050 $650 $300Method #2 - A single level payment amount used for all children:If you use a single monthly amount, then the payments would be level throughout the education years.This method is generally easier for most families to afford. (The chart below is an example only and does not relate to your plan.) Funding for all children using level payments = $625 per month10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 26 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Education Funding A21New Scenario (10/19/2011 3:59:19 PM)The following schedules illustrate the education funds needed, using an after tax rate of return or a 529education funding account. The options include separate accounts for each child, pre-funding with levelmonthly deposits through the last year, or a lump sum deposit. The results shown are not guarantees orestimates of future results but are for illustration purposes only. Annual Costs Monthly deposit Pre-Funded Accounts * Costs Parents Amount Required Lump Sum Monthly inflated at share at Using Separate Account NaN Year 5.50% 100.00% Accounts 6.50% 6.50% 2011 2012 2013 Totals 0 0Funding education costs with a lump sum investment now: Lump sum needed today to fund future costs (No current educational funds available.) $0 Your education needs are overfunded $0Monthly funding with level payments through the last year of college: Total level monthly payments to fund costs With $0 available, no additional funding is required. NA Total deposits needed to fund college costs NA * If the 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.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 27 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Education - Separate Accounts A22New Scenario (10/19/2011 3:59:19 PM)If separate accounts are maintained for each childs education funding, then the following report willillustrate the amount of expenses in each year, and both the immediate lump sum required and the amount ofmonthly deposits required to create an education fund for each child.The projection assumes use of a 529 college fund or an after tax rate of return on required funds at 6.50%. Child Yevelle Totals Monthly Per Year Deposits Lump Sum* by Year Monthly** 2011 2012 2013 Totals $0 Note: If existing education fund balances or monthly additions exist then the amounts shown above would be reduced accordingly. *Lump sum is the dollar amount needed today to fund the expenses assuming a 6.50% after-tax or tax-free return on education funds. **Monthly deposit needed from now through the last year of school to fund the expenses.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 28 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Education Funding Sources A23New Scenario (10/19/2011 3:59:19 PM) Annual Sources of Funds Education Growth at From Fund Balance Annual Annual 6.50% Education From Ages Year (begin year) Additions Costs Year Funds Assets 1 2 3 4 6 7 32 28 2011 33 29 2012 34 30 2013 35 31 2014 36 32 2015 37 33 2016 38 34 2017 39 35 2018 40 36 2019 41 37 2020 42 38 2021 43 39 2022 44 40 2023 45 41 2024 46 42 2025 47 43 2026 48 44 2027 49 45 2028 50 46 2029 51 47 2030 52 48 2031 53 49 2032 54 50 2033 55 51 2034 56 52 2035 57 53 2036 58 54 2037 59 55 2038 60 56 2039 Note: The education funds are not included in the other expenses, the above amounts are for illustration only. Note: Education expenses are increased at 5.50% per year10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 29 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • PersonalTaxAnalysisforDon TrumpetteNew Scenario (10/19/2011 3:59:19 PM)Report CoverInformationGoes HereTo EditGo To SettingsReport Defaults 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. 10/19/2011
    • Income Tax Analysis of your taxable income sources, exemptions, deductions and Federal and State taxes due. The analysis includes phaseouts of itemized deductions and exemptions, where required, special dividend and capital gain rates, AMT and other items affecting your income tax and financial results. These reports are estimates only and should not be relied on for preparation of your income tax return.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 31 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Income Tax Planning D1New Scenario (10/19/2011 3:59:19 PM)An important factor in any financial plan is consideration of the effect of income taxes, both now and in thefuture. Unfortunately there is a great deal of uncertainty about the nature of the income tax codes when itcomes to planning for the future. In recent years a number of tax changes have been passed by congress.EGTRRA In 2001 the Economic Growth and Tax Relief Reconciliation Act provided a $1.35 Trillion taxcut. Although this was a welcome event, it was accompanied by a "now you see it, now you dont"disappearing act. – New 10% rate introduced. – Remaining tax table rates reduced gradually until 2006. – Itemized deduction and exemption phaseout repealed gradually. – Child tax credit gradually increased from $500 to $1,000. – Marriage tax penalty gradually repealed. – Education incentives gradually improved. – Estate taxes gradually reduced and then finally repealed in 2010. – Retirement plan contributions liberalized over several years.The bad news was that effective in 2011, all these benefits are scheduled to revert back to the rules in effect in2001 unless Congress decides to make them permanent.JGTRRA Next came the Jobs and Growth Tax Relief Reconciliation Act of 2003. This further enhancedmany of the EGTRRA changes (but did not make anything permanent.) – Increased the child tax credit to $1,000 immediately. – Provided accelerated tax relief for married couples. – Increased the AMT exemption amounts (but not by much.) – Reduced the tax rates on dividends and capital gains to 5% or 15%.Tax Relief Act Most of the temporary provisions have been extended by the Tax Relief, UnemploymentInsurance Reauthorization, and Job Creation Act of 2010. – The lower tax rates were extended through 2012. – The $1,000 child tax credit was extended through 2012. – The standard deduction was enhanced to equalize married and joint filers. – FICA tax is reduced by 2% for 2011 and 2012.. – AMT relief extended through 2011. 2011 tax rates including extension under WFTRA Single Rates Joint Rates $0 10% $0 10% $8,500 15% $17,000 15% $34,500 25% $69,000 25% $83,600 28% $139,350 28% $174,400 33% $212,300 33% $379,150 35% $379,150 35%Of course, the flip side of these benefits is that they are still not permanent. Without specific action byCongress, in 2013 these will all revert back to the 2001 rules. The highly popular dividend and capital gainsrates of 0% for taxpayers at or below the 15% tax bracket or 15% rate for those in the 25% bracket or higherare scheduled to disappear after 2012.As we work with you to help achieve your personal and financial goals, we will consider the present andfuture tax implications and their effect on the suggestions we might make for you. The hard part is theanticipation that there will undoubtedly be additional future changes that cannot be accurately predicted now.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 32 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Income Tax D2New Scenario (10/19/2011 3:59:19 PM)Income taxes can consume a substantial portion of your income. One of your objectives should be to controlthe amount of taxes you must pay through careful management of your income and investment portfolio. Thetax calculations are based on the 2010 tax tables.Estimated income and taxes for the current year: Tax Rates: Gross income $95,194 Adjustments (2,887) Adjusted Gross Income $92,307 Marginal tax rate = 15.00% Itemized or Standard deductions (28,837) (Combined Federal and State tax rates) Personal exemptions (11,100) Taxable income $52,370 Federal Income Tax 7,006 Effective tax rate = 15.69% FICA (social security) tax 8,477 (Taxes divided by Adjusted Gross Income) Other tax or credits (1,000) State income tax D3 Total Tax $14,48310/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 33 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Income Taxes D3New Scenario (10/19/2011 3:59:19 PM)The following calculations give an idea of the amount of taxes you might pay based on the incomeand asset information provided. These amounts are approximations only and the actual tax amountsmay be higher or lower than illustrated. INCOME: Gross Taxable Salaries and Wages $47,870 $47,870 G16,17 Interest 324 324 H1...H4 Schedule C (self employment) 47,000 47,000 G16 GROSS INCOME $95,194 Adjustments: Self Employment FICA $5,773 ($2,887) ADJUSTED GROSS INCOME $92,307 Itemized Deductions: Gross Allowed Mortgage interest 19,660 19,660 K1 Charitable contributions 1,000 1,000 G14 Medical expenses & premiums 8,200 1,277 G14 Property taxes 6,900 6,900 G14 Misc Itemized deductions 0 G14 Itemized deductions $28,837 (28,837) or Standard deductions $11,600 0 Personal exemptions ( 3 ) (11,100) TAXABLE INCOME $52,370 TAX SUMMARY: Federal Income Tax (Joint) $7,006 FICA (Social Security) & HI Tax 8,477 Other Taxes or (credits)* (1,000) TOTAL TAXES $14,483 Your Federal marginal tax bracket is 15.00 % . Your total taxes equal 15.69 % of your Adjusted Gross Income, and 27.65% of your Taxable income. ** The itemized deductions and/or personal exemptions were reduced based on phase-out provisions for high income taxpayers.