Allen & Betty Abbett...Income Tax Planning (text) - D1a 84 Income Tax Chart (text) - D2 85 Income Tax - Current Year - D3 86 Tax vs Income Graph - D4 87 Tax vs Expense Graph - D5 88

IMPORTANT: The illustrations or other information generated by this report regarding the likelihood of various investmentoutcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results.

Sample Plan - TOTAL Cash-Flow-Based Planning

Personal Retirement Analysis

Allen & Betty Abbett

A Registered Investment Advisor2430 NW Professional DriveCorvallis, OR 97330

www.moneytree.com877-421-9815

Asset Advisors Example, LLCJohn Smith

Mar 29, 2018

Table of ContentsCover 2

Introduction 3

Introduction (text) 4

Cash Flow Planning (text) - A1 5

Personal Statistics 6

Assumptions - A2 7

Assumptions Continued - A2a 8

Net Worth - A3 9

Net Worth Graph - A3a 10

Asset Details - A4 11

Personal Property Detail - A5 12

Liability Detail - A6 13

Insurance Detail - A7 14

Miscellaneous Insurance - A8 15

Personal Expense - A9 16

Affordable Care Act - A10 17

Notes - Audit Trail (text) - A11 18

Cash Flow 19

Cash Flow Management (text) - B1 20

Cash Flow Needed vs Available Graph - B2 21

Sources of Funds Graph - B3 22

Annual Expenses Graph - B4 23

Cash Flow Chart (text) - B5 24

Current Year Cash Flow - B6 25

Future Year Cash Flow - B6a 26

1 to 5 Year Cash Flow - B6b 27

6 to 10 Year Cash Flow - B6c 28

Cash Flow Illustration - B7 29

Annual Expense Illustration - B8 30

Earned Income - B9 31

Pension and SS - B10 32

Social Security Comparison - B11 33

Social Security Income Comparison - B12 34

Social Security Breakeven Point - B13 35

Social Security Retirement Income - B14 36

Social Security Terminology - B15 37

Social Security Optimization - B16 38

Other Income/Expense Detail - B17 39

Other Income/Expense - B18 40

Miscellaneous Cash Flow Items - B18a 41

Financial Goals - B19 42

Education Funding - B20 43

Education Funding Sources - B20a 44

Saving For College (text) - B20b 45

Residence Sale - B21 46

Life Insurance Summary - B22 47

Other Ins Premiums - B23 48

Loans 1 - B24 49

Loans 3 - B24b 50

Loans By Owner - B24c 51

Allocation of Cash Flow - B25 52

Assets 53

Asset Accounts (text) - C1 54

Investment Returns (text) - C1a 55

Account Summary Graph - C2 56

Account Summary - C3 57

Total Assets - C3a 58

Taxable Account - C4 59

Equity and Other Accounts - C5 60

Capital Gains Worksheet - C6 61

Capital Gain/Loss Carryforward - C6a 62

Retirement Account Allen - C10 63

Retirement Account Betty - C10a 64

Roth Allen - C11 65

Roth Betty - C11a 66

Retirement Plan Summary - C13 67

Stock Option Summary - C14 68

Stock Option #1 - C15 69

Stock Option Text (text) - C16 70

Stock Option Notes (text) - C17 71

Asset Allocation - C18 72

Asset Allocation Graph - C19 73

Allocation Worksheet - C20 74

Risk (text) - C21 75

Liquidity Graph - C22 76

Liquidity - C23 77

Rental Real Estate Details - C24 78

Rental Real Estate Summary - C25 79

Rental Real Estate Income - C26 80

Rental Real Estate Inc/Exp - C27 81

Income Tax 82

Income Tax Calculation (text) - D1 83

Income Tax Planning (text) - D1a 84

Income Tax Chart (text) - D2 85

Income Tax - Current Year - D3 86

Tax vs Income Graph - D4 87

Tax vs Expense Graph - D5 88

Tax Summary - D6 89

Taxable Income Analysis - D7 90

Dividend, Capital Gain Sources - D7a 91

Federal Income Tax Worksheet - D8 92

Adjustments to Income - D9 93

Itemized Deduction and Exemption - D10 94

Itemized Deduction Phaseout - D11 95

Alternative Minimum Tax - D12 96

Early Distribution Taxes - D13 97

FICA Worksheet- D15 98

Taxable Social Security - D16 99

State Tax Worksheet - D17 100

Taxable Earned Income - D18 101

This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial advisors.

Actual future investment returns, taxes and inflation are unknown. Do not rely upon this report to predict future investment performance.Page 13/29/2018

Securities offered by Asset Advisors - a Registered Investment Advisor

Table of ContentsEstate 102

Estate Planning (text) - E1 103

Current Estate Details - E2 104

Estate Graphs - E3 105

Estate Tax Illustration - E4 106

Estate Chart - Current Situation - E5 107

Estate Chart - With Trusts - E6 108

Future - Allen Dies First - E7 109

Future Graph - Allen dies First - E7a 110

Future - Betty Dies First - E8 111

Future Graph - Betty dies First - E8a 112

Estate Concepts (text) - E9 113

Calculating Estate Taxes - E10 114

Estate Gifting (text) - E11 115

Estate ILIT (text) - E12 116

Estate CRT (text) - E13 117

Estate QTIP (text) - E14 118

Estate GSTT (text) - E15 119

Estate CST (text) - E16 120

Estate QPRT (text) - E17 121

Estate GRT (text) - E18 122

Estate FLP (text) - E19 123

Estate WRT (text) - E20 124

Estate Planning Options Allen - E21 125

Estate Planning Options Notes (text) - E22 126

Estate Options Graph - Allen - E23 127

Estate Options Assumptions Allen - E24 128

Estate - Personal - E25 129

Estate - Allen - E26 130

Estate - Betty - E27 131

Estate - Joint, Comm Prop - E28 132

Estate - Trust, Other - E29 133

Estate - Estimate Worksheet - E30 134

Summary 135

Retirement Summary - F1 136

Retirement Estimate Graph - F2 137

Retirement Capital Estimate - F3 138

Monte Carlo - F4 139

Monte Carlo Details (text) - F5 140

Standard Deviation (text) - F5a 141

Net Worth - F6 142

Personal Assets - F7 143

Withdrawal Rates - F8 144

Withdrawal Rate Graph - F8a 145

What-If Graph - F12 146

Real Estate 149

Property 1 - Assumptions - G1 150

Property 1 - Summary - G1a 151

Property 1 - Income - G1b 152

Property 1 - Inc/Exp - G1c 153

Input Data 154

Personal, Assets 155

Ret Acct, Residence, Debts, Expenses 156

SS, Income, Pensions 157

Tax, Insurance 158

Other Income / Expenses 159

Personal Expense Detail 160




Introduction

A summary of the assumptions used in this analysis, a description of the purpose of the reports and a listing of assets,insurance and other details.




Income required annually:

Introduction

Planning for your retirement years requires consideration of many variables. This report will help you visualize thepotential future changes in your income and assets by projecting your needs and resources ahead on a year byyear basis.


Living expensesInsurance premiumsDebt paymentsSaving and investment contributionsInflationary effects

This report is not intended to predict what will actually happen, but is only an illustration based on theassumptions contained in the report. No guarantee of future performance is implied or intended and no specificinvestments or financial products are represented in the reports.

Among the areas considered in the report are:

Earned incomeInterest and dividendsSocial SecurityPension and other retirement plansOther income (inheritances, gifts, stock options, etc.)

Income sources:

TaxableTax-DeferredTax-FreeEquity or Other accountsQualified plans (IRA, Profit sharing, etc.)

Asset accounts:

Using actual tax ratesIndexing of tax brackets and exemptionsAlternate minimum taxState Tax estimates

Income taxes:

Although this report should prove helpful in visualizing the possibilities for your financial future, you should keepin mind that your actual results will undoubtedly differ from those shown.





Cash Flow Planning

Cash Flow Planning

This financial analysis has been prepared with the objective of illustrating your present and future cash flows,integrated with your assets and income taxes.

Cash flow planning is designed to account for all sources of income and expense, and to illustrate the impact thatany surpluses or shortages might have on the ability of your assets to last through your life expectancy. Thismethod of planning is sometimes referred to as an "optimized" approach.

A1

Each year your income sources are compared to your annual expenses. Any surplus of spendableincome is automatically added to your savings and investments starting in the first year. If there isa shortage of spendable income, the amount needed to make up the shortage is withdrawn fromyour asset accounts. This approach is intended to reflect what would happen if you are managingyour funds in an optimal manner.

What do we mean by "Optimized" planning?

Cash Flow

Every year your savings and investment accounts will have potential interest, dividends, capitalgains or appreciation. The cash flow analysis makes the assumption that, unless otherwiseindicated, the entire rate of return is reinvested into the account. This approach optimizes thepotential growth of each asset account. Taxes are not charged to the earnings on the account, butinstead are added to your personal expenses.

Assets

Since income and FICA (Social Security) taxes can represent a substantial part of your annualexpenses, the "optimized" planning approach carefully computes your tax burden every year. Theanalysis uses the actual IRS tax rate tables including annual adjustments for "indexing" the ratebreakpoints and standard deductions. For high income taxpayers, itemized deductions andexemptions are phased out. Separate tax treatment is provided for dividends, capital gains,alternate minimum tax, the taxable portion of social security income and other areas wherespecial treatment is required. The result is that, instead of showing a "guesstimate" of your annualtaxes, the analysis provides a more accurate yearly indication of future potential taxes.

Taxes




Personal Statistics

Allen Abbett and Betty Abbett

3/29/2018

Birth DateFamily Member Age


3/5/1965Allen Abbett 53

6/8/1966Betty Abbett 51

1/12/2003Bonnie C. Abbett 15

2/28/2001Andy B. Abbett 17

Employment

BettyAllen

This presentation provides a general overview of some aspects of your personal financial position. It is designed toprovide 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 yourprofessional 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.




Assumptions A2


Prepared for Allen & Betty Abbett 29-Mar-18

The following basic information was used in preparing the reports. Other assumptions may havebeen used in preparation of this projection which are not shown here.

Basic Plan Assumptions:

Allen BettyCurrent Age 53 51Retirement Age 65 64Annual Salary $86,000 $72,000Self employed income $8,000Age to start Soc. Sec. benefits 67 67Monthly Pension benefits $200

Personal Savings and Investment Accounts

This section includes amounts in your current savings and investment accounts.

Amount Additions RateAsset Accounts

Monthly Interest

Rate

Dividend

Rate

Cap Gain

Rate

Appr.

Taxable (at ordinary rates) $83,800 $250 1.65

Equity & other 165,000 500 4.00 3.50

Tax-deferred 6.00

Tax-free 5.75

Retirement Accounts:

This group includes tax deductible retirement plans like IRA, 401(k), profit sharing, etc.

AdditionsPers./Comp.Amount Rate of Ret.

267,500 Allen 7.00 430 / 287

110,250 Betty 7.00 360 / 360

Roth IRA and Roth 401(k) Accounts:Allen 62,500 450 7.00

Betty 72,800 450 7.00




Assumptions Cont.Sample Plan - TOTAL Cash-Flow-Based Planning

Current Living Expenses:

$51,380

Average Per year Per month

$4,282Personal expenses*

5,050 421Insurance premiums

20,400 1,700Debt payments

11,400 950Asset account and education

20,280 1,690Ret. account deposits

Other exp. & stock opt.

15,400 1,283Itemized deductions

Mortgages & Loans:

Basic personal monthly expenseamounts at selected ages *

Age InflationAmount

Income tax and FICA 4,01548,185

63 3,782

68

3,782

4,28253

58

3,723

73 3,723

3.20%

3.20%

3.20%

3.20%

3.20%

$172,095 $14,341Total expenses * In today's dollars, does not includeinsurance, debts, taxes, etc.

Investment Loans

Investment Real Estate

Per monthAmount

100Credit Cards

Auto Loans

6,640

$1,700Totals $238,640

Personal Loans

Other Liabilities

Residence Mortgage

RV and Boat Loans232,000 1,600

Assumed cost of living increase factor for Social Security benefits = 2.00%

Life expectancy for Allen is age 90.

Other Assumptions:

State income tax estimate is based on OR state tax tables.

Life expectancy for Betty is age 95.

Joint income tax filing status.

Inflation (index) rate for income tax table breakpoints = 2.00%

A2a




Net Worth Statement A3


ASSETS

Allen Betty Joint / CP Trust/Oth. TotalOrdinary Interest Accounts:

$12,450 $2,850 Insurance Cash Value, Dividends $15,300

Total $12,450 $2,850 $15,300

Equity (Investment) Accounts:

248,800 Mutual Funds 248,800

Total $248,800 $248,800

Retirement Accounts:

213,500 401(k) accounts 213,500 54,000 IRA accounts 54,000

110,250 403(b), SEP, Simple 110,250 62,500 72,800 Roth accounts 135,300

Total $330,000 $183,050 $513,050

Personal Use Assets:

50,000 19,600 Personal property 69,600

Total $50,000 $19,600 $69,600

Real Estate Assets:

447,000 Residence 447,000 200,000 Rental real estate 200,000

Total $447,000 $200,000 $647,000

Total Assets $840,930 $185,900 $468,400 $1,495,230

Allen Betty Joint / CP Trust/Other TotalLIABILITIES($232,000)Residence mortgage ($232,000)

(6,640)Credit Cards (6,640)(2,500)Life insurance loans (2,500)

(118,000)Rental real estate (118,000)

($9,140) ($350,000) ($359,140)Total Liabilities

NET WORTH $831,790 $185,900 $118,400 $1,136,090

Note: Assets held in a Revocable Trust are included in the grantors assets.




Net WorthSample Plan - TOTAL Cash-Flow-Based Planning

A3a

A3

Net Worth is the amount of assets remaining if all debts were paid off immediately. Typicallyover time an individual’s net worth starts negative and grows until retirement or a little afterthen starts to decline as assets are spent.

(9,140)Other Liabilities

$1,495,230

Personal Assets

15,300

248,800 Investment Accounts

513,050 Retirement Accounts

71,080

Savings Accounts

($359,140)Debts

$1,136,090 Net Worth

Real Estate 647,000

(350,000)Real Estate

Assets




Asset Detail

Rate of Return %

RetAppr.NameMonthly

AdditionsAccount

Value OwnerInter. Div. CapG. GroupLiquid TypeClass

A4


Allen$213,500 430 / 287 7.00 Liquid MF-BalanceAllen's 401k Gr Retire Yes

Allen54,000 0 / 0 7.00 Non-Liquid MF-BalanceAllen's IRA Rollover Gr Retire Yes

Allen62,500 450 / 0 7.00 Cash/Reserve MF-BalanceAllen's Roth Inc Retire Yes

Betty110,250 360 / 360 7.00 Liquid MF-BalanceBetty's 403b Gr Retire Yes

Betty72,800 450 / 0 7.00 Non-Liquid MF-BalanceBetty's Roth Gr Retire Yes

Joint32,200 250 / 0 6.00 Cash/Reserve MF-BalanceChecking/Savings Res Taxable Yes

Joint20,000 0 / 0 2.00 Liquid MF-BalanceCredit Union CD Inc Taxable Yes

Joint31,600 0 / 0 3.10 Cash/Reserve MF-BalanceJoint Money Market Accoun Inc Taxable Yes

Joint165,000 500 / 0 Liquid MF-BalanceJTWROS Investment Accoun 4.00 3.50 AgGr EqOther Yes




Personal Property DetailsSample Plan - TOTAL Cash-Flow-Based Planning

A5

ValueDescription Rate %Owner

Appreciation

AllenCorvallis Home 2.00 $447,000

AllenFord F150 (8.00)22,000

AllenHousehold Property 28,000

JointSubaru Outback (5.00)19,600

AllenVacation Home - purchase @ 65 2.00

$516,600Total




Liability DetailSample Plan - TOTAL Cash-Flow-Based Planning

A6

BalanceOwed toDescription RatePayment

Interest

Corvallis home BofA $232,000 4.37 $1,600

Wells Fargo Wells Fargo 6,640 13.75 100

Totals $1,700 $238,640




Insurance Detail

Insured Description Company Owner Beneficiary Amount Premium Value Amount

A7


LoanCashAnnualFace

Betty 10 Year Term ANLIC Betty Allen $250,000 $375

Allen Group Life Aetna Allen Betty 250,000

Allen Whole Life Met Life Allen Betty 100,000 1,900 12,450 2,500

Betty Whole Life NWML Betty Allen 60,000 650 2,850

$1,900$350,000 $2,500$12,450

PremiumAmount AmountValue

$1,025$310,000 $2,850

Allen

Betty

TotalsLoanCashAnnualFace




Miscellaneous Insurance

Insured DescriptionCompany Type Premium


A8

Annual

Indiv1 Auto PremiumAllen $350 Auto

Indiv1 Disability PremiumAllen 600 Disability

Indiv1 Other PremiumAllen 900 Homeowners, P&C, Other

Indiv2 Auto PremiumBetty 275 Auto

$2,125 Total




Personal Expense Detail

Description Rate


Current Amounts

A9

Increase

AnnualMonthlyDiscretionary Spending $1,000 $12,000 3.20

Food and Household Expenses 500 6,000 3.20

Utilities and Bills 445 5,340 3.20

Auto Operating and Maintenance 367 4,400 3.20

Child Related Expenses 500 6,000 3.20

Holidays 167 2,000 3.20

Household Help 220 2,640 3.20

Clothing 250 3,000 3.20

Property Improvements/Upkeep 500 6,000 3.20

Vacations 333 4,000 3.20

$51,380

Note: Dollar amounts and increase rates are for the current year.

$4,282Totals




Affordable Care Act A10


The Affordable Care Act (ACA) was signed into law in 2010 and significantly changes the health insuranceindustry that Americans have known for the past several years. Health insurance is now available at stateexchanges which also help determine eligibility for the Advanced Premium Tax Credit. The ACA introduces twonew taxes and two new credits. The ones that impact individuals are discussed in detail below. Not discussedbelow are the new Employer Shared Responsibility Tax and the Small Business Health Insurance Tax Credit.

Advanced Premium Tax Credit (APTC)

The ACA includes an advance credit for families that meet certain requirements including buying their healthinsurance through the official health exchange. The amount of credit depends on the Modified Adjusted GrossIncome. For this purpose MAGI includes non-taxable municipal bond income, non-taxable foreign earnedincome, and non-taxable Social Security Income. The credit sets a maximum for the cost of the benchmark silverplan as a percent of MAGI, it is then compared to the actual cost of the benchmark silver plan and the differenceis the credit. This credit is paid directly to the health insurance exchanges to lower the monthly premium costs. Ifthe credit is over/under paid, annual taxes are adjusted accordingly.

100%

FamilySize 133% 150% 200% 250% 300% 400%

Percent of Federal Poverty Level and related APTC benchmark

1 17,82015,80011,880 23,760 47,52035,64029,700

2 24,03021,30716,020 32,040 64,08048,06040,050

3 30,24026,81320,160 40,320 80,64060,48050,400

4 36,45032,31924,300 48,600 97,20072,90060,750

5 42,66037,82528,440 56,880 113,76085,32071,100

6 48,87043,33132,580 65,160 130,32097,74081,450

7 55,09548,85136,730 73,460 146,920110,19091,825

8 61,33554,38440,890 81,780 163,560122,670102,225

Each add'l 6,2405,5334,160 8,320 16,64012,48010,400

Benchmark Premium Limit 4%3%2% 6.30% 9.50%9.50%8.05%

#N/A

Individual Shared Responsibility Tax (ISRT)

In order to make sure that not only the sick who sign up for health insurance under ACA the law includes a newtax applicable to those who do not own health insurance. This is commonly called the Individual Mandate as theattempt is to mandate or command that all Americans buy health insurance. There are some exemptions fromISRT including an earnings threshold.

Under 65Filing Status 65 and Over

10,400Single 11,950

13,400Head of Household 14,950

20,800Married Filing Jointly 22,050

16,750Qualifying widow(er) 18,000

4,050Married Filing Separate 4,050

Per PersonYear % of Income

Phase-In of Penalty Tax

$3252015 2%

$6952016 2.5%

$6952017 2.5%

*2018 2.5%

To calculate ISRT add any tax-exempt municipal bond income as well as any amount excluded from income forforeign earned income or housing assistance to Adjusted Gross Income then subtract the applicable filingthreshold amount. This amount is then multiplied by the penalty percent. The tax due is the higher of thisnumber or the per person penalty amount ($695 for 2018). As a provision of the Tax Cuts and Jobs Act of 2017,the ISRT is scheduled to end in 2018.

Your potential Individual Shared Responsibility Tax is: $1,665




Audit Trail Notes

The Audit Trail is used to help you find the source of all the numbers used in preparing your financial report. Thisreport consists of multiple pages covering three primary sections:


The page numbers appear at the top right of each page. The summary page for each section has a singleletter - A, B, C, etc. Each following page in that section is identified by a letter/number combination - A1,A2, etc.

Graphs:

Cash Flow

Each of the sections includes a "summary" page, where you can visualize the results of your plan each year andsee what might happen under the assumptions of inflation, taxes and changes to your assets and income sources.

Each section includes one or more graphs that will give you a quick way to visualize the flow of income, assetsand taxes through the years.

Tracking Numbers:

In developing this plan, care has been taken to provide full documentation of the internal calculations and allowyou to track the source of each number. At the bottom of many columns you will find, in small type, a code thatwill indicate the source of the value in the column. The following notes will assist in understanding the meaningof the codes.

Page numbering:

On each page the columns are numbered consecutively from left to right (excluding age columns) at thetop of each column.

Column numbering:

Source Notes:

Columns where the source of the data is not obvious will include a legend at the bottom of the columnspecifying the source of the data. Examples of the source notes are shown:

A10

Asset Accounts

Income Taxes

An illustration of the sources of income and expenditures.

Savings, investments, life insurance and retirement accounts.

Estimates of income taxes each year.

A1 From report page A1

C5 From report page C5




Cash Flow

An analysis of all cash income sources, expenses, and liabilities. Includes an estimate of social security, pensions,miscellaneous income or expense items, special financial goals or education funding requirements.




Cash Flow Management

The management of your annual cash inflows and outflows is based on the following details.The various report pages will provide more specifics about the annual amounts and results.


Cash Flow Surplus

In any year when there is a cash flow surplus, this surplus will be reinvested into your savings andinvestment accounts divided as shown below:

Cash Flow Shortage

If in any year the amount of expenses exceeds the spendable income available, the analysis will draw fundsfrom your savings and investment accounts to make up the shortfall. These funds may result in a taxableevent if money is taken from your equity and other accounts which have a cost basis less than the currentmarket value, or if it is necessary to take money from your retirement accounts because all other accountshave been depleted.

In case of a shortage, funds are drawn from accounts in the following order - taxable, equity and other, taxfree, tax deferred, tax deductible retirement accounts, and finally Roth IRA accounts. In some cases assetsmay be periodically rebalanced between accounts.

B1

– Taxable accounts (savings, CD, money market)

age 65 age 65

Each year the interest and dividends earned is computed on the various accounts, and these amounts areautomatically assumed to be reinvested into the account unless an option is elected to take the amounts incash and added to your spendable cash flow. On the following reports, the cash option will be indicated by acash distributions in the "Cash Withdrawal" column.

Interest and dividends

The amount you are required to pay for income taxes can vary every year, depending on the sources andamount of your income, and the adjustments and deductions available. In the analysis we have estimated allthe various income and deduction items to determine the taxable income each year, including considerationof ordinary taxable income, capital gains, AMT and other significant items.

Income Taxes

20% 40%

– Equity and other (stocks, mutual funds, real estate, etc.) 80% 60%

– Tax-Free accounts (municipal bonds and funds) 0% 0%

– Tax-Deferred accounts (annuities, non deductible IRAs, etc.) 0% 0%

The taxes are computed using real IRS tax rate tables, including indexing of the tax breakpoints using anassumed index rate of 2.00% per year. The amount of federal and state income tax and FICA (Social Security)tax is added to your annual expenses each year.

Before After

– Equity and other (stocks, mutual funds, real estate, etc.)

– Taxable accounts (savings, CD, money market)

– Tax-Deferred accounts (annuities, non deductible IRAs, etc.)

– Tax-Free accounts (municipal bonds and funds)




Cash FlowSample Plan - TOTAL Cash-Flow-Based Planning

B2

The bars in the above graph represent the amounts available from...

The black outline illustrates the annual expenses including ...

Earned income (wages & self employment)

Pension plans and Social Security

Misc (inheritances, sale of residence, investment account systematic withdrawal plansor interest/dividends taken in cash, scheduled retirement account distributions orrequired minimum distribution amounts.)

If income from various sources exceeds expenses, the excess is reinvested in savings and investmentaccounts. If expenses are greater than income, it is assumed that funds required to meet such excessexpenses will be drawn from savings and investment accounts to make up the shortage.

– Personal living expenses– Life insurance and other premiums– Mortgage and debt repayment– Planned deposits to investments and retirement accounts– Miscellaneous expense items– Taxes




Sources of FundsSample Plan - TOTAL Cash-Flow-Based Planning

B3

Each year your spendable money will come from several different sources, as shown above. When yourexpenses exceed the income available from earnings, pensions and Social Security, then withdrawals are madefrom your investment accounts or retirement plans.

Salaries and self employment income.

Defined benefit pension plans and the total income from Social Security benefits.

Interest or dividends paid in cash or withdrawals from your investment accounts tomeet spending requirements.

Distributions from your retirement accounts either to meet your spending needs,scheduled distributions, or distributions made to meet the IRS minimum distributionrequirements.

Other single year or multiple year sources of funds, excess proceeds from sale of yourresidence, or life insurance death benefits.

Earned

Pen/SS

Invest

Retire

Other




Annual ExpensesSample Plan - TOTAL Cash-Flow-Based Planning

B4

Your annual expenses represent a number of different items, including personal needs, life insurance premiums,debt repayment, additions to savings and investments, other miscellaneous expenditures and taxes of varioustypes.

The graph should help you visualize the proportionate amount of your total outlay for each of these types ofexpenditures, and the changing mix over the future years.




Cash Flow Chart

The following flow chart illustrates the logic used in your cash flow report, indicating the methods used toallocate annual surplus and shortages.


SURPLUS - If there is a surplus of income after deducting expenses, then the surplus is divided between theTaxable, Equity/Other, Tax-Deferred, and Tax-Free accounts in the percentages shown.

SHORTAGE - if there is a cash flow shortage, funds are drawn from the accounts in order starting from the topdown. As each account is depleted, then the next account is used.

Earned IncomeInterest and Dividends

Pensions & Social SecurityMiscellaneous Income

Taxable

PersonalInsurance

Debt PaymentsSavings and investment additions

Income Taxes

Equity & Other

Tax-Free

Tax-Deferred

Qualified Plans *

Income

is drawn fromaccounts in the

order shown below

Shortage

Surplus

is divided asshown below

(Until age 65) (After age 65)

>>>>>

<<<<<

<<<<<

<<<<<

<<<<<

<<<<<

<<<<<

<<<<<

<<<<<

<<<<<

>>>>>

20%

80%

40%

60%

* Mandatory distributions start at age 70.5.