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 34 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Income Taxes Paid D4New Scenario (10/19/2011 3:59:19 PM) Amount of tax paid on: Tax paid on assets: Rental Other Total Taxes * * Earned Real Inc & St Tax- Ind. 1 Ind. 2 Ages Income Pensions RMDs Estate Opt Taxable Equity Deferred Retire Retire $1,090,682 32 28 $14,434 $49 $14,483 33 29 15,010 87 15,097 34 30 15,611 126 15,737 35 31 16,237 168 16,405 36 32 16,889 211 17,100 37 33 17,570 256 17,826 38 34 18,279 303 18,582 39 35 19,019 352 19,371 40 36 19,791 402 20,193 41 37 20,596 456 21,052 42 38 21,436 511 21,947 43 39 22,312 569 22,881 44 40 23,226 629 23,855 45 41 24,180 692 24,872 46 42 25,175 757 25,932 47 43 26,213 825 27,038 48 44 27,297 896 28,193 49 45 28,428 970 29,398 50 46 29,608 1,047 30,655 51 47 30,841 1,128 31,969 52 48 32,128 1,212 33,340 53 49 33,471 1,299 34,770 54 50 34,873 1,391 36,264 55 51 36,338 1,486 37,824 56 52 37,867 1,585 39,452 57 53 39,465 1,688 41,153 58 54 41,133 1,796 42,929 59 55 42,875 1,908 44,783 60 56 44,696 2,025 46,721 61 57 46,597 2,148 48,745 62 58 30,905 2,042 34 32,981 63 59 32,451 2,142 107 34,700 64 60 34,073 2,252 203 36,528 65 61 35,777 2,377 299 38,453 66 62 2,014 351 2,365 67 63 1,044 371 1,415 68 64 271 174 542 557 1,544 69 65 29,536 29,536 70 66 30,440 30,440 71 67 1,246 30,127 31,373 72 68 105 2,677 2,781 73 69 74 70 75 71 76 72 77 73 78 74 79 75 80 76 81 77 82 78 83 79 84 80 85 81 86 82 87 83 88 84 89 85 90 86 91 87 92 88 93 89 94 90 95 91 96 92 97 93 98 94 99 95100 96101 97 G9, G11 G11 B14 B9, G7 H1 H2 H4 H5...H6d H6...H6d *Tax on earned income includes state tax, FICA, or other taxes. All tax amounts are estimates only.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 35 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Tax Favored Investing D5New Scenario (10/19/2011 3:59:19 PM)This illustration assumes that each account has an existing balance of $20,000. The illustration is used tocompare the future accumulation and income potential of various types of investments. Taxable Tax-Deferred Tax-Free Tax Ded. Capital GainsInitial Account Balance $20,000 $20,000 $20,000 $20,000 $20,000Annual deposit available 2,000 2,000 2,000 2,000 2,000Less taxes at 15.00%* (300) (300) (300) (300)Net deposits $1,700 $1,700 $1,700 $2,000 $1,700Annual interest rate 5.00% 5.00% 5.00% 5.00% 5.00%Net interest after tax* 4.25% 5.00% 5.00% 5.00% 4.25% Taxable Tax Tax Tax Capital Ages Account Deferred Free Deductable Gains 32 28 $20,000 $20,000 $20,000 $20,000 $20,000 33 29 22,622 22,785 22,785 23,100 22,622 34 30 25,356 25,709 25,709 26,355 25,356 35 31 28,206 28,780 28,780 29,773 28,206 36 32 31,177 32,004 32,004 33,361 31,177 37 33 34,274 35,389 35,389 37,129 34,274 38 34 37,503 38,943 38,943 41,086 37,503 39 35 40,869 42,675 42,675 45,240 40,869 40 36 44,378 46,594 46,594 49,602 44,378 41 37 48,037 50,709 50,709 54,182 48,037 42 38 51,850 55,029 55,029 58,991 51,850 43 39 55,826 59,566 59,566 64,041 55,826 44 40 59,971 64,329 64,329 69,343 59,971 45 41 64,292 69,331 69,331 74,910 64,292 46 42 68,797 74,582 74,582 80,756 68,797 47 43 73,493 80,096 80,096 86,894 73,493 48 44 78,389 85,886 85,886 93,338 78,389 49 45 83,492 91,965 91,965 100,105 83,492 50 46 88,813 98,349 98,349 107,210 88,813 51 47 94,360 105,051 105,051 114,671 94,360 52 48 100,143 112,089 112,089 122,504 100,143 Average monthly income** $459 $514 $514 $562 $459 Less average tax at 15.00%* (43) (63) (84) (43) Spendable Income $416 $451 $514 $478 $416 Annual Interest Rate = This hypothetical rate is used to show the effect of tax treatments on various account types. TAXABLE = Bank savings, CDs, corporate or govt. bonds, or other accounts where earnings are fully taxed each year. TAX-DEFERRED = Annuities or US Savings Bonds where interest accumulates without tax and is then taxed when drawn out of the account. TAX-FREE = Municipal bonds or funds and Roth IRA where all interest is generally federal tax free and may also be free from state taxation. TAX-DEDUCTIBLE = Regular IRAs, 401(k), 403(b), etc. where deposits are deductible, tax on interest is deferred, then all withdrawals are fully taxed. CAPITAL GAINS = Stocks, mutual funds, real estate or other investments qualified for capital gain treatment. Note: This report is not intended to apply to any specific savings or investment product. The results illustrated are not estimates or guarantees of future results, and are intended for educational purposes only. * Capital gains column uses tax rate of 15.00%. Assumes taxes are paid each year on gain. ** Assuming entire balance is paid in level annual distributions over an age 52 life expectancy period of 48.0 years10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 36 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • PersonalInvestmentAnalysisforDon TrumpetteNew Scenario (10/19/2011 3:59:19 PM)Report CoverInformationGoes HereTo EditGo To SettingsReport Defaults 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. 10/19/2011
    • Investment A discussion of various considerations of your savings and investment status, potential risks, liquidity, financial attitudes and asset allocation.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 38 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Asset Management B1New Scenario (10/19/2011 3:59:19 PM)Asset Management has sometimes been defined as: Managing assets and resources in relationship to your personal and financial goals, in order to most efficiently accomplish desired results.Achieving financial goals involves the use of many techniques, financial concepts and tools. Perhaps one ofthe most important is the proper use of savings, investments and retirement accounts. During your financiallife you will accumulate funds from various sources including savings, surplus income, inheritances, gifts,company contributions to retirement accounts, and other financial resources.Since savings and investment accounts are acquired over a broad time frame, it is not unusual to find that thefunds have been put into savings or investment accounts with inadequate thought as to how the accountsrelate to each other, or how they fit with your goals for financial success.One objective of any financial plan is to determine the proper mix of asset types and classes. To achieve thedesired results for your financial future, it may be wise to consider repositioning assets from an existingaccount to another that more appropriately match your goals and comfort level.As a result of our analysis of your financial goals and the resources available to achieve those goals, it may bedetermined that some changes to your assets or their management would enhance your potential for futuresuccess. Any recommendations relating to changes will take into consideration: – Your investment time horizon (time left to accumulate or use investments.) – Your risk tolerance level. – Your experience and training in investment management. – The amount of time or interest you have for investment analysis or research. – The amount of funds available relative to the amount required to achieve your goals.Once a portfolio mix has been designed and assets positioned to accomplish your goals, you should plan forregular reviews of your accounts. At that time we will reevaluate your circumstances, economic and financialconditions, and determine whether any changes are in order to bring your asset mix or management back intoproper balance.