B5

Less Expenses





Current Year Cash Flow B6

MonthlyAmount

AnnualAmount

Percent ofIncomeINCOME

$13,167 $158,000 Salaries & Wages 91.53 B9

667 8,000 Self Employment Income (Sch C) 4.63 B9

552 6,628 Rental Real Estate 3.84 C 24

Total income available $14,386 $172,628 100.00

MonthlyAmount

AnnualAmount

Percent ofIncomeEXPENDITURES

$2,914 $34,968 Federal and State Income Tax 20.26 D3

1,101 13,217 FICA Taxes 7.66 D6

1,600 19,200 Residence Mortgage 11.12 B 24

100 1,200 Credit Cards 0.70 B 24

244 2,925 Life Insurance Premiums 1.69 A7

75 900 Homeowners & Other Insurance 0.52 A8

52 625 Auto Insurance 0.36 A8

50 600 Disability Insurance 0.35 A8

750 9,000 Saving and Investment Additions 5.21 B8

1,690 20,280 Retirement Account Additions (IRA, 401(k), TSA, etc.) 11.75 B8

200 2,400 Education Fund Deposits 1.39 B 20a

333 4,000 Charitable Contributions 2.32 D 10

617 7,400 Property Taxes 4.29 D 10

333 4,000 Medical Expenses 2.32 D 10

1,000 12,000 Discretionary Spending 6.95 A9

500 6,000 Food and Household Expenses 3.48 A9

445 5,340 Utilities and Bills 3.09 A9

367 4,400 Auto Operating and Maintenance 2.55 A9

500 6,000 Child Related Expenses 3.48 A9

167 2,000 Holidays 1.16 A9

220 2,640 Household Help 1.53 A9

250 3,000 Clothing 1.74 A9

500 6,000 Property Improvements/Upkeep 3.48 A9

333 4,000 Vacations 2.32 A9

Total spending and savings $14,341 $172,095 99.69

Cash flow surplus (Income less Spending) $45 $533





Future Year Cash Flow at Allen's Age 65 B6a

MonthlyAmount

AnnualAmount

Percent ofIncomeINCOME

$7,609 $91,313 Salaries & Wages 80.26 B9

846 10,146 Self Employment Income (Sch C) 8.92 B9

1,026 12,306 Rental Real Estate 10.82 C 24

Total income available $9,481 $113,765 100.00

MonthlyAmount

AnnualAmount

Percent ofIncomeEXPENDITURES

$1,994 $23,924 Federal and State Income Tax 21.03 D6

702 8,419 FICA Taxes 7.40 D6

1,600 19,200 Residence Mortgage 16.88 B 24

213 2,550 Life Insurance Premiums 2.24 B 22

109 1,313 Homeowners & Other Insurance 1.15 B 23

76 912 Auto Insurance 0.80 B 23

1,027 12,328 Retirement Account Additions (IRA, 401(k), TSA, etc.) 10.84 B8

423 5,073 Charitable Contributions 4.46 D 10

1,657 19,889 Property Taxes 17.48 D 10

1,272 15,265 Medical Expenses 13.42 D 10

11,046 132,557 Other Expense (Stock Options, Educations Costs, etc.) 116.52 B 18

1,459 17,512 Discretionary Spending 15.39

426 5,108 Food and Household Expenses 4.49

649 7,793 Utilities and Bills 6.85

462 5,545 Auto Operating and Maintenance 4.87

243 2,919 Holidays 2.57

321 3,853 Household Help 3.39

292 3,502 Clothing 3.08

973 11,675 Property Improvements/Upkeep 10.26

608 7,297 Vacations 6.41

Total spending and savings $25,552 $306,634 269.53

Cash flow surplus (Income less Spending) ($16,071) ($192,869)




Five Year Cash Flow at Allen's Age 65Sample Plan - TOTAL Cash-Flow-Based Planning

B6b

Allen's AgeBetty's Age 63

65 6664

6765

6866

6967

INCOMESalaries & Wages $91,313 B9

Self Employment Income 10,146 B9

Rental Real Estate 12,306 12,843 13,391 13,949 14,519 C 24

Other Income Items B 18

Pension Income 2,400 2,448 2,497 B 10

Retirement Account Dist. C 13

Social Security 34,803 35,499 67,047 B 10

$113,765 $84,063 $51,896 $50,594 $12,843 Total income available

EXPENDITURESFederal and State Income Tax $23,924 $6,423 $27,038 $47,590 $45,041 D6

FICA Taxes 8,419 D6

Residence Mortgage 19,200 52,898 52,898 52,898 52,898 B 24

Life Insurance Premiums 2,550 2,550 2,550 2,550 2,550 B 22

Homeowners & Other Ins. 1,313 1,355 1,399 1,444 1,490 B 23

Auto Insurance 912 941 971 1,002 1,035 B 23

Retirement Additions 12,328 B8

Charitable Contributions 5,073 5,174 5,278 5,383 5,491 D 10

Property Taxes 19,889 20,486 21,101 21,734 22,386 D 10

Medical Expenses 15,265 16,181 17,151 18,181 19,271 D 10

Other Expenses 132,557 15,060 69,940 16,040 16,553 B 18

Discretionary Spending 17,512 18,072 18,651 19,248 19,864

Food and Household Expenses 5,108 5,271 5,440 5,614 5,794

Utilities and Bills 7,793 8,042 8,300 8,565 8,839

Auto Operating and Maintenanc 5,545 5,723 5,906 6,095 6,290

Holidays 2,919 3,012 3,108 3,208 3,311

Household Help 3,853 3,976 4,103 4,234 4,370

Clothing 3,502 3,614 3,730 3,850 3,973

Property Improvements/Upkee 11,675 12,048 12,434 12,832 13,242

Vacations 7,297 7,530 7,771 8,020 8,276

$306,634 $240,674 $238,488 $267,769 $188,356 Total spending and savings

($156,611)($186,592)($217,175)($175,513)($192,869)Cash flow surplus




Five Year Cash Flow at Allen's Age 70Sample Plan - TOTAL Cash-Flow-Based Planning

B6c

Allen's AgeBetty's Age 68

70 7169

7270

7371

7472

INCOMESalaries & Wages B9

Self Employment Income B9

Rental Real Estate 238,244 C 24

Other Income Items 200,000 B 18

Pension Income 2,547 2,598 2,650 2,703 2,757 B 10

Retirement Account Dist. 4,490 24,315 51,365 54,546 57,917 C 13

Social Security 68,388 69,756 71,151 72,574 74,025 B 10

$513,669 $134,699 $129,823 $125,166 $96,669 Total income available

EXPENDITURESFederal and State Income Tax $63,250 $2,277 $8,462 $9,741 $22,352 D6

FICA Taxes 2,428 D6

Residence Mortgage 37,799 33,698 33,698 33,698 33,698 B 24

Life Insurance Premiums 2,550 2,550 2,550 2,550 2,550 B 22

Homeowners & Other Ins. 1,537 1,587 1,637 1,690 1,744 B 23

Auto Insurance 1,068 1,102 1,137 1,173 1,211 B 23

Retirement Additions B8

Charitable Contributions 5,601 5,713 5,827 5,944 6,063 D 10

Property Taxes 23,057 23,749 24,461 25,195 25,951 D 10

Medical Expenses 20,428 21,653 22,953 24,330 25,790 D 10

Other Expenses 17,083 17,629 18,193 18,776 19,376 B 18

Discretionary Spending 20,499 21,155 21,832 22,531 23,252

Food and Household Expenses 5,979 6,170 6,368 6,571 6,782

Utilities and Bills 9,122 9,414 9,715 10,026 10,347

Auto Operating and Maintenanc 6,491 6,699 6,913 7,135 7,363

Holidays 3,417 3,526 3,639 3,755 3,875

Household Help 4,510 4,654 4,803 4,957 5,115

Clothing 4,100 4,231 4,366 4,506 4,650

Property Improvements/Upkee 13,666 14,103 14,555 15,020 15,501

Vacations 8,541 8,815 9,097 9,388 9,688

$251,126 $225,308 $206,986 $200,206 $188,725 Total spending and savings

($90,609)($77,163)($75,040)($92,056)$262,543 Cash flow surplus




Cash Flow IllustrationSample Plan - TOTAL Cash-Flow-Based Planning

Ages Total Sources

Scheduled Cash flow sources and Required Minimum Distributions

B7

Retire/RothAccounts *

EarnedIncome

Less LivingExpense &

TaxesSurplus

(Shortage)InvestmentAccounts *

Pension/SocSec Other Income

1 2 3 4 5 6 7 8

$166,000 53 51 $6,628 $172,628 ($172,096) $532

169,750 54 52 7,051 176,801 (176,205) 596

183,041 55 53 7,483 190,524 (198,631) (8,107)

187,202 56 54 7,924 195,126 (246,333) (51,207)

191,456 57 55 8,414 199,870 (254,046) (54,176)

195,811 58 56 8,831 204,642 (222,250) (17,608)

200,264 59 57 11,631 211,895 (228,594) (16,699)

210,763 60 58 210,763 (288,808) (78,045)

215,572 61 59 10,262 225,834 (205,851) 19,983

220,494 62 60 10,758 231,252 (211,227) 20,025

225,528 63 61 15,312 240,840 (217,740) 23,100

230,679 64 62 11,780 242,459 (220,956) 21,503

101,459 65 R 63 12,306 113,765 (306,633) (192,868)

66 64 R 12,843 12,843 (188,359) (175,516)

67 65 37,203 13,391 50,593 (267,769) (217,176)

68 66 37,947 13,949 51,896 (238,487) (186,591)

69 67 69,544 14,519 84,063 (240,673) (156,610)

70 4,490 68 70,935 438,244 513,668 (251,126) 262,542

71 24,315 69 72,354 96,669 (188,725) (92,056)

72 51,365 70 73,801 125,166 (200,207) (75,041)

73 54,546 71 75,277 129,823 (206,986) (77,163)

74 57,917 72 76,782 134,699 (225,308) (90,609)

75 59,454 73 78,318 137,772 (213,606) (75,834)

76 59,543 74 79,884 139,427 (220,463) (81,036)

77 59,104 75 81,482 140,586 (227,608) (87,022)

78 58,112 76 83,111 141,223 (235,093) (93,870)

79 56,559 77 84,774 141,333 (242,857) (101,524)

80 54,071 78 86,469 140,540 (250,950) (110,410)

81 50,658 79 88,199 138,857 (210,834) (71,977)

82 49,066 80 89,962 139,028 (218,763) (79,735)

83 46,607 81 91,762 138,369 (227,001) (88,632)

84 43,478 82 93,597 137,075 (235,579) (98,504)

85 39,205 83 95,469 134,674 (244,515) (109,841)

86 33,295 84 97,378 130,673 (253,805) (123,132)

87 25,727 85 99,325 125,052 (263,507) (138,455)

88 16,139 86 101,313 117,452 (273,618) (156,166)

89 4,080 87 103,338 107,418 (251,556) (144,138)

90 L 88 105,406 105,406 (256,615) (151,209)

91 89 59,838 59,838 (235,847) (176,009)

92 90 61,034 61,034 (245,132) (184,098)

93 91 62,255 62,255 (254,826) (192,571)

94 92 63,501 63,501 (264,949) (201,448)

95 93 64,770 64,770 (275,522) (210,752)

96 94 66,066 66,066 (286,568) (220,502)

97 95 L 67,387 67,387 (298,109) (230,722)

98 96

* Scheduled distributions, interest or dividends taken in cash or amounts taken to meet the IRS minimum distribution requirements.

B9 C10..C11a C4..C8 B10 B18, B18a B8

R = Retirement Age, L = Life Expectancy




Annual Expense IllustrationSample Plan - TOTAL Cash-Flow-Based Planning

Ages

OtherExpense &Stock Opt.

B8

Life &Misc. Ins.

PremiumsPersonal

Expenses *Itemized

Deductions**Total

ExpensesDebt

Payments

AssetAccountDeposits

RetirementAccountDeposits

1 2 3 4 5 6 7 98

Income Tax

$48,186 $53,780 53 $20,400 $5,050 51 $9,000 $20,280 $15,400 $172,096

49,668 55,424 54 20,400 5,099 52 9,000 20,711 15,902 176,205

56,739 57,121 55 20,400 5,149 53 9,000 21,719 12,080 16,422 198,631

58,233 58,872 56 20,400 5,201 54 9,000 22,185 55,481 16,962 246,333

60,159 59,479 57 20,400 5,255 55 9,000 22,658 59,575 17,521 254,046

61,269 54,321 58 20,400 5,310 56 9,000 23,143 30,707 18,100 222,250

63,166 54,820 59 20,400 5,367 57 9,000 23,637 33,502 18,701 228,594

71,816 56,575 60 20,400 5,426 58 9,000 24,500 81,766 19,324 288,808

67,582 58,385 61 20,400 5,487 59 9,000 25,026 19,971 205,851

69,819 60,253 62 20,400 5,550 60 9,000 25,564 20,641 211,227

73,738 62,182 63 19,757 5,615 61 9,000 26,113 21,337 217,740

74,548 64,171 64 19,200 5,306 62 9,000 26,672 22,058 220,956

32,343 65,203 65 19,200 4,775 63 12,328 132,557 40,227 306,633

6,423 67,290 66 52,898 4,847 64 15,060 41,841 188,359

27,038 69,443 67 52,898 4,920 65 69,940 43,530 267,769

47,590 71,665 68 52,898 4,996 66 16,040 45,298 238,487

45,041 73,959 69 52,898 5,074 67 16,553 47,148 240,673

65,678 76,325 70 37,799 5,155 68 17,083 49,086 251,126

2,277 78,768 71 33,698 5,238 69 17,629 51,115 188,725

8,462 81,288 72 33,698 5,324 70 18,193 53,241 200,207

9,741 83,889 73 33,698 5,413 71 18,776 55,469 206,986

22,352 86,574 74 33,698 5,505 72 19,376 57,803 225,308

30,713 83,345 75 33,698 5,599 73 60,250 213,606

32,239 86,012 76 33,698 5,697 74 62,816 220,463

33,841 88,765 77 33,698 5,798 75 65,507 227,608

35,559 91,605 78 33,698 5,902 76 68,329 235,093

37,323 94,537 79 33,698 6,009 77 71,290 242,857

39,174 97,562 80 33,698 6,120 78 74,397 250,950

26,258 100,684 81 6,234 79 77,659 210,834

27,424 103,906 82 6,352 80 81,082 218,763

28,620 107,231 83 6,473 81 84,677 227,001

29,867 110,662 84 6,599 82 88,452 235,579

31,167 114,203 85 6,728 83 92,417 244,515

32,503 117,858 86 6,862 84 96,583 253,805

33,918 121,629 87 7,000 85 100,960 263,507

35,394 125,521 88 7,143 86 105,561 273,618

4,332 129,538 89 7,290 87 110,397 251,556

9 133,683 90 7,441 88 115,481 256,615

111 110,369 91 4,539 89 120,828 235,847

117 113,901 92 4,664 90 126,451 245,132

122 117,545 93 4,792 91 132,366 254,826

128 121,307 94 4,925 92 138,590 264,949

134 125,189 95 5,061 93 145,139 275,522

139 129,195 96 5,203 94 152,031 286,568

145 133,329 97 5,348 95 159,286 298,109

98 96

D6

* Personal expenses include education fund deposits.** Itemized deductions do not include mortgage interest, state tax, and medical insurance premiums,

which are accounted for in respective expense categories.

B18B23 B24b C4..C8 C10..C11a D10




Earned Income ScheduleSample Plan - TOTAL Cash-Flow-Based Planning

AgeAnnualSalary

B9

AnnualSalary

TotalEarnedIncome

SelfEmployment

1 2 3 4 65

SelfEmploymentAge

Allen Betty

51 $8,000 $86,000 53 $72,000 $166,000

52 8,160 88,150 54 73,440 169,750

53 8,323 99,809 55 74,909 183,041

54 8,490 102,305 56 76,407 187,202

55 8,659 104,862 57 77,935 191,456

56 8,833 107,484 58 79,494 195,811

57 9,009 110,171 59 81,084 200,264

58 9,189 118,869 60 82,705 210,763

59 9,373 121,840 61 84,359 215,572

60 9,561 124,886 62 86,047 220,494

61 9,752 128,008 63 87,768 225,528

62 9,947 131,209 64 89,523 230,679

63 10,146 65 91,313 101,459

6466

6567

6668

6769

6870

6971

7072

7173

7274

7375

7476

7577

7678

7779

7880

7981

8082

8183

8284

8385

8486

8587

8688

8789

8890

8991

9092

9193

9294

9395

9496

9597

9698




Pension and Social SecuritySample Plan - TOTAL Cash-Flow-Based Planning

Age

Spouse Pension 1

B10

Client Pension 2 Spouse Pension 2

TotalPension &

SocialSecurity

Client Pension 1 SocSec*

Age

1 2 3 4 5 6 7 8

SocSec *

$26,376 $2,400 $22,464

Allen Betty

53 5154 5255 5356 5457 5558 5659 5760 5861 5962 6063 6164 6265 6366 6467 34,803 2,400 37,203 6568 35,499 2,448 37,947 66

30,838 69 36,209 2,497 69,544 6731,455 70 36,933 2,547 70,935 6832,084 71 37,671 2,598 72,354 6932,726 72 38,425 2,650 73,801 7033,380 73 39,193 2,703 75,277 7134,048 74 39,977 2,757 76,782 7234,729 75 40,777 2,812 78,318 7335,423 76 41,592 2,868 79,884 7436,132 77 42,424 2,926 81,482 7536,855 78 43,273 2,984 83,111 7637,592 79 44,138 3,044 84,774 7738,343 80 45,021 3,105 86,469 7839,110 81 45,921 3,167 88,199 7939,893 82 46,840 3,230 89,962 8040,690 83 47,776 3,295 91,762 8141,504 84 48,732 3,361 93,597 8242,334 85 49,707 3,428 95,469 8343,181 86 50,701 3,496 97,378 8444,045 87 51,715 3,566 99,325 8544,926 88 52,749 3,638 101,313 8645,824 89 53,804 3,710 103,338 8746,741 90 54,880 3,785 105,406 8855,978 91 3,860 59,838 8957,097 92 3,937 61,034 9058,239 93 4,016 62,255 9159,404 94 4,097 63,501 9260,592 95 4,178 64,770 9361,804 96 4,262 66,066 9463,040 97 4,347 67,387 95

98 96

* Less earned income reduction if applicable




B11Sample Plan - TOTAL Cash-Flow-Based Planning

Social Security Comparison

Current Claiming Strategy

Allen's benefit at age 67

$2,198 per month

Betty's benefit at age 67

$1,872 per month

Betty claims survivor benefits at 89

$2,198 per month

Monthly Expenses

Optimal Claiming Strategy

Allen files for delayed retirement benefits at 70

$2,726 per month

Betty files for delayed retirement benefits at 70

$2,321 per month

Betty claims survivor benefits at 89

$2,726 per month

Monthly Expenses

*All amounts on this page are in today’s dollars and show gross monthly benefits.




Social Security Income ComparisonSample Plan - TOTAL Cash-Flow-Based Planning

B12





B13


Social Security Breakeven Point

Age Year File at 62/62 Current Strategy Optimal Strategy

202762 60

202863 61

202964 62

203065 63 18,463

203166 64 52,651

203267 65 86,839 26,376

203368 66 121,027 52,752

203469 67 155,215 101,592

203570 68 189,403 150,432 32,706

203671 69 223,591 199,272 65,412

203772 70 257,779 248,112 125,974

203873 71 291,967 296,952 186,536

203974 72 326,155 345,792 247,097

204075 73 360,343 394,632 307,659

204176 74 394,531 443,472 368,220

204277 75 428,719 492,312 428,782

204378 76 462,907 541,152 489,344

204479 77 497,095 589,992 549,905

204580 78 531,283 638,832 610,467

204681 79 565,471 687,672 671,028

204782 80 599,659 736,512 731,590

204883 81 633,847 785,352 792,152

204984 82 668,035 834,192 852,713

205085 83 702,223 883,032 913,275

205186 84 736,411 931,872 973,836

205287 85 770,599 980,712 1,034,398

205388 86 804,787 1,029,552 1,094,960

205489 87 838,975 1,078,392 1,155,521

205590 88 873,163 1,127,232 1,216,083





B14


Social Security Income (Today's Dollars)

87654321

StrategyStrategy62/62Before SSIncomePensionIncomeExpensesAgesOptimalCurrentExpensesOtherEarned

Social Security IncomeRemainingRetirement Income

$6,628$166,000$172,0965153

6,833166,000171,4745254

5,5337,026175,000187,5595355

41,4867,209175,000223,6955456

40,8307,418175,000223,2485557

8,5717,544175,000191,1155658

5,9079,628175,000190,5355759

56,294180,000236,2945860

7,976180,000165,2055961

8,102180,000164,8466062

11,174180,000165,0256163

8,330180,000162,5996264

18,463108,0168,43380,000196,4496365

34,188134,4408,528142,9686466

26,37634,188180,0848,6162,400191,0996567

26,37634,188157,2778,6972,400168,3736668

48,84034,188154,7428,7712,400165,9136769

32,70648,84034,188342,0942,400162,0516870

32,70648,84034,188104,60213,7922,400120,7956971

60,56248,84034,18893,52128,2332,400124,1547072

60,56248,84034,18893,24029,0522,400124,6917173

60,56248,84034,18898,74829,8902,400131,0397274

60,56248,84034,18889,73029,7322,400121,8627375

60,56248,84034,18890,87228,8532,400122,1267476

60,56248,84034,18892,24027,7532,400122,3937577

60,56248,84034,18893,84126,4412,400122,6827678

60,56248,84034,18895,62224,9362,400122,9587779

60,56248,84034,18897,73823,1002,400123,2387880

60,56248,84034,18860,30420,9712,40083,6757981

60,56248,84034,18861,72419,6822,40083,8068082

60,56248,84034,18863,41418,1162,40083,9298183

60,56248,84034,18865,27816,3762,40084,0548284

60,56248,84034,18867,47114,3082,40084,1808385

60,56248,84034,18870,12511,7752,40084,3008486

60,56248,84034,18873,2128,8162,40084,4288587

60,56248,84034,18876,7995,3592,40084,5588688

60,56248,84034,18870,4861,3132,40074,1998789

60,56248,84034,18870,4082,40072,8088890

32,70626,37621,76070,4392,40072,83989

32,70626,37621,76070,4392,40072,83990

32,70626,37621,76070,4402,40072,84091

32,70626,37621,76070,4402,40072,84092

32,70626,37621,76070,4412,40072,84193

32,70626,37621,76070,4412,40072,84194

32,70626,37621,76070,4412,40072,84195




B15


Social Security Terminology

Primary Insurance Amount (PIA):

This is the amount that all benefits are based on. A worker’s PIA is determined by a formula that looks at the top 35years of earning history, adjusted into today’s dollars.

If a claimant files at Full Retirement Age, they receive a benefit equal totheir full PIA every month. Full Retirement Age is determined by year ofbirth according to the table on the right. Note that individuals born onJanuary 1 are deemed to have been born in the previous year for determin

Full Retirement Age:

It is possible to claim Social Security retirement benefits as early as 62,however doing so permanently reduces the amount of benefit. Theamount of reduction depends on the claimant's Full Retirement Age andwhether they are claiming their own retirement benefit or spousal retirem

Filing Early:

It is also possible to claim Social Security retirement benefits after Full Retirement Age. There is no benefit toclaiming spousal retirement benefits after Full Retirement Age. However, when claiming one’s own retirementbenefit there are Delayed Retirement Credits applied for each month delayed past Full Retirement Age that equal 8%annually. This increase stops at age 70, so that while it is possible to claim benefits after age 70, there are no further

Filing Late:

When comparing Social Security claiming strategies, one important detail to be aware of is that the optimal strategydepends, in part, on the life expectancy of the claimant(s). Delaying claiming past 62 increases monthly income butalso means giving up income for a certain number of months. The breakeven point is when a certain strategy withhigher income has “caught up” to, or provided the same or more lifetime income than, an earlier claiming strategy.The age that this occurs depends on the situation, as well as future Cost of Living Adjustments made by the SocialSecurity Administration, and the opportunity cost of spending money from other sources in order to delay claimingbenefits.

Breakeven Point:

Spouses, and in certain cases ex-spouses, are entitled to a portion of a worker’s retirement benefit after the workerhas filed for retirement benefits. If taken at Full Retirement Age this equals 50% of the worker’s PIA. This benefit isreduced when taken early, but can be claimed as early as 62. Spousal benefits are not eligible for DelayedRetirement Credits so while they can be claimed after Full Retirement Age there is no advantage to doing so.

Spousal Benefits:

Restricted Filing:

When a worker is eligible for both spousal retirement benefits and their own retirement benefits, and has reached atleast Full Retirement Age, they are able to restrict their filing application to one or the other. This is typically done toclaim spousal benefits without also claiming their own retirement benefits since their own benefit will then continueto grow while spousal benefits do not increase after Full Retirement Age. Restricting the filing is necessary becausethe Social Security Administration deems filing for one benefit as filing for all eligible benefits without this election.

NOTE: ONLY AVAILABLE FOR THOSE BORN ON OR BEFORE JANUARY 1, 1954.

Year of Birth Full Retirement Age

1943-1954 66

66 and 2 months1955

66 and 4 months1956

66 and 6 months1957

671960 and later

66 and 10 months

66 and 8 months

1959

1958




B16


Social Security Optimization

When attempting to optimize Social Security, one needs to define which part of Social Security they are attemptingto optimize as well as certain assumptions about life expectancy, Cost of Living Adjustments, and the opportunitycost of taking Social Security later rather than earlier.

First, many think of Social Security as longevity insurance. This means that in case someone and/or their spouse liveslonger than expected, there is some guaranteed income available. To optimize longevity insurance the goal shouldbe to achieve the largest annual income stream.

Another way to think of Social Security is a source of income to help pay medical bills for someone with majormedical needs in their 60s and 70s. If the need begins in their early 60s likely optimization means getting income assoon as possible to help cover medical bills. If the need arises after full retirement age, those who have delayedretirement benefits can receive up to six months of retroactive benefits as a lump sum. Accepting retroactivebenefits can lower retirement benefits and related survivor benefits.

Perhaps the most popular way to think of Social Security is as one of the core sources of income for retirementspending. What to optimize in this situation is much more personal and depends heavily on each individual situation.First, does the person have enough assets to retire at 62 or earlier without Social Security benefits? If not, are theyable to continue working to increase benefits later? In addition, what is the life expectancy of the person, and whatis it for their spouse? Shorter life expectancies are usually optimized by having earlier benefits, and longer lifeexpectancies by maximizing annual income.

Since arriving at an optimal Social Security claiming strategy is extremely complex, this model shows multiplestrategies and the impacts at different life expectancies. One key thing to keep in mind is that a little planning will goa long way, but the difference between the most optimal approach, and the second most is typically negligible andthus a person’s comfort with the strategy should be taken into consideration in addition to the financial benefit ofthe strategy.




Other Income/Expense Detail B17


Amount(future $)*

Amount(today's $)*

StartAge

IncreaseRate

(prior)

IncreaseRate

(after)StopAge

PercentTaxable

DollarAmountDescription

Ordinary TaxableSingle Year

70 71Betty's Expected Inheritance (~200k) $200,000 $200,000 $0 0.00% 0.00% 0.00%

67 68Bonnie's Wedding (35,000) (54,398) 0 3.20% 3.20% 0.00%

60 61Kitchen and Bath Remodel (55,000) (68,568) 0 3.20% 3.20% 0.00%

Amount(future $)*

Amount(today's $)*

StartAge

IncreaseRate

(prior)

IncreaseRate

(after)StopAge

PercentTaxable

DollarAmountDescription

Ordinary TaxableMultiple Year

65 75Extended travel - first 10 years of retire (10,000) (14,593) 0 3.20% 3.20% 0.00%

* Negative numbers indicate cash outflow, positive numbers represent income.




Other Income (Expense)Sample Plan - TOTAL Cash-Flow-Based Planning

AgesStock

Options

B18

IncomeAmount

LifeInsurance

Residencesale

OtherExpenses

Tax-able %

ExpenseAmount

Tax-able %

1 2 3 4 5 6 7 98

EducationOther goals

OtherIncome

10

TaxableAmounts

Other Income and Expense Totals

53 51

54 52

55 53 (12,080) (12,080)

56 54 (55,481) (55,481)

41 57 55 41 (59,575) (59,575) 1,336

58 56 (30,707) (30,707)

2,332 59 57 2,332 (33,502) (33,502)

60 58 (68,568) (68,568)

61 59

62 60

4,048 63 61 4,048 4,048

64 62

65 R 63 (14,593) (88,777) (29,187) (132,557)

66 64 R (15,060) (15,060)

67 65 (69,940) (69,940)

68 66 (16,040) (16,040)

69 67 (16,553) (16,553)

200,000 70 200,000 68 (17,083) (17,083)

71 69 (17,629) (17,629)

72 70 (18,193) (18,193)

73 71 (18,776) (18,776)

74 72 (19,376) (19,376)

75 73

76 74

77 75

78 76

79 77

80 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 L 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95 L

98 96

R = Retirement Age, L = Life Expectancy

B17 B21 B19, B20aC14B17 B17 B17

*Residence sale = Sale price less sale cost less down payment on new home.




Miscellaneous Cash Flow ItemsSample Plan - TOTAL Cash-Flow-Based Planning

Ages

AMTPreference

Income

B18a

Sched DCapital G/L

Total OtherCashFlow

ItemsSched E

Passive G/L

OtherNon Taxable

Income

Increase(decrease)

Fed/State Income

OtherTaxableIncome

Rental RealEstate Inc/

(Exp)

53 $6,628 51 $6,628

54 7,051 52 7,051

55 7,483 53 7,483

56 7,924 54 7,924

57 8,373 55 8,373

58 8,831 56 8,831

59 9,299 57 9,299

60 (13,198)58 (13,198)

61 10,262 59 10,262

62 10,758 60 10,758

63 11,264 61 11,264

64 11,780 62 11,780

65 12,306 63 12,306

66 12,843 64 12,843

67 13,391 65 13,391

68 13,949 66 13,949

69 14,519 67 14,519

70 238,244 68 238,244

71 69

72 70

73 71

74 72

75 73

76 74

77 75

78 76

79 77

80 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96

C26




Financial Goals B19


It is important to plan ahead for financial goals like purchasing a home, a business opportunity or other specialneeds. If you indicated any special goals, the following table shows the amount of money needed for those items.The costs shown below are included in your projection of Other Income and Expense.

Funding methods at 6.00%after tax

MonthlyDeposit

Lump SumDeposit

InflatedAmountNeeded

AmountNeeded

InflationRate %

AgeNeededDescription:

3.20% $20,000 $29,187 Sail boat $14,505 $138 65

In order to achieve a future financial goal, such as a major purchase or investment, you should plan to have fundsavailable at the right time. Two methods are illustrated: pre-funding with a lump sum of money dedicated to thefuture goal, or pre-funded with an accumulation account where funds are deposited each month.

Lump Sum

Using this method, a calculation is done to determine what amount of money would need to be set aside now atan after-tax rate of return that would grow to the required amount at the time the funds are needed. The initiallump sum deposit would be held in a separate account and then used to pay for the expense.

Monthly Deposits

If a lump sum amount is not available to set aside for the future expense, you might consider using a separateaccount where monthly deposits are contributed to accumulate the funds required. The amount shown above as"Monthly Deposit" would be anticipated to grow at the after-tax rate shown, and when needed would be used topay for the goal specified.

The above funding amounts and rates are used for illustration only and do not represent any particular investmentprogram. Results are not guaranteed.

Note: The expenses for these goals are included in the projection of personal expenses.




Educational Funding RequirementsSample Plan - TOTAL Cash-Flow-Based Planning

Child

B20

Bonnie

Per Year

Lump Sum*

Monthly **

$25,000

$100,000

$1,605

$25,000

$100,000

$2,298

Andy

$200,000

Totals

$3,903

to be Paid

Amount

100.00%

by Parents

2018

2019 26,25026,250 26,250

2020 27,56327,563 27,563

28,9412021 57,88128,941 57,881

30,3882022 60,77530,388 60,775

31,9072023 31,90731,907

33,5022024 33,50233,502

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

Funding education costs with a lump sum investment now:

Lump sum needed today to fund future costs

Funds now available for college expenses.

Additional lump sum needed now

Total level monthly payments to fund costs

Monthly funding with level payments through the last year of college:

Additional needed with $32,300 and $200 current deposits

Payments needed considering $32,300 available now

Note: If education funds do not earn at the rate illustrated, it would require either a larger amount of initial lump sum investment,larger monthly deposits to the education fund, or education loans to finance the costs.

*Lump sum is the dollar amount needed today to fund the expenses assuming a 5.00% after tax or tax free return on education funds.**Monthly deposit needed to fund the expenses from now through the last year of school.

Note: The parents' share of education costs is included in personal expenses.Note: Education expenses are assumed to inflate at 5%.

$200,000

32,300

$167,700

$3,211

2,693

$2,493




431 762

Education Funding Sources B20a

EducationFund Balance

(begin year)Annual

AdditionsAnnual

Costs 5.00%

Sources of Funds

FromEduc Funds

FromAssetsAges Year


AnnualGrowth at

2018 $32,300 53 51 $2,400 $1,671

2019 36,371 54 52 2,400 26,250 (26,250) 562

2020 13,083 55 53 2,400 15,483 12,080 (27,563)

202156 54 2,400 2,400 55,481 (57,881)

202257 55 1,200 1,200 59,575 (60,775)

202358 56 1,200 1,200 30,707 (31,907)

202459 57 33,502 (33,502)

202560 58

202661 59

202762 60

202863 61

202964 62

203065 63

203166 64

203267 65

203368 66

203469 67

203570 68

203671 69

203772 70

203873 71

203974 72

204075 73

204176 74

204277 75

204378 76

204479 77

204580 78

204681 79

Note: The parents' share of education costs is included in personal expenses.

Note: Education expenses are assumed to inflate at 5.00%.




Saving For College

Recent changes in income tax regulations have provided a variety of opportunities that should make savingfor your child's 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 pas

Section 529 of the Revenue code has enabled states to establish special college savings funds whereparents or grandparents can make deposits to an account to accumulate money for tuition and in somecases other expenses. The terms and benefits of each state vary, but generally include the followingfeatures:

Other education plans:

529 Plans:

Tax savings -earnings on the accounts not only accumulate without federal income tax, butwithdrawals are also tax free so long as they are used for qualified educational expenses. Some statesalso allow withdrawals free of state taxation, and many states permit a deduction for a portion of plandeposits, but the rules of each state vary. Also, withdrawals from 529 plans that are not used forqualified educational expenses are generally subject to both federal and state taxation plus a 10%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 inmost cases you can even reclaim the funds, particularly if the child elects not to attend college. (Theremay be a penalty for "non-qualified" withdrawals.)

Everyone eligible - generally there are no special eligibility requirements, and the amounts you cancontribute in many states are substantial (in some cases as much as $250,000 or more.)

Simple - once you select which state plan to use, a simple enrollment form is completed, and depositsmay even be made by automatic checking account withdrawals. The account is managed by the stateor an investment manager hired by the state.

Coverdell Education Savings Accounts - the nondeductible contribution may be used for "qualifiedhigher education" or "qualified elementary and secondary education expenses", including privateinstitutions. The maximum allowable contribution is $2,000 subject to certain income limitations. Theplan is integrated with the HOPE and Lifetime Learning Credit programs.

Student Loan Interest Deduction - the availability for this benefit has been broadened and theearnings limits raised.

Employer provided assistance - the $5,250 contribution level now extends the exclusion to graduatecourses and makes the exclusion for undergraduate and graduate courses permanent.

For more information about these plans or to compare your state 529 plan with other states,

go on the internet to :

●

●

●

●

●

●

●

www.savingforcollege.com


B20b

● Deduction of higher education expenses up to $4,000 may be deductible (subject to incomelimitations.) This deduction continues to be renewed by Congress, but may not be available in futureyears.




www.savingforcollege.com

Residence Sale Worksheet B21


Ages

ResidenceValues*

MortgagePayoff

Cost ofSale

New HomeDown

NetProceeds

Combined amounts for residences schedule for sale.