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 39 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Risk B2New Scenario (10/19/2011 3:59:19 PM)In every aspect of life, we are faced with varying degrees of unknown outcomes. These uncertainties in lifeare sometimes referred to as areas of "Risk". In particular, financial matters are commonly described as either"Safe" or "Risky" or somewhere in between the two extremes.It is important to recognize that the term "Risk" can refer to more than simply the loss of your money. Someof the different types of risk are described below. Loss of Principal: If you have $10,000 invested in a stock, the stock declines in value to $5,000, and you sell the stock, then you have suffered a loss of principal. On the other hand, if you do NOT sell the stock while the value is down, and the stock recovers to $10,000 then you have not suffered a loss. Time and diversification are keys to mitigating this type of loss. Loss of Purchasing Power: If you own a $10,000 certificate of deposit earning 5% interest, you will receive $500 per year interest. Since the account is insured by the FDIC and the interest is guaranteed for a set time frame, this may seem like a "safe" investment. If we experience inflation at the rate of 3% per year, the purchasing power of the $500 income will be reduced after the first year to $485, and after 10 years to $372. The purchasing power of the $10,000 after 10 years will be reduced to $7,441. This loss is a permanent one with no chance for recovery unless our economy goes into a protracted deflationary cycle. Tax Loss: Using the same $10,000 as above, and assuming you are in the 25% tax bracket, the $500 interest would be reduced to $375 after taxes. After 10 years, the $500 interest after taxes and inflation would provide purchasing power of only $277. Illiquidity: If you place all or most of your financial assets into illiquid assets like real estate, mortgages or notes, small business interests or even tax deferred retirement accounts with severe early withdrawal penalties, then you may find that you no longer have control of your financial future. If your personal financial affairs take a turn for the worse due to a disability, loss of employment, death in the family or other unforeseen event, and you cannot readily reposition your assets to meet your new needs, then you are exposed to the risk of not being in control of your financial well being.Although there are other types of risk that could be considered, the above examples will illustrate that it isimportant to properly plan and balance your financial assets so that all possibilities are considered. As yourfinancial plan is created, we take into consideration your levels of comfort with different type of assets andwith attention to your personal situation and goals.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 40 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Asset Pyramid Chart B3New Scenario (10/19/2011 3:59:19 PM)Proper management of your assets requires an understanding of the relationship between RISK andREWARD. The pyramid below illustrates the assets by levels, with the safest at the bottom and the riskgenerally increasing as you near the top of the pyramid. More Aggressive Dollar Amount Percent of Total Other $0 Assets, 20.00% Business Interests, etc. NON - LIQUID $0 Partnerships 20.00% Real Estate, Mortgage, Notes LIQUID INVESTMENTS $0 Stocks, Bonds 20.00% Mutual Funds, CDs CASH and RESERVES $0 20.00% Checking, Savings Money Market, US Savings Bonds. $0 RETIREMENT ACCOUNTS 20.00% (The retirement account assets are included in the above groups.) ESTATE and FAMILY PROTECTION Life, medical, and disability insurance (This section does not represent assets, but is an important basis for a solid financial plan.) More Conservative $0 TOTAL 100%10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 41 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Financial Attitudes B4New Scenario (10/19/2011 3:59:19 PM)You provided information about your attitudes and feelings relating to asset management and investments.The scale below reflects the information provided, with a score of "5" being most important and a "1"representing the least important. Area of Concern Importance Maximum Investment Growth Potential 3 Protection from Inflation 3 Reducing Income Taxes 3 Liquidity (convert assets to cash) 3 Current Spendable Income 3LIQUIDITY:This factor does not appear to be a high priority. When making investment decisions dont let the length ofthe investment period overshadow the other factors which might be of more concern.GROWTH:A balance between growth, stability and income is appropriate. Your portfolio should reflect a welldiversified selection of assets and should be flexible for easy revision as your goals change.INCOME:At the present time you should not concentrate solely on income producing programs. try for a balancedapproach with some current income and some investments that will build for the future.TAXES:Since the tax treatment of your investments is not a high priority, you should be more concerned about thereal rate of return on an investment than whether it has current tax benefits.INFLATION:Your moderate concern about inflation would indicate a balanced approach to asset selection. Position yourassets for a good return without sacrificing inflation protection.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 42 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Asset Classes B5New Scenario (10/19/2011 3:59:19 PM)The task of managing your assets is a lifetime undertaking, and should be managed with careful regard toyour present and future financial goals. Of particular importance is maintaining an appropriate mix of assetsin respect to your current objectives and the constantly changing economic and market conditions.ASSET CLASSES:There are many different types of assets available to which funds may be allocated. The characteristics ofeach asset will vary but will generally fit into one of the following categories. Cash Income Growth and Income Growth Aggressive Growth MiscThe amount of funds you place in each of these categories will be determined by a number of factorsincluding your need for income, growth, tax sensitivity, inflation expectations and other items.As your goals and objectives change, and as the current economic and market outlook varies it is expectedthat your use of the various asset classes will also change, requiring a periodic review and repositioning ofyour saving and investment assets.Asset allocation does not guarantee a profit or protect against loss in a declining market.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 43 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Asset Allocation B6New Scenario (10/19/2011 3:59:19 PM)As you manage your portfolio of savings and investment assets, it is important that you consider how thecharacteristics of each asset matches your overall level of risk tolerance and your current financial goals.The chart below illustrates a suggested percentage of assets for various risk tolerance levels. Your risk profile indicates an investor type of : Moderate Typical percentage of assets allocated for various risk levels. Your Very Very Custom Asset Class Conservative Conservative Moderate Aggressive Aggressive Allocation Cash 20 20 15 5 5 15% Income 30 25 20 10 10 20% Growth and Income 40 25 20 20 15 20% Growth 10 25 30 35 25 30% Aggressive Growth 5 15 30 45 15% Misc 100% 100% 100% 100% 100% 100%The allocation percentages illustrated above are only suggestions for your consideration, and are not intendedto be a permanent allocation. As time passes and your goals change, it will be important that you review yourportfolio to assure that the current mix of your assets is appropriate for your goals and for current economicand market conditions.This Asset Allocation does not guarantee a profit or protect against loss in declining markets.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 44 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Asset Allocation B7New Scenario (10/19/2011 3:59:19 PM)The following graph is provided to help you more easily visualize your present and suggested asset allocation.This suggested mix is intended only for the current period, and you are encouraged to return regularly toreview your personal goals and resources, the financial environment and to determine whether changes to thesuggested mix is appropriate. The percentages shown on the label area indicate the Present / Suggested"percent for each asset class. B8 Present Suggested Cash 0.00% 15.00% Income 0.00% 20.00% GrwInc 0.00% 20.00% Growth 0.00% 30.00% AggGrw 0.00% 15.00% Misc 0.00% 0.00% Asset Allocation does not guarantee a profit or protect against loss in declining markets.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 45 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Allocation Worksheet B8New Scenario (10/19/2011 3:59:19 PM)The following worksheet compares your present assets to the percentages suggested for your particular goalsand risk tolerance level. If the amount in a class is too large or small, then the amount you might considermoving into or out of a category is shown in the "Amount To Move" column. Amount to Present Suggested Move InAsset Class Amount Percent Amount Percent (or out)Cash 15.00%Income 20.00%Growth and Income 20.00%Growth 30.00%Aggressive Growth 15.00%Misc TOTAL*It will be important to re-evaluate your asset mix on a regular basis and determine which assets should befurther increased or decreased. As you make changes to your portfolio you should carefully review yourcurrent lifestyle needs and goals.Please recognize that the asset mix suggested above is not intended as a guarantee or assurance of futureresults. The suggested asset classes and their percentages do not represent an offer to sell or a solicitation of apurchase of any particular security, but are provided only as an illustration of a possible portfolio mix basedon your stated goals and risk level.Asset allocation does not guarantee a profit or protect against loss in declining markets. * The asset category amounts shown do not include your residence, rental real estate and personal property.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 46 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Investment Returns B8aYour financial analysis includes hypothetical portfolio illustrations. To help you understand the potentialrisks and rewards of investing, the following information shows some historical investment results. While theanalysis has used annual rates to illustrate possible scenarios, it does not attempt to specify which assetclasses, investment vehicles or combinations of classes you will actually use in your portfolio, as theportfolio mix will generally change several times in the future. Historical Stock Market ChangesThis chart illustrates the variable nature of stock investing. The scale does not represent any specific value orpercent change, but rather shows relative increases or decreases in the indexes. Be aware that stock pricesincrease or decrease at various times and there is no assurance that profits will be realized in any particulartime frame. The chart does not represent any particular investment portfolio or asset class.Historical Asset Class ReturnsThis table shows the wide range of returns realized on various asset classes for different time periods. Annual* 5 Year Return** 20 Year Return*** Asset Class Return Maximum Minimum Maximum Minimum Treasury Bills 3.66% 11.12% 0.07% 7.72% 0.42% Bonds - Intermediate Govt. 5.32% 16.98% 0.96% 9.97% 1.58% Bonds - Long Term Govt. 5.46% 21.62% -2.14% 12.09% 0.69% Bonds - Long Term Corporate 5.98% 22.51% -2.22% 12.13% 1.34% Stocks - Small Companies 12.13% 45.90% -27.54% 21.13% 5.74% Stocks - Large Companies 9.86% 28.60% -12.47% 17.88% 3.11% Inflation 2.98% 10.06% -5.42% 6.36% 0.07% * Annual return is the average annual compounded rate of return from 1926 through 2010. ** 5 year return is the highest and lowest average rolling return for all the 5 year periods from 1926 through 2010. *** 20 year return is the highest and lowest average rolling return for all the 20 year periods from 1926 through 2010.These rates of return do not include adjustment for annual fees, commissions, taxes or other expenses thatmight be incurred in any investment plan. These costs could range from 0% to as much as 2% per year ormore depending on the type of investment activity and method of managing the accounts. In addition toannual fees and expenses, some investments may include an initial commission, sales charge or set upexpense. If fees and expenses are taken into account, the above rates of return would be lower. The rates usedin the analysis are assumed to be net of any potential fees and expenses. If we assist you in selecting assetsfor your investment portfolio, a complete description of any fees, expenses, commissions or other costs willbe provided for each investment selected.In any report that illustrates an annuity product, it is assumed that the product is a fixed annuity earninginterest as paid by the issuing company. A fixed annuity is generally protected against loss of principal. If avariable annuity should be selected by you for any portion of your portfolio, please be aware that the annualreturn and corresponding asset value, death benefit and cash values will be based on the underlyinginvestment choice, and could result in a zero or negative rate unless the product has specific terms limitingthe loss of principal. The terms for annuity products will be spelled out in the annuity contract. The fees andcharges on any annuity contract will vary based on the company and features provided in the contract. Theycould range from a minimal amount to as much as 2.5% or more.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 47 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • PersonalRetirementAnalysisforDon TrumpetteNew Scenario (10/19/2011 3:59:19 PM)Report CoverInformationGoes HereTo EditGo To SettingsReport Defaults 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. 10/19/2011
    • Retirement Reviewing your retirement goals and objectives, assets available to use for retirement and an estimate of how long your funds might last based on various assumptions. A Monte Carlo Simulation report may be included to illustrate the fact that the results of any retirement projection will vary based on market conditions and other factors that are not possible to accurately predict. Please be aware that this retirement illustration is not guaranteed, does not represent use of any particular investment securities, asset classes or investment style. The rates of return used are hypothetical and are used for educational and illustration purposes.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 49 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Retirement Planning C1New Scenario (10/19/2011 3:59:19 PM)At some time we all reach a point where we are ready to "slow down" from the pressures of earning a livingand would prefer to enjoy taking life as we want it instead of continuing with the daily work routine.In recent years we have seen several trends that will affect your plans and how they are achieved. In many cases an "early" retirement is desired - resulting in a difficult challenge to assure that adequate funds are available to last for a significant number of years. In other cases, the thought of exiting the work place is difficult, resulting in what could be described as a "slow down" mode where instead of leaving the work force, the decision is made to work on a reduced schedule. This allows for a gradual change, as well as providing some continued income while the adjustment is made. The "new retirement" mode also requires a different approach to income and expense planning. Where in the past, a retirement plan estimated that a specific dollar amount of income would be required from retirement age through life expectancy, we now recognize that the "retirement" years may actually consist of several different stages. For example:Typical "New Retirement" phases: First 5 years - you may actually have an increased need for income as you now have time to travel to all the places you wanted to see but just couldnt get away from the daily grind in order to really enjoy yourself. Next 5 to 10 years - a moderated level of expenses as you now have the extra play time out of your system. Perhaps you still enjoy various activities, but find them less expensive than in the earlier retirement years. Additional years when your expenses actually decline as you reach an age where your energy level is now lower, and you spend less money on items subject to higher levels of inflation, like clothing, eating out, etc. The later years when health conditions start to take an additional toll and your expenses again increase as medical costs become a more significant part of your living expenses.As we have prepared your financial analysis we have tried to anticipate your needs and take intoconsideration how you might most effectively prepare for the golden years of your life.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 50 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Retirement C2New Scenario (10/19/2011 3:59:19 PM)The amount of monthly income needed for retirement can increase dramatically when inflation isconsidered. The above graph illustrates the impact of inflation on your desired income by showingannual expenses in todays dollars as well as the same items adjusted for inflation.*If you have not accumulated enough capital to last through your lifetime, you could then find yourselfdependent on others during the years when you most desire your financial independence. The graphabove illustrates the amount of your capital available each year, or the amount of cumulative incomeshortage when your capital runs out. *Annual expenses include basic living expenses, mortgage and debt payments, insurance premiums, itemized deductions, savings and investment deposits.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 51 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Retirement Needs Analysis C3New Scenario (10/19/2011 3:59:19 PM)In order to determine whether you will have adequate income and capital to fund your retirement, a numberof factors must be evaluated: – Income needed for basic living expense and number of years required. – Income available from Social Security, pensions or other sources. – Extraordinary income or expense items that will affect your retirement capital. – Existing savings, investment and retirement funds and annual additions to the accounts. – The effect of inflation on income and expenses. – The rate of return you are able to earn on your accounts. – The effect of income taxes on your income sources and accounts.You are now ages 32 and 28 and plan to retire at ages 62 and 62. That leaves you 30 years to preparefor your financial independence.The anticipated expenses and various income streams available are illustrated below. In order to help youvisualize the relative value of the income streams, we have shown the total amount of payments needed orreceived over your retirement years through life expectancy, as well as the value of the streams of income atretirement. In Todays Total Monthly Inflation Dollars at Amounts in Inflation Adjusted Cumulative 6.00% NPVIncome needed: Todays $ (a) Rate Amounts (b) Income/Expense Discount Current living expenses $9,764 3.00% $9,764 Living expenses at age 62 6,863 3.00% 15,030 $12,023,702 (c) $717,033 G4,G12 Expenses at age 74 6,863 3.00% 20,943 Expenses at age 87 6,863 3.00% 30,220Sources of income: Total Income (d) Social Security - Don at age 62 1,034 2.00% 1,873 1,123,891 76,734 G11 Social Security - Sabrina at age 62 1,020 2.00% 2,000 1,202,528 64,950 G11 Other income items & insurance 829,195 120,599 G8 Total income or expenses $3,155,614Income shortfall - amount needed compared to amount available $8,868,089Estimated capital required at retirement to satisfy this shortfall $2,690,000 (f) Including an assumed 6.00% after-tax rate of return on capital.