53 51 $447,000

54 52 455,940

55 53 465,059

56 54 474,360

57 55 483,847

58 56 493,524

59 57 503,395

60 58 513,462

61 59 523,732

62 60 534,206

63 61 544,891

64 62 555,788

65 63 566,904 88,777 (88,777)

66 64 1,031,004

67 65 1,051,625

68 66 1,072,657

69 67 1,094,110

70 68 1,115,992

71 69 1,138,312

72 70 1,161,079

73 71 1,184,300

74 72 1,207,986

75 73 1,232,146

76 74 1,256,789

77 75 1,281,924

78 76 1,307,563

79 77 1,333,714

80 78 1,360,389

81 79 1,387,596

82 80 1,415,348

83 81 1,443,655

84 82 1,472,528

85 83 1,501,979

86 84 1,532,018

87 85 1,562,659

88 86 1,593,912

89 87 1,625,790

90 88 1,658,306

91 89 1,691,472

92 90 1,725,302

93 91 1,759,808

94 92 1,795,004

95 93 1,830,904

96 94 1,867,522

97 95 1,904,872

98 96 1,942,970

99 97

100 98

101 99

102 100

103 101

104 102

105 103

106 104

Description

Current value

Appreciation rate

Sale age

Value at sale

Percent sale cost

Total sales cost

Mortgage payoff

Vacation Home -

2.00%

65

New mortgage

Down payment

$350,000

80.00%

$443,885 Appreciated cost

New Home

Percent financed

Number of years

Mortgage rate 5.00%

$88,777

15

$355,108

*Replacement residence value is shown at the end of the first year.




Life Insurance SummarySample Plan - TOTAL Cash-Flow-Based Planning

Age

B22

Group orTerm

Permanent(Net of Loans) Premiums

1 2 3 4 5 6 7 8

Allen Betty

CashValues

Group orTerm

CashValues

Permanent(Net of Loans)Age Premiums

$2,850 $250,000 53 $97,500 $1,900 $60,000 $1,025 51$12,450 $250,000

5,131 250,000 54 97,500 1,900 60,000 1,025 5215,996 250,000

7,412 250,000 55 97,500 1,900 60,000 1,025 5319,542 250,000

9,692 250,000 56 97,500 1,900 60,000 1,025 5423,087 250,000

11,973 250,000 57 97,500 1,900 60,000 1,025 5526,633 250,000

14,254 250,000 58 97,500 1,900 60,000 1,025 5630,179 250,000

16,535 250,000 59 97,500 1,900 60,000 1,025 5733,725 250,000

18,815 250,000 60 97,500 1,900 60,000 1,025 5837,271 250,000

21,096 250,000 61 97,500 1,900 60,000 1,025 5940,817 250,000

23,377 250,000 62 97,500 1,900 60,000 1,025 6044,362 250,000

25,658 250,000 63 97,500 1,900 60,000 1,025 6147,908 250,000

27,938 250,000 64 97,500 1,900 60,000 650 6251,454

30,219 65 97,500 1,900 60,000 650 6355,000

32,500 66 97,500 1,900 60,000 650 6456,286

33,264 67 97,500 1,900 60,000 650 6557,571

34,028 68 97,500 1,900 60,000 650 6658,857

34,792 69 97,500 1,900 60,000 650 6760,143

35,556 70 97,500 1,900 60,000 650 6861,429

36,319 71 97,500 1,900 60,000 650 6962,714

37,083 72 97,500 1,900 60,000 650 7064,000

37,847 73 97,500 1,900 60,000 650 7165,286

38,611 74 97,500 1,900 60,000 650 7266,571

39,375 75 97,500 1,900 60,000 650 7367,857

40,139 76 97,500 1,900 60,000 650 7469,143

40,903 77 97,500 1,900 60,000 650 7570,429

41,667 78 97,500 1,900 60,000 650 7671,714

42,431 79 97,500 1,900 60,000 650 7773,000

43,194 80 97,500 1,900 60,000 650 7874,286

43,958 81 97,500 1,900 60,000 650 7975,571

44,722 82 97,500 1,900 60,000 650 8076,857

45,486 83 97,500 1,900 60,000 650 8178,143

46,250 84 97,500 1,900 60,000 650 8279,428

47,014 85 97,500 1,900 60,000 650 8380,714

47,778 86 97,500 1,900 60,000 650 8482,000

48,542 87 97,500 1,900 60,000 650 8583,286

49,306 88 97,500 1,900 60,000 650 8684,571

50,069 89 97,500 1,900 60,000 650 8785,857

50,833 90 97,500 1,900 60,000 650 8887,143

51,597 91 60,000 650 89

52,361 92 60,000 650 90

53,125 93 60,000 650 91

53,889 94 60,000 650 92

54,653 95 60,000 650 93

55,417 96 60,000 650 94

56,181 97 60,000 650 95

98 96




Allen

Misc. Insurance PremiumsSample Plan - TOTAL Cash-Flow-Based Planning

Ages

B23

Auto Disability Medical LTC

1 2 3 4 5 6 7 98

HomeownersProp & Casualty

TotalMisc

Premiums

Betty

Disability Medical LTCAuto

10

$2,125 $350 53 $600 51 $275 $900

2,174 361 54 600 52 284 929

2,224 373 55 600 53 293 959

2,276 385 56 600 54 302 989

2,330 397 57 600 55 312 1,021

2,385 410 58 600 56 322 1,054

2,442 423 59 600 57 332 1,087

2,501 436 60 600 58 343 1,122

2,562 450 61 600 59 354 1,158

2,625 465 62 600 60 365 1,195

2,690 480 63 600 61 377 1,233

2,756 495 64 600 62 389 1,273

2,225 511 65 63 401 1,313

2,297 527 66 64 414 1,355

2,370 544 67 65 427 1,399

2,446 561 68 66 441 1,444

2,524 579 69 67 455 1,490

2,605 598 70 68 470 1,537

2,688 617 71 69 485 1,587

2,774 637 72 70 500 1,637

2,863 657 73 71 516 1,690

2,955 678 74 72 533 1,744

3,049 700 75 73 550 1,800

3,147 722 76 74 567 1,857

3,248 745 77 75 586 1,917

3,352 769 78 76 604 1,978

3,459 794 79 77 624 2,041

3,570 819 80 78 644 2,107

3,684 845 81 79 664 2,174

3,802 873 82 80 686 2,244

3,923 900 83 81 707 2,315

4,049 929 84 82 730 2,390

4,178 959 85 83 753 2,466

4,312 990 86 84 778 2,545

4,450 1,021 87 85 802 2,626

4,593 1,054 88 86 828 2,710

4,740 1,088 89 87 855 2,797

4,891 1,123 90 88 882 2,887

3,889 91 89 910 2,979

4,014 92 90 939 3,074

4,142 93 91 969 3,173

4,275 94 92 1,000 3,274

4,411 95 93 1,032 3,379

4,553 96 94 1,066 3,487

4,698 97 95 1,100 3,599

98 96




Residence Mortgage

Loans - Mortgage, Auto, Credit CardSample Plan - TOTAL Cash-Flow-Based Planning

Ages

B24

Balance Interest Principal

1 2 3 4 5 6 8 97

Interest Principal

Auto

Balance

Credit Card

InterestBalance Principal

$894 $9,245 $306 $232,000 53 $9,955 51 $6,640

849 9,658 351 222,755 54 9,542 52 6,334

798 10,088 402 213,097 55 9,112 53 5,984

739 10,538 461 203,009 56 8,662 54 5,582

672 11,008 528 192,471 57 8,192 55 5,121

594 11,499 606 181,463 58 7,701 56 4,592

506 12,011 695 169,965 59 7,189 57 3,987

404 12,547 796 157,954 60 6,653 58 3,292

287 13,106 913 145,407 61 6,094 59 2,496

153 13,690 1,047 132,301 62 5,510 60 1,583

20 14,301 536 118,610 63 4,899 61 536

14,939 104,309 64 4,261 62

15,605 89,371 65 3,595 63

32,613 428,874 66 20,285 64

34,175 396,261 67 18,723 65

35,811 362,086 68 17,087 66

37,527 326,274 69 15,372 67

23,990 288,748 70 13,809 68

20,936 264,758 71 12,762 69

22,007 243,822 72 11,691 70

23,133 221,816 73 10,565 71

24,316 198,683 74 9,382 72

25,560 174,367 75 8,138 73

26,868 148,807 76 6,830 74

28,243 121,939 77 5,456 75

29,687 93,696 78 4,011 76

31,206 64,009 79 2,492 77

32,803 32,803 80 895 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96

99 97




Investment Real Estate

Loans - RE, Other, TotalsSample Plan - TOTAL Cash-Flow-Based Planning

Ages

B24b

Balance Interest Principal

1 2 3 4 5 6 9 118

Principal Annualpayments

Other Liabilities

LoanBalances

Interest

Total of all liabilities

10

InterestBalance Principal

$9,551 $238,640 $20,400 53 51 $10,849

10,008 229,089 20,400 54 52 10,392

10,490 219,081 20,400 55 53 9,910

10,999 208,591 20,400 56 54 9,401

11,536 197,592 20,400 57 55 8,864

12,104 186,056 20,400 58 56 8,296

12,706 173,952 20,400 59 57 7,694

13,343 161,246 20,400 60 58 7,057

14,019 147,903 20,400 61 59 6,381

14,737 133,884 20,400 62 60 5,663

14,837 119,147 19,757 63 61 4,920

14,939 104,309 19,200 64 62 4,261

15,605 89,371 19,200 65 63 3,595

32,613 428,874 52,898 66 64 20,285

34,175 396,261 52,898 67 65 18,723

35,811 362,086 52,898 68 66 17,087

37,527 326,274 52,898 69 67 15,372

23,990 288,748 37,799 70 68 13,809

20,936 264,758 33,698 71 69 12,762

22,007 243,822 33,698 72 70 11,691

23,133 221,816 33,698 73 71 10,565

24,316 198,683 33,698 74 72 9,382

25,560 174,367 33,698 75 73 8,138

26,868 148,807 33,698 76 74 6,830

28,243 121,939 33,698 77 75 5,456

29,687 93,696 33,698 78 76 4,011

31,206 64,009 33,698 79 77 2,492

32,803 32,803 33,698 80 78 895

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96

99 97A6




Loan Balances(by owner)

Loans By OwnerSample Plan - TOTAL Cash-Flow-Based Planning

Ages

B24c

TotalBalances Allen Betty Betty Joint

TotalPayments Allen

Loan Payments(by owner)

C. Prop.JointTrust &

OtherTrust &

OtherC. Prop.

$19,200 $20,400 $238,640 53 $6,640 51 $1,200 $232,000

19,200 20,400 229,089 54 6,334 52 1,200 222,755

19,200 20,400 219,081 55 5,984 53 1,200 213,097

19,200 20,400 208,591 56 5,582 54 1,200 203,009

19,200 20,400 197,592 57 5,121 55 1,200 192,471

19,200 20,400 186,056 58 4,592 56 1,200 181,463

19,200 20,400 173,952 59 3,987 57 1,200 169,965

19,200 20,400 161,246 60 3,292 58 1,200 157,954

19,200 20,400 147,903 61 2,496 59 1,200 145,407

19,200 20,400 133,884 62 1,583 60 1,200 132,301

19,200 19,757 119,147 63 536 61 557 118,610

19,200 19,200 104,309 64 62 104,309

19,200 19,200 89,371 65 63 89,371

19,200 52,898 428,874 66 355,108 64 33,698 73,766

19,200 52,898 396,261 67 338,795 65 33,698 57,466

19,200 52,898 362,086 68 321,647 66 33,698 40,439

19,200 52,898 326,274 69 303,622 67 33,698 22,653

4,101 37,799 288,748 70 284,675 68 33,698 4,073

33,698 264,758 71 264,758 69 33,698

33,698 243,822 72 243,822 70 33,698

33,698 221,816 73 221,816 71 33,698

33,698 198,683 74 198,683 72 33,698

33,698 174,367 75 174,367 73 33,698

33,698 148,807 76 148,807 74 33,698

33,698 121,939 77 121,939 75 33,698

33,698 93,696 78 93,696 76 33,698

33,698 64,009 79 64,009 77 33,698

33,698 32,803 80 32,803 78 33,698

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96




Allocation of Cash Flow Surplus or (Shortage)Sample Plan - TOTAL Cash-Flow-Based Planning

Ages

B25

% Amount

Taxable Equity/Other

1 2 3 4 5 6 7 98

RetirementAccounts

RothAccountsTax-DeferredTax-Free

10

Amount% Amount% Amount% Amount Amount

20 53 $106 51 $426 80

20 54 119 52 477 80

na55 (8,107)53 na na na

na56 (51,207)54 na na na

na57 (45,122)55 (9,054)na na na

na58 (3,000)56 (14,608)na na na

na59 (3,000)57 (13,699)na na na

na60 (3,000)58 (75,045)na na na

20 61 3,997 59 15,987 80

20 62 4,005 60 16,020 80

20 63 4,620 61 18,480 80

20 64 4,301 62 17,203 80

na65 (29,898)63 (162,970)na na na

na66 64 (175,516)na na na

na67 65 (114,748)na na na (102,428)

na68 66 na na na (186,591)

na69 67 na na na (156,610)

40 70 105,017 68 157,525 60

na71 (92,056)69 na na na

na72 (14,821)70 (60,220)na na na

na73 71 (77,163)na na na

na74 72 (45,619)na na na (44,990)

na75 73 na na na (75,834)

na76 74 na na na (81,035)

na77 75 na na na (87,021)

na78 76 na na na (93,869)

na79 77 na na na (101,524)

na80 78 na na na (110,409)

na81 79 na na na (71,977)

na82 80 na na na (79,734)

na83 81 na na na (88,631)

na84 82 na na na (98,503)

na85 83 na na na (109,840)

na86 84 na na na (123,132)

na87 85 na na na (138,454)

na88 86 na na na (156,166)

na89 87 na na na (47,741) (96,396)

na90 88 na na na (151,208)

na91 89 na na na (176,009)

na92 90 na na na (184,097)

na93 91 na na na (192,570)

na94 92 na na na (201,448)

na95 93 na na na (210,752)

na96 94 na na na (220,501)

na97 95 na na na (230,721)

40 98 96 60

C4 C5 C7 C8 C10..C10e C11, C11a




Assets

Details of your existing assets, changes due to additions or withdrawals, rate of return and, where appropriate, stockoptions.

Assets are divided into taxable, tax free, tax deferred, equity, retirement accounts, IRA and Roth IRA accounts.




Asset AccountsSample Plan - TOTAL Cash-Flow-Based Planning

C1

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.

This includes any account that is treated by the IRS as qualified for special tax-deferral or deduction.

Personal Accounts:

Fully Taxable:

These are savings and investments that earn interest or dividends which are fully taxable at ordinaryincome rates. Included in this category are savings accounts, certificates of deposit, money marketfunds and accounts, bonds, notes and mortgages, etc.

Tax-Deferred:

Some assets allow you to accumulate money without current taxation on interest or other returns. Themost common are fixed or variable annuities issued by insurance companies. Any illustration of anannuity account is hypothetical, and does not represent any specific product or underlying investmentaccounts and is not intended to project or predict investment results. The variable nature of a variableannuity will affect not only the investment returns, but will also affect the cash value and deathbenefits of the annuity. The annuity could result in zero or negative return, depending on theperformance of the underlying investments and the terms of the annuity contract.

Tax-Free:

Equity and Other:

Tax Deductible Retirement Accounts:

Interest earned on certain bonds issued by federal, state or local municipalities are exempt fromfederal and in some cases state income tax. These are referred to as "tax exempt" securities and maybe purchased individually or as muni bond investment trusts or mutual funds.

Assets which receive part or all of their return in the form of appreciation and qualify for special capitalgains treatment on the profits would be included in this category. Such assets include: stocks, equitymutual funds, real estate, business interest, etc.

Not an Investment Offer:

IMPORTANT:

Individual Retirement Accounts.Corporate thrift or savings plans.Retirement plans for self employed individuals.Tax sheltered annuity plans for employees of 403(b) taxexempt organizations.Employer sponsored plans.Corporate plans for employee profit sharing.(Tax-free growth).Tax-free after-tax personal contributions, pre-tax company additions.

These accounts generally allow for pre-tax contributions and tax deferred earnings. When funds are withdrawnfrom these accounts the entire amount is taxable at the ordinary tax rate. (Roth accounts use after taxcontributions and tax free accumulation and withdrawal.)

This is not an offer to sell or a solicitation of an offer to buy any security. Such offer would be accompanied by aprospectus or other offering materials.

The projections or other information generated by Money Tree regarding the likelihood of various investmentoutcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of futureresults.

IRA401(k)Keogh or SEPTSA

SIMPLE 401(k) and SIMPLE IRAProfit SharingRoth IRA accountsRoth 401(k)




Investment Returns

This 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 above chart does not represent any particular investment portfolio or asset class.

Historical Stock Market Changes

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 or moredepending on the type of investment activity and method of managing the accounts. In addition to annual feesand expenses, some investments may include an initial commission, sales charge or set up expense. If fees andexpenses are taken into account, the above rates of return would be lower. The rates used in the analysis areassumed to be net of any potential fees and expenses. If we assist you in selecting assets for your investmentportfolio, a complete description of any fees, expenses, commissions or other costs will be provided for eachinvestment selected.

Historical Asset Class Returns

This table shows the wide range of returns realized on various asset classes for different time periods.

Your financial analysis includes hypothetical portfolio illustrations. To help you understand the potential risksand 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 the portfoliomix will generally change several times in the future.

Asset Class

Treasury Bills

Bonds - Intermediate Govt.

Bonds - Long Term Govt.

Bonds - Long Term Corporate

Stocks - Small Companies

Stocks - Large Companies

Inflation

5 Year Return**

11.12%

16.98%

0.07%

0.96%

21.62%

22.51%

-2.14%

-2.22%

45.90%

28.60%

-27.54%

-12.47%

10.06% -5.42%

Return

3.42%

5.28%

5.58%

6.07%

12.48%

10.12%

2.91%

Annual*

Maximum

20 Year Return***

Minimum

7.72%

9.97%

0.42%

1.58%

12.09%

12.13%

0.69%

1.34%

21.13%

17.88%

5.74%

3.11%

6.36% 0.07%

* Annual return is the average compounded rate from 1926 through 2015.

** 5 year return is the highest and lowest average rolling return for all the 5 year periods from 1926 through 2015.

*** 20 year return is the highest and lowest average rolling return for all the 20 year periods from 1926 through 2015.

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. With a fixed annuity you are generally protected against a loss ofprincipal. If a variable annuity should be selected by you for any portion of your portfolio, please be aware thatthe annual return 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 limiting theloss 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.

C1a

MinimumMaximum




Account SummarySample Plan - TOTAL Cash-Flow-Based Planning

In years when there is a surplus of spendable income, the surplus is reinvested into the asset accounts in theproportions shown below. Period 1 covers the years up to age 65.

In years when there is a shortage of spendable income from earnings, pensions, social security, interest anddividends taken in cash, and miscellaneous income sources, the shortage is made up by withdrawals from asset andretirement accounts. It is assumed that funds are taken in the following order - from taxable, equity and other non-qualified, tax-free, tax-deferred and then qualified retirement accounts.

Allocation of Surplus Cash Flow

C2




Account SummarySample Plan - TOTAL Cash-Flow-Based Planning

Ages

C3

TaxableAccount

Equity& Other

TaxFree

1 2 3 4 5 6 7 98

Retirement accounts Roth IRAs

BettyAllen

TaxDeferred

Begin. YearAccount

Totals

BettyAllen5.75% 6.00%7.50%1.65% 7.00% 7.00%7.00% 7.00%

$267,500 $72,800 $761,850 $83,800 53 $165,000 51 $110,250 $62,500

295,158 83,505 850,470 88,313 54 184,068 52 126,942 72,484

324,976 95,072 945,842 92,914 55 204,619 53 144,982 83,279

358,092 107,563 1,040,573 89,291 56 226,215 54 164,468 94,944

393,785 121,045 1,099,431 42,122 57 249,431 55 185,505 107,543

432,242 135,590 1,162,136 58 264,957 56 208,205 121,142

473,664 151,274 1,269,304 59 275,863 57 232,688 135,815

518,264 168,180 1,385,700 60 288,534 58 259,083 151,639

566,890 186,396 1,447,770 61 238,259 59 287,528 168,697

619,228 206,016 1,616,581 7,060 62 279,029 60 318,170 187,078

675,546 227,141 1,797,868 14,244 63 322,892 61 351,168 206,877

736,131 249,879 1,995,670 22,167 64 372,607 62 386,690 228,196

801,289 274,345 2,206,313 29,898 65 424,720 63 424,917 251,144

853,373 299,272 2,164,173 66 280,172 64 463,888 267,468

908,842 318,725 2,121,209 67 114,748 65 494,041 284,853

861,810 339,442 2,030,774 68 66 526,154 303,368

724,535 361,506 1,969,482 69 67 560,354 323,087

609,395 385,004 1,935,264 70 68 596,777 344,088

644,354 410,029 2,324,661 105,958 71 162,298 69 635,568 366,454

661,049 436,681 2,350,929 14,821 72 171,224 70 676,880 390,274

677,268 465,065 2,370,989 73 118,597 71 694,417 415,642

692,886 495,294 2,387,912 74 45,619 72 711,454 442,659

661,159 527,488 2,387,939 75 73 727,860 471,432

595,668 561,775 2,403,008 76 74 743,490 502,075

522,392 598,290 2,413,576 77 75 758,184 534,710

440,675 637,179 2,419,085 78 76 771,765 569,466

349,591 678,596 2,418,886 79 77 784,218 606,481

248,572 722,705 2,412,353 80 78 795,174 645,902

136,584 769,681 2,398,769 81 79 804,618 687,886

62,996 819,710 2,427,650 82 80 812,345 732,599

872,991 2,450,189 83 81 796,980 780,218

929,735 2,469,355 84 82 708,688 830,932

990,168 2,482,783 85 83 607,672 884,943

1,054,529 2,489,765 86 84 492,772 942,464

1,123,073 2,489,554 87 85 362,757 1,003,724

1,196,073 2,481,297 88 86 216,258 1,068,966

1,273,818 2,464,088 89 87 51,821 1,138,449

1,356,616 2,469,206 90 88 1,112,590

1,444,796 2,473,065 91 89 1,028,269

1,538,708 2,451,484 92 90 912,776

1,638,724 2,420,121 93 91 781,397

1,745,241 2,377,942 94 92 632,701

1,858,682 2,323,825 95 93 465,143

1,979,496 2,256,552 96 94 277,056

2,108,163 2,174,807 97 95 66,644

2,075,223 2,075,223 98 96

C4 C5 C7 C8 C10,C10b...e C10a, C10b...e C11 C11a

Note: Rates shown above are for first year only. Refer to account reports for future year rates.




Total Working AssetsSample Plan - TOTAL Cash-Flow-Based Planning

Ages

C3a

AccountBalances

PersonalDeposits

CompanyDeposits

1 2 3 4 5 6 7

Contributions Withdrawals

PersonalScheduled

Surplus or(Shortage)

AnnualReturn

RequiredMin. Distr*

$51,049 53 $761,850 51 $29,280 $7,760 $532

57,132 54 850,470 52 29,711 7,932 596

63,632 55 945,842 53 30,719 8,487 (8,107)

70,204 56 1,040,573 54 31,185 8,677 (51,207)

76,353 57 1,099,431 55 31,658 8,871 (54,176)

83,564 58 1,162,136 56 32,143 9,069 (17,608)

91,186 59 1,269,304 57 32,637 9,272 (16,699)

96,897 60 1,385,700 58 33,500 9,717 (78,045)

104,866 61 1,447,770 59 34,026 9,935 19,984

116,540 62 1,616,581 60 34,564 10,158 20,025

129,203 63 1,797,868 61 35,113 10,386 23,100

142,848 64 1,995,670 62 35,672 10,620 21,504

132,921 65 2,206,313 63 12,328 5,479 (192,868)

132,552 66 2,164,173 64 (175,516)

126,740 67 2,121,209 65 (217,176)

125,299 68 2,030,774 66 (186,591)

122,392 69 1,969,482 67 (156,610)

131,345 70 1,935,264 68 262,542 (4,490)

142,639 71 2,324,661 69 (92,056) (24,315)

146,465 72 2,350,929 70 (75,041) (51,365)

148,631 73 2,370,989 71 (77,163) (54,546)

148,553 74 2,387,912 72 (90,609) (57,917)

150,357 75 2,387,939 73 (75,834) (59,454)

151,146 76 2,403,008 74 (81,035) (59,543)

151,634 77 2,413,576 75 (87,021) (59,104)

151,782 78 2,419,085 76 (93,869) (58,112)

151,550 79 2,418,886 77 (101,524) (56,559)

150,896 80 2,412,353 78 (110,409) (54,071)

151,515 81 2,398,769 79 (71,977) (50,658)

151,339 82 2,427,650 80 (79,734) (49,066)

154,404 83 2,450,189 81 (88,631) (46,607)

155,409 84 2,469,355 82 (98,503) (43,478)

156,027 85 2,482,783 83 (109,840) (39,205)

156,216 86 2,489,765 84 (123,132) (33,295)

155,924 87 2,489,554 85 (138,454) (25,727)

155,096 88 2,481,297 86 (156,166) (16,139)

153,335 89 2,464,088 87 (144,137) (4,080)

155,067 90 2,469,206 88 (151,208)

154,428 91 2,473,065 89 (176,009)

152,734 92 2,451,484 90 (184,097)

150,391 93 2,420,121 91 (192,570)

147,331 94 2,377,942 92 (201,448)

143,479 95 2,323,825 93 (210,752)

138,756 96 2,256,552 94 (220,501)

131,137 97 2,174,807 95 (230,721)

98 2,075,223 96

C3

This report summarizes all the asset reports including savings and investments and retirement accounts.




Taxable AccountSample Plan - TOTAL Cash-Flow-Based Planning

Ages

C4

Begin YearAccountBalance

AnnualDeposit

Cash Flow Surplus(short)

1 2 3 4 5 6 7

Annual Additions or Withdrawals Annual Interest

Cashwithdrawal

TaxableIncome

%Rate

$Amount

$1,407 53 $83,800 $1,407 51 $3,000 $106 1.65

1,482 54 88,313 1,482 52 3,000 119 1.65

1,484 55 92,914 1,484 53 3,000 (8,107) 1.65

1,038 56 89,291 1,038 54 3,000 (51,207) 1.65

57 42,122 55 3,000 (45,122) 1.65

58 56 3,000 (3,000) 1.65

59 57 3,000 (3,000) 1.65

60 58 3,000 (3,000) 1.65

63 61 63 59 3,000 3,997 1.65

179 62 7,060 179 60 3,000 4,005 1.65

303 63 14,244 303 61 3,000 4,620 1.65

430 64 22,167 430 62 3,000 4,301 1.65

65 29,898 63 (29,898) 1.65

66 64 1.65

67 65 1.65

68 66 1.65

69 67 1.65

941 70 941 68 105,017 1.65

919 71 105,958 919 69 (92,056) 1.65

72 14,821 70 (14,821) 1.65

73 71 1.65

74 72 1.65

75 73 1.65

76 74 1.65

77 75 1.65

78 76 1.65

79 77 1.65

80 78 1.65

81 79 1.65

82 80 1.65

83 81 1.65

84 82 1.65

85 83 1.65

86 84 1.65

87 85 1.65

88 86 1.65

89 87 1.65

90 88 1.65

91 89 1.65

92 90 1.65

93 91 1.65

94 92 1.65

95 93 1.65

96 94 1.65

97 95 1.65

98 96B25




Annual Additions or Withdrawals

Equity and Other AccountsSample Plan - TOTAL Cash-Flow-Based Planning

Ages

C5


AnnualDeposit

Cash FlowSurplus (Short)

1 2 3 4 5 8 107

OrdinaryRate

At Div CGRate

Annual Rate of Return

Apprec

TotalAnnualReturn

Taxable Income

9

DividendInterest Capital Gain

6 11

CashWithdrawal

$12,642 4.00 3.50 $426 $5,898 $165,000 53 $6,000 51

14,074 4.00 3.50 477 6,566 184,068 54 6,000 52

15,596 4.00 3.50 7,277 204,619 55 6,000 53

17,216 4.00 3.50 8,033 226,215 56 6,000 54

18,580 4.00 3.50 (9,054) 8,672 249,431 57 6,000 55

19,514 4.00 3.50 (14,608) 9,109 264,957 58 6,000 56

20,370 4.00 3.50 (13,699) 9,508 275,863 59 6,000 57

18,770 4.00 3.50 (75,045) 8,776 288,534 60 6,000 58

18,783 4.00 3.50 15,987 8,760 238,259 61 6,000 59

21,843 4.00 3.50 16,020 10,188 279,029 62 6,000 60

25,235 4.00 3.50 18,480 11,770 322,892 63 6,000 61

28,910 4.00 3.50 17,203 13,486 372,607 64 6,000 62

18,422 2.50 1.50 1.00 0.50 (162,970) 8,394 424,720 65 63 1,682

10,092 2.50 1.50 1.00 0.50 (175,516) 4,609 280,172 66 64 925

2.50 1.50 1.00 0.50 (114,748)114,748 67 65

2.50 1.50 1.00 0.50 68 66

2.50 1.50 1.00 0.50 69 67

4,773 2.50 1.50 1.00 0.50 157,525 2,150 70 68 427

8,926 2.50 1.50 1.00 0.50 4,057 162,298 71 69 811

7,593 2.50 1.50 1.00 0.50 (60,220) 3,459 171,224 72 70 693

4,185 2.50 1.50 1.00 0.50 (77,163) 1,912 118,597 73 71 384

2.50 1.50 1.00 0.50 (45,619)45,619 74 72

1.00 1.00 1.50 1.00 75 73

1.00 1.00 1.50 1.00 76 74

1.00 1.00 1.50 1.00 77 75

1.00 1.00 1.50 1.00 78 76

1.00 1.00 1.50 1.00 79 77

1.00 1.00 1.50 1.00 80 78

1.00 1.00 1.50 1.00 81 79

1.00 1.00 1.50 1.00 82 80

1.00 1.00 1.50 1.00 83 81

1.00 1.00 1.50 1.00 84 82

1.00 1.00 1.50 1.00 85 83

1.00 1.00 1.50 1.00 86 84

1.00 1.00 1.50 1.00 87 85

1.00 1.00 1.50 1.00 88 86

1.00 1.00 1.50 1.00 89 87

1.00 1.00 1.50 1.00 90 88

1.00 1.00 1.50 1.00 91 89

1.00 1.00 1.50 1.00 92 90

1.00 1.00 1.50 1.00 93 91

1.00 1.00 1.50 1.00 94 92

1.00 1.00 1.50 1.00 95 93

1.00 1.00 1.50 1.00 96 94

1.00 1.00 1.50 1.00 97 95

98 96

B25




RatioCost/

Balance

Capital Gains WorksheetSample Plan - TOTAL Cash-Flow-Based Planning

Ages

C6

Equity & OtherAccountBalance

CostBasis

1 2 3 4 5 6 7 98 10

AnnualAdditions

Withdrawalfor Cash

Flow

InterestDividend,

Capital Gain

NetAdditions/

WithdrawalsCash

Withdrawal

Annual CapitalGain (loss)