(a) Total expense = personal expense, itemized deductions, insurance premiums, debts and mortgages, saving and investments. (G4)(b) Inflation adjustments apply only to those items exposed to inflation (not debts, life insurance, etc.)(c) Cumulative living expense is the total of all expense payments needed during retirement through life expectancy.(d) The "Sources of income" represents the sum of all monthly or annual income expected from Social Security, pensions (after tax) orother anticipated post-retirement income sources. Any life insurance benefit shown is received at life expectancy.(f) This number is calculated using the most conservative of two separate calculations.Note: Income taxes are not included as part of expenses as the taxes are paid out of the sources of taxable income.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 52 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Retirement Capital Analysis C4New Scenario (10/19/2011 3:59:19 PM)The remaining expense anticipated as described on the Retirement Needs Analysis is . . . . . . . . . . . . . $8,868,089 C3 (This amount was carried forward form the Retirement Needs analysis page.)At age 62 the remaining expense could require capital of approximately . . . . . . . . . . . . . $2,690,000 (This assumes an after tax rate of return of 6.00% on assets used to fund shortage. The actual amount of capital needed will vary depending on the type of savings and investments used and their tax treatment.) Current value Current Current Current used for weighted averageEstimate of future year annual retirement average after tax Future Valueasset account values additions estimate rate rate * at age 62Taxable Accounts $4,800 $4,280 5.00% 4.25% $301,110 H1Equity & other accounts H2Tax-Free accounts H3Tax-Deferred annuity or govt bonds. H4Deductible retirement - Don 48,596 7.00% 7.00% 369,925 H5...H6dDeductible retirement - Sabrina H6...H6d H7 H8Total Asset values $52,876 6.84% 6.78% $671,035 * The after-retirement rate may differ substantially from the pre-retirement rate, particularly on deductible retirement accounts. Tax rate on interest is 15.00% before retirement, 15.00% after. Dividend and Capital Gain taxed at 15.00% before retirement and 15.00% after. You might have as much as $671,035 capital available at retirement. You may need additional capital of $2,018,965. Your current funds could last until your age 72 at which time your funds will be depleted. The above results are hypothetical, based on the assumptions used, and are not guaranteed. The illustration is provided for educational purposes and does not represent any specific investment, class of investments or investment style. In order to make up this shortage of capital required for your retirement, you have several choices: Average1. Increase the before-tax "weighted average" rate of ratereturn on all your existing asset accounts to . . . 10.50% C52. Increase the amount of money being added to your savings and investments.You would have to make the following additional monthly deposits at a return of ... 5.00% after tax = $1,900 (Assuming deposits C5 7.00% after tax = $900 are increased by 9.00% after tax = $400 3.20% per year.) Note: The monthly additions are made into a side fund and computed to assure that asset account balances are never less than $0.3. Use some combination of the two methods shown above.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 53 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Retirement Capital Notes C4aNew Scenario (10/19/2011 3:59:19 PM)The Retirement Capital Analysis report lists existing savings and investment accounts and shows hypotheticalvalues at retirement age. The analysis is based on assumed rates of return information supplied by you and isnot an estimate or guarantee of future performance. The assumptions used are detailed below.Income taxesThe tax rate used for ordinary income items prior to retirement is 15.00% and after retirement is 15.00%.Thetaxable income includes interest, non-qualified dividends, tax deferred and retirement accounts distributions.Tax on qualified dividends, capital gains and appreciation is computed at the rate of 15.00% beforeretirementand 15.00% after retirement.The rates used are estimates based on your current tax bracket and may or may not reflect the rates that mightbe in effect at any time in the future. These rates are used for illustration purposes only and future changes inthe tax laws or in your taxable income level may significantly affect the tax results of this analysis.Future Values at Retirement AgeEach type of asset illustrated in the previous page uses a different assumed rate of return and tax treatment forestimating the future result. The assumed rates of return are derived from the asset and rate information youprovided and may not actually reflect future results and are used for illustration purposes. The CurrentWeighted Average Rates come from the Asset Summary report. The Current After Tax Rates reflect theeffective tax treatment of each asset type as described below.Taxable AccountsInterest earned on this asset type is taxed at the ordinary tax rate each year, both before and after retirement.As interest is earned, the estimated tax is deducted and the remaining interest is reinvested.Equity and Other AccountsThe appropriate income tax effect is applied to the portfolio return based on the sources of income (interest,dividend, capital gain and appreciation). The after-tax return is reinvested.Tax-Free AccountsThe income on this asset type is assumed to be fully exempt from tax and the entire return is reinvested eachyear.Tax-Deferred AccountsIn years when there are no distributions from the accounts, the entire return is reinvested with no tax effect. Inany year when a distribution is made, the distribution is assumed to come first from the accumulated tax-deferred returns. When all the accumulated tax-deferred returns have been distributed, the annual earnings arethen taxed when distributed. The balance of distributions are treated as non-taxable distribution of the originalcapital. All taxable distributions are taxed at the ordinary income tax rate.Deductible Retirement AccountsAnnual returns on these accounts are reinvested each year with no income tax. When distributions are made,the entire amount is taxed at the ordinary income tax rate. If distributions are made prior to age 59 1/2 theymay be subject to an additional 10% excise tax penalty. Distributions must begin by age 70 1/2 unless specialconditions apply.Roth IRA AccountsThe earnings and withdrawals in these accounts are exempt from tax, both during the accumulation anddistribution years.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 54 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Retirement Estimate Solution C5New Scenario (10/19/2011 3:59:19 PM) Original estimate plus monthly additions into side fund. Revised Estimate (Monthly deposits increase at 3.20% per year. Annual deposit amounts shown.) Original With All Capital Assets at 1900 Total 900 Total 400 Total Ages Estimate 10.5% 5.00% Value 7.00% Value 9.00% Value 32 28 $61,352 $63,226 $22,800 $84,682 $10,800 $72,505 $4,800 $66,355 33 29 70,283 74,553 23,530 118,883 11,146 93,753 4,954 80,918 34 30 79,694 86,953 24,283 155,627 11,502 116,739 5,112 96,656 35 31 89,611 100,526 25,060 195,071 11,870 141,593 5,276 113,662 36 32 100,065 115,384 25,861 237,383 12,250 168,455 5,445 132,048 37 33 111,085 131,650 26,689 282,738 12,642 197,475 5,619 151,924 38 34 122,705 149,457 27,543 331,323 13,047 228,814 5,799 173,419 39 35 134,959 168,954 28,424 383,335 13,464 262,643 5,984 196,667 40 36 147,885 190,302 29,334 438,984 13,895 299,149 6,176 221,819 41 37 161,520 213,676 30,273 498,489 14,340 338,528 6,373 249,032 42 38 175,907 239,271 31,241 562,083 14,799 380,994 6,577 278,484 43 39 191,089 267,299 32,241 630,013 15,272 426,773 6,788 310,363 44 40 207,113 297,993 33,273 702,539 15,761 476,111 7,005 344,877 45 41 224,029 331,608 34,338 779,938 16,265 529,270 7,229 382,251 46 42 241,889 368,425 35,436 862,499 16,786 586,531 7,460 422,729 47 43 260,751 408,749 36,570 950,533 17,323 648,197 7,699 466,580 48 44 280,671 452,917 37,741 1,044,361 17,877 714,588 7,945 514,089 49 45 301,715 501,299 38,948 1,144,331 18,449 786,052 8,200 565,576 50 46 323,948 554,297 40,195 1,250,802 19,040 862,961 8,462 621,381 51 47 347,443 612,357 41,481 1,364,162 19,649 945,713 8,733 681,880 52 48 372,274 675,964 42,808 1,484,813 20,278 1,034,734 9,012 747,477 53 49 398,523 745,653 44,178 1,613,187 20,927 1,130,483 9,301 818,616 54 50 426,274 822,008 45,592 1,749,734 21,596 1,233,450 9,598 895,779 55 51 455,619 905,670 47,051 1,894,934 22,287 1,344,162 9,905 979,492 56 52 486,655 997,343 48,557 2,049,293 23,000 1,463,184 10,222 1,070,325 57 53 519,485 1,097,800 50,110 2,213,345 23,736 1,591,121 10,550 1,168,903 58 54 554,218 1,207,888 51,714 2,387,655 24,496 1,728,620 10,887 1,275,904 59 55 590,969 1,328,536 53,369 2,572,817 25,280 1,876,375 11,236 1,392,065 60 56 629,865 1,460,763 55,077 2,769,464 26,089 2,035,136 11,595 1,518,195 61 57 671,035 1,605,686 56,839 2,978,260 26,924 2,205,697 11,966 1,655,168 62 58 721,689 1,774,901 3,146,956 2,367,292 1,798,141 63 59 779,324 1,964,805 3,328,672 2,543,888 1,956,754 64 60 844,539 2,177,550 3,524,317 2,736,663 2,132,420 65 61 917,994 2,415,657 3,734,874 2,946,900 2,326,688 66 62 811,058 2,488,182 3,772,055 2,986,634 2,351,897 67 63 696,168 2,564,356 3,808,655 3,029,017 2,381,548 68 64 571,012 2,644,565 3,842,740 3,072,502 2,414,492 69 65 404,150 2,729,246 3,843,266 3,086,473 2,420,561 70 66 220,198 2,818,895 3,835,266 3,096,427 2,425,763 71 67 17,845 2,899,864 3,817,866 3,101,997 2,430,307 72 68 2,983,002 3,811,793 3,124,461 2,456,123 73 69 3,068,266 3,817,944 3,161,461 2,497,657 74 70 3,155,590 3,818,600 3,195,325 2,537,277 75 71 3,244,876 3,813,294 3,225,643 2,574,618 76 72 3,335,986 3,801,529 3,251,964 2,609,274 77 73 3,428,526 3,782,778 3,273,805 2,640,798 78 74 3,521,893 3,756,481 3,290,637 2,668,692 79 75 3,609,886 3,722,041 3,301,889 2,692,405 80 76 3,693,117 3,678,826 3,306,941 2,711,330 81 77 3,772,040 3,626,164 3,305,123 2,724,793 82 78 3,849,765 3,563,342 3,295,707 2,732,054 83 79 3,925,876 3,489,603 3,277,907 2,732,293 84 80 3,999,903 3,404,144 3,250,874 2,724,608 85 81 4,071,319 3,306,114 3,213,687 2,708,002 86 82 4,139,533 3,194,609 3,165,353 2,681,379 87 83 4,203,884 3,068,672 3,104,798 2,643,532 88 84 4,263,632 2,927,290 3,030,862 2,593,132 89 85 4,317,952 2,769,386 2,942,294 2,528,717 90 86 4,364,944 2,593,823 2,837,742 2,448,677 91 87 4,402,267 2,399,393 2,715,748 2,351,246 92 88 4,428,329 2,184,820 2,574,739 2,234,478 93 89 4,441,434 1,948,751 2,413,019 2,096,239 94 90 4,440,604 1,689,755 2,228,758 1,934,183 95 91 4,424,058 1,406,317 2,019,986 1,745,733 96 92 4,479,020 1,181,833 1,869,578 1,613,062 97 93 4,543,306 935,905 1,698,337 1,457,985 98 94 4,600,421 668,093 1,505,414 1,279,059 99 95 4,649,291 376,988 1,288,955 1,073,758 100 96 4,688,768 61,102 1,046,961 839,311 101 97 C6 Monthly deposits are computed to assure that assets never fall below $0 prior to last life expectancy. * An asterisk (*) indicates that the monthly deposits would exceed 1/3 of your income and this option is not practical. NA - The "N/A" sign in the monthly amount area indicates that no monthly deposits are required.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 55 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Retirement Capital Estimate C6New Scenario (10/19/2011 3:59:19 PM) Income available/Other expenses Annual Tax Due Surplus Return Total Annual Pension & Scheduled Social Other Annual on Each Year Acct Values Expenses (shortage) Min. Dist. Dist. Security Inc/Exp Deposits Assets 15.00% (end of year) Ages ($12,023,702) $7,655 $0 $2,326,419 $829,195 $144,000 15.00% $52,876 32 28 $4,800 $3,725 ($49) $61,352 33 29 4,800 4,217 (87) 70,283 34 30 4,800 4,736 (126) 79,694 35 31 4,800 5,285 (168) 89,611 36 32 4,800 5,864 (211) 100,065 37 33 4,800 6,476 (256) 111,085 38 34 4,800 7,123 (303) 122,705 39 35 4,800 7,806 (352) 134,959 40 36 4,800 8,527 (402) 147,885 41 37 4,800 9,290 (456) 161,520 42 38 4,800 10,097 (511) 175,907 43 39 4,800 10,951 (569) 191,089 44 40 4,800 11,853 (629) 207,113 45 41 4,800 12,807 (692) 224,029 46 42 4,800 13,817 (757) 241,889 47 43 4,800 14,886 (825) 260,751 48 44 4,800 16,016 (896) 280,671 49 45 4,800 17,213 (970) 301,715 50 46 4,800 18,480 (1,047) 323,948 51 47 4,800 19,822 (1,128) 347,443 52 48 4,800 21,243 (1,212) 372,274 53 49 4,800 22,748 (1,299) 398,523 54 50 4,800 24,341 (1,391) 426,274 55 51 4,800 26,030 (1,486) 455,619 56 52 4,800 27,820 (1,585) 486,655 57 53 4,800 29,717 (1,688) 519,485 58 54 4,800 31,728 (1,796) 554,218 59 55 4,800 33,859 (1,908) 590,969 60 56 4,800 36,120 (2,025) 629,865 61 57 4,800 38,517 (2,148) 671,035 62 58 (180,356) 22,480 172,662 14,786 37,944 (2,076) 721,689 63 59 (185,355) 22,930 181,295 18,869 41,017 (2,249) 779,324 64 60 (190,505) 23,388 190,360 23,243 44,428 (2,455) 844,539 65 61 (195,809) 23,856 199,878 27,925 48,205 (2,676) 917,994 66 62 (201,273) 48,336 (152,936) 48,365 (2,365) 811,058 67 63 (206,900) 49,303 (157,597) 44,120 (1,415) 696,168 68 64 (212,696) 50,289 (162,407) 38,793 (1,544) 571,012 69 65 (218,666) 51,295 (167,371) 30,043 (29,536) 404,150 70 66 (224,815) 52,321 (172,494) 18,980 (30,440) 220,198 71 67 (231,148) 7,063 53,367 (170,718) 6,800 (30,127) 17,845 72 68 (237,671) 592 54,434 (182,644) (2,677) 73 69 (244,391) 55,523 (188,867) 74 70 (251,311) 56,634 (194,678) 75 71 (258,440) 57,766 (200,673) 76 72 (265,782) 58,922 (206,860) 77 73 (273,344) 60,100 (213,244) 78 74 (281,134) 61,302 (219,832) 79 75 (289,157) 62,528 (226,628) 80 76 (297,420) 63,779 (233,642) 81 77 (305,932) 65,054 (240,878) 82 78 (314,699) 66,355 (248,344) 83 79 (323,729) 67,682 (256,046) 84 80 (333,030) 69,036 (263,994) 85 81 (342,610) 70,417 (272,193) 86 82 (352,477) 71,825 (280,652) 87 83 (362,640) 73,262 (289,379) 88 84 (373,108) 74,727 (298,382) 89 85 (383,891) 76,221 (307,669) 90 86 (394,996) 77,746 (317,251) 91 87 (406,435) 79,301 (327,135) 92 88 (418,217) 80,887 (337,331) 93 89 (430,353) 82,505 (347,848) 94 90 (442,852) 84,155 (358,698) 95 91 (455,727) 85,838 (369,889) 96 92 (468,988) 87,554 85,000 (296,433) 97 93 (351,351) 44,958 (306,393) 98 94 (361,553) 45,857 (315,695) 99 95 (372,060) 46,774 (325,286) 100 96 (382,883) 47,710 (335,173) 101 97 G4 G9,G11 H1...H8 G11 B15, G8 H1...H8 H1...H8 D4 Note: All incomes/expenses are represented in after-tax values with the exception of Social Security. Tax rate on income and interest is 15.00% before retirement,15.00% after. Dividend and Capital Gain taxed at 15.00% before retirement and 15.00% after.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 56 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Asset Illustration C7New Scenario (10/19/2011 3:59:19 PM)Your assets are illustrated in this plan based on two major groups, Personal Accounts and Tax DeductibleRetirement accounts. Within these groups, the assets are further divided as described below.Personal Accounts: Fully Taxable: These are savings and investments that earn interest or dividends which are fully taxable at ordinary income rates. Included in this category are savings accounts, certificates of deposit, money market funds and accounts, bonds, notes and mortgages, etc. Tax-Deferred: Some assets allow you to accumulate money without current taxation on interest or other returns. The most common are fixed or variable annuities issued by insurance companies. Any illustration of an annuity account is hypothetical, and does not represent any specific product or underlying investment accounts and is not intended to project or predict investment results. The variable nature of a variable annuity will affect not only the investment returns, but will also affect the cash value and death benefits of the annuity. The annuity could result in zero or negative return, depending on the performance of the underlying investments and the terms of the annuity contract. Tax-Free: Interest earned on certain bonds issued by federal, state or local municipalities are exempt from federal and in some cases state income tax. These are referred to as "tax exempt" securities and may be purchased individually or as muni bond investment trusts or mutual funds. Equity and Other: Assets which receive part or all of their return in the form of appreciation and qualify for special capital gains treatment on the profits would be included in this category. Such assets include: stocks, equity mutual funds, real estate, business interest, etc.Tax Deductible Retirement Accounts:This includes any account that is treated by the IRS as qualified for special tax deferral or deduction. IRA - Individual Retirement Accounts. 401(k) - corporate thrift or savings plans. Keogh or SEP - retirement plans for self employed individuals. TSA - tax sheltered annuity plans for employees of 403(b) tax exempt organizations. SIMPLE 401(k) and SIMPLE IRA - employer sponsored plans. Profit Sharing - corporate plans for employee profit sharing. Roth IRA accounts (tax free growth). Roth 401(k) - tax-free after-tax personal contributions, pre-tax company additions.These accounts generally allow for pre-tax contributions and tax-deferred earnings. When funds arewithdrawn from these accounts the entire amount is taxable at the ordinary tax rate. (Roth accounts use aftertax contributions and tax-free accumulation and withdrawal.)Not an Investment Offer:This is not an offer to sell or a solicitation of an offer to buy any security. Such offer would be accompaniedby a prospectus or other offering materials.IMPORTANT:The projections or other information generated by Money Tree regarding the likelihood of variousinvestment outcomes are hypothetical in nature, do not reflect actual investment results and are notguarantees of future results.