Change toBasis

53 $165,000 51 $6,426 0.73 $5,898 $12,324 $12,324 $120,000

54 184,068 52 6,477 0.72 6,566 13,043 13,043 132,324

55 204,619 53 6,000 0.71 7,277 13,277 13,277 145,367

56 226,215 54 6,000 0.70 8,033 14,033 14,033 158,644

(9,054)57 249,431 55 6,000 0.69 8,672 5,618 5,618 172,677

(14,608)58 264,957 56 6,000 0.67 9,109 501 501 178,295

(13,699)59 275,863 57 6,000 0.65 9,508 1,809 1,809 178,796

(75,045)60 288,534 58 6,000 0.63 8,776 (60,269) 22,544 (37,725)180,605

61 238,259 59 21,987 0.60 8,760 30,747 30,747 142,880

62 279,029 60 22,020 0.62 10,188 32,208 32,208 173,627

63 322,892 61 24,480 0.64 11,770 36,250 36,250 205,835

64 372,607 62 23,203 0.65 13,486 36,689 36,689 242,085

(162,970)65 424,720 63 0.66 10,085 (152,885) 52,536 (100,350)278,774

(175,516)66 280,172 64 0.64 5,543 (169,973) 61,727 (108,245)178,425

(114,748)67 114,748 65 0.61 (114,748) 44,569 (70,179)70,179

68 66

69 67

70 68 157,525 2,569 160,094 160,094

71 162,298 69 0.99 4,868 4,868 4,868 160,094

(60,220)72 171,224 70 0.96 4,155 (56,065) 2,050 (54,015)164,962

(77,163)73 118,597 71 0.94 2,300 (74,863) 4,829 (70,035)110,947

(45,619)74 45,619 72 0.90 (45,619) 4,706 (40,913)40,913

75 73

76 74

77 75

78 76

79 77

80 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96

C5C5C5C5 C5




Capital Gain or Capital Loss CarryforwardSample Plan - TOTAL Cash-Flow-Based Planning

Ages

C6a

Annual CGDistributions

G/L on Sale ofAssets

Other Gain &Stock Option

1 2 3 4 5 6 98

Gain or Loss SourcesTaxableCapital

Gain (loss)Net

Gain/LossOther Loss &Stock Option

Net CapitalGain andDividend

AnnualDividend

AmountCarried

Forward7

$5,898 $5,898 $5,898 53 51 $5,898 6,566 6,566 6,566 54 52 6,566 7,277 7,277 7,277 55 53 7,277 8,033 8,033 8,033 56 54 8,033 8,672 8,672 8,672 57 55 8,672 9,109 9,109 9,109 58 56 9,109

10,504 996 10,504 9,508 59 57 10,504 31,320 31,320 8,776 60 22,544 58 31,320

8,760 8,760 8,760 61 59 8,760 10,188 10,188 10,188 62 60 10,188 11,770 11,770 11,770 63 61 11,770 13,486 13,486 13,486 64 62 13,486 57,576 3,361 60,937 5,041 65 52,536 63 57,576 64,497 1,848 66,345 2,770 66 61,727 64 64,497 44,568 44,568 67 44,569 65 44,568

68 66

69 6766,557 855 65,271 67,412 1,286 70 68 66,557

2,434 1,622 4,056 2,434 71 69 2,434 4,127 1,385 5,512 2,077 72 2,050 70 4,127 5,977 766 6,743 1,149 73 4,829 71 5,977 4,706 4,706 74 4,706 72 4,706

75 73

76 74

77 75

78 76

79 77

80 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96C5 C6 D7a D7a




ByCompany

Retirement Accounts - AllenSample Plan - TOTAL Cash-Flow-Based Planning

Age

C10

BalanceBy

Participant

1 2 3 4 5 6 7 98 10

PlansRequired

Min. Distr *Scheduled%

RateFor SpendShortage

AnnualInterest

Gross **Minimum

Distribution

Contributions Withdrawals Rate of Return

Roth

$3,440 53 $267,500 7.00 $19,058 $5,160

3,526 54 295,158 7.00 21,003 5,289

3,992 55 324,976 7.00 23,135 5,989

4,092 56 358,092 7.00 25,463 6,138

4,194 57 393,785 7.00 27,971 6,292

4,299 58 432,242 7.00 30,673 6,449

4,407 59 473,664 7.00 33,583 6,610

4,755 60 518,264 7.00 36,739 7,132

4,874 61 566,890 7.00 40,154 7,310

4,995 62 619,228 7.00 43,830 7,493

5,120 63 675,546 7.00 47,784 7,680

5,248 64 736,131 7.00 52,037 7,873

65 801,289 6.50 52,084

66 853,373 6.50 55,469

(102,428)67 908,842 6.50 55,396

(186,591)68 861,810 6.50 49,316

(156,610)69 724,535 6.50 41,470

(4,490)70 609,395 6.50 39,449 4,490

(24,315)71 644,354 6.50 41,010 24,315

(25,822)72 661,049 6.50 42,041 25,822

(27,420)73 677,268 6.50 43,038 27,420

(44,990)(29,113)74 692,886 6.50 42,376 29,113

(75,834)(28,872)75 661,159 6.50 39,215 28,872

(81,035)(27,076)76 595,668 6.50 34,835 27,076

(87,021)(24,641)77 522,392 6.50 29,945 24,641

(93,869)(21,708)78 440,675 6.50 24,493 21,708

(101,524)(17,928)79 349,591 6.50 18,433 17,928

(110,409)(13,293)80 248,572 6.50 11,714 13,293

(71,977)(7,630)81 136,584 6.50 6,019 7,630

(59,312)(3,684)82 62,996 6.50 3,684

83 6.50

84 6.50

85 6.50

86 6.50

87 6.50

88 6.50

89 6.50

90 6.50

91 6.50

92 6.50

93 6.50

94 6.50

95 6.50

96 6.50

97 6.50

98

** Gross Required Minimum Distributions - using either IRS uniform Life Table, or Joint Life Table. IRAs are not subject to delayed starting age.

B25

* Remaining Required Minimum Distribution after adjustment for scheduled withdrawals (columns 4)




ByCompany

Retirement Accounts - BettySample Plan - TOTAL Cash-Flow-Based Planning

Age

C10a

BalanceBy

Participant

1 2 3 4 5 6 7 98 10

PlansRequired

Min. Distr *Scheduled%

RateFor SpendShortage

AnnualInterest

Gross **Minimum

Distribution

Contributions Withdrawals Rate of Return

Roth

$4,320 51 $110,250 7.00 $8,052 $4,320

4,406 52 126,942 7.00 9,227 4,406

4,495 53 144,982 7.00 10,497 4,495

4,584 54 164,468 7.00 11,868 4,584

4,676 55 185,505 7.00 13,348 4,676

4,770 56 208,205 7.00 14,944 4,770

4,865 57 232,688 7.00 16,665 4,865

4,962 58 259,083 7.00 18,520 4,962

5,062 59 287,528 7.00 20,519 5,062

5,163 60 318,170 7.00 22,672 5,163

5,266 61 351,168 7.00 24,990 5,266

5,371 62 386,690 7.00 27,484 5,371

5,479 63 424,917 6.50 28,013 5,479

64 463,888 6.50 30,153

65 494,041 6.50 32,113

66 526,154 6.50 34,200

67 560,354 6.50 36,423

68 596,777 6.50 38,791

69 635,568 6.50 41,312

(25,543)70 676,880 6.50 43,080 25,543

(27,126)71 694,417 6.50 44,163 27,126

(28,804)72 711,454 6.50 45,210 28,804

(30,582)73 727,860 6.50 46,212 30,582

(32,467)74 743,490 6.50 47,161 32,467

(34,463)75 758,184 6.50 48,044 34,463

(36,404)76 771,765 6.50 48,857 36,404

(38,631)77 784,218 6.50 49,587 38,631

(40,778)78 795,174 6.50 50,222 40,778

(43,028)79 804,618 6.50 50,755 43,028

(20,422)(45,382)80 812,345 6.50 50,439 45,382

(88,631)(46,607)81 796,980 6.50 46,946 46,607

(98,503)(43,478)82 708,688 6.50 40,965 43,478

(109,840)(39,205)83 607,672 6.50 34,145 39,205

(123,132)(33,295)84 492,772 6.50 26,412 33,295

(138,454)(25,727)85 362,757 6.50 17,682 25,727

(156,166)(16,139)86 216,258 6.50 7,868 16,139

(47,741)(4,080)87 51,821 6.50 4,080

88 6.50

89 6.50

90 6.50

91 6.50

92 6.50

93 6.50

94 6.50

95 6.50

96

** Gross Required Minimum Distributions - using either IRS uniform Life Table, or Joint Life Table. IRAs are not subject to delayed starting age.

B25

* Remaining Required Minimum Distribution after adjustment for scheduled withdrawals (columns 4)




Roth Accounts - AllenSample Plan - TOTAL Cash-Flow-Based Planning

Age

C11


Annual Deposit

1 2 3 4 5 6 7

CashWithdrawal401(k)

Cash Flow(shortage)

AnnualInterest% Rate


Roth

RMD8

7.00 $4,584 53 $62,500 $5,400 7.00 5,287 54 72,484 5,508 7.00 6,047 55 83,279 5,618 7.00 6,868 56 94,944 5,731 7.00 7,754 57 107,543 5,845 7.00 8,711 58 121,142 5,962 7.00 9,743 59 135,815 6,081 7.00 10,855 60 151,639 6,203 7.00 12,054 61 168,697 6,327 7.00 13,345 62 187,078 6,454 7.00 14,736 63 206,877 6,583 7.00 16,234 64 228,196 6,714 6.50 16,324 65 251,144 6.50 17,385 66 267,468 6.50 18,515 67 284,853 6.50 19,719 68 303,368 6.50 21,001 69 323,087 6.50 22,366 70 344,088 6.50 23,820 71 366,454 6.50 25,368 72 390,274 6.50 27,017 73 415,642 6.50 28,773 74 442,659 6.50 30,643 75 471,432 6.50 32,635 76 502,075 6.50 34,756 77 534,710 6.50 37,015 78 569,466 6.50 39,421 79 606,481 6.50 41,984 80 645,902 6.50 44,713 81 687,886 6.50 47,619 82 732,599 6.50 50,714 83 780,218 6.50 54,011 84 830,932 6.50 57,521 85 884,943 6.50 61,260 86 942,464 6.50 65,242 87 1,003,724 6.50 69,483 88 1,068,966 6.50 70,537 (96,396)89 1,138,449 6.50 66,887 (151,208)90 1,112,590 6.50 60,516 (176,009)91 1,028,269 6.50 52,718 (184,097)92 912,776 6.50 43,874 (192,570)93 781,397 6.50 33,890 (201,448)94 632,701 6.50 22,665 (210,752)95 465,143 6.50 10,089 (220,501)96 277,056 6.50 (66,644)97 66,644

98B25




Roth Accounts - BettySample Plan - TOTAL Cash-Flow-Based Planning

Age

C11a


Annual Deposit

1 2 3 4 5 6 7

CashWithdrawal401(k)

Cash Flow(shortage)

AnnualInterest% Rate


Roth

RMD8

7.00 $5,305 51 $72,800 $5,400 7.00 6,059 52 83,505 5,508 7.00 6,873 53 95,072 5,618 7.00 7,751 54 107,563 5,731 7.00 8,700 55 121,045 5,845 7.00 9,722 56 135,590 5,962 7.00 10,825 57 151,274 6,081 7.00 12,013 58 168,180 6,203 7.00 13,293 59 186,396 6,327 7.00 14,671 60 206,016 6,454 7.00 16,155 61 227,141 6,583 7.00 17,752 62 249,879 6,714 6.50 18,078 63 274,345 6,849 6.50 19,453 64 299,272 6.50 20,717 65 318,725 6.50 22,064 66 339,442 6.50 23,498 67 361,506 6.50 25,025 68 385,004 6.50 26,652 69 410,029 6.50 28,384 70 436,681 6.50 30,229 71 465,065 6.50 32,194 72 495,294 6.50 34,287 73 527,488 6.50 36,515 74 561,775 6.50 38,889 75 598,290 6.50 41,417 76 637,179 6.50 44,109 77 678,596 6.50 46,976 78 722,705 6.50 50,029 79 769,681 6.50 53,281 80 819,710 6.50 56,744 81 872,991 6.50 60,433 82 929,735 6.50 64,361 83 990,168 6.50 68,544 84 1,054,529 6.50 73,000 85 1,123,073 6.50 77,745 86 1,196,073 6.50 82,798 87 1,273,818 6.50 88,180 88 1,356,616 6.50 93,912 89 1,444,796 6.50 100,016 90 1,538,708 6.50 106,517 91 1,638,724 6.50 113,441 92 1,745,241 6.50 120,814 93 1,858,682 6.50 128,667 94 1,979,496 6.50 131,137 (164,077)95 2,108,163

96 2,075,223 B25




Retirement Plan SummarySample Plan - TOTAL Cash-Flow-Based Planning

Ages

C13

BalanceBy

participantBy

company1 2 3 4 5 6 7

Contributions

For spendshortage

RequiredMin. Distr*Scheduled

Gross **Minimum

distributionAnnual

Withdrawals Return

8

$36,999 $7,760 $513,050 53 $20,280 51

41,576 7,932 578,089 54 20,711 52

46,552 8,487 648,309 55 21,719 53

51,950 8,677 725,067 56 22,185 54

57,773 8,871 807,878 57 22,658 55

64,050 9,069 897,179 58 23,143 56

70,816 9,272 993,441 59 23,637 57

78,127 9,717 1,097,166 60 24,500 58

86,020 9,935 1,209,511 61 25,026 59

94,518 10,158 1,330,492 62 25,564 60

103,665 10,386 1,460,732 63 26,113 61

113,508 10,620 1,600,896 64 26,672 62

114,499 5,479 1,751,695 65 12,328 63

122,460 1,884,001 66 64

126,740 2,006,461 67 (102,428)65

125,299 2,030,774 68 (186,591)66

122,392 1,969,482 69 (156,610)67

(4,490) 125,631 4,490 1,935,264 70 68

(24,315) 132,794 24,315 2,056,405 71 69

(51,365) 138,872 51,365 2,164,884 72 70

(54,546) 144,446 54,546 2,252,392 73 71

(57,917) 148,553 57,917 2,342,293 74 (44,990)72

(59,454) 150,357 59,454 2,387,939 75 (75,834)73

(59,543) 151,146 59,543 2,403,008 76 (81,035)74

(59,104) 151,634 59,104 2,413,576 77 (87,021)75

(58,112) 151,782 58,112 2,419,085 78 (93,869)76

(56,559) 151,550 56,559 2,418,886 79 (101,524)77

(54,071) 150,896 54,071 2,412,353 80 (110,409)78

(50,658) 151,515 50,658 2,398,769 81 (71,977)79

(49,066) 151,339 49,066 2,427,650 82 (79,734)80

(46,607) 154,404 46,607 2,450,189 83 (88,631)81

(43,478) 155,409 43,478 2,469,355 84 (98,503)82

(39,205) 156,027 39,205 2,482,783 85 (109,840)83

(33,295) 156,216 33,295 2,489,765 86 (123,132)84

(25,727) 155,924 25,727 2,489,554 87 (138,454)85

(16,139) 155,096 16,139 2,481,297 88 (156,166)86

(4,080) 153,335 4,080 2,464,088 89 (144,137)87

155,067 2,469,206 90 (151,208)88

154,428 2,473,065 91 (176,009)89

152,734 2,451,484 92 (184,097)90

150,391 2,420,121 93 (192,570)91

147,331 2,377,942 94 (201,448)92

143,479 2,323,825 95 (210,752)93

138,756 2,256,552 96 (220,501)94

131,137 2,174,807 97 (230,721)95

2,075,223 98 96

Summary of retirement and Roth accounts




OrdinaryIncome *

CapitalGains AMT

Reportable for Taxes

ISO NQSO

Cash FromSale ofSharesYear

Options Exercised

C14Stock Options SummarySample Plan - TOTAL Cash-Flow-Based Planning

Age

201853

201954

202055

202156

784 1,336 41 5,620 202257

202358

(784)997 2,332 202459

202560

202661

202762

4,048 4,048 8,048 202863

202964

203065

203166

203267

203368

203469

203570

203671

203772

203873

203974

204075

204176

204277

204378

204479

204580

204681

204782

204883

204984

205085

205186

205287

205388

205489

205590

205691

205792

205893

205994

206095

206196

206297

206398

* Includes ISO prematurely exercised or sold, or disqualified portion of ISO not eligible for CG treatment (vested in excess of $100,000 in a given year).




Alternative Minimum Tax Income$4,048

Net cash results at future sale

Future Sale of Stock (shares that were held)

$ per share

** Ordinary income from premature exercise or disqualified ISO from vested amounts exceeding $100,000 in a given year

$1,336 Ordinary income **

Sell part. Sell all.

100

$8,048

# shares sold

# Shares sold

Ordinary income *(STCG)

Long term capital gain

AMTI recapture

$997

($784)

Date of sale

$2,332

$63

1/1/2024

37

63

Grant information:

100 100

$4,000

$44.90 / 6.00%

1/1/2028

Number of shares

1/1/2022Vest date

Stock Options Worksheet

* Interim guidance provided by the I.R.S. in notice 2005-I indicates that certain limited types of nonqualified stock options may be subject to the new deferredcompensation rules un IRC409A. Consult your professional tax advisor for guidance.

Company Stock

As of 3/30/2018

Incentive Stock Options

Grant (strike) price

Exercise cost

Current price / appreciation rate

Grant date

$35.00

1/1/2012

$3,500

$40.00

1/1/2014

Company Stock

$44.90 / 6.00%

Exercise value

Bargain element

$5,620

Exercise information:

$2,120

$3,541 Amount realized from sale

Exercise method *

1/1/20281/1/2022

$4,048

$56

$4,048

$80

$4,000 $3,500

$41

$8,048

Net cash results at exercise

Less payment for grant

$ per share

Anticipated Exercise date

Date of sale

Number of shares

# shares sold

Vest date

Ordinary income (STCG)

Long term capital gain

# Shares sold

Future Sale of Stock:

$ per share


*Sell all = sell all shares immediately. * Sell part = sell enough shares to pay cost of exercise. *Hold all = pay exercise cost out of pocket.

Ordinary income at exercise

Net cash results at future sale

Exercise information:

Exercise method *

Amount realized from sale

Payment for grant

$784

Anticipated Exercise date

Net cash results at exercise

$ per share

Non Qualified Stock Options *

Exercise cost

Grant (strike) price

Grant date

Current price / appreciation rate

Grant information:

Bargain element

Exercise value

C15




Stock Options Text

A stock option is a right to buy or sell a particular stock, at a specified price, until that option expires at acertain date. Many companies with publicly traded shares award or grant stock purchase options to someemployees as an employment benefit, or as a part of the employee's compensation package. Stock optionsof this kind can allow the employee to significantly benefit from increases in the value of the underlyingstock.

While there exists significant potential gains from employee stock option programs, it is important toconsider various tax implications connected to the exercise of these options. Knowing in advance the taxrules and consequences connected to employee stock option plans may allow participants to activelymaximize the results of exercising an option.

Terms:

The date on which the employee received an option.

Date when the option is first exercisable (unless early exercise is allowed.)

Difference between the market price of the stock and the grant price.

Value of the shares when the employee makes the purchase.

The date when the employee elects to purchase the stock.

The price the employee will pay to purchase the stock (usually paid in cash.)

Total cost of the shares purchased (Grant Price times number of shares.)

Upon exercise, immediate sale of enough shares to pay the exercise cost.

Value of shares when sold (number of shares times current market price.)

Alternate Minimum Taxable Income.

Incentive Stock Options:

An option which complies with certain IRS regulations. When the shares are sold, all or a portion of thevalues in excess of the Exercise Cost may be treated as a Capital Gain, which may allow the gain to be taxedat a rate lower than the ordinary tax rates. The sale must take place more than 24 months after the grantdate and 12 months after the exercise date. Grants that vest or become exercisable in a single year in excessof $100,000 will be "disqualified" or treated as ordinary income.

When the shares are purchased, the employee will report the bargain element as AMT Income. When theshares are sold, the difference between the Total Sale and the Exercise Cost (depending on the timing of thesale) will be taxed as long term capital gain if held more than 12 months, or, if held less that 12 months or di

Non-Qualified Stock Options:*

These options are generally more flexible than the Incentive Stock Options*. One advantage is that the"Grant" price may be set by the company at a price lower than the current market price.

When the option is exercised, the employee will report ordinary income equal to the difference betweenthe exercise cost and the exercise value. The exercise value then becomes the cost basis.

When the shares are sold, the difference between the exercise value and the total sale will be reported ascapital gain or loss (long or short term.)

*Interim guidance provided by the I.R.S. in notice 2005-1 indicates that certain limited types of nonqualified stock options may be subject to the newdeferred compensation rules under I.R.C 409A. Consult your professional tax advisor for guidance.

Grant Date

Vest Date

Exercise Date

Grant (Strike) Price

Exercise Cost

Bargain Element

Exercise Value

Cashless Sale

Total Sale

AMTI

C16





Stock Option Report Notes

In some cases, a different ordinary income tax rate will be used before and after retirement age. In addition,long term capital gains may be taxed at a lower rate. The report will use the rates to apply to the differenttypes of income to be reported.

An election to use a cashless exercise is common when the participant does not have cash available to useto purchase the shares. In this case an arrangement will be made (usually with a stockbroker) toimmediately sell enough shares upon exercise to pay for the cost of the shares.

The Stock Option Summary report combines the various events in the year that the eventtakes place. By combining the various events into a yearly projection you may see more clearlythe effect on your cash flow and taxable events for each year.

Cashless Exercise

The stock options are presented in two formats:

Tax Rates

The Stock Option Worksheet reports deal with each option in a single column on each page.The Grant, Exercise, Sale, Tax and Net Cash Results may occur in several different years for a p

Tax treatment

When an ISO is exercised, no ordinary income tax is due. When the shares are ultimately sold, then theparticipant will owe taxes on the amount of funds realized in excess of the cost of the shares (the exercisecost.) If the shares have been held for more than 12 months, the gain will be treated as long term andqualify for the lower LTCG rate. If the shares were held for less than 12 months, taxes will be paid at the sho

When a NQSO is exercised*, the value of the shares acquired (exercise value) in excess of the cost (thebargain element) will be taxed at the ordinary tax rates. If the stock is held for later resale, then theappreciation of the shares from the time of purchase until the time of sale will be treated either as a longterm or short term capital gain, depending on whether the holding period was more or less than 12 months.

*Interim guidance provided by the I.R.S. in notice 2005-I indicates that certain limited types of nonqualified stock options may be subject to the newdeferred compensation rules under IRC 409A. Consult your professional tax advisor for guidance.

Timing of cash and tax eventsThe exercise and the sale in many cases will take place in different years. As a result you need to recognizethat the net cash results of a particular grant will appear different in the Worksheet than in the Summary re

For example, an ISO option exercised in 2021 with the stock then sold in 2023 will show taxes due in 2023,and cash realized in the same year. On the other hand, a NQSO exercised in 2021 will show ordinary tax paidon the bargain element in 2021, then if the shares are later sold in 2023, a capital gain tax will be paid atthat time, and cash from the sale will be realized in 2023.

Alternate Minimum Tax

When exercising an ISO, the amount of the bargain element will be reported as AMT Income, and mayrequire payment of alternate minimum tax. When the stock shares are sold an AMTI adjustment will beavailable, potentially offsetting the original AMTI. Due to the complicated nature of the AMT taxcalculations, the actual AMT tax due may be dramatically different than the amount illustrated.

The exercise value shown on the Stock Options report is determined by using the hypothetical appreciationrate that you provided for the company shares. The price is increased for the number of months betweencurrent date and the assumed exercise date, compounded monthly. This current price and the assumedappreciation rate is shown on the first line for each option. IMPORTANT: If the price used to compute futurevalues is in excess of a conservative growth rate, then the amounts shown in the report may not be realisticand could dramatically overstate the potential results of this analysis.

Exercise Value

C17

-

-





Asset Allocation

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. Thechart below illustrates a suggested percentage of assets for various risk tolerance levels.

C18


VeryConservativeAsset Class Conservative Moderate Aggressive Very Aggressive

YourCustom

Allocation

At your age 53 we have prepared this plan for a Conservative investor.*

Typical percentage (%) of assets allocated for various risk levels.

5 20 Reserves 5 20 15 20

10 25 Income 10 25 20 30

20 25 Growth and income 15 25 20 40

35 25 Growth 25 25 30 10

30 5 Aggressive Growth 45 5 15

Misc

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.

100 100 100 100 100

*After consideration of your personal goals and risk level, your suggested asset allocation has been customizedto reflect a suggested amount for the various asset classes, shown in the last column on the right.




Asset Allocation C19


Asset Class RecommendedCurrent Difference

Reserves 4.23% 20.00% 15.77%Income 14.98% 25.00% 10.02%Growth and income 0.00% 25.00% 25.00%Growth 59.14% 25.00% (34.14 %)Aggressive Growth 21.66% 5.00% (16.66 %)

Asset Allocation does not guarantee a profit or protect against loss in declining markets.




Allocation Worksheet

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.

C20

Suggested

Amount

Present

Percent PercentAmount (or out)

Amount toMove In

Asset Class


4.23%$32,200 Reserves $120,170 20.00%$152,370

14.98%114,100 Income 76,363 25.00%190,463

Growth and income 190,463 25.00%190,463

59.14%450,550 Growth (260,088)25.00%190,463

21.66%165,000 Aggressive Growth (126,908)5.00%38,093

Misc

It will be important to re-evaluate your asset mix on a regular basis and determine which assets should be onpercentages illustrated above are only suggestions for your consideration, and are not intended furtherincreased or decreased. As you make changes to your portfolio you should carefully review your current lifestyleneeds 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 based onyour 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 and personal property.

$761,850 Total* $761,850




Risk

In every aspect of life, we are faced with varying degrees of unknown outcomes. These uncertainties in life aresometimes referred to as areas of "Risk". In particular, financial matters are commonly described as either "Safe"

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 mayseem like a "safe" investment. If we experience inflation at the rate of 3% per year, the purchasingpower of the $500 income will be reduced after the first year to $485, and after 10 years to $372. Thepurchasing power of the $10,000 after 10 years will be reduced to $7,441. This loss is a permanent onewith no chance for recovery unless our economy goes into a protracted deflationary cycle.

Using the same $10,000 as above, and assuming you are in the 25% tax bracket, the $500 interestwould be reduced to $375 after taxes. After 10 years, the $500 interest after taxes and inflation wouldprovide purchasing power of only $277.

Loss of Purchasing Power:

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 withdrawalpenalties, then you may find that you no longer have control of your financial future. If your personalfinancial affairs take a turn for the worse due to a disability, loss of employment, death in the family orother unforeseen event, and you cannot readily reposition your assets to meet your new needs, thenyou are exposed to the risk of not being in control of your financial well being.

Tax Loss:

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 and withattention to your personal situation and goals.

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 thevalue is down, and the stock recovers to $10,000 then you have not suffered a loss. Time anddiversification are keys to mitigating this type of loss.

It is important to recognize that the term "Risk" can refer to more than simply the loss of your money. Some ofthe different types of risk are described below.

Illiquidity:

C21





Liquidity

The above graph illustrates the liquidity level of your working assets, measuring the ability to convert workingassets 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.

* Excluding residence and personal assets. Includes retirement accounts.

** Includes residence and personal assets in non-liquid category.

C22


C23

Other

Non-Liquid

Your working asset liquidity ratio (cash and liquid assets divided by all working* assets) is 66%

Your total liquidity level including your residence and personal property is 43%.

Total Assets** Working assets*

Liquid

Cash & Reserves $126,300

326,800

508,750

This level of working asset liquidity should be adequate except in severe cases.

00

508,750

$126,300

857,680




Liquidity Analysis

Liquidity is a measure of the ability to convert assets to cash. This can be important in two major instances ...

SECOND - In the event of loss of income due to death or disability, there may be a need to reposition someof the assets to change from a growth oriented to a more income oriented asset position. If too much ofyour assets are positioned in non-liquid accounts, you may find it impossible to make the changes requiredwithout paying substantial penalties or taxes, or you may find it difficult or impossible to make the changesat all.

These are generally assets that can quickly be taken in cash without significantdelay and without substantial loss of value. Included in this group are yourchecking, savings, US savings bond accounts, and money market funds.

CASH and RESERVES

LIQUID INVESTMENTS

FIRST - In times of economic disruption, cash is king. If a substantial portion of your net worth is held inassets that are not readily convertible to cash, you may find their value rapidly fluctuating. This couldseverely hamper your ability to move them to a "safe haven" if needed.

These accounts can be converted to cash in a reasonable length of time, but theymay suffer an unpredictable loss due to market fluctuations, liquidationpenalties or other complications. Some assets like annuities, CDs and retirementaccounts may be subject to liquidation penalties and/or taxes which may makeliquidation less attractive. Included in this category are Gov't T-Bills and bonds,corporate bonds, tax-advantaged municipal bonds, fixed or variable annuities,variable life insurance, certificates of deposit, mutual funds, stocks and othersecurities.

OTHER ASSETS

NON-LIQUID ASSETS

These accounts are considered non-liquid, meaning that even if you want to sellor dispose of them, there may not be a ready buyer for the asset. This includesreal estate, partnerships, mortgages and notes. Residence, personal propertyand cash values are included in "All Assets" category.

Items in this category are most likely to be non-liquid or may suffer substantialloss if they must be sold quickly. They include business interests, other ventures,and tangibles.

Total of all assets

Liquid assets (Cash, Reserves and Liquid investments)

Liquidity ratio (Liquid assets divided by Total Assets)

$635,050

43%

$635,050

$961,850 $1,492,730

$326,800 $857,680

$508,750 $508,750

66%

*Includes residence, all types of personal property, insurance cash values, savings, investments and retirement assets.