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 57 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Asset Accounts C8New Scenario (10/19/2011 3:59:19 PM) Taxable Equity Tax-Free Tax-Deferred Retirement Accts Roth Accounts Balance Balance Balance Balance Balance Balance Total Working $4,280 $48,596 Assets (eoy) Deposits Deposits Deposits Deposits Deposits Deposits Ages or draws 5.00% or draws 8.00% or draws 4.00% or draws 5.00% or draws 7.00% or draws $52,876 32 28 $4,800 $9,355 $51,998 $61,353 33 29 4,800 14,646 55,638 70,284 34 30 4,800 20,162 59,532 79,694 35 31 4,800 25,912 63,699 89,611 36 32 4,800 31,907 68,158 100,065 37 33 4,800 38,156 72,929 111,085 38 34 4,800 44,671 78,035 122,706 39 35 4,800 51,463 83,497 134,960 40 36 4,800 58,544 89,342 147,886 41 37 4,800 65,925 95,596 161,521 42 38 4,800 73,620 102,287 175,907 43 39 4,800 81,642 109,448 191,090 44 40 4,800 90,005 117,109 207,114 45 41 4,800 98,723 125,306 224,029 46 42 4,800 107,812 134,078 241,890 47 43 4,800 117,288 143,463 260,751 48 44 4,800 127,166 153,506 280,672 49 45 4,800 137,464 164,251 301,715 50 46 4,800 148,200 175,749 323,949 51 47 4,800 159,392 188,051 347,443 52 48 4,800 171,060 201,215 372,275 53 49 4,800 183,224 215,300 398,524 54 50 4,800 195,904 230,371 426,275 55 51 4,800 209,123 246,497 455,620 56 52 4,800 222,904 263,752 486,656 57 53 4,800 237,271 282,214 519,485 58 54 4,800 252,249 301,969 554,218 59 55 4,800 267,863 323,107 590,970 60 56 4,800 284,141 345,724 629,865 61 57 4,800 301,110 369,925 671,035 62 58 2,957 315,635 5,914 6,105 2,957 3,021 2,958 2,958 393,970 721,689 63 59 3,773 331,547 7,547 14,260 3,773 6,997 3,774 6,942 419,578 779,324 64 60 4,648 348,958 9,297 24,706 4,648 12,026 4,649 11,999 446,851 844,540 65 61 6,981 369,409 6,981 33,383 6,981 19,641 6,982 19,665 475,896 917,994 66 62 (152,936) 227,887 35,368 20,426 20,548 506,830 811,059 67 63 (157,596) 76,209 37,472 21,243 21,471 539,773 696,168 68 64 (77,742) (38,455) (21,618) (21,435) (3,712) 571,012 571,012 69 65 (196,905) 404,150 404,150 70 66 (202,932) 220,198 220,198 71 67 (209,153) 17,845 17,845 72 68 (18,542) 73 69 74 70 75 71 76 72 77 73 78 74 79 75 80 76 81 77 82 78 83 79 84 80 85 81 86 82 87 83 88 84 89 85 90 86 91 87 92 88 93 89 94 90 95 91 96 92 97 93 98 94 99 95 100 96 101 97 H1 H2 H3 H4 H5...H6d H7,H8 Note: Rate of return shown for the asset groups are for the first year only. Refer to asset reports for future rates.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 58 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Total Asset Accounts C8aNew Scenario (10/19/2011 3:59:19 PM) Savings Retirement Tax Due Account Personal Cash Minimum Return and & Roth Each Year Balance Personal Company With- Flow Distribution on Investment Accounts 15.00% Ages Deposits Deposits drawls (shortage) 15.00% ** Assets $4,280 $48,596 $52,876 32 28 $4,800 ($49) $3,726 $9,355 $51,998 $61,353 33 29 4,800 (87) 4,218 14,646 55,638 70,284 34 30 4,800 (126) 4,737 20,162 59,532 79,694 35 31 4,800 (168) 5,285 25,912 63,699 89,611 36 32 4,800 (211) 5,865 31,907 68,158 100,065 37 33 4,800 (256) 6,476 38,156 72,929 111,085 38 34 4,800 (303) 7,123 44,671 78,035 122,706 39 35 4,800 (352) 7,806 51,463 83,497 134,960 40 36 4,800 (402) 8,528 58,544 89,342 147,886 41 37 4,800 (456) 9,291 65,925 95,596 161,521 42 38 4,800 (511) 10,098 73,620 102,287 175,907 43 39 4,800 (569) 10,951 81,642 109,448 191,090 44 40 4,800 (629) 11,853 90,005 117,109 207,114 45 41 4,800 (692) 12,808 98,723 125,306 224,029 46 42 4,800 (757) 13,817 107,812 134,078 241,890 47 43 4,800 (825) 14,886 117,288 143,463 260,751 48 44 4,800 (896) 16,016 127,166 153,506 280,672 49 45 4,800 (970) 17,213 137,464 164,251 301,715 50 46 4,800 (1,047) 18,481 148,200 175,749 323,949 51 47 4,800 (1,128) 19,822 159,392 188,051 347,443 52 48 4,800 (1,212) 21,244 171,060 201,215 372,275 53 49 4,800 (1,299) 22,748 183,224 215,300 398,524 54 50 4,800 (1,391) 24,342 195,904 230,371 426,275 55 51 4,800 (1,486) 26,031 209,123 246,497 455,620 56 52 4,800 (1,585) 27,821 222,904 263,752 486,656 57 53 4,800 (1,688) 29,718 237,271 282,214 519,485 58 54 4,800 (1,796) 31,729 252,249 301,969 554,218 59 55 4,800 (1,908) 33,860 267,863 323,107 590,970 60 56 4,800 (2,025) 36,120 284,141 345,724 629,865 61 57 4,800 (2,148) 38,518 301,110 369,925 671,035 62 58 14,786 (2,076) 37,944 327,719 393,970 721,689 63 59 18,867 (2,249) 41,017 359,746 419,578 779,324 64 60 23,242 (2,455) 44,429 397,689 446,851 844,540 65 61 27,925 (2,676) 48,205 442,098 475,896 917,994 66 62 (152,936) (2,365) 48,365 304,229 506,830 811,059 67 63 (157,596) (1,415) 44,121 156,395 539,773 696,168 68 64 (162,406) (1,544) 38,794 571,012 571,012 69 65 (167,370) (29,536) 30,044 404,150 404,150 70 66 (172,493) (30,440) 18,981 220,198 220,198 71 67 (170,718) (30,127) (8,309) 6,801 17,845 17,845 72 68 (182,644) (2,677) (697) 73 69 (188,867) 74 70 (194,677) 75 71 (200,673) 76 72 (206,860) 77 73 (213,244) 78 74 (219,831) 79 75 (226,628) 80 76 (233,641) 81 77 (240,877) 82 78 (248,343) 83 79 (256,046) 84 80 (263,993) 85 81 (272,192) 86 82 (280,651) 87 83 (289,378) 88 84 (298,381) 89 85 (307,669) 90 86 (317,250) 91 87 (327,134) 92 88 (337,330) 93 89 (347,848) 94 90 (358,697) 95 91 (369,889) 96 92 (296,433) 97 93 (306,392) 98 94 (315,695) 99 95 (325,285) 100 96 (335,173) 101 97 Note: This report is a summary of all the asset illustration pages (H1 - H8).10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 59 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Monte Carlo Retirement Simulation C9New Scenario (10/19/2011 3:59:19 PM)Monte Carlo Simulations illustrate possible variations in growth and/or depletion of retirement capital underunpredictable future conditions. Simulation introduces uncertainty by fluctuating annual rates of return on assets.The graph and related calculations do not presuppose or analyze any particular investment or investment strategy.This long-term hypothetical model is used to help show potential effects of market volatility and possible effectson your financial future. This is not a projection, but an illustration of uncertainty.The simulations begin in the current year and model potential asset level changes over time. Included are allcapital assets, both tax advantaged and taxable, all expenses, including education funding if applicable, pensionbenefits and Social Security benefits. Observing results from these large number of simulations may offer insightinto the shape, trends and potential range of future retirement plan outcomes under volatile market conditions. Results from 10,000 Monte Carlo Simulations:Original Retirement Capital estimate $0 Percentage of results above zero* 0%Minimum (worst case) result $0 Percentage with $ remaining at Dons age 84 0%Average Monte Carlo result $0 Percentage with $ remaining at Dons age 79 0%Maximum Monte Carlo result $0 Percentage with $ remaining at Dons age 74 0% *Percent of times money is remaining at 89 The bold line is the estimated retirement capital value over time using fixed rates. Current rate of return is 6.84% in the original estimate and varies from 5.54% to 9.43%, with portfolio changes. This simulation used a 0.00% standard deviation to create ten thousand sets of normally distributed random rates of return based on the annual rates of return in the original estimate (95% of the rates fall between 5.54% and 9.43%). A standard deviation rate of 0.00% was applied to the inflation rate used on personal expenses. The original capital estimate indicated a possibility of having $0 in assets remaining at last life expectancy. MonteCarlo simulation, using 10,000 trials of the same assets, income and expenses, resulted in a 0% probability of having funds remaining at last life expectancy, and an average amount of $0 remaining. The Monte Carlo illustration above points out the uncertainty of future retirement capital outcomes. It is important that you return regularly for a review of your goals and financial condition, in order to assure that appropriate periodic adjustments are made to your financial affairs.IMPORTANT: The projections or other information generated in this report regarding the likelihood of variousinvestment outcomes are hypothetical in nature, do not reflect actual investment products or results and are notguarantees of future results. Results may vary with each report and over time. Results of this simulation are neitherguarantees nor projections of future results. Information is for illustrative purposes only. Do not rely on this report topredict actual performance of any investment or investment strategy.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 60 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Monte Carlo Details C10New Scenario (10/19/2011 3:59:19 PM)Financial analysis can help you evaluate your status in relationship to your financial goals and objectives. Inpreparing your financial analysis various assumptions were used, including income available, annualexpenses, amount of money currently invested and rates of return on retirement assets. The analysis ofpotential funds available for use in retirement included an assumed "fixed" or "static" rate of return on eachasset type - taxable, tax-free, tax-deferred, equity and retirement accounts.Fixed or Static rates:Use of a fixed or static rate (where the initial rate used remains static throughout the analysis) can be helpfulfor visualizing potential future values to see how long your money might last, but may not reflect whathappens in the real world of finance.Variable Rates:The Monte Carlo illustration applies a concept of variable rates of return on assets over time, in an attempt toillustrate what might happen in a situation where the returns on assets may be positive in some years andnegative in other years. Since there is no way to predict either the positive or negative years or the amount ofgain or loss that the assets might be exposed to, a Monte Carlo Simulation is used. This involves preparationof 10,000 separate projections of your financial future, where a rate of return is randomly selected every yearin each of the 10,000 simulations.Standard Deviation:The term "standard deviation" refers to the extent of variability, or deviation, above or below the normalaverage that was used in the original illustration. This illustration uses a blended standard deviation ratebased on the assumption that our portfolio will consist of various asset components. Assets like CDs, bondsand savings will be conservative and have a low variation in rate. Other assets like stocks, mutual funds, realestate, etc. will likely show a greater degree of variability in rate of return. It is also assumed that the mix ofassets will change as your goals and time horizon changes.Original Result -vs.- Monte Carlo:The bold blue line in the Monte Carlo graph represents the amount of funds available using the fixed or staticrates of return. This outcome is unlikely to be realized, because in reality the rates of return will vary eachyear. The Monte Carlo illustration shows additional lines representing the range of results using variablerates of return each year for each of the 10,000 Monte Carlo simulations. The Monte Carlo "tornado" chartmakes it clear that there is a great range of potential outcomes that could be realized in the future.Monte Carlo Simulation Minimum, Average and Maximum Dollar ResultsValues above the Monte Carlo graph indicate the best, worst and average results at the end of 10,000 MonteCarlo simulations. These show the range of results (high and low), and the average of all Monte Carloresults. All values are based on results at the life expectancy of the last to die or the ages shown.Minimum This represents the lowest return of 10,000 simulations. In most cases at least some of these results will be zero (0), indicating that funds ran out prior to life expectancy.Average This is the average of all positive Monte Carlo simulations. The average may or may not be similar to the Original Retirement Capital Estimate.Maximum This result represents the highest accumulation of the 10,000 simulations. IMPORTANT: The projections or other information generated in the reports regarding the likelihood of variousinvestment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Each Monte Carlo Simulation is unique; results vary with each use over time.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 61 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Standard Deviation C11New Scenario (10/19/2011 3:59:19 PM)Standard Deviation:Standard deviation is a measure of the extent to which the rate of return on a financial asset varies from theaverage return in a given period of time. It is a measure of the volatility or risk of the asset.Portfolio Return Volatility:In broad terms, assets with low rates of return usually demonstrate lower volatility than assets and portfolioswith potentially high rates. Assets with low rates and volatility would include CDs, bonds, savings, moneymarket accounts and other fixed rate of return assets. Those with higher volatility include stocks, mutualfunds and other investment assets. While future financial returns cannot be predicted, it is possible to modelpotential results by applying a standard deviation to the average rate of return, based on the past or expectedlevel of volatility, and using a Monte Carlo simulation model.Because a typical portfolio may consist of a mixture of fixed assets with a low standard deviation as well assome equity assets with higher standard deviations, and the portfolio mix is expected to change over theyears, the Monte Carlo report uses a blended, and conservative standard deviation rate. If the weightedaverage rate on your entire portfolio is low, then the standard deviation rate used will be low. If the portfoliorate is higher, then the standard deviation rate will be higher. In order to present a more conservative look atthe Monte Carlo result, the actual rate selected may be lower than a rate on any single asset class. The rate isnot intended to represent any one asset type, is hypothetical and used for illustration purposes only.Standard DeviationsSince the typical portfolio (as described above) will generally include many different asset classes and willchange over time, we have not attempted to identify any particular historical asset class on which to base thestandard deviation. Unless a specific standard deviation rate has been chosen by you, the following table isused to represent a portfolio of mixed assets. The weighted average rate of the portfolio is used to choose astandard deviation rate. Weighted Average Standard Deviation Portfolio Rate Range 1 - 3% 3% 4 - 7% 4 - 7% 8 - 10% 8 - 12% 11 - 15% 14 - 25.5% 16%+ 28% +In this presentation no single asset class or investment portfolio is assumed to be used. Instead the entireportfolio of savings, bonds, investments, retirement accounts, real estate and other assets used for retirementaccumulation are treated as a group, and the current weighted average rate of return is calculated on theportfolio. Then a hypothetical standard deviation rate is applied based on the average rate, with a low standarddeviation rate used if the portfolio rate is low and a higher standard deviation rate used for higher portfoliorates. This method may result in a standard deviation rate lower than reported on some specific asset classes,but will provide a reasonable illustration of a mixed portfolio as described above.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 62 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Withdrawal Rates C12New Scenario (10/19/2011 3:59:19 PM) Personal & Personal Total Net Ages in Account Company Annual Total Funds Withdrawals Surplus or Withdrawal WithdrawalRetirement Balance Additions Return Available and RMDs (Shortage) Amount Rate 62 58 $671,035 $37,944 $708,979 $14,786 63 59 721,689 41,017 762,706 18,867 64 60 779,324 44,429 823,753 23,242 65 61 844,540 48,205 892,745 27,925 66 62 917,994 48,365 966,360 (152,936) (152,936) 15.83% 67 63 811,059 44,121 855,179 (157,596) (157,596) 18.43% 68 64 696,168 38,794 734,962 (162,406) (162,406) 22.10% 69 65 571,012 30,044 601,056 (167,370) (167,370) 27.85% 70 66 404,150 18,981 423,131 (172,493) (172,493) 40.77% 71 67 220,198 6,801 226,999 (8,309) (170,718) (179,027) 78.87% 72 68 17,845 17,845 (697) (17,845) (17,845) 100.00% 73 69 C8a C8a C8a H1 ...H8 C8a C8a10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 63 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.
    • Withdrawal Rates Analysis C12aNew Scenario (10/19/2011 3:59:19 PM)It is important to ensure that income is available when you need it. If some of the income requirements are to bemet from the capital you have accumulated, then monitoring the rate at which you are spending capital is critical.The bar graph, indicated on the left scale, measures your capital values available at each year. The line, using theright scale, represents the dollar amounts withdrawn from your assets to meet spending requirements.The following graph measures your spending as a percent of capital each year. It uses a "moving average"method to smooth the lines into an average withdrawal rate over one, three, five and ten year periods. Withdrawal Rate Averages High Low* Average Annual range (rate for each year) 100.00% 0.00% Three year average range 73.21% 0.00% Five year average range 53.92% 3.17% Ten year average range 30.38% 20.38% *Years when there is a positive cash flow and no withdrawals are required results in a 0% withdrawal rate.10/19/2011 This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors. Page 64 Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.