**Includes only savings, investment and retirement account assets.

C23


Assets*

$126,300 $126,300

Working

Assets**

All




Details - All Properties C24


Property OwnerDescription

REAL ESTATE ASSETS

ExpensesTotal IncomeCurrent ValueFourth Street Rental Joint $200,000 $21,600 ($4,940)

REAL ESTATE LIABILITIES

Description Interest RateBalance Monthly PaymentPrimaryFourth Street Rental $118,000 6.00%$800




653

C25


Annual Summary - All Properties

Ages

Market Value Total Total

Income Expenses

Mortgage Information

Balance #1

$118,000

Interest

6.00%

Principal

$9,600

Balance #2 Interest Principal

1 2 4 7 8 9

$200,000

2.00%

53 51 $200,000 $21,168 ($4,940) $118,000 $7,080 $2,520

54 52 204,000 21,591 (4,940) 115,480 6,928 2,672

55 53 208,080 22,023 (4,940) 112,808 6,768 2,832

56 54 212,242 22,464 (4,940) 109,976 6,598 3,002

57 55 216,486 22,913 (4,940) 106,974 6,418 3,182

58 56 220,816 23,371 (4,940) 103,792 6,227 3,373

59 57 225,232 23,839 (4,940) 100,419 6,025 3,575

60 58 229,737 24,315 (27,914) 96,844 5,810 3,790

61 59 234,332 24,802 (4,940) 93,054 5,583 4,017

62 60 239,019 25,298 (4,940) 89,037 5,342 4,258

63 61 243,799 25,804 (4,940) 84,779 5,086 4,514

64 62 248,675 26,320 (4,940) 80,265 4,815 4,785

65 63 253,648 26,846 (4,940) 75,480 4,528 5,072

66 64 258,721 27,383 (4,940) 70,408 4,224 5,376

67 65 263,896 27,931 (4,940) 65,032 3,901 5,699

68 66 269,174 28,489 (4,940) 59,333 3,559 6,041

69 67 274,557 29,059 (4,940) 53,292 3,197 6,403

70 68 280,048 29,640 (4,940) 46,889 2,813 46,889

71 69

72 70

73 71

74 72

75 73

76 74

77 75

78 76

79 77

80 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96

99 97

100 98

101 99

102 100

103 101

Note: This report is a summary of all the real estate properties (G1a through G12a)




flow

Net cash

income/

Tax saved /

MarketValue

(due)

Annual ROR on

3 65


Deprec. Taxable

Income & Tax Analysis - All Properties

Ages

Equity$5,867 properties$113,000

9

C26

Cost Basis

1

Capital Sale of

2 8

Improve-ments

4 7

(loss) (before tax)

Capital

gain on sale

§

10 11

Unrecaptured1250 Gain

53 51 $5,867 $3,281 $6,628 ($722) 2.95 7.20 $107,133

54 52 5,867 3,857 7,051 (848) 3.04 7.01 101,267

55 53 5,867 4,449 7,483 (979) 3.13 6.83 95,400

56 54 5,867 5,059 7,924 (1,113) 3.21 6.66 89,533

57 55 5,867 5,688 8,373 (1,251) 3.29 6.50 83,667

58 56 5,867 6,338 8,831 (1,394) 3.37 6.36 77,800

59 57 5,867 7,007 9,299 (1,542) 3.44 6.21 71,933

60 58 6,292 7,273 (13,198) (1,600) -6.44 -11.14 22,974 88,615

61 59 6,718 7,561 10,262 (1,890) 3.57 5.93 81,897

62 60 6,718 8,298 10,758 (2,075) 3.63 5.79 75,180

63 61 6,718 9,060 11,264 (2,265) 3.69 5.66 68,462

64 62 6,718 9,847 11,780 (2,462) 3.75 5.53 61,745

65 63 6,718 10,661 12,306 (1,599) 4.22 6.01 55,027

66 64 6,718 11,502 12,843 4.96 6.82 48,310

67 65 6,718 12,372 13,391 (1,856) 4.37 5.80 41,592

68 66 851 19,139 13,949 (4,785) 3.40 4.37 40,741

69 67 851 20,071 14,519 (5,018) 3.46 4.29 39,890

70 68 851 21,036 238,244 (1,110) 84.68 101.70 39,039 263,245 65,272 158,934

71 69

72 70

73 71

74 72

75 73

76 74

77 75

78 76

79 77

80 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96

Note: This report is a summary of all the real estate properties (G1b through G12b)




Income & Expense Summary - All Properties

Ages

Vacancy


Rents

9

Management

$21,600

5

TotalIncome

2.00%

Net rents

63

Other

10 11

CapitalOtherImprove-

ments

Prop. Tax

2

Rep./Maint. Insur.

1 74 8

2.00% 0.00%

Income Summary Expense Summary

TotalExpense

12

($500)

0.00%0.00%

($1,440) ($500)

0.00%

($2,500)

0.00% 0.00%

C27

53 51 $21,600 ($432) $21,168 $21,168 ($1,440) ($500) ($500) ($2,500) ($4,940)

54 52 22,032 (441) 21,591 21,591 (1,440) (500) (500) (2,500) (4,940)

55 53 22,473 (449) 22,023 22,023 (1,440) (500) (500) (2,500) (4,940)

56 54 22,922 (458) 22,464 22,464 (1,440) (500) (500) (2,500) (4,940)

57 55 23,381 (468) 22,913 22,913 (1,440) (500) (500) (2,500) (4,940)

58 56 23,848 (477) 23,371 23,371 (1,440) (500) (500) (2,500) (4,940)

59 57 24,325 (487) 23,839 23,839 (1,440) (500) (500) (2,500) (4,940)

60 58 24,812 (496) 24,315 24,315 (1,440) (500) (500) (2,500) (22,974) (27,914)

61 59 25,308 (506) 24,802 24,802 (1,440) (500) (500) (2,500) (4,940)

62 60 25,814 (516) 25,298 25,298 (1,440) (500) (500) (2,500) (4,940)

63 61 26,330 (527) 25,804 25,804 (1,440) (500) (500) (2,500) (4,940)

64 62 26,857 (537) 26,320 26,320 (1,440) (500) (500) (2,500) (4,940)

65 63 27,394 (548) 26,846 26,846 (1,440) (500) (500) (2,500) (4,940)

66 64 27,942 (559) 27,383 27,383 (1,440) (500) (500) (2,500) (4,940)

67 65 28,501 (570) 27,931 27,931 (1,440) (500) (500) (2,500) (4,940)

68 66 29,071 (581) 28,489 28,489 (1,440) (500) (500) (2,500) (4,940)

69 67 29,652 (593) 29,059 29,059 (1,440) (500) (500) (2,500) (4,940)

70 68 30,245 (605) 29,640 29,640 (1,440) (500) (500) (2,500) (4,940)

71 69

72 70

73 71

74 72

75 73

76 74

77 75

78 76

79 77

80 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96

Note: This report is a summary of all the real estate properties (G1c through G12c)




Income Tax

Analysis of your taxable income sources, deductions and Federal and State taxes due.

The analysis includes special dividend and capital gain rates, AMT and other items affecting your income tax and financialresults.

These reports are estimates only and should not be relied on for preparation of your income tax return.




Income Tax Calculation

The tax calculations prepared in this report use the actual federal tax rate schedules as published by the IRS. Inother words, the taxable income reported herein is taxed first at the 10% level, then 12% and so forth, based on theactual breakpoints provided by the IRS. A financial plan that is prepared using only a single estimated tax bracket toillustrate the amount of taxes due can substantially understate or overstate the actual real tax impact on the plan.


On December 22, 2017, the TCJA act was signed into law enacting substantial changes to the tax law. A majority ofindividual tax law changes are not permanent and are set to expire after 2025*.

Tax Cuts and Jobs Act of 2017

Unless Congressional action is taken, a majority of the TCJA changes will expire after 2025, reverting to the rules inplace under the previous tax act. The changes listed here may prove temporary unless Congress decides thechanges will be made permanent, or other changes are made.

* Sunset Provision

Tax Rate Schedules:

Marginal Tax Bracket percentages:

Pre-tax Act

The Alternative Minimum Tax exclusion levels were increased to $109,400/$70,300 for 2018 with annual indexingattached. Qualified dividends will continue to be taxed at long-term capital gains rates. Dividends and capital gainswill now be taxed at a rate of 0%, 15% or 20% depending on the taxpayer's marginal bracket, with an additional 3.8% Hospital Insurance tax on capital gains for anyone with an AGI over $200,000/$250,000.

Additional TCJA Changes

Comparison of estimated income tax rate versus actual tax bracket calculations (married filing jointly)

$50,000

Using 15%estimated

rate

$50,000

$6,000 $2,739

($24,000)

$26,000

-- Income Level --

Using 2018tax rates.

Tax due...Tax due...

- Standard deduction

- a $3,261 or 54% difference.

D1

- Taxable

2001 2002 2003 2012

0.0%15.0%28.0%31.0%36.0%39.6%

27.5%15.0%10.0%

39.1%35.5%30.5%

10.0%15.0%27.5%30.0%35.0%38.6%

25.0%15.0%10.0%

35.0%33.0%28.0%

10.0%15.0%25.0%28.0%33.0%35.0%

Indexing of tax brackets:

A further complication of the tax planning aspect is the fact that many of the numbers used in computing taxes are"indexed" each year to compensate for the effects of inflation. These include personal exemptions, standarddeductions, marginal tax brackets and other items.

22.0%12.0%

2018

24.0%

37.0%35.0%32.0%

The TCJA introduced numerous changes. The Child Tax Credit doubled to $2,000. Marriage penalty relief iseliminated for all but the top tax bracket. Personal exemptions are suspended. The standard deduction nearlydoubled to $24,000/$12,000 (married filing jointly/single filer). A new $10,000/$5,000 limit is placed on thededuction for state and local taxes. Itemized deductions are no longer subject to phase-out for high-incometaxpayers. New limits are placed on the deductibility of home mortgage and home equity loan interest. Rules for529 college savings plan has been extended to allow use for K-12 education expenses. Self-employed taxpayersmay be able to claim a new deduction of up to 20% of qualified business income.

TCJAATRAJGTRRAJCWAAEGTRRA




D1aIncome Tax Planning

Taxation is an important consideration within any financial plan, both for today and in future years. Incometaxation has effects on spending, saving, investment growth, and beneficiaries’ inheritances. Unfortunately,uncertainty exists regarding future tax levels and rules. Tax planning is a valuable and ongoing process. Congresshas made several tax changes in recent years, and tax rules are always subject to change.

– The top income tax rate reduced from 39.6% to 37%– The standard deduction amount nearly double from the prior level– Personal exemptions are suspended– State and local tax deductions are limited to $10,000– Itemized deduction phase-out for high-income taxpayers is suspended– New limits are placed on the deductibility of home mortgage and home equity loan interest– Child tax credit increased to $2,000– The AMT exemption amount doubled, reducing the number of taxpayers subject to AMT– Marriage tax penalty eliminated for all but the top tax bracket– 529 college savings plan use has been extended to allow for qualified K-12 education expenses– Self-employed taxpayers may be able to claim a new deduction of up to 20% of qualified businessincome– Estate tax exemption amount doubled, significantly reducing the number of estates subject to estate tax

TCJA In December 2017, Congress passed the Tax Cuts and Jobs Act (TCJA) enacting substantial changes tothe US tax code. A majority of changes to individual tax laws stemming from the TCJA are not permanent. Withoutspecific action by Congress, the tax laws will sunset after 2025, reverting to the rules in place before the TCJA. TCJA

2018 Tax Rates

Single Rates Joint Rates

$9,525

$38,700

$82,500

$157,500

$200,000

10.00%

12.00%

22.00%

24.00%

32.00%

35.00%

$19,050

$77,400

$165,000

$315,000

$400,000

It is essential to consider the present and future tax implications of financial decisions and the effect they may haveon tax strategies that are being implemented or planned while keeping in mind future tax law changes areunknown.


22.00%

12.00%

10.00%

35.00%

32.00%

24.00%

The American Taxpayer Relief Act of 2012 (ATRA) attempted to create greater predictability and stability in the taxcode by making what were deemed permanent changes. The passage of the TCJA highlights the critical point thatnothing is certain regarding future taxation.

The recent rule changes may introduce the new tax planning strategies and techniques. Making the most ofpotential tax planning opportunities requires understanding the relative importance of taxation on a particularplan, and recognizing specific tax minimization techniques that may apply to an individual situation. Taxpayers nearthe top of the 37% bracket might use strategies unnecessary in lower brackets. Tax strategies can vary based onincome, deductions, age, marital status, goals, qualified plans, charitable, and estate considerations.

It is worthwhile to consider the long-term impact of taxes and how they may interact with future income streams.For instance, it may be advantageous to convert IRA or 401(k) assets into Roth accounts in years leading up to age70. Roth IRA conversions could potentially transfer some taxable income to earlier, lower tax bracket years, andresult in tax-free income later on and lower RMDs, reducing income exposed to higher tax brackets. Tax planningdepends heavily on individual situations, and not all solutions are appropriate for everyone. It may be prudent toconsult with a tax specialist when working to implement complex strategies.

37.00%$500,000 37.00% $600,000




INCOME SOURCESEarned income

Interest and dividendsRetirement distributions

Pension incomeTaxable Social Security

Capital gains

Income Tax Chart

Federal income taxes, including personal exemptions, are computed using the IRS tax rate tables with allamounts indexed at 2.00 % per year.


Total Income & Other Taxes

Taxable Income

Qualified plan contributionsItemized or Standard deductions

Less

Federal Income TaxAlternate Minimum Tax

Early distribution & other taxesState Income Tax

FICA, HI (Social Security) taxesLess: Federal credits

Less: State credits

D2




The following calculations give an idea of the amount of taxes you might pay based on the income and assetinformation provided. These amounts are approximations only and the actual tax amounts may be higher orlower than illustrated.

Income Tax - Current Year D3


Gross TaxableINCOME:

B9$158,000 $158,000 Salaries and wages

C4..C81,407 1,407 Interest

B98,000 8,000 Schedule C (self employment)

C6 a5,898 5,898 Schedule D (net gain/loss)

D93,281 3,281 Schedule E (passive gain/loss)

$176,587 GROSS INCOME

Adjustments:

C10-C10e($5,160)Retirement plan deposits - Allen

(4,320)Retirement plan deposits - Betty

D15(565)1,130 Self Employment FICA

$166,542 ADJUSTED GROSS INCOME

Gross AllowedItemized Deductions: D10

$9,955 $9,955 Mortgage interest

4,000 4,000 Charitable contributions

4,000 Medical expenses

10,000 21,543 State, Property & Other Tax

$142,542

($24,000)$24,000

TAXABLE INCOME

Itemized deductions $23,955

or Standard deductions

D11

TAX SUMMARY:

Federal Income Tax $22,825

FICA (Social Security) & HI Tax 13,217

Other Taxes or (credits) (2,000)

State Income Tax 14,143

$48,185 TOTAL TAXES

Your combined federal & state marginal tax bracket is 31.00 % .

Your total taxes equal 28.93 % of your Adjusted Gross Income, and 33.80% of your Taxable income.

*Dividend and Capital Gains taxed marginally at 15.00%.




Tax -vs- IncomeSample Plan - TOTAL Cash-Flow-Based Planning

D4

Spendable income is defined here as your total sources of funds less the amount owed for taxes each year.Included in income sources are . . .

Earned income (salaries & wages)Pension and Social Security incomeInterest and dividends taken in cashOther (misc. income, net proceeds from sale of residence, life insurance proceeds, etc.)

Generally, income taxes will be highest during your earning years. In your later years as you start consuming yoursavings and investment accounts, the amount of income tax will gradually decrease as a percent of total income.There may be periods when the income tax is greater than the income sources. This usually occurs when you aredrawing from capital accounts to meet your need for income.




Tax -vs- Expense GraphSample Plan - TOTAL Cash-Flow-Based Planning

D5

In a given year there are many factors that affect the amount of income and other taxes payable. This graphattempts to show the amount of taxes paid each year compared to other expenses. The expenses coveredinclude. . .

Personal living expensesLife insurance premiumsDebt paymentsAsset and retirement account depositsOther misc. expenses

Causes for high taxes relative to other expenses could include increased distribution from pension plans or otherqualified plans, liquidation of assets generating a capital gain, liquidation of tax-deferred investment or higheramounts of earned income compared to the scheduled expenses.




Tax SummarySample Plan - TOTAL Cash-Flow-Based Planning

Ages

D6

FederalIncome Tax

AdditionalAMT Tax

FederalCredits

1 2 3 4 5 6 7 98

Federal Income Tax Amounts

StateTax

Total Fed.Income Tax

Early distr. &other tax

TotalTaxes

FICAand HI

Tax

AdditionalState Tax

or (credits)

$20,826 $13,217 ($2,000) $48,186 $22,826 53 51 $14,503 ($360)

21,576 13,514 (2,000) 49,668 23,576 54 52 14,938 (360)

26,288 14,541 56,739 26,288 55 53 16,180 (270)

27,018 14,870 58,233 27,018 56 54 16,615 (270)

27,914 15,309 60,159 27,914 57 55 17,116 (180)

28,437 15,551 61,269 28,437 58 56 17,461 (180)

29,419 15,903 63,166 29,419 59 57 18,024 (180)

34,469 16,718 71,816 34,469 60 58 20,809 (180)

31,447 17,098 67,582 31,447 61 59 19,217 (180)

32,673 17,487 69,819 32,673 62 60 19,838 (180)

34,873 18,194 73,738 34,873 63 61 20,851 (180)

35,278 18,291 74,548 35,278 64 62 21,159 (180)

9,421 8,419 32,343 9,421 65 63 14,683 (180)

6,423 66 64 6,603 (180)

13,145 27,038 13,145 67 65 14,073 (180)

29,520 47,590 29,520 68 66 18,250 (180)

29,581 45,041 29,581 69 67 15,640 (180)

40,843 2,428 65,678 40,843 70 68 22,587 (180)

2,277 71 69 2,457 (180)

3,708 8,462 3,708 72 70 4,934 (180)

4,613 9,741 4,613 73 71 5,308 (180)

13,085 22,352 13,085 74 72 9,447 (180)

18,950 30,713 18,950 75 73 11,943 (180)

19,995 32,239 19,995 76 74 12,424 (180)

21,092 33,841 21,092 77 75 12,929 (180)

22,278 35,559 22,278 78 76 13,461 (180)

23,488 37,323 23,488 79 77 14,015 (180)

24,757 39,174 24,757 80 78 14,597 (180)

15,602 26,258 15,602 81 79 10,836 (180)

16,207 27,424 16,207 82 80 11,397 (180)

16,818 28,620 16,818 83 81 11,982 (180)

17,452 29,867 17,452 84 82 12,595 (180)

18,110 31,167 18,110 85 83 13,237 (180)

18,776 32,503 18,776 86 84 13,907 (180)

19,487 33,918 19,487 87 85 14,611 (180)

20,225 35,394 20,225 88 86 15,349 (180)

4,332 89 87 4,512 (180)

9 90 88 189 (180)

111 91 89 201 (90)

117 92 90 207 (90)

122 93 91 212 (90)

128 94 92 218 (90)

134 95 93 223 (90)

139 96 94 229 (90)

145 97 95 235 (90)

98 96D8 D12 D13, D14 D17 D17 D15

Note - it is assumed the Tax Cuts and Jobs Act (TCJA) sunsets after 2025. See Income Tax Calculations report for details.




Taxable Income AnalysisSample Plan - TOTAL Cash-Flow-Based Planning

Ages

D7

EarnedIncome

(includingnon-cash)

InterestDividendCap Gain

QualifiedPlan

Distribution

1 2 3 4 5 6 9 118

TaxableOrdinary

Income

Net CapitalGain, Div,§

1250

Exemp-tions

Item/StdDeductions

10

TaxableSocial

Security

Less *

7 12

PensionPlans

OtherTaxable

Income**Adjust-ments

AGI(includingcap gain)

$136,644 $24,000 $5,898 $166,000 53 $7,305 51 ($6,764) $166,542

140,337 24,480 6,566 169,750 54 8,048 52 (6,415) 171,383

152,933 24,970 7,277 183,041 55 8,761 53 (6,623) 185,180

156,507 25,469 8,033 187,201 56 9,071 54 (6,264) 190,009

160,923 25,978 1,336 8,672 191,457 57 8,672 55 (5,891) 195,573

163,807 26,498 9,109 195,810 58 9,109 56 (5,505) 199,414

168,131 27,028 10,504 200,264 59 10,504 57 (5,105) 205,663

177,725 27,568 31,320 210,763 60 31,320 58 (5,470) 236,613

161,271 39,192 8,760 215,573 61 8,823 59 (5,473) 9,700 218,923

166,136 39,604 10,188 220,494 62 10,367 60 (5,033) 9,900 225,827

174,813 40,391 4,048 11,770 225,528 63 12,073 61 (4,575) 10,100 237,073

176,253 40,457 13,486 230,679 64 13,916 62 (4,099) 10,300 240,496

54,046 43,061 60,937 101,459 65 62,620 63 4,465 10,500 168,544

60,672 7,400 66 67,270 64 11,502 10,700 78,772

76,787 58,995 2,400 102,428 44,568 67 44,568 65 29,582 12,372 11,000 191,350

164,878 62,274 2,448 186,591 68 66 30,174 19,139 11,200 238,352

166,060 58,708 2,497 156,610 69 67 56,990 20,071 11,400 236,168

11,098 64,874 158,934 2,547 4,490 226,346 70 68,781 68 58,130 21,036 11,600 313,918

60,281 2,598 24,315 71 5,787 69 26,041 11,900 58,741

33,972 58,662 2,650 51,365 5,512 72 6,205 70 50,026 12,100 110,246

40,190 59,308 2,703 54,546 6,743 73 7,128 71 54,164 12,300 118,541

96,862 59,123 2,757 102,907 4,706 74 4,706 72 62,921 12,600 173,291

129,556 59,923 2,812 135,288 75 73 64,180 12,800 202,280

134,810 61,000 2,868 140,578 76 74 65,463 13,100 208,909

140,295 62,129 2,926 146,125 77 75 66,773 13,400 215,824

146,160 63,313 2,984 151,981 78 76 68,108 13,600 223,073

152,140 64,558 3,044 158,083 79 77 69,470 13,900 230,597

158,380 65,865 3,105 164,480 80 78 70,860 14,200 238,445

115,072 68,507 3,167 122,635 81 79 72,277 14,500 198,079

119,329 71,723 3,230 128,800 82 80 73,722 14,700 205,752

123,624 75,106 3,295 135,238 83 81 75,197 15,000 213,730

128,081 78,662 3,361 141,981 84 82 76,701 15,300 222,043

132,705 82,403 3,428 149,045 85 83 78,235 15,600 230,708

137,385 86,337 3,496 156,427 86 84 79,800 16,000 239,723

142,366 90,477 3,566 164,181 87 85 81,396 16,300 249,143

147,534 94,833 3,638 172,305 88 86 83,023 16,600 258,966

103,361 3,710 51,821 89 87 58,143 16,900 113,674

113,611 3,785 90 88 15,006 17,300 18,791

115,363 3,860 91 89 3,424 8,800 7,284

120,981 3,937 92 90 3,743 9,000 7,680

126,890 4,016 93 91 4,068 9,150 8,084

133,107 4,097 94 92 4,400 9,350 8,497

139,716 4,178 95 93 4,903 9,550 9,081

146,698 4,262 96 94 5,489 9,700 9,751

154,045 4,347 97 95 6,087 9,900 10,434

98 96

D18

* It is assumed the Tax Cuts and Jobs Act (TCJA) sunsets after 2025. ** Includes stock options, unrecaptured §1250 gain and other income items.

D7a C10a..C10e B18 B10 D16 D9 D10 D11 C6a




Taxable Interest

Interest, Dividend, Capital Gain SourcesSample Plan - TOTAL Cash-Flow-Based Planning

Ages

D7a

TaxableAccount

Tax DeferredAccount

EquityAccount

1 2 3 4 5 6 9 118

Add'lGain/Loss

§ 1250Unrecaptured

GainSale ofAssets

R/E Sale,Stock Opt.

Capital Gain / Loss

7

DividendsTotal

InterestEquity

CG Distr.Total

CG/Loss

10

$5,898 $5,898 $1,407$1,40753 51

6,566 6,566 1,4821,48254 52

7,277 7,277 1,4841,48455 53

8,033 8,033 1,0381,03856 54

8,672 8,672 57 55

9,109 9,109 58 56

9,508 10,505 997 59 57

8,776 31,320 22,544 60 58

8,760 8,760 636361 59

10,188 10,188 17917962 60

11,770 11,770 30330363 61

13,486 13,486 43043064 62

5,041 57,577 52,536 1,682 3,3621,68265 63

2,770 64,497 61,727 925 1,84892566 64

44,569 44,569 67 65

68 66

69 67

1,286 158,934 66,558 65,272 427 8561,36894170 68

2,434 2,434 811 1,6231,73091971 69

2,077 4,127 2,050 693 1,38569372 70

1,149 5,978 4,829 384 76738473 71

4,706 4,706 74 72

75 73

76 74

77 75

78 76

79 77

80 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96

C6C4 C8 C5 C5 C5 B21, C12, C24 C24




Federal Income Tax WorksheetSample Plan - TOTAL Cash-Flow-Based Planning

Ages

D8

FilingStatus

TaxableOrdinary

Income

Cap. Gain,Div. &

§ 1250

1 2 3 4 5 6 10 128

TotalTax

MaxCG

Rate

Cap. GainDiv &

§ 1250 Tax

OrdinaryIncome

Tax

117 13

Marginal rate brackets indexed at 2.0 %

15%

9

25% 28% 33% 35% 39.6%

37%35%32%24%22%12%

$600,000 $21,941 $885 $19,050 $77,400 $5,898 $22,826 Joint53 $136,644 51 $165,000 $315,000 15%$400,000

612,000 22,591 985 19,431 78,948 6,566 23,576 Joint54 140,337 52 168,300 321,300 15%408,000

624,240 25,196 1,092 19,820 80,527 7,277 26,288 Joint55 152,933 53 171,666 327,726 15%416,160

636,725 25,813 1,205 20,216 82,137 8,033 27,018 Joint56 156,507 54 175,099 334,281 15%424,483

649,459 26,613 1,301 20,620 83,780 8,672 27,914 Joint57 160,923 55 178,601 340,966 15%432,973

662,448 27,071 1,366 21,033 85,456 9,109 28,437 Joint58 163,807 56 182,173 347,785 15%441,632

675,697 27,843 1,576 21,453 87,165 10,504 29,419 Joint59 168,131 57 185,817 354,741 15%450,465

689,211 29,771 4,698 21,882 88,908 31,320 34,469 Joint60 177,725 58 189,533 361,836 15%459,474

562,455 30,133 1,314 22,320 90,686 8,760 31,447 Joint61 161,271 59 182,955 278,796 15%497,897

573,704 31,146 1,528 22,767 92,500 10,188 32,673 Joint62 166,136 60 186,614 284,372 15%507,855

585,178 33,107 1,766 23,222 94,350 11,770 34,873 Joint63 174,813 61 190,346 290,060 15%518,012

596,882 33,255 2,023 23,686 96,237 13,486 35,278 Joint64 176,253 62 194,153 295,861 15%528,372

608,819 6,899 2,523 24,160 98,162 60,937 9,421 Joint65 54,046 63 198,036 301,778 15%538,939

620,996 24,643 100,125 7,400 Joint66 64 201,997 307,814 549,718

633,416 10,261 2,884 25,136 102,128 44,568 13,145 Joint67 76,787 65 206,037 313,970 15%560,713

646,084 29,521 25,639 104,170 29,520 Joint68 164,878 66 210,157 320,249 571,927

659,006 29,582 26,152 106,254 29,581 Joint69 166,060 67 214,360 326,654 583,365

672,186 1,110 39,734 26,675 108,379 226,346 40,843 Joint70 11,098 68 218,648 333,187 595,033

685,630 27,208 110,546 Joint71 69 223,021 339,851 606,933

699,342 3,708 27,752 112,757 5,512 3,708 Joint72 33,972 70 227,481 346,648 619,072

713,329 4,613 28,307 115,012 6,743 4,613 Joint73 40,190 71 232,031 353,581 631,453

727,596 13,086 28,873 117,313 4,706 13,085 Joint74 96,862 72 236,671 360,653 644,082

742,148 18,951 29,451 119,659 18,950 Joint75 129,556 73 241,405 367,866 656,964

756,990 19,995 30,040 122,052 19,995 Joint76 134,810 74 246,233 375,223 670,103

772,130 21,092 30,641 124,493 21,092 Joint77 140,295 75 251,157 382,728 683,505

787,573 22,279 31,254 126,983 22,278 Joint78 146,160 76 256,181 390,382 697,176

803,324 23,489 31,879 129,523 23,488 Joint79 152,140 77 261,304 398,190 711,119

819,391 24,758 32,516 132,113 24,757 Joint80 158,380 78 266,530 406,154 725,341

835,779 15,602 33,167 134,755 15,602 Joint81 115,072 79 271,861 414,277 739,848

852,494 16,208 33,830 137,450 16,207 Joint82 119,329 80 277,298 422,562 754,645

869,544 16,818 34,506 140,199 16,818 Joint83 123,624 81 282,844 431,013 769,738

886,935 17,452 35,197 143,003 17,452 Joint84 128,081 82 288,501 439,634 785,133

904,674 18,111 35,900 145,863 18,110 Joint85 132,705 83 294,271 448,426 800,836

922,767 18,777 36,619 148,781 18,776 Joint86 137,385 84 300,156 457,395 816,852

941,223 19,487 37,351 151,756 19,487 Joint87 142,366 85 306,160 466,543 833,189

960,047 20,225 38,098 154,791 20,225 Joint88 147,534 86 312,283 475,874 849,853

979,248 38,860 157,887 Joint89 87 318,528 485,391 866,850

998,833 39,637 161,045 Joint90 88 324,899 495,099 884,187

905,585 20,215 82,133 Single91 89 198,859 414,803 901,871

923,697 20,619 83,776 Single92 90 202,837 423,099 919,908

942,171 21,032 85,451 Single93 91 206,893 431,561 938,306

961,014 21,452 87,160 Single94 92 211,031 440,193 957,073

980,234 21,881 88,903 Single95 93 215,252 448,996 976,214

999,839 22,319 90,681 Single96 94 219,557 457,976 995,738

1,019,836 22,765 92,495 Single97 95 223,948 467,136 1,015,653

98 96


D7 D7




One HalfSelf Empl

Taxes

Adjustments to Income, Passive IncomeSample Plan - TOTAL Cash-Flow-Based Planning

Ages

D9

QualifiedPlan

Contrib.

1 2 3 4 5 7 98 10

Self EmplMedical

PremiumsOther

AdjustmentsAlimony

PassiveGain or

(Loss)Total

AdjustmentsAllowable

Amount

LossCarry

Forward

$10,045 53 $9,480 $3,281 $3,281 $565 51

10,272 54 9,695 3,857 3,857 576 52

11,071 55 10,483 4,449 4,449 588 53

11,322 56 10,723 5,059 5,059 600 54

11,580 57 10,968 5,688 5,688 612 55

11,843 58 11,219 6,338 6,338 624 56

12,112 59 11,475 7,007 7,007 636 57

12,744 60 12,094 7,273 7,273 649 58

13,034 61 12,372 7,561 7,561 662 59

13,331 62 12,656 8,298 8,298 675 60

13,636 63 12,947 9,060 9,060 689 61

13,947 64 13,244 9,847 9,847 703 62

6,196 65 5,479 10,661 10,661 717 63

66 11,502 11,502 64

67 12,372 12,372 65

68 19,139 19,139 66

69 20,071 20,071 67

70 21,036 21,036 68

71 69

72 70

73 71

74 72

75 73

76 74

77 75

78 76

79 77

80 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96D14C10...C10e D15 C24




CharitableContribution

Itemized Deduction & ExemptionSample Plan - TOTAL Cash-Flow-Based Planning

Ages

D10

MortgageInterest

Deduction

MedicalExpense &

Premium

1 2 3 4 5 6 7 98

State,Property &

Other Tax

OtherDeductible

Interest

TotalItemized

Deduction

Misc.Itemized

DeductionNo.

ExmpPersonal

Exemption

53 $9,955 51 $10,000 $4,000 $23,955

54 9,542 52 10,000 4,080 23,622

55 9,112 53 10,000 4,162 23,273

56 8,662 54 10,000 4,245 22,907

57 8,192 55 10,000 4,330 22,522

58 7,701 56 10,000 4,416 22,118

59 7,189 57 10,000 4,505 21,693

60 6,653 58 10,000 4,595 21,248

61 6,094 59 28,411 4,687 39,192 2 4,850

62 5,510 60 29,314 4,780 39,604 2 4,950

63 4,899 61 30,616 4,876 40,391 2 5,050

64 4,261 62 31,222 4,974 40,457 2 5,150

65 3,595 63 34,392 5,073 43,061 2 5,250

66 20,285 64 26,909 5,174 60,672 2 5,3508,303

67 18,723 65 34,994 5,278 58,995 2 5,500

68 17,087 66 39,804 5,383 62,274 2 5,600

69 15,372 67 37,846 5,491 58,708 2 5,700

70 13,809 68 45,464 5,601 64,874 2 5,800

71 12,762 69 26,026 5,713 60,281 2 5,95015,779

72 11,691 70 29,215 5,827 58,662 2 6,05011,928

73 10,565 71 30,323 5,944 59,308 2 6,15012,476

74 9,382 72 35,218 6,063 59,123 2 6,3008,460

75 8,138 73 38,493 6,184 59,923 2 6,4007,109

76 6,830 74 39,776 6,308 61,000 2 6,5508,086

77 5,456 75 41,106 6,434 62,129 2 6,7009,133

78 4,011 76 42,489 6,562 63,313 2 6,80010,251

79 2,492 77 43,920 6,694 64,558 2 6,95011,452

80 895 78 45,404 6,828 65,865 2 7,10012,738

81 79 42,573 6,964 68,507 2 7,25018,970

82 80 44,091 7,103 71,723 2 7,35020,529

83 81 45,662 7,245 75,106 2 7,50022,198

84 82 47,291 7,390 78,662 2 7,65023,981

85 83 48,979 7,538 82,403 2 7,80025,885

86 84 50,727 7,689 86,337 2 8,00027,921

87 85 52,541 7,843 90,477 2 8,15030,093

88 86 54,422 8,000 94,833 2 8,30032,411

89 87 44,763 8,160 103,361 2 8,45050,439

90 88 41,653 8,323 113,611 2 8,65063,635

91 89 43,004 8,489 120,210 1 8,80068,717

92 90 44,297 8,659 125,800 1 9,00072,844

93 91 45,628 8,832 131,680 1 9,15077,220

94 92 46,998 9,009 137,868 1 9,35081,861

95 93 48,410 9,189 144,364 1 9,55086,765

96 94 49,864 9,373 151,195 1 9,70091,958

97 95 51,362 9,560 158,388 1 9,90097,466

98 96

B24c





GrossID

Itemized Deduction PhaseoutSample Plan - TOTAL Cash-Flow-Based Planning

D11

IndexedStandard

Deduction

1 2 3 4 5 6 87 9

Net IDTimes 80%

PhaseoutThresholdAGI

3.00%Times 6

AGI LessFloor Disallowed

AdjustedID

Itemized Deduction Phaseout Calculations*

53 $24,000 $166,542 $23,955 $23,955

54 24,480 171,383 23,622 23,622

55 24,970 185,180 23,273 23,273

56 25,469 190,009 22,907 22,907

57 25,978 195,573 22,522 22,522

58 26,498 199,414 22,118 22,118

59 27,028 205,663 21,693 21,693

60 27,568 236,613 21,248 21,248

31,353 61 15,232 218,923 374,931 39,192 39,192

31,683 62 15,536 225,827 382,430 39,604 39,604

32,313 63 15,847 237,073 390,078 40,391 40,391

32,366 64 16,164 240,496 397,880 40,457 40,457

34,449 65 18,136 168,544 405,837 43,061 43,061

41,895 66 18,499 78,772 413,954 60,672 52,369

47,196 67 20,584 191,350 422,233 58,995 58,995

49,819 68 20,996 238,352 430,678 62,274 62,274

46,967 69 21,415 236,168 439,291 58,708 58,708

51,899 70 21,844 313,918 448,077 64,874 64,874

35,601 71 22,281 58,741 457,039 60,281 44,501

37,387 72 22,726 110,246 466,180 58,662 46,734

37,466 73 23,181 118,541 475,503 59,308 46,832

40,530 74 23,644 173,291 485,013 59,123 50,663

42,252 75 24,117 202,280 494,713 59,923 52,814

42,331 76 24,600 208,909 504,608 61,000 52,913

42,396 77 25,092 215,824 514,700 62,129 52,995

42,450 78 25,593 223,073 524,994 63,313 53,062

42,484 79 26,105 230,597 535,494 64,558 53,105

42,501 80 26,627 238,445 546,204 65,865 53,126

39,629 81 27,160 198,079 557,128 68,507 49,537

40,955 82 27,703 205,752 568,270 71,723 51,194

42,326 83 28,257 213,730 579,636 75,106 52,908

43,745 84 28,822 222,043 591,228 78,662 54,681

45,214 85 29,399 230,708 603,053 82,403 56,517

46,733 86 29,987 239,723 615,114 86,337 58,416

48,307 87 30,587 249,143 627,416 90,477 60,384

49,937 88 31,198 258,966 639,965 94,833 62,422

42,338 89 31,822 113,674 652,764 103,361 52,922

39,981 90 32,459 18,791 665,819 113,611 49,976

37,317 91 17,191 7,284 566,017 115,363 46,647

38,509 92 17,534 7,680 577,337 120,981 48,137

39,736 93 17,885 8,084 588,884 126,890 49,669

40,997 94 18,243 8,497 600,662 133,107 51,247

42,360 95 18,608 9,081 612,675 139,716 52,951

43,792 96 18,980 9,751 624,929 146,698 54,740

45,263 97 19,359 10,434 637,427 154,045 56,579

98

D7D10

* Itemized deduction phaseout suspended for tax years prior to 2026.




Alternative Minimum Tax WorksheetSample Plan - TOTAL Cash-Flow-Based Planning

Ages

D12

TaxableIncome

+ Exemptions

MunicipalBond

IncomeItem. Ded.

Adjustments

1 2 3 4 5 6 9 118

TentativeMinimum

TaxTaxable

Cap. GainTax

Rate Tax

107 12

OtherPref. Item+ St. Opt.

LessExempt.

Amount*Taxable

(less CG)Tax

at 26%Tax

at 28%

AMT Tax on Ordinary Income AMT Tax on Capital Gains

($109,400)$10,000 $9,683 $142,542 53 51 $37,244 $9,683 $5,898

(111,600)10,000 10,071 146,903 54 52 38,737 10,072 6,566

(113,800)10,000 12,774 160,210 55 53 49,133 12,775 7,277

(116,100)10,000 13,105 164,540 56 54 50,407 13,106 8,033

784 (118,400)10,000 13,859 169,595 57 55 53,307 13,860 8,672

(120,800)10,000 13,781 172,916 58 56 53,007 13,782 9,109

(784) (123,200)10,000 14,078 178,635 59 57 54,147 14,078 10,504

700 15.00 (125,700)10,000 16,826 209,045 60 58 62,025 16,126 31,320

1,314 15.00 (97,039)28,411 27,923 179,731 61 59 102,343 26,609 8,760

1,528 15.00 (98,141)29,314 29,402 186,224 62 60 107,209 27,874 10,188

1,766 15.00 (98,275)30,616 32,251 196,683 63 61 117,253 30,486 11,770

2,023 15.00 (100,385)31,222 32,544 200,039 64 62 117,390 30,521 13,486

(109,300)34,392 125,483 65 63 50,576

(111,500)26,909 18,100 66 64

(113,700)34,994 2,361 132,355 67 65 9,081 2,361 44,568

(116,000)39,804 25,969 176,078 68 66 99,882 25,969

(118,300)37,846 25,221 177,460 69 67 97,005 25,221

39,734 15.00 (104,523)45,464 39,734 249,045 70 68 189,986

(123,100)26,026 11,900 71 69

(125,600)29,215 51,584 72 70

(128,100)30,323 59,233 73 71

(130,700)35,218 3,634 114,168 74 72 13,980 3,635 4,706

(133,300)38,493 12,362 142,356 75 73 47,549 12,363

(135,900)39,776 13,464 147,910 76 74 51,785 13,464

(138,600)41,106 14,612 153,695 77 75 56,201 14,612

(141,400)42,489 15,820 159,760 78 76 60,849 15,821

(144,200)43,920 17,097 166,040 79 77 65,759 17,097

(147,100)45,404 18,429 172,580 80 78 70,884 18,430

(150,100)42,573 5,731 129,572 81 79 22,045 5,732

(153,100)44,091 6,505 134,029 82 80 25,020 6,505

(156,100)45,662 7,328 138,624 83 81 28,187 7,329

(159,300)47,291 8,156 143,381 84 82 31,372 8,157

(162,400)48,979 9,069 148,305 85 83 34,884 9,070

(165,700)50,727 9,987 153,385 86 84 38,412 9,987

(169,000)52,541 10,973 158,666 87 85 42,207 10,974

(172,400)54,422 12,000 164,134 88 86 46,156 12,001

(175,800)44,763 16,900 89 87

(179,400)1,491 17,300 90 88

(117,600)8,800 91 89

(119,900)9,000 92 90

(122,300)9,150 93 91

(124,800)9,350 94 92

(127,300)9,550 95 93

(129,800)51 9,700 96 94

(132,400)534 9,900 97 95

98 96

D7 D10




Early Distribution Penalty TaxSample Plan - TOTAL Cash-Flow-Based Planning

Ages

D13

PensionIncome

AccountDistributions

Total QualifiedPlan Income

1 2 3 4 5 6 7

Allen Betty

PensionIncome

AccountDistributions

EarlyDistribution

PenaltyTotal Qualified

Plan IncomeTax Deferred

Accounts

53 51

54 52

55 53

56 54

57 55

58 56

59 57

60 58

61 59

62 60

63 61

64 62

65 63

66 64

67 65 102,428 102,428 2,400

68 66 186,591 186,591 2,448

69 67 156,610 156,610 2,497

70 68 4,490 4,490 2,547

71 69 24,315 24,315 2,598

72 70 25,822 25,822 25,543 28,193

73 71 27,420 27,420 27,126 29,829

74 72 74,103 74,103 28,804 31,561

75 73 104,706 104,706 30,582 33,394

76 74 108,111 108,111 32,467 35,335

77 75 111,662 111,662 34,463 37,389

78 76 115,577 115,577 36,404 39,388

79 77 119,452 119,452 38,631 41,675

80 78 123,702 123,702 40,778 43,883

81 79 79,607 79,607 43,028 46,195

82 80 62,996 62,996 65,804 69,034

83 81 135,238 138,533

84 82 141,981 145,342

85 83 149,045 152,473

86 84 156,427 159,923

87 85 164,181 167,747

88 86 172,305 175,943

89 87 51,821 55,531

90 88 3,785

91 89 3,860

92 90 3,937

93 91 4,016

94 92 4,097

95 93 4,178

96 94 4,262

97 95 4,347

98 96

B10 C10,C10a...C10e B10 C10,C10a...C10e




FICA WorksheetSample Plan - TOTAL Cash-Flow-Based Planning

Age

D15

MaximumSoc Sec

Wage Base

Wages * Self Empl

1 2 3 4 5 6 7

Allen

Wages

Age

Hosp. Ins. Hosp. Ins.

* Self Empl

Betty

6.20% 12.40%

1.45%

2.90%

1.45%

2.90%12.40%6.20%

Net Invest.Income Tax

8

3.80%

51 $916 $1,258 $128,400 53 $5,332 $4,464 $1,247

52 934 1,283 130,968 54 5,465 4,553 1,278

53 953 1,309 133,587 55 6,188 4,644 1,447

54 972 1,335 136,259 56 6,343 4,737 1,483

55 992 1,362 138,984 57 6,584 4,832 1,540

56 1,011 1,389 141,764 58 6,664 4,929 1,559

57 1,032 1,417 144,599 59 6,831 5,027 1,597

58 1,052 1,445 147,491 60 7,370 5,128 1,724

59 1,073 1,474 150,441 61 7,554 5,230 1,767

60 1,095 1,504 153,450 62 7,743 5,335 1,811

61 1,117 1,534 156,519 63 8,188 5,442 1,915

62 1,139 1,564 159,649 64 8,135 5,550 1,903

63 1,162 1,596 162,842 65 5,661

64166,099 66

65169,421 67

66172,809 68

67176,266 69

68179,791 70 2,429

69183,387 71

70187,055 72

71190,796 73

72194,612 74

73198,504 75

74202,474 76

75206,523 77

76210,654 78

77214,867 79

78219,164 80

79223,548 81

80228,018 82

81232,579 83

82237,230 84

83241,975 85

84246,815 86

85251,751 87

86256,786 88

87261,922 89

88267,160 90

89272,503 91

90277,953 92

91283,512 93

92289,183 94

93294,966 95

94300,866 96

95306,883 97

9698

* Self employed FICA tax has been adjusted to 92.35% of SE income according to IRS Form SE.** Beginning in 2013 includes additional Medicare tax from Health Care Reconciliation Act

B9 B9 B9 B9




Taxable Social Security WorksheetSample Plan - TOTAL Cash-Flow-Based Planning

Ages

D16

AdjustedGross Income

(SS)Tax-FreeInterest

1 2 3 4 5 6 7 8

* ExclusionAmount

SocialSecurity

* ExclusionAmount

TaxableSS

CurrentYear

TaxableTaxable

SS

50% method (pre '94) 85% method (post '93)

$44,000 5153 $166,542 $32,000

44,000 5254 171,383 32,000

44,000 5355 185,180 32,000

44,000 5456 190,009 32,000

44,000 5557 195,573 32,000

44,000 5658 199,414 32,000

44,000 5759 205,663 32,000

44,000 5860 236,613 32,000

44,000 5961 218,923 32,000

44,000 6062 225,827 32,000

44,000 6163 237,073 32,000

44,000 6264 240,496 32,000

44,000 6365 168,544 32,000

44,000 6466 78,772 32,000

29,582 29,582 44,000 17,401 6567 161,768 32,000 34,803

30,174 30,174 44,000 17,749 6668 208,178 32,000 35,499

56,990 56,990 44,000 33,523 6769 179,178 32,000 67,047

58,130 58,130 44,000 34,194 6870 255,789 32,000 68,388

26,041 26,041 44,000 17,789 6971 32,700 32,000 69,756

50,026 50,026 44,000 31,898 7072 60,220 32,000 71,151

54,164 54,164 44,000 34,332 7173 64,377 32,000 72,574

62,921 62,921 44,000 37,013 7274 110,370 32,000 74,025

64,180 64,180 44,000 37,753 7375 138,100 32,000 75,506

65,463 65,463 44,000 38,508 7476 143,446 32,000 77,016

66,773 66,773 44,000 39,278 7577 149,051 32,000 78,556

68,108 68,108 44,000 40,064 7678 154,965 32,000 80,127

69,470 69,470 44,000 40,865 7779 161,127 32,000 81,730

70,860 70,860 44,000 41,682 7880 167,585 32,000 83,364

72,277 72,277 44,000 42,516 7981 125,802 32,000 85,032

73,722 73,722 44,000 43,366 8082 132,030 32,000 86,732

75,197 75,197 44,000 44,233 8183 138,533 32,000 88,467

76,701 76,701 44,000 45,118 8284 145,342 32,000 90,236

78,235 78,235 44,000 46,020 8385 152,473 32,000 92,041

79,800 79,800 44,000 46,941 8486 159,923 32,000 93,882

81,396 81,396 44,000 47,880 8587 167,747 32,000 95,759

83,023 83,023 44,000 48,837 8688 175,943 32,000 97,675

58,143 58,143 44,000 36,673 8789 55,531 32,000 99,628

15,006 15,006 44,000 11,298 8890 3,785 32,000 101,621

3,424 3,424 34,000 3,424 8991 3,860 25,000 55,978

3,743 3,743 34,000 3,743 9092 3,937 25,000 57,097

4,068 4,068 34,000 4,068 9193 4,016 25,000 58,239

4,400 4,400 34,000 4,400 9294 4,097 25,000 59,404

4,903 4,903 34,000 4,737 9395 4,178 25,000 60,592

5,489 5,489 34,000 5,082 9496 4,262 25,000 61,804

6,087 6,087 34,000 5,434 9597 4,347 25,000 63,040 9698

D7 C7 B10

* The SS exclusion amounts are not indexed for inflation at the present time.




State Income Tax (est.)Sample Plan - TOTAL Cash-Flow-Based Planning

Ages

D17

State

* StateTax

Code* Federal

Amount

1 2 3 4 5 6 9 118

EstimatedState

Tax

EstimatedNet State

Tax

NetState

Taxable

* StateTax

Rate

7

Add BackState Tax &Fed Exemp.

StatePersonal

Exemp.

StateCredits orAdd'l Tax

10

Incr/DecrState

Taxable

$14,503 $14,143 ($360)$166,542 $166,542 1 OR53 51

14,938 14,578 (360)171,383 171,383 1 OR54 52

16,180 15,910 (270)185,180 185,180 1 OR55 53

16,615 16,345 (270)190,009 190,009 1 OR56 54

17,116 16,936 (180)195,573 195,573 1 OR57 55

17,461 17,281 (180)199,414 199,414 1 OR58 56

18,024 17,844 (180)205,663 205,663 1 OR59 57

20,809 20,629 (180)236,613 236,613 1 OR60 58

19,217 19,037 (180)218,923 218,923 1 OR61 59

19,838 19,658 (180)225,828 225,828 1 OR62 60

20,851 20,671 (180)237,073 237,073 1 OR63 61

21,159 20,979 (180)240,496 240,496 1 OR64 62

14,683 14,503 (180)168,544 168,544 1 OR65 63

6,603 6,423 (180)78,772 78,772 1 OR66 64

14,073 13,893 (180)161,768 191,350 (29,582)1 OR67 65

18,250 18,070 (180)208,178 238,352 (30,174)1 OR68 66

15,640 15,460 (180)179,178 236,168 (56,990)1 OR69 67

22,587 22,407 (180)255,789 313,918 (58,130)1 OR70 68

2,457 2,277 (180)32,700 58,741 (26,041)1 OR71 69

4,934 4,754 (180)60,220 110,246 (50,026)1 OR72 70

5,308 5,128 (180)64,377 118,541 (54,164)1 OR73 71

9,447 9,267 (180)110,370 173,291 (62,921)1 OR74 72

11,943 11,763 (180)138,100 202,280 (64,180)1 OR75 73

12,424 12,244 (180)143,446 208,909 (65,463)1 OR76 74

12,929 12,749 (180)149,051 215,824 (66,773)1 OR77 75

13,461 13,281 (180)154,965 223,073 (68,108)1 OR78 76

14,015 13,835 (180)161,127 230,597 (69,470)1 OR79 77

14,597 14,417 (180)167,585 238,445 (70,860)1 OR80 78

10,836 10,656 (180)125,802 198,079 (72,277)1 OR81 79

11,397 11,217 (180)132,030 205,752 (73,722)1 OR82 80

11,982 11,802 (180)138,533 213,730 (75,197)1 OR83 81

12,595 12,415 (180)145,342 222,043 (76,701)1 OR84 82

13,237 13,057 (180)152,473 230,708 (78,235)1 OR85 83

13,907 13,727 (180)159,923 239,723 (79,800)1 OR86 84

14,611 14,431 (180)167,747 249,143 (81,396)1 OR87 85

15,349 15,169 (180)175,943 258,966 (83,023)1 OR88 86

4,512 4,332 (180)55,531 113,674 (58,143)1 OR89 87

189 9 (180)3,785 18,791 (15,006)1 OR90 88

201 111 (90)3,860 7,284 (3,424)1 OR91 89

207 117 (90)3,937 7,680 (3,743)1 OR92 90

212 122 (90)4,016 8,084 (4,068)1 OR93 91

218 128 (90)4,097 8,497 (4,400)1 OR94 92

223 133 (90)4,178 9,081 (4,903)1 OR95 93

229 139 (90)4,262 9,751 (5,489)1 OR96 94

235 145 (90)4,347 10,434 (6,087)1 OR97 95

98 96

D8 D14

* State tax is computed using: 1=State Tax Table or Percent of 2=Gross income, 3=AGI, 4=Federal Tax, 5=Fed Taxable Income

D14




SelfEmployment

Taxable Earned IncomeSample Plan - TOTAL Cash-Flow-Based Planning

Age

D18

Salaryand Wages

IncreaseFactor

IncreaseFactor

TotalTaxable

Earned IncomeAgeIncrease

FactorSalary

and WagesSelf

EmploymentIncrease

Factor

BettyAllen

1 2 3 4 5 6 7 8

1.00 $72,000 53 $86,000 51 $8,000 1.00% $166,000 1.00

1.02 73,440 54 88,150 52 8,160 1.02% 169,750 1.03

1.04 74,909 55 99,809 53 8,323 1.04% 183,041 1.05

1.06 76,407 56 102,305 54 8,490 1.06% 187,201 1.08

1.08 77,935 57 104,862 55 8,659 1.08% 191,457 1.10

1.10 79,494 58 107,484 56 8,833 1.10% 195,810 1.13

1.13 81,084 59 110,171 57 9,009 1.13% 200,264 1.16

1.15 82,705 60 118,869 58 9,189 1.15% 210,763 1.19

1.17 84,359 61 121,840 59 9,373 1.17% 215,573 1.22

1.20 86,047 62 124,886 60 9,561 1.20% 220,494 1.25

1.22 87,768 63 128,008 61 9,752 1.22% 225,528 1.28

1.24 89,523 64 131,209 62 9,947 1.24% 230,679 1.31

1.27 91,313 65 63 10,146 1.27% 101,459

66 64

67 65

68 66

69 67

70 68

71 69

72 70

73 71

74 72

75 73

76 74

77 75

78 76

79 77

80 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96

Earned income subject to income tax.




Estate

This section evaluates your financial estate with an illustration of potential estate taxes and settlement costs. It highlightsthe potential savings that might be realized through use of certain trust and estate planning tools.

You may want to consult with an estate planning attorney for a more detailed analysis of the options available and foradditional evaluation of other techniques that might be of benefit.




– The second illustration shows the benefit of using the Credit Shelter Trust and an Irrevocable LifeInsurance Trust.

– The first illustration shows the costs with your current planning in effect. This includes a CreditShelter Trust, but not an Irrevocable Life Insurance Trust.

– Have you taken advantage of Living Wills and other pre-planning techniques that might help yoursurvivors avoid trauma and indecision at a time when they are already under stress?

– Could charitable gifting assist in reducing your estate costs and at the same time provide abenefits to others, instead of the IRS?

– Have you considered the various trust planning techniques available that could help reduce costsand taxes?

–

–

–

As part of your estate planning you should consider the following:

Estate Planning

The Estate Planning section of this analysis will provide you with information that can help youunderstand your exposure to estate taxes and to visualize some of the potential techniques that couldbe considered.

Are your wills and other estate documents current with the existing legal conditions?

Have you recently reviewed your desires regarding final disposition of your remainder estate?

Is your estate large enough now or is it anticipated that it will grow to an extent that yourexposure to estate taxes could be costly to your heirs?

The following analysis of your estate situation is developed to illustrate your potential exposure now and in thefuture. The estate flow charts are prepared using two assumptions:

By comparing the two results you will be able to understand the impact of estate planning using just these twotrust arrangements. Additional techniques are described in the "Estate Concept" illustration pages.

E1





Your Current Estate Details E2


The illustrations in this report are based on information that you provided. As you review the Estate Planningreports, please be aware that the numbers provided are only estimates and are not to be relied on for actualestate tax reporting. You should always rely on your legal and financial professionals for final information aboutyour estate and other tax planning issues.

Basic Data Allen Betty

Current Ages 53 51

Age at death for the estate options illustration 65 63

Estimated final expenses (increasing at 3.20% per year.) $15,000 $15,000

Administrative and probate expense estimate as a percent of estate assets

First death 3.00%

Second death 4.00%

Existing Estate Planning Allen Betty

Yes Yes

Yes Yes

No No

No No

No No

No No

No No

No No

No

Yes Yes

Yes Yes

Living Will

Durable Health Care Power of Attorney

Durable General Power of Attorney

Irrevocable Life Insurance Trust

Generation Skipping Trust Provisions

Testamentary Trust Provisions

QTIP Trust Provisions

Credit Shelter Trust Provisions

Marital Trust Provisions

Joint Revocable Trust

Revocable Living Trust

YesYesWill

Estate Assets Summary: Allen Betty Joint/Other

Life Insurance $97,500 $60,000

$1,136,090 Net Worth

$118,400 $831,790 $185,900 Totals

(9,140) (350,000)Debts and mortgages

19,600 498,480 Residence and Personal Property

330,000 183,050 Retirement accounts

248,800 Equity, Investment accounts

$2,850 $12,450 Ordinary Income/Interest bearing accounts

Real Estate Investments 200,000

Plan for estate needs:

A careful review of the information shown above will help you to determine which legal estate planningtools should be considered in order to be fully protected. As you consider the various estate planning toolslisted, please recognize that competent legal advice is necessary to assure that the documents areproperly prepared.

Any family members who might have a concern regarding the above items should be appropriatelyinvolved in your estate planning and protection to avoid possible confusion or uncertainty of your wisheswhen an event requires use of any of the documents.

Proper planning and preparation before a need arises can avoid unnecessary delay, confusion, potentiallegal costs and family disruption.




$143,900

$1,203,759

Betty dies first

CurrentSituation

WithTrusts

$2,135,950

(916,091)

$0

1,128,209

$0

1,272,109 1,236,769

$0

1,061,716

$0

(982,584)

$2,135,950

WithTrusts

CurrentSituation

Allen dies first

Gain using trust

Estate tax

Net estate

Debts and expenses

Estate Taxes

All assets including life insurance

$1,137,266

$175,053

To heirs

E3


Less bequests to other than spouse (16,100) (16,100)




183,050 330,000

$497,000

234,200

310,000

Betty dies first*

Illustrating the potential savings available buying a Credit Shelter Trust (CST) and an Irrevocable Life Insurance Trust (ILIT). This report showsresults if both deaths occur now. For future death ages refer to the "Estate Planning Options" Report.

Gross Estate

347,500

234,200

Allen dies first*

Life Insurance (net of loans) (1)

1/2 Joint or Community property

Separate property - Betty

Separate property - Allen

First death

(1) Only life insurance currently in an ILIT is included in the "current situation" scenario, all insurance is in an ILIT in the "trust" scenario.

Estate Tax Illustration E4

(With and without trust planning)

Retirement plans (2)

$727,250 $1,408,700

(82,725)

(6,817)

(150,870)

Estate (before trusts)

($373,447)

(175,000)

(15,000)

(181,640)

(25,937)

Less expenses:

Debts

Total Expenses

$1,035,253 $447,707

($279,542)

(15,000)

Other expenses/gifts

Final expenses

Administration @ 3.00%

Bequests to other than spouse

To credit shelter trust (3)

Life insurance outside estate or held in ILIT

$16,100 $16,100

$123,553

$347,500 $310,000

310,000

234,200

Betty dies second*

310,000

Gross Estate

183,050

Allen dies second*

$1,019,153 $1,019,153

234,200

Second death

Net estate from spouse

Retirement plans (2)

$1,746,403 $965,350

183,050

Life Insurance (net of loans) (1)

Separate property


Without trusts With trusts With trustsWithout trusts

330,000

$431,607

347,500

497,000

234,200

347,500

$1,182,807

330,000

497,000

$431,607

234,200

$1,840,307

Total expenses

Debts

Less expenses:

Administration @ 4.00%

Final expenses

Charity, other expenses, gifts

($609,137)

(15,000)

(31,014)

(175,000)

(213,070)

(15,000)

($434,084)

(49,856)

(175,000)

(369,281) (256,561)

($492,648)

(181,640)

($636,548)

(15,000)

(39,447)

(388,061)

(181,640)

(51,847)

(15,000)

Estimated Federal Estate tax

$1,137,266

(167,368)

$0

$531,266

Tentative Federal estate tax 167,368

Net taxable estate

$0

Less applicable estate tax credit

226,159

$1,203,759

(427,304)

$690,159

427,304

(400,707)

400,707

(226,159)

$0 $0

Income tax on ret. plans at 20% (2)

Remainder Estate

(75,550)

$175,053

1,137,266

657,500

531,266

Gain to heirs with Trusts

123,553

(75,550) (75,550)

$143,900

1,203,759

657,500 Life Insurance Trust or not in estate (1)

Credit shelter trust (3)

Irrevocable trust, other assets (net)

(75,550)

690,159

$1,236,769 Estate and Trust to heirs* $1,061,716 $1,128,209 $1,272,109


(2) Estimated income tax on retirement accounts. The actual amount will vary depending on the heirs tax rates.

(3) The Credit Shelter Trust is funded with the smaller of the current year Unified Tax Credit Equivalent or separate property.

$16,100 $16,100

- Less CST and ILIT (781,053) (657,500)

$40,000 of the Credit Shelter Trust was utilized prior to death. The first spouse's estate credit was available for use.

*The above results are based on deaths occurring in the current year. Results will vary in future years.




$1,128,209

47.18%

(636,548)

Heir's Estate

*The above results are based on both deaths occurring in the current year. Results will vary in future years.

Estate Shrinkage

Less tax on retirement accounts$0

Less debts and expenses

Federal estate tax(75,550)

(75,550)Less tax on retirement accountsLess debts and expenses

Federal estate tax

(609,137)

Estate Shrinkage

$1,061,716 Heir's Estate

50.29%

Less insurance outside of estate or in ILIT

431,607

Allen's property & insurance

Received from Betty

Allen's retirement accounts 330,000

1,078,700

Total AssetsLess debts and expenses

$727,250 (279,542)

Betty dies first*

1,840,307 Gross estate

When assets are passed to heirs by simple wills (or by State statutes when no wills exist), the estate will probably be subject to themaximum amount of Federal Estate taxes. The illustration assumes only life insurance currently owned in an Irrevocable LifeInsurance Trust is exempt from estate tax.

While estate taxes may not be a serious problem for smaller estates, time, combined with the growth of successfulinvestments or inflation can result in a substantial estate tax liability.

$1,408,700

Estate Taxes - Current Situation E5


*** The Credit Shelter Trust is funded with the smaller of the current year Unified Tax Credit Equivalent or separate property

(16,100)Bequests to other than spouse

(373,447)

Betty's retirement accounts544,200

Less insurance outside of estate or in ILIT

Betty's property & insurance1,019,153

183,050

Received from Allen

Gross estate

You may want to consider various types of trust or estate planning techniques to help assure that all aspects of your estatedisposition are handled according to your wishes and with the minimum estate taxation. This report is an estimate and does notconstitute legal advice. Obtain legal counsel before taking action affecting your estate planning.

E4

Total Assets

$1,746,403


E4

Allen dies first*

** Retirement accounts will be subject to additional income taxes.

Credit Shelter

Ins. in ILIT or non est.

Trust***

$497,000 $347,500 $234,200

1/2 Joint PropertyAllen's property

$330,000

Retirement accounts **Life Insurance

1/2 Joint PropertyBetty's property Retirement accounts **$183,050 $310,000

(Assumes all ins. to ILIT)

Life Insurance$234,200

Trust***


Credit Shelter

Bequests to other than spouse (16,100)




Betty dies first*

*Retirement accounts will be subject to additional income tax.**The above results are based on both deaths occurring in the current year. Results will vary in future years.

Allen dies first*

If you decide to use these techniques, you should coordinate the process with all appropriate legal and financial advisorsto evaluate the benefits of the trusts. Implementation would require preparation of will and trust documents andpossible re-titling of some assets and insurance policies in order to maximize the effect of the trust planning.

Estate Taxes - With Trusts

You might consider using a Credit Shelter Trust to minimize the cost of passing your assets to your heirs. This isaccomplished by arranging to have a portion of your assets placed into trust upon the first death. The income from thetrust may be made available to the surviving spouse, allowing the remaining trust assets to pass to the heirs withoutever being included in the second spouse's estate. This illustration assumes all life insurance is held in an IrrevocableLife Insurance Trust (ILIT) and protected from estate taxes.

In order to take advantage of a Credit Shelter Trust, your assets must be owned in a manner that will enable the assetsto flow into the trust, such as separately owned or community property assets. Jointly held assets may be placed in thetrust only if the surviving spouse makes a special election. An Irrevocable Life Insurance Trust would need be in forcewith all policies properly owned within the trust.

E6


Federal estate tax

Less CST & ins. outside of estate or in ILIT

Credit Shelter

Betty's retirement accounts(781,053)


Plus Irrevocable Trust assets

42.10%Estate Shrinkage

Less debt and expenses

Less tax on retirement accounts (75,550)

$1,236,769

(434,084)

Heir's Estate

544,200

$497,000

$1,408,700

$347,500 $234,200

Total AssetsLess debts and expenses (373,447)

(16,100)

Trust***

781,053

$657,500

$123,553

$330,000

Plus CST and life insurance outside estate or in ILIT

$965,350


Received from Allen

183,050

1,019,153 Betty's property & insurance

E4

Bequests to other than spouse

Gross estate

1/2 Joint PropertyAllen's property

Gross estate

1/2 Joint PropertyBetty's property

Total Assets

(279,542)

$1,182,807


1,078,700 330,000

(657,500)Allen's retirement accounts


Received from BettyAllen's property & insurance

$727,250

431,607

(16,100)Bequests to other than spouse

$234,200 $183,050 $310,000

Plus Irrevocable Trust assets

657,500 Plus life insurance outside estate or in ILIT

Trust***

$657,500

Credit Shelter

E4

Federal estate tax(75,550)

Ins. in ILIT or non est.Less insurance outside of estate or in ILIT

40.44%$1,272,109

Estate Shrinkage

Less tax on retirement accounts

Less debt and expenses

Heir's Estate

(492,648)






Deaths in same year - Allen dies first.

To HeirsEstate taxTo HeirsEstate Tax

(after both

Assets &

Gain with

Credit Shelter Trust and Irrev. LifeIns. Trust ****Current Situation

Ages

E7Future Estate CostsSample Plan - TOTAL Cash-Flow-Based Planning

Trusts

Debts &

Expenses**

deaths)

Net

EstateInsurance*

$1,312,319 $175,053 $0 $0 $1,153,366 ($982,584)51 $1,137,266 $2,135,950 53

1,773,604 20,159 1,753,445 (481,325)52 1,753,445 2,234,770 54

1,884,770 20,450 1,864,320 (476,471)53 1,864,320 2,340,791 55

1,996,297 20,754 1,975,543 (471,068)54 1,975,543 2,446,610 56

2,074,906 21,070 2,053,836 (463,153)55 2,053,836 2,516,990 57

2,158,186 21,398 2,136,788 (454,854)56 2,136,788 2,591,642 58

2,284,574 21,738 2,262,836 (448,343)57 2,262,836 2,711,179 59

2,420,786 22,089 2,398,697 (441,662)58 2,398,697 2,840,360 60

2,506,758 22,452 2,484,306 (431,322)59 2,484,306 2,915,627 61

2,694,843 22,826 2,672,017 (426,030)60 2,672,017 3,098,046 62

2,895,953 23,212 2,872,741 (420,608)61 2,872,741 3,293,349 63

2,873,341 23,609 2,849,732 (405,842)62 2,849,732 3,255,574 64

2,870,745 24,018 2,846,727 (384,318)63 2,846,727 3,231,045 65

2,972,502 42,548 2,929,955 (726,947)64 2,929,955 3,656,902 66

2,989,430 43,341 2,946,090 (692,544)65 2,946,090 3,638,634 67

2,965,257 44,153 2,921,104 (652,380)66 2,921,104 3,573,484 68

2,972,343 44,983 2,927,360 (610,711)67 2,927,360 3,538,070 69

3,007,214 45,833 2,961,381 (568,950)68 2,961,381 3,530,331 70

3,196,054 46,702 3,149,353 (511,811)69 3,149,353 3,661,163 71

3,260,565 47,590 3,212,975 (496,441)70 3,212,975 3,709,416 72

3,320,311 48,498 3,271,813 (480,154)71 3,271,813 3,751,967 73

3,378,587 49,426 3,329,162 (462,730)72 3,329,162 3,791,892 74

3,423,114 50,374 3,372,740 (442,699)73 3,372,740 3,815,440 75

3,483,954 51,342 3,432,612 (421,941)74 3,432,612 3,854,553 76

3,542,317 52,331 3,489,985 (399,712)75 3,489,985 3,889,697 77

3,597,749 53,342 3,544,407 (375,914)76 3,544,407 3,920,321 78

3,649,720 54,374 3,595,346 (350,436)77 3,595,346 3,945,782 79

3,697,717 55,428 3,642,289 (323,175)78 3,642,289 3,965,464 80

3,741,155 56,504 3,684,651 (294,006)79 3,684,651 3,978,657 81

3,794,116 57,602 3,736,514 (298,372)80 3,736,514 4,034,887 82

3,841,095 58,724 3,782,372 (302,983)81 3,782,372 4,085,354 83

3,883,434 59,868 3,823,566 (309,473)82 3,823,566 4,133,039 84

3,920,678 61,037 3,859,641 (315,944)83 3,859,641 4,175,585 85

3,952,148 62,229 3,889,919 (322,376)84 3,889,919 4,212,295 86

3,977,129 63,447 3,913,683 (328,749)85 3,913,683 4,242,431 87

3,994,803 64,689 3,930,114 (335,038)86 3,930,114 4,265,153 88

4,004,301 65,956 3,938,344 (341,220)87 3,938,344 4,279,564 89

4,038,526 67,250 3,971,276 (345,679)88 3,971,276 4,316,956 90

3,982,992 68,570 3,914,422 (341,832)89 3,914,422 4,256,254 91

3,995,291 69,917 3,925,373 (342,915)90 3,925,373 4,268,288 92

3,999,231 71,292 3,927,939 (343,291)91 3,927,939 4,271,231 93

3,993,871 72,694 3,921,177 (342,882)92 3,921,177 4,264,059 94

3,978,187 74,125 3,904,062 (341,603)93 3,904,062 4,245,665 95

3,951,069 75,585 3,875,484 (339,360)94 3,875,484 4,214,843 96

3,911,313 77,075 3,834,239 (336,053)95 3,834,239 4,170,292 97

9698

E30E30

**Debts and expenses = mortgages, loans, final expenses (with inflation adjustments), and estimated estate administration costs.

*** May include insurance held outside of the estate.

*Assets & Insurance = residence, personal prop., savings, investments, retirement accounts and life insurance.

****The Credit Shelter Trust is funded with the smaller of the current year Unified Tax Credit Equivalent or separate property plus

It is assumed that both deaths occur at each age illustrated.

1/2 community property. Expenses reduced on trust assets.




Tax Cuts and Jobs Act

Future Estate Costs Graph

We have taken information provided about your current estate net worth to estimate your estate tax exposureunder the new law over the next several years. We make some general assumptions regarding the growth ofassets. Also, as previously suggested in this analysis, we assume that each individual has funded a credit sheltertrust utilizing the applicable exclusion amounts available to them (currently $11,200,000 per person in 2018).We also assume that any life insurance benefits are kept out of the taxable estate. The graph below shows yourestimated estate tax exposure (red) and your estate remainder after taxes (green) at each year end.

The Tax Cuts and Jobs Act, which went into effect at the end of 2017, includes a provision that temporarilydoubles the estate exclusion amount. The new exclusion allows up to $11,200,000 to be transferred beforebeing taxed at 40% estate rate. The provision is set to expire in 2026, at which point the exclusion will return to$5,600,000.

E7a

An Estimate of Your Estate Tax Exposure Using Suggested Planning

Capital*Age

Deaths in same year - Allen dies first.


Retirement Debts &Expenses

Net TaxableEstate

ExclusionAmount

EstimatedEstate Tax

($982,584)$2,135,950 53 $22,400,000 $1,153,366

(481,325)2,234,770 54 22,848,000 1,753,445

(476,471)2,340,791 55 23,304,960 1,864,320

(471,068)2,446,610 56 23,771,059 1,975,543

(463,153)2,516,990 57 24,246,480 2,053,836

(454,854)2,591,642 58 24,731,410 2,136,788

(448,343)2,711,179 59 25,226,038 2,262,836

(441,662)2,840,360 60 25,730,559 2,398,697

(431,322)2,915,627 61 13,122,585 2,484,306

(426,030)3,098,046 62 13,385,037 2,672,017

*Assets & Insurance = residence, personal prop., savings, investments, retirement accounts and life insurance. Net of bequests.




Deaths in same year - Betty dies first.

To HeirsEstate taxTo HeirsEstate Tax

(after both

Assets &

Gain with

Credit Shelter Trust and Irrev. LifeIns. Trust ****Current Situation

Ages

E8Future Estate CostsSample Plan - TOTAL Cash-Flow-Based Planning

Trusts

Debts &

Expenses**

deaths)

Net

EstateInsurance*

(net of

bequests)

$1,347,659 $143,900 $0 $0 $1,173,339 ($916,091)51 $1,203,759 $2,089,430 53

1,724,894 1,724,894 (461,203)52 1,724,894 2,186,098 54

1,833,987 1,833,987 (455,822)53 1,833,987 2,289,809 55

1,943,493 1,943,493 (449,832)54 1,943,493 2,393,324 56

2,020,877 2,020,877 (441,293)55 2,020,877 2,462,171 57

2,102,866 2,102,866 (432,331)56 2,102,866 2,535,197 58

2,227,014 2,227,014 (425,117)57 2,227,014 2,652,130 59

2,360,808 2,360,808 (417,690)58 2,360,808 2,778,498 60

2,445,586 2,445,586 (406,540)59 2,445,586 2,852,126 61

2,630,183 2,630,183 (400,390)60 2,630,183 3,030,572 62

2,827,564 2,827,564 (394,057)61 2,827,564 3,221,621 63

2,813,545 2,813,545 (371,124)62 2,813,545 3,184,669 64

2,804,900 2,804,900 (355,774)63 2,804,900 3,160,674 65

2,892,324 2,892,324 (684,932)64 2,892,324 3,577,256 66

2,910,098 2,910,098 (649,288)65 2,910,098 3,559,386 67

2,884,773 2,884,773 (610,882)66 2,884,773 3,495,655 68

2,887,392 2,887,392 (573,621)67 2,887,392 3,461,013 69

2,917,757 2,917,757 (535,685)68 2,917,757 3,453,442 70

3,103,317 3,103,317 (478,107)69 3,103,317 3,581,425 71

3,165,738 3,165,738 (462,889)70 3,165,738 3,628,626 72

3,224,178 3,224,178 (446,073)71 3,224,178 3,670,250 73

3,281,192 3,281,192 (428,115)72 3,281,192 3,709,306 74

3,323,455 3,323,455 (408,886)73 3,323,455 3,732,341 75

3,380,732 3,380,732 (389,871)74 3,380,732 3,770,603 76

3,435,406 3,435,406 (369,575)75 3,435,406 3,804,981 77

3,487,024 3,487,024 (347,914)76 3,487,024 3,834,938 78

3,535,044 3,535,044 (324,801)77 3,535,044 3,859,845 79

3,578,957 3,578,957 (300,141)78 3,578,957 3,879,098 80

3,618,165 3,618,165 (273,838)79 3,618,165 3,892,004 81

3,667,100 3,667,100 (279,909)80 3,667,100 3,947,009 82

3,711,131 3,711,131 (285,246)81 3,711,131 3,996,377 83

3,754,479 3,754,479 (288,544)82 3,754,479 4,043,023 84

3,793,194 3,793,194 (291,449)83 3,793,194 4,084,642 85

3,826,643 3,826,643 (293,910)84 3,826,643 4,120,553 86

3,854,161 3,854,161 (295,872)85 3,854,161 4,150,033 87

3,874,988 3,874,988 (297,271)86 3,874,988 4,172,260 88

3,888,315 3,888,315 (298,042)87 3,888,315 4,186,357 89

3,919,727 3,919,727 (303,207)88 3,919,727 4,222,934 90

3,857,369 3,857,369 (306,185)89 3,857,369 4,163,554 91

3,862,998 3,862,998 (312,329)90 3,862,998 4,175,327 92

3,859,825 3,859,825 (318,380)91 3,859,825 4,178,205 93

3,846,878 3,846,878 (324,312)92 3,846,878 4,171,190 94

3,823,102 3,823,102 (330,095)93 3,823,102 4,153,196 95

3,787,349 3,787,349 (335,697)94 3,787,349 4,123,046 96

3,738,382 3,738,382 (341,083)95 3,738,382 4,079,465 97

9698

E30E30

**Debts and expenses = mortgages, loans, final expenses (with inflation adjustments), and estimated estate administration costs.

*** May include insurance held outside of the estate.

*Assets & Insurance = residence, personal prop., savings, investments, retirement accounts and life insurance.

***The Credit Shelter Trust is funded with the smaller of the current year Unified Tax Credit Equivalent or separate property plus

It is assumed that both deaths occur at each age illustrated.

1/2 community property.




Tax Cuts and Jobs Act

Future Estate Costs Graph

We have taken information provided about your current estate net worth to estimate your estate tax exposureunder the new law over the next several years. We make some general assumptions regarding the growth ofassets. Also, as previously suggested in this analysis, we assume that each individual has funded a credit sheltertrust utilizing the applicable exclusion amounts available to them (currently $11,200,000 per person in 2018).We also assume that any life insurance benefits are kept out of the taxable estate. The graph below shows yourestimated estate tax exposure (red) and your estate remainder after taxes (green) at each year end.

The Tax Cuts and Jobs Act, which went into effect at the end of 2017, includes a provision that temporarilydoubles the estate exclusion amount. The new exclusion allows up to $11,200,000 to be transferred beforebeing taxed at 40% estate rate. The provision is set to expire in 2026, at which point the exclusion will return to$5,600,000.

E8a

An Estimate of Your Estate Tax Exposure Using Suggested Planning

Capital*Age

Deaths in same year - Betty dies first.


Retirement Debts &Expenses

Net TaxableEstate

ExclusionAmount

EstimatedEstate Tax

($916,091)$2,089,430 51 $22,400,000 $1,173,339

(461,203)2,186,098 52 22,848,000 1,724,894

(455,822)2,289,809 53 23,304,960 1,833,987

(449,832)2,393,324 54 23,771,059 1,943,493

(441,293)2,462,171 55 24,246,480 2,020,877

(432,331)2,535,197 56 24,731,410 2,102,866

(425,117)2,652,130 57 25,226,038 2,227,014

(417,690)2,778,498 58 25,730,559 2,360,808

(406,540)2,852,126 59 13,122,585 2,445,586

(400,390)3,030,572 60 13,385,037 2,630,183

*Assets & Insurance = residence, personal prop., savings, investments, retirement accounts and life insurance. Net of bequests.




40%5,490,000 2017

40%5,450,000 2016

40%5,430,000 2015

40%5,340,000 2014

40%5,250,000 2013

35%5,120,000 2012

35%5,000,000 2011

0%Estate tax repealed*2010

Highestrate

ExemptionamountYear

Estate Planning Concept Illustrations

The following Estate Planning report pages are provided to illustrate various conceptual planning techniques thatmight be considered for present or future use.

The estate reports illustrate several techniques that might be considered in a more extensive analysis, but is byno means comprehensive. Although these concepts have been used in the past, their applicability will be subjectto the results of possible changes in estate taxation decisions made by Congress going forward.

The present estate tax situation is described below:

Unless Congress makes changes, the estate tax will remain as it is in 2018 with indexing adjustments each yearuntil 2026. In 2026, the estate exemption is scheduled to halve, potentially dramatically increasing the amount ofestate tax due.

At present when an heir receives property from an estate, the property takes a "stepped up basis", protectingthe heir from income tax on appreciation that occurred prior to the estate settlement.

An import concept in estate planning is portability. This means that the second spouse to die has full access toany applicable estate credit not used at the death of the first spouse.

It is still possible Congress will make additional changes to the situation described above. For this reason it issuggested that a separate analysis of your estate planning be considered only if it appears that your situationmight benefit from more in-depth analysis and planning. Please recognize that any estate suggestions made nowcould require total revision depending on future changes in the estate tax laws enacted in the next few years.

E9





Unified Creditand Other Credits

(Concept illustration)

Net estate to heirs

Net Federal Estate Tax

Tentative Estate Tax Before Credits

Taxable Estate

Less:

Marital ExemptionCharitable Contributions

Plus Life Insurance, Trusts and OtherAssets Passing Outside of the Estate

Gifts to Charityand Others

Adjusted Gross Estate

Administration and Funeral ExpensesTaxes and Debts

and other adjustments

Less:

Gross Estate

RetirementAccounts

LifeInsurance

Credit Shelter Trust

1/2 of Jointor Community

Property

SeparateProperty

Illustrating a typical process for computing estate taxes.

Calculating Estate Taxes E10





Tax

Tax

Annual gifts

8% growth

*2018 amounts are shown. Allowable amount for gifting is scheduled to increase in future years.

8% growth

To heirs

Tax chargedon

estate lessgifts

Gifts made during the donors lifetime ($15,000 per person or $30,000 joint for a married couple*) times thenumber of heirs, will bypass estate and gift tax on the amount given and on the appreciation on the gifts.

Annual Gift Program

Death in 10 years

Tax charged onentire estate

Entire estate taxed upon death.

No Gift Program


Estate

Note: The current estate tax rules and probable future changes could dramatically affect a gifting program eitherpositively or negatively.

The ability to gift assets to donees without payment of gift or estate taxes can substantially increase the futurevalues available to heirs. When the $5,000,000 estate described above is compared without and with a program ofgiving $28,000 per year for 10 years, the savings in estate taxes increases the future benefit to heirs from$10,804,720 to $10,975,470, an increase of $170,750.

Gifting Program

A significant benefit of making tax free gifts from your estate is the ability to avoid estate taxes on the futureappreciation of the property gifted.

E11

Estatevalue

Estate$5,000,000

To heirs

Gifts plusappreciation

Death in 10 years

Estatevalue

Fromestate

Gifts plusappreciation


+ =

(Estate Reduced byGifts)




IRS

Estate paysestate tax

Estate

Grantor

During Lifetime

* If existing policies are gifted to trust, insured must live 3 years to avoid tax.

- Provide income for a family- Provide funds for estate settlements costs- Avoid increasing estate taxes- Avoid probate costs- Provide for management of assets- Maintain confidentiality- Take advantage of gift tax laws- Help provide a minimal drain on present funds


Irrevocable Life Insurance Trust (ILIT)

The Irrevocable Life Insurance Trust (ILIT) is a basic and useful tool for estate planning. When an ILIT is fundedwith life insurance it may accomplish multiple objectives.

E12

InsuranceCompany

Trust

Beneficiaries

Upon Death

InsuranceCompany

Trust

Grantor

Pays death benefits to trust (no estate tax*)Propertypasses to

estate

Insurance proceeds loanedor used to purchase assets from estate.

Income and principal for benefit of beneficiaries


- Establishes trust

- Makes gift of policies

(or trust acquires policies)

- Makes gift of subsequent premiums

Beneficiaries

Have right to requestfunds from trust

Trust pays premiums to insurance company.




Charitable remainder trust

Grantor

Charity Beneficiaries

Lower value of estate results in less estate taxes. Beneficiaries receive remaining estate assets.

Grantor receives tax deductionplus income from trust

BeneficiariesCharity

Some of the potential benefits:

Grantor

During Lifetime

The charitable trust is sometimes referred to as a double win trust. The grantor wins by receiving an immediatetax deduction based on the present value of the charity's remainder interest. The grantor also receives income,either as a fixed annual amount in the form of an "annuity trust" or as a percent of the trust value as a "unitrust".The charity wins by receiving the remaining assets in the trust when the grantor dies.

- Immediate reduction in income taxes- Increased cash flow- Avoidance of capital gains upon sale of the asset- Eventual reduction of estate taxes- Satisfaction of benefiting a favored charity


Charitable Remainder Trust (CRT)

Using a charitable remainder trust, an individual makes a substantial deferred gift to a charity while retaining theright to receive payments from the trust. The use of such a trust can have multiple tax and non-tax advantages,particularly when the gift is in the form of appreciated property.

E13

Charitable remainder trust

Gives property to trust

Upon Death

Remaining property given to charity.





Tax Remaining trust assets

Assets to "B" trust

All income from the trustis paid to surviving spouse.

Uses applicable credit equivalent toavoid tax.

To beneficiaries as specified in trust

Estate Assets placed into QTIP Trust

Estate Assets

Upon first death

In order to qualify for this treatment the executor must make an irrevocable election to have the maritaldeduction apply to property placed in the trust. This gives the executor the power to determine how much, ifany, of the estate will be taxed at the first death, and also provides flexibility for post death planning.


Qualified Terminal Interest Trust (QTIP)

The Qualified Terminable Interest Trust (QTIP) is designed to reduce taxes through the use of the maritaldeduction, yet control who will eventually receive the property upon the death of the surviving spouse.

E14

Executor determines amount of assets to be treated as marital property

Upon second death


Note: The scheduled estate tax changes and probable additional future revisions in the estate tax laws will likelyimpact the above illustration.




The GSTT is paid in addition to the normal estate or gift tax, and is applied when property istransferred to a person two or more generations younger than the transferor.

To children

For grandchildren

Trust assets divided

Tax

Tax For children

GSTT exemption"B" trust

Skipped generation to grandchildren.

To spouse - "A" trust

Grandparent's Estate

Upon the First Grandparent's Death

Although the benefits of using the GSTT transfer techniques can be substantial for larger estates,its complexity would indicate that careful and thorough planning with qualified counsel is required inorder to avoid unexpected tax consequences.


Generation-Skipping Transfers

The Federal estate tax system is designed to tax property as it is passed from one generation to the next. Thegeneration-skipping transfer tax (GSTT) is intended to prevent wealthy families from reducing estate taxes byskipping one or more generations in the passage of their assets.

E15

GSTT Exemption

Upon the Second Grandparent's Death


Note: The scheduled estate tax changes and probable additional future revisions in the estate taxlaws will likely impact the above illustration.




Assets may pass outright to beneficiaries or into trust for their benefit.

No TaxTax on AssetsOver $11,200,000

No Tax Credit Shelter Trust$11,200,000

Becomes Irrevocable

Surviving Spouse hasright to:

> All income> Principal for health, support, and maintenance> Limited power to appoint principal to heirs

> All income> All principal> Unlimited power to appoint principal to anyone

2,081,800

2,125,800

4,425,800

2,117,800

11,200,000

5,430,000

5,450,000

5,340,000

2018

2017

2016

2015

2014

TaxessavedExclusionYear

The amount of the estate exclusion varies depending on the year of death. Under current rules, an an inflationindex is applied annually to the applicable credit exclusion amount. This estate exemption is now permanentlyportable between spouses.

All assets outside ofcredit shelter trust pass

outright to survivingspouse.

Surviving spouse hasright to:

Remaining Beneficiaries

Current Estate

First Spouse Dies


Credit Shelter Trust

A credit shelter trust is a device used to minimize estate taxes at the passing of each spouse by using theapplicable exclusion amount. It allows the surviving spouse use and access to the assets of the deceased spouse.

E16

Surviving Spouse Dies


5,490,000 2,141,800




E17

Residence is gifted to the trust.The value of the gift is discounted using actuarial tables.

Limited additional cash may be included for debt service and maintenance.Grantor may serve as trustee.

QPRT trust

Personal Residence

The trust may include a contingent reversionary interest, which will cause the residence to revert back to theestate in case of death before the end of the term. With this provision the grantor could utilize the maritaldeduction by passing the residence to a surviving spouse, postponing the estate tax and causing the trust to beclassified as a "grantor trust". This would allow the grantor to deduct property taxes and mortgage interest on hisown tax return during the term of the trust.


Qualified Personal Residence Trust (QPRT)

The QPRT is created by transferring a residence, or second home, into a split interest trust for a specific period oftime, typically between 10 and 20 years. The advantages of the trust arrangement include transfer of theproperty at a low gift tax value and shifting future appreciation out of the grantors estate, providing he or shelives until the end of the term.

When Trust terminates, property istransferred to the beneficiary / heirs.

At this time the grantor may rent or purchasethe residence and continue occupancy.

Grantor may continue to use the residence through the term of the trust.Appreciation is transferred outside the estate.

Residence reverts back to the estate if death occurs before termination of the trust.





The term of a GRAT or GRUT may be for the life of the grantor, for a specified term of years or for the shorter ofthe two periods. If a GRAT is selected and the grantor dies before the trust terminates, some or all of theadvantages of the trust arrangement may be lost. For this purpose it may be wise to select a short trust term andthen repeat the trust - sometimes referred to as "re-GRATing."

Variable annual income amount

The annual payment is a predetermined percent of the fair market value of the trustassets each year and will increase or decrease as the trust assets change.

Level annual income amount

The annuity payment is a fixed dollar amount specified at the time the trust isestablished.

GRUT

GRAT

Two types of trusts are commonly used - Grantor Retained Annuity Trust (GRAT) and Grantor RetainedUnitrust (GRUT).

Property placedinto GRUT

As there are many complex consideration involved in determining the most effective selection, it is veryimportant that the options be carefully reviewed with your financial advisor, accountant and legal counsel.


Grantor Retained Trusts (GRT)

The Grantor Retained Trust is a device that can leverage gifts between generations. By placing property into thetrust, future appreciation on the property is not included in the grantors estate, but the grantor retains anincome interest in the property. The property is treated as a gift subject to gift taxes, however, the terms of thetrust result in a discount to the gift value, effectively reducing the value of the gift to be reported.

E18

Advantages

Property placedinto GRAT


– A hedge against inflation. (If the assets

– Reduce transfer tax cost.

by the property in the trust.

– Removal of future appreciation from estate.

– Additional contributions allowed.increase in value, the income increases)

– Reduce transfer tax cost.

Disadvantages

GRUT

– Continued receipt of the income generated– Removal of future appreciation from estate.

GRAT

– Unstable income stream. (amount maydies prior to termination trust).

– Assets belong to the trust.

increase or decrease)

until end of trust term.– No allocation of Generation Skipping Tax– Annual valuation of trust assets required.

dies prior to termination trust).

– Assets belong to the trust.– Inclusion in Gross Estate. (If grantor

– No allocation of Generation Skipping Tax

– Inclusion in Gross Estate. (If grantor

until end of trust term.

– Additional contributions prohibited.




Business Purpose Attack

Disadvantages

– Increased administration expenses.– Real discounted value may inhibit ability to borrow or invest.– Potential family disharmony if all participants do not agree.– IRS scrutiny - when discounts are taken, the IRS may have a tendency toward closer examination.– Difficult trust administration due to fiduciary obligations that might run counter to the grantor's wishes.– Loss of basis step-up if IRS challenges the discounts and valuations.– Liquidity concerns.– Estate tax implications for closely held stock in the partnership.– Operational formalities, if not closely followed may result in the partnership being disregarded.

From the partial list of advantages and disadvantages shown above, it should be obvious that undertaking a FLPis a serious consideration and will require an in depth degree of analysis and legal consideration.

Shares or Units gifted or sold to children

In a typical situation the parents transfer assets to a family partnership in exchange for partnership shares orunits. This is generally a tax-free event. Partnership interests are then gifted or sold to the children or to trustsestablished for the children's benefit.

Family Limited Partnership

The IRS challenges many FLPs on the theory that the partnership lacks economic substance/business purpose andis merely an attempt to avoid taxation, especially if the property is valued at an excessive discount. It is criticalthat, if a FLP is used, you must have the proper motivation and financial and legal assistance.

– Shift income and appreciation from higher tax bracket family members to those in lower brackets.– Avoid corporate double taxation without use of an S Corporation structure.– Allow step up of basis in partnership assets upon death of a partner.– Divert appreciation of assets from older family members.– Maintain control over assets.– Facilitate a gifting program.– Provide flexibility in managing resources.– Avoid local probate.– Avoid fractionalizing of title, particularly when real estate is involved.– Provide protection from creditors.– Maintain family control.– Facilitate family communication.


Family Limited Partnership (FLP)

A family partnership is an unincorporated entity created by the transfer of property from one or more individualsfor the common benefit of family members. Generally the objective of a FLP is minimizing estate and gift taxes.

E19

Advantages

Family Assets





Estate Assets

Because there are significant tax and financial ramifications, this technique should only be considered withassistance from appropriate financial and legal counsel. An additional consideration is the ability of the potentialinsured to satisfy the medical qualifications for the insurance protection.

Estate owner's death

Estate Received by Heirs

LifeInsurance

The vehicle used for this technique is a life insurance policy, typically some form of permanent insurance that willpersist until the insured's life expectancy. The basic principal is that the policy benefits are used to replace theassets which were transferred out of the estate.

E20

In order to avoid the insurance being included in the taxable estate it should either be owned by the beneficiaryor be held in an Irrevocable Life Insurance Trust. If the charitable gift is in the form of a Charitable RemainderTrust, then an appropriate amount of the income received from the charitable trust could be gifted to theinsurance trust to make the premium payments.


Wealth Replacement Trust

The "Wealth Replacement Trust" is a tool used to replace assets that have been removed from a family'sestate when assets are gifted or otherwise disposed of in order to reduce the taxable estate. This can also beuseful when there is a desire to assist a charitable institution, or to remove appreciated assets for income taxplanning.

Insurance purchased with estate assetsor from income sources to replace the gift value.

CharitableGift

(reduces estate)

InsuranceReceived by

Heirs





$58,507

$2,662,197 $2,603,690

Planning Difference

Total to all beneficiaries

Total to other beneficiaries $647,416

$2,014,781 $2,603,690 Total to Heirs

(245,241)(245,241)

330,495

1,237,527 2,848,931

Before Planning After Planning

To Other Beneficiaries:

Life insurance proceeds paid to other beneficiaries (j)Living gifts made to charityLiving gifts made to other beneficiaries

Less estimated potential income tax on retirement accounts at 20% (k)Less estate taxesInsurance in ILIT after planning

Betty's insurance in ILIT plus Allen's ILIT

Credit Shelter Trust assets to heirsAssets in Betty's estate after planning

Assets and insurance in Betty's estate including insurance from Allen

To Heirs:***

Living gifts to heirs

Summary of Combined Estate Distributions:

Net Estimated Federal Estate Tax in 2030

1,085,372 ($1,085,372)

(51,564)(116,205)

Applicable Estate Tax Credit indexed at 2.00 (less $40,000 credit already used.) (i)Estimated Estate Tax **

Final expenses

Betty's insurance (net of loans) payable to beneficiaries (a)Betty's insurance owned by ILIT or others

Betty dies at age 63 in 2030

$1,237,527

Net estate from Allen ($1,949,484), plus Betty's property ($1,059,968) (h)Assets (after gifts of $984,046) and Allen's insurance ($97,500) into ILIT

Total Estate Estimate - Betty

Reductions to determine taxable estate estimate:

Debt

Administration and probate at 4.00% (net of debt, final expense and insurance)Betty's insurance in ILIT or otherwise not taxable (b)

Total ReductionsNet Taxable Estate

3,009,452 1,393,407

60,000

$3,069,452 $1,453,407

(21,890) (21,890)

(60,000)

($220,521) ($215,879)$2,848,931

Example Estate Estimates upon Second Death:

$1,052,433 $1,949,484

(785,396)(161,593)

(97,500)(49,080)(57,278)

(21,890)(21,890)

$1,837,829 $2,111,077

97,500 97,500 1,052,433 1,052,433

687,896 $961,144

After PlanningBefore Planning

Net Estate in 2030

Total ReductionsAllen's insurance in trust or otherwise not taxable in the estate (b)Administration and probate at 3.00% (net of debt, final exp. and insurance)

Debt (separate + half of joint or community property debt)Final expensesCredit Shelter Trust funded (d)

Reductions to determine taxable estate estimate:

Total Estate Estimate - Allen

Allen's insurance (net of loans) (a)Allen's retirement plans

Property value after Allen's gifts of $267,114 (net cost to estate = $273,249)Separate property ($600,438) plus shared property ($360,706)

Allen dies at age 65 in 2030

*Gifts and CST are limited to assets available reduced by debt, expenses and insurance. Some or all joint

Example Estate Estimates upon First Death:

Estate Planning Options - Allen dies first E21

(82,425) (82,425)

(534,500)

534,500

157,500

(82,425)(82,425)

440,811 ($440,811)

30,000 617,416


property may need to be retitled as separate property in order to fund the Credit Shelter Trust.

**Assumes estate taxes after the year 2018 continue with indexing.

***Insurance, gifts and CST assets are assumed to accumulate at the taxable asset after-tax rate of 1.14% .

2.25%




(k) Tax on retirement accounts

This is an estimated tax which at some time would be payable by the heirs at their tax rate. There are variousoptions that may minimize or defer payment of taxes.

(j) Life Insurance paid to Other than Heirs

Life insurance that is not payable to heirs is not included in the heirs final estate values.

(i) Applicable Estate Tax Credit

It is assumed that the Estate Taxes have been continued at 2018 levels by congress, including indexing of theexclusion amount at 2.00% per year.

(h) Asset Values projected

The estimated values received from the estate of Allen have been either increased based on asset growth andaccumulation of additional funds or reduced by spending during the period between the first and second death.These values will be reduced to reflect the assets held in the Credit Shelter Trust.

These are gifts made to entities other than your heirs, and treated as a reduction to your taxable estate. Thesefunds will not be shown as a benefit to your heirs. The gift may require payment of gift taxes. Such taxes havenot been estimated in this report.

(g) Gifts to others*

(f) Gifts to Heirs*

This represents planned future gifts to heirs either as the maximum amount allowed by IRS or a specified dollaramount that is exempt from gift taxes, currently $15,000 per recipient in 2018. Combined gifts from bothspouses may allow the gift amount to be doubled.

The amount shown is either outright gifts to charity, or the present value of a Charitable Remainder AnnuityTrust (CRAT) or Charitable Remainder Unitrust (CRUT). If a Charitable Trust arrangement is used other benefitsmay be available in the form of continued income and potential income tax deductions.

(e) Gifts to Charity*

The amount of the available Unified Tax Credit will vary depending on the year of death. Future Unified Creditamounts have been indexed at 2.00% . Funds in the Credit Shelter Trust are grown at the after-tax rate ontaxable assets of 1.14%. Under the current scenario, only assets held as separate property will be available foruse in the Credit Shelter Trust. The trust amount has been reduced by the amount of prior credits used in theamount of $40,000.

(d) Credit Shelter Trust

These estimated reductions could include special valuation discounts for closely held business interests, familypartnerships or certain other illiquid assets in the estate.

(c) Other reductions and discounts

(b) Life Insurance in ILIT or otherwise excluded

Life insurance values shown here are not subject to the estate tax, either held in an Irrevocable Life InsuranceTrust (ILIT), or excluded due to other ownership provisions. Caution - Existing insurance policies must be held forthree or more years prior to assignment to an ILIT in order to be excluded from estate taxation. Insuranceproceeds are assumed to appreciate at the after-tax rate on taxable assets. Group insurance is not included inthe ILIT.

This is the total amount of life insurance in force, including amounts that will not be taxed.

(a) Life Insurance

*Note: Gifts to charity or others based on a percent of estate is based on the amount of assets not including life insurance and net of debts.

Notes to Estate Planning Options E22


The After Planning scenario uses separate property plus half of joint property. Joint Property ownership mayneed to be revised in order to fully fund the credit shelter trust. The credit shelter will be funded with the lesserof the amount available to fund the Credit Shelter Trust, or the maximum allowable credit shelter amount.




Estate Option Comparison E23


Various estate planning options illustrated result in different amounts received by the heirs, the IRS and, if elected,amounts gifted to charities, heirs or others. The amounts shown are estimates only and are subject to future changeby Congress.

CurrentPlanningEstate Planning Results

Life Insurance

Trust

Gifts to Charity,

Heirs, otherAll

Options

CreditShelter

Trust

$842,169 $2,691,431 $1,871,020 Assets and insurance paid to heirs $1,237,527 $2,848,931

2,006,762 Credit Shelter Trust to heirs 534,500

330,495 Gifts to Heirs 330,495

157,500 Life Insurance Trust & not in estate 157,500

30,000 Gifts to Charity 30,000

Estate and retirement plan tax* ($245,241) ($245,241) ($245,241) ($245,241) ($245,241)

Total to Heirs $2,603,690 $2,603,690 $2,603,690 $1,956,273 $2,014,781

Total to all Beneficiaries $2,603,690 $2,603,690 $2,603,690 $2,603,690 $2,662,197

Planning Gain $0 $0 $0 $58,507

Implementation of estate planning options as illustrated above should be based on careful consideration with yourfinancial and legal advisors. The amounts and results shown are estimates only and actual results may differsubstantially. No investment products or systems are represented in this illustration. Future Estate balances arehypothetical and are used for illustration purposes only.

*Columns do not total 100% due to asset increase or reduction with deaths occurring at different ages.

**Assumes estate taxes after the year 2018 continue with indexing.Note: For source of numbers for Current and All Options refer to Estate Planning Options report.




$40,000

Total Cost of Gifts $984,046

Gifts from Betty's estate $710,797

10,000

255,406

150,495

second death

10,000

284,896

Gifts from Allen's estate

180,000

$267,114

77,114

10,000

at first death to the estate

10,000

77,114

$273,249

186,134

$60,000

Amount at second death

At second death with growth

After planning Before planning

$97,500

$97,500

183,050 699,262

234,200 360,706

$417,250 $1,059,968

($220,521) ($220,521)

$1,059,968

360,706

699,262

$839,447 $417,250 $839,447

$1,851,984 $1,851,984 $1,061,200

$600,438 $600,438 $497,000

Other estate adjustments:

Amount of Applicable Estate Tax Credit already used.

Charitable gifts of $10,000 plus 0.00 percent of assets

Gifts to others of $0 plus 10.00 percent of assets

Planned giving from the estate of the last to die:

From the estate of Betty:

Charitable gifts of $10,000 plus 0.00 percent of assets

Maximum amount allowable for estate exclusion for 2 persons

Gifts to heirs starting at age 60 for 5 years

Gifts to others of $0 plus 10.00 percent of assets

Gifts to others of $0 plus 10.00% of assets

Gifts to heirs starting at age 60 for 5 years:

Maximum amount allowable for estate exclusion for 2 persons

Charitable gifts of $10,000 plus 0.00% of assets

From the estate of Allen:

Total

Self owned payable to heirs

Less Loans

Total for Betty

Total Assets

Less: Debts, final expenses and administration

Betty's separate property


Betty's retirement accounts

Total for Allen

1,052,433

360,706

$2,013,577

($161,593)

Betty's age 63

The following assumptions have been used to illustrate some of the estate planning options shown in the report.

ILIT or non-owned to heirs

Betty's life insurance:

Insurance policies:

Allen's life insurance:

Self owned payable to heirs

Total

$97,500

97,500

($161,593)

$2,013,577 $1,061,200

360,706 234,200

1,052,433 330,000

Allen's age 65

Today'sDollars

Total Assets

Less: Debts, final expenses and administration


Allen's retirement accounts

Allen's separate property

Assets prior to reduction by debts, gifts, trusts and expenses:

*Future values for gifts are increased at the annual rate indicated until the gift is made. Life insurance and Credit Shelter Trust assets are assumed to grow at theafter-tax rate of return earned on taxable assets of 1.14%. Expenses and gifts paid from the first estate are compounded at the after tax rate of return to

illustrate the lost potential earnings on the assets for comparison purposes.

Estate Options Assumptions E24


Group ins. to heirs

ILIT or non-owned to non-heirs

Self owned payable to non-heirs

ILIT or non-owned to heirs

$60,000

ILIT or non-owned to non-heirs

Group ins. to heirs

$60,000

Self owned payable to non-heirs

60,000

$0 per year for 2 persons increased at 0.00% per year

$0 per year for 2 persons increased at 0.00% per year

Discounts to asset values for illiquid holdings.

Gifts are made only from separate and jointly owned assets plus insurance proceeds. No gifts are made from retirement plan assets to avoid undesirable taxconsequences.

Before planning After planning

Face Amount

Amount of gifts Cost of Gifts

Gifts made at




Estate Personal AssetsSample Plan - TOTAL Cash-Flow-Based Planning

Ages

E25

Art &Antiques

Autos RV's &Boats

1 2 3 4 5 6 7

PersonalProperty

Jewelry& Furs

TotalPersonal

Assets

OtherResidence

$447,000

2.00%

$69,600

-3.94% $516,600

8

51 $516,600 53 $69,600 $447,000

52 522,800 54 66,860 455,940

53 529,369 55 64,310 465,059

54 536,296 56 61,936 474,360

55 543,572 57 59,725 483,847

56 551,190 58 57,666 493,524

57 559,142 59 55,748 503,395

58 567,423 60 53,960 513,462

59 576,026 61 52,294 523,732

60 584,947 62 50,740 534,206

61 594,182 63 49,292 544,891

62 603,729 64 47,941 555,788

63 613,584 65 46,680 566,904

64 1,076,508 66 45,503 1,031,004

65 1,096,029 67 44,405 1,051,625

66 1,116,036 68 43,379 1,072,657

67 1,136,531 69 42,421 1,094,110

68 1,157,519 70 41,526 1,115,992

69 1,179,002 71 40,690 1,138,312

70 1,200,987 72 39,908 1,161,079

71 1,223,478 73 39,178 1,184,300

72 1,246,480 74 38,494 1,207,986

73 1,270,001 75 37,855 1,232,146

74 1,294,045 76 37,257 1,256,789

75 1,318,621 77 36,697 1,281,924

76 1,343,736 78 36,173 1,307,563

77 1,369,396 79 35,682 1,333,714

78 1,395,611 80 35,223 1,360,389

79 1,422,388 81 34,792 1,387,596

80 1,449,737 82 34,388 1,415,348

81 1,477,665 83 34,010 1,443,655

82 1,506,184 84 33,656 1,472,528

83 1,535,302 85 33,323 1,501,979

84 1,565,030 86 33,011 1,532,018

85 1,595,377 87 32,718 1,562,659

86 1,626,356 88 32,444 1,593,912

87 1,657,976 89 32,186 1,625,790

88 1,690,250 90 31,944 1,658,306

89 1,723,189 91 31,716 1,691,472

90 1,756,804 92 31,503 1,725,302

91 1,791,110 93 31,302 1,759,808

92 1,826,117 94 31,114 1,795,004

93 1,861,840 95 30,936 1,830,904

94 1,898,291 96 30,770 1,867,522

95 1,935,485 97 30,613 1,904,872

9698

Note: Beginning of year values are illustrated.




Estate - AllenSample Plan - TOTAL Cash-Flow-Based Planning

E26

AgePersonalProperty Taxable

Equity &Other

Tax

Free

Tax

Deferred

Ret/Roth

Accounts

Liabilities Final

Expenses

Life

Insurance

(less loans)

Life Ins

in ILIT or

Outside

Estate

RentalReal Estate

Savings and Investments

53 $497,000 $330,000 $6,640 $15,000 $347,500

54 503,972 367,642 6,334 15,480 347,500

55 511,258 408,255 5,984 15,975 347,500

56 518,854 453,036 5,582 16,487 347,500

57 526,753 501,328 5,121 17,014 347,500

58 534,951 553,384 4,592 17,559 347,500

59 543,443 609,479 3,987 18,120 347,500

60 552,227 669,903 3,292 18,700 347,500

61 561,299 735,587 2,496 19,299 347,500

62 570,658 806,306 1,583 19,916 347,500

63 580,301 882,423 536 20,554 347,500

64 590,228 964,327 21,211 347,500

65 600,438 1,052,433 21,890 97,500

66 1,063,693 1,120,841 355,108 22,591 97,500

67 1,083,524 1,193,695 338,795 23,313 97,500

68 1,103,820 1,165,178 321,647 24,060 97,500

69 1,124,585 1,047,622 303,622 24,829 97,500

70 1,145,824 953,483 284,675 25,624 97,500

71 1,167,544 1,010,808 264,758 26,444 97,500

72 1,189,748 1,051,323 243,822 27,290 97,500

73 1,212,445 1,092,910 221,816 28,163 97,500

74 1,235,640 1,135,545 198,683 29,065 97,500

75 1,259,340 1,132,591 174,367 29,995 97,500

76 1,283,554 1,097,743 148,807 30,955 97,500

77 1,308,287 1,057,102 121,939 31,945 97,500

78 1,333,549 1,010,141 93,696 32,967 97,500

79 1,359,348 956,072 64,009 34,022 97,500

80 1,385,692 894,474 32,803 35,111 97,500

81 1,412,590 824,470 36,235 97,500

82 1,440,053 795,595 37,394 97,500

83 1,468,088 780,218 38,591 97,500

84 1,496,706 830,932 39,826 97,500

85 1,525,918 884,943 41,100 97,500

86 1,555,733 942,464 42,415 97,500

87 1,586,163 1,003,724 43,772 97,500

88 1,617,219 1,068,966 45,173 97,500

89 1,648,912 1,138,449 46,619 97,500

90 1,681,254 1,112,590 48,111 97,500

91 1,714,257 1,028,269 49,650

92 1,747,933 912,776 51,239

93 1,782,295 781,397 52,878

94 1,817,355 632,701 54,571

95 1,853,128 465,143 56,317

96 1,889,626 277,056 58,119

97 1,926,864 66,644 59,979

98

E25 C4 C5 C7 C8 C10-C11 B24c B22C22




Estate - BettySample Plan - TOTAL Cash-Flow-Based Planning

E27

AgePersonalProperty Taxable

Equity &Other

Tax

Free

Tax

Deferred

Ret/Roth

Accounts

Liabilities Final

Expenses

Life

Insurance

(less loans)

Life Ins

in ILIT or

Outside

Estate1.43%

RentalReal Estate


51 $183,050 $15,000 $310,000

52 210,447 15,480 310,000

53 240,054 15,975 310,000

54 272,031 16,487 310,000

55 306,550 17,014 310,000

56 343,795 17,559 310,000

57 383,962 18,120 310,000

58 427,263 18,700 310,000

59 473,924 19,299 310,000

60 524,186 19,916 310,000

61 578,309 20,554 310,000

62 636,569 21,211 60,000

63 699,262 21,890 60,000

64 763,160 22,591 60,000

65 812,766 23,313 60,000

66 865,596 24,060 60,000

67 921,860 24,829 60,000

68 981,781 25,624 60,000

69 1,045,597 26,444 60,000

70 1,113,561 27,290 60,000

71 1,159,482 28,163 60,000

72 1,206,748 29,065 60,000

73 1,255,348 29,995 60,000

74 1,305,265 30,955 60,000

75 1,356,474 31,945 60,000

76 1,408,944 32,967 60,000

77 1,462,814 34,022 60,000

78 1,517,879 35,111 60,000

79 1,574,299 36,235 60,000

80 1,632,055 37,394 60,000

81 1,669,971 38,591 60,000

82 1,638,423 39,826 60,000

83 1,597,840 41,100 60,000

84 1,547,301 42,415 60,000

85 1,485,830 43,772 60,000

86 1,412,331 45,173 60,000

87 1,325,639 46,619 60,000

88 1,356,616 48,111 60,000

89 1,444,796 49,650 60,000

90 1,538,708 51,239 60,000

91 1,638,724 52,878 60,000

92 1,745,241 54,571 60,000

93 1,858,682 56,317 60,000

94 1,979,496 58,119 60,000

95 2,108,163 59,979 60,000

96

E25 C4 C5 C7 C8 C10-C11 B24c B22C22




Taxable

Estate - Joint and Community PropertySample Plan - TOTAL Cash-Flow-Based Planning

Ages

E28

PersonalProperty

Equity &Other

Tax-Deferred

Tax-Free Liabilities


100.00% 100.00% 100.00% 100.00%

RentalReal Estate

1 2 3 4 5 6 7

$165,000 53 $19,600 $350,000 $83,800 51 $200,000

184,068 54 18,828 338,235 88,313 52 204,000

204,619 55 18,110 325,905 92,914 53 208,080

226,215 56 17,442 312,985 89,291 54 212,242

249,431 57 16,819 299,445 42,122 55 216,486

264,957 58 16,239 285,255 56 220,816

275,863 59 15,699 270,384 57 225,232

288,534 60 15,196 254,798 58 229,737

238,259 61 14,726 238,461 59 234,332

279,029 62 14,289 221,338 7,060 60 239,019

322,892 63 13,881 203,389 14,244 61 243,799

372,607 64 13,500 184,574 22,167 62 248,675

424,720 65 13,145 164,851 29,898 63 253,648

280,172 66 12,814 144,174 64 258,721

114,748 67 12,505 122,498 65 263,896

68 12,216 99,772 66 269,174

69 11,946 75,945 67 274,557

70 11,694 50,962 68 280,048

162,298 71 11,459 105,958 69

171,224 72 11,239 14,821 70

118,597 73 11,033 71

45,619 74 10,840 72

75 10,660 73

76 10,492 74

77 10,334 75

78 10,187 76

79 10,048 77

80 9,919 78

81 9,798 79

82 9,684 80

83 9,578 81

84 9,478 82

85 9,384 83

86 9,296 84

87 9,214 85

88 9,136 86

89 9,064 87

90 8,996 88

91 8,932 89

92 8,871 90

93 8,815 91

94 8,762 92

95 8,712 93

96 8,665 94

97 8,621 95

98 96C7E25 C5 C8 B24cC22




Taxable

Irrevocable Trust, OtherSample Plan - TOTAL Cash-Flow-Based Planning

Ages

E29

PersonalProperty

Equity &Other

Tax-Deferred

Tax-Free Liabilities


RentalReal Estate

1 2 3 4 5 6 7

53 51

54 52

55 53

56 54

57 55

58 56

59 57

60 58

61 59

62 60

63 61

64 62

65 63

66 64

67 65

68 66

69 67

70 68

71 69

72 70

73 71

74 72

75 73

76 74

77 75

78 76

79 77

80 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96C7C4E25 C5 C8 B24cC22




Estate - Estimate Worksheet*Sample Plan - TOTAL Cash-Flow-Based Planning

E30

Allen dies first

Age

Assets

+ 1/2 Jt, CP

+Estate Ins.

Debts &

Final

Expenses

First

to Die

@ 3.00%

Second

to Die

@ 4.00%

Admin Costs

+estate ins.

Debts &

final+1/2 Jt, CP

Betty dies first

age

Assets

expenses

to die

@ 4.00%

Admin. costs

SecondFirst

to die

@ 3.00%

Life

Insurance

Non-Estate

Sp

53 $1,408,700 ($386,640) ($25,937) ($49,856) $727,250 51 ($386,640) ($51,847)($6,817)

54 1,466,718 (375,529) (32,736) (73,060) 768,052 52 (375,529) (73,899)(11,776)

55 1,528,875 (363,840) (34,951) (77,680) 811,916 53 (363,840) (78,540)(13,442)

56 1,591,985 (351,540) (37,213) (82,314) 854,626 54 (351,540) (83,199)(15,093)

57 1,638,010 (338,594) (38,982) (85,577) 878,979 55 (338,594) (86,487)(16,212)

58 1,686,841 (324,965) (40,856) (89,033) 904,801 56 (324,965) (89,971)(17,395)

59 1,758,819 (310,611) (43,446) (94,285) 952,359 57 (310,611) (95,253)(19,252)

60 1,836,363 (295,490) (46,226) (99,946) 1,003,996 58 (295,490) (100,945)(21,255)

61 1,888,045 (279,554) (48,255) (103,513) 1,027,583 59 (279,554) (104,545)(22,441)

62 1,994,162 (262,753) (51,942) (111,334) 1,103,884 60 (262,753) (112,402)(25,234)

63 2,107,632 (245,033) (55,878) (119,698) 1,185,717 61 (245,033) (120,804)(28,221)

64 2,230,530 (226,997) (60,106) (118,739) 1,025,044 62 (226,997) (120,185)(23,941)

65 2,111,077 (208,631) (57,073) (118,614) 1,119,968 63 (208,631) (119,803)(27,340)

66 2,557,888 (544,463) (60,403) (122,081) 1,099,014 64 (544,463) (123,832)(16,637)

67 2,570,294 (507,920) (61,871) (122,754) 1,068,340 65 (507,920) (124,556)(16,813)

68 2,507,193 (469,538) (61,130) (121,713) 1,066,291 66 (469,538) (123,442)(17,903)

69 2,412,959 (429,225) (59,512) (121,973) 1,125,112 67 (429,225) (123,519)(20,877)

70 2,342,679 (386,885) (58,674) (123,391) 1,187,652 68 (386,885) (124,777)(24,023)

71 2,415,709 (317,646) (62,942) (131,223) 1,245,454 69 (317,646) (132,627)(27,834)

72 2,437,213 (298,403) (64,164) (133,874) 1,272,203 70 (298,403) (135,272)(29,214)

73 2,467,670 (278,142) (65,686) (136,326) 1,284,297 71 (278,142) (137,746)(30,185)

74 2,496,915 (256,812) (67,203) (138,715) 1,294,978 72 (256,812) (140,157)(31,145)

75 2,494,762 (234,356) (67,812) (140,531) 1,320,678 73 (234,356) (141,940)(32,590)

76 2,484,043 (210,716) (68,200) (143,026) 1,370,511 74 (210,716) (144,362)(34,794)

77 2,468,056 (185,829) (68,467) (145,416) 1,421,641 75 (185,829) (146,672)(37,074)

78 2,446,284 (159,631) (68,600) (147,684) 1,474,037 76 (159,631) (148,850)(39,432)

79 2,417,944 (132,053) (68,577) (149,806) 1,527,838 77 (132,053) (150,874)(41,874)

80 2,382,626 (103,025) (68,388) (151,762) 1,582,838 78 (103,025) (152,722)(44,394)

81 2,339,459 (72,469) (68,010) (153,527) 1,639,198 79 (72,469) (154,367)(47,002)

82 2,337,990 (74,788) (67,896) (155,688) 1,696,897 80 (74,788) (156,457)(48,663)

83 2,350,595 (77,181) (68,202) (157,599) 1,734,760 81 (77,181) (158,338)(49,727)

84 2,429,877 (79,651) (70,507) (159,315) 1,703,162 82 (79,651) (160,187)(48,705)

85 2,513,053 (82,200) (72,926) (160,818) 1,662,532 83 (82,200) (161,839)(47,410)

86 2,600,345 (84,830) (75,465) (162,080) 1,611,949 84 (84,830) (163,266)(45,814)

87 2,691,994 (87,545) (78,133) (163,070) 1,550,437 85 (87,545) (164,440)(43,887)

88 2,788,253 (90,346) (80,937) (163,755) 1,476,899 86 (90,346) (165,328)(41,597)

89 2,889,393 (93,237) (83,885) (164,098) 1,390,171 87 (93,237) (165,897)(38,908)

90 2,895,842 (96,221) (83,989) (165,470) 1,421,114 88 (96,221) (167,240)(39,747)

91 2,746,992 (99,300) (79,431) (163,101) 1,509,262 89 (99,300) (164,586)(42,299)

92 2,665,145 (102,478) (76,880) (163,557) 1,603,144 90 (102,478) (164,832)(45,020)

93 2,568,099 (105,757) (73,870) (163,664) 1,703,131 91 (105,757) (164,702)(47,921)

94 2,454,437 (109,141) (70,359) (163,382) 1,809,622 92 (109,141) (164,156)(51,014)

95 2,322,627 (112,634) (66,300) (162,669) 1,923,038 93 (112,634) (163,149)(54,312)

96 2,171,015 (116,238) (61,643) (161,478) 2,043,828 94 (116,238) (161,631)(57,828)

97 1,997,819 (119,958) (56,336) (159,760) 2,172,473 95 (119,958) (159,550)(61,575)

98 96

Note: Beginning of year values are illustrated.

*Assumes that both deaths occur in the same year.

E25-29 E25-29 E25-29 E25-29




Summary

This section summarizes the results of the combined cash flows, their effect on your asset accounts and income taxes.

The result is an illustration of the amount of capital available at any time, the amount of funds used for your retirementand how long funds will last.

A Monte Carlo Simulation report may be included to illustrate the fact that the results of any retirement projection willvary based on market conditions, and other factors that are not possible to accurately predict.




Retirement Summary F1


The following table summarizes the goals, assumptions and variables used in the Retirement Planning analysis.

RETIREMENT GOALS: BettyAllen

6465Retirement Age

9590Life ExpectancyB8$44,680Retirement Living Expenses (after-tax) Today's $B865,203Retirement Living Expenses (after-tax) Inflated

3.20%Standard of Living Inflation Rate

RETIREMENT CAPITAL:

6.52%Rate of Return - Pre-Retirement (pre-tax)C3$761,850Total Assets Available for RetirementB820,280Annual Additions to Qualified AccountsB89,000Annual Additions to Other Accounts

RETIREMENT INCOME (pre-tax): BettyAllen

6767Social Security Starting Age

$30,838$34,803Social Security Benefit

2.00%Social Security COLA

65Pension 1 Starting Age

2,400Pension 1 Benefit

Pension 1 Survivorship

2.00%Pension 1 COLA

OTHER INCOME/EXPENSE ITEMS (pre-tax):B18$200,000Other IncomeB18(291,811)Other ExpenseB186,421Stock Option ProceedsB18(88,777)Residence Sale Proceeds

B18a391,706Rental Real Estate IncomeB18(191,346)Education ExpensesB18(29,187)Other Goals

INCOME TAXES:D331.00%Marginal Tax Rate (Federal & State)D328.93%Effective Tax Rate

RETIREMENT ANALYSIS:

2,206,314Amount Available at Retirement

2,075,223Retirement Assets at Age 97

Your assets may last through life expectancy.




Retirement EstimateSample Plan - TOTAL Cash-Flow-Based Planning

F2

As inflation increases the amount of income needed for your standard of living, there is the potential need to drawincreasing amounts out of savings, investments and retirement accounts.

The graph shows how long your capital might last. The objective is to assure that your capital is properly managedso that it will last at least until your life expectancy.

If the capital is depleted before your need for income has ceased, then you will become dependent on yourpensions, Social Security, relatives or public sources. If there is capital remaining when your need for income stopsthen the remaining capital is available for your heirs.

The line allows you to visualize the annual expenses as compared to your capital accounts.

If the bars dip below the "0" level on the graph, it indicates that you have consumed all your savings, investment,and retirement accounts, and your spending requirements have caused a "deficit" spending situation - a need forfunds where none exists.




Retirement Capital EstimateSample Plan - TOTAL Cash-Flow-Based Planning

Ages *

F3

Begin. Yr.Account

Totals

1 2 3 4 5 76 8

EarnedIncome

** InvestmentAcct Distr.

** RetirementAcct Distr.

Other Inc.& St. Opt.

Pensions/Soc Sec

AnnualSurplus

Ending YearAccount

Totals

Income and Capital DistributionsAnnual

ExpensesIncl. Tax

$166,000 53 $761,850 $6,628 $532 $850,471 ($172,096)51

169,750 54 850,471 7,051 596 945,842 (176,205)52

183,041 55 945,842 7,483 8,107 1,040,573 (198,631)53

187,202 56 1,040,573 7,924 51,207 1,099,431 (246,333)54

191,456 57 1,099,431 8,414 54,176 1,162,136 (254,046)55

195,811 58 1,162,136 8,831 17,608 1,269,304 (222,250)56

200,264 59 1,269,304 11,631 16,699 1,385,701 (228,594)57

210,763 60 1,385,701 78,045 1,447,770 (288,808)58

215,572 61 1,447,770 10,262 19,983 1,616,581 (205,851)59

220,494 62 1,616,581 10,758 20,025 1,797,868 (211,227)60

225,528 63 1,797,868 15,312 23,100 1,995,670 (217,740)61

230,679 64 1,995,670 11,780 21,503 2,206,314 (220,956)62

101,459 65 2,206,314 12,306 192,868 2,164,173 (306,633)63R

66 2,164,173 12,843 175,516 2,121,209 (188,359)64 R

37,203 67 2,121,209 102,428 13,391 114,748 2,030,773 (267,769)65

37,947 68 2,030,773 186,591 13,949 1,969,482 (238,487)66

69,544 69 1,969,482 156,610 14,519 1,935,264 (240,673)67

70,935 70 1,935,264 4,490 438,244 262,542 2,324,661 (251,126)68

72,354 71 2,324,661 24,315 92,056 2,350,929 (188,725)69

73,801 72 2,350,929 51,365 75,041 2,370,988 (200,207)70

75,277 73 2,370,988 54,546 77,163 2,387,911 (206,986)71

76,782 74 2,387,911 102,907 45,619 2,387,939 (225,308)72

78,318 75 2,387,939 135,288 2,403,008 (213,606)73

79,884 76 2,403,008 140,578 2,413,576 (220,463)74

81,482 77 2,413,576 146,125 2,419,085 (227,608)75

83,111 78 2,419,085 151,981 2,418,886 (235,093)76

84,774 79 2,418,886 158,083 2,412,353 (242,857)77

86,469 80 2,412,353 164,480 2,398,769 (250,950)78

88,199 81 2,398,769 122,635 2,427,649 (210,834)79

89,962 82 2,427,649 128,800 2,450,189 (218,763)80

91,762 83 2,450,189 135,238 2,469,355 (227,001)81

93,597 84 2,469,355 141,981 2,482,783 (235,579)82

95,469 85 2,482,783 149,045 2,489,765 (244,515)83

97,378 86 2,489,765 156,427 2,489,554 (253,805)84

99,325 87 2,489,554 164,181 2,481,297 (263,507)85

101,313 88 2,481,297 172,305 2,464,088 (273,618)86

103,338 89 2,464,088 148,217 2,469,206 (251,556)87

105,406 90 2,469,206 151,208 2,473,065 (256,615)88L

59,838 91 2,473,065 176,009 2,451,484 (235,847)89

61,034 92 2,451,484 184,097 2,420,121 (245,132)90

62,255 93 2,420,121 192,570 2,377,942 (254,826)91

63,501 94 2,377,942 201,448 2,323,825 (264,949)92

64,770 95 2,323,825 210,752 2,256,552 (275,522)93

66,066 96 2,256,552 220,501 2,174,807 (286,568)94

67,387 97 2,174,807 230,721 2,075,223 (298,109)95 L

98 2,075,223 2,075,223 96

C3aB18, B18aB10C4...C8C10...C10eB9B8

R = Retirement Age, L = Life Expectancy**Investment and Retirement distributions include withdrawals from account totals to satisfy "Income needed" shortages from Cash Flow report.




F4Monte Carlo Retirement Simulation

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. Thegraph and related calculations do not presuppose or analyze any particular investment or investment strategy. Thislong-term hypothetical model is used to help show potential effects of market volatility and possible effects on yourfinancial 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 all capitalassets, both tax advantaged and taxable, all expenses, including education funding if applicable, pension benefits andSocial Security benefits. Observing results from these large number of simulations may offer insight into the shape,trends and potential range of future retirement plan outcomes under volatile market conditions.

Results from 10,000 Monte Carlo Simulations:$2,074,952 Percentage of results above zero*

Maximum Monte Carlo result

Average Monte Carlo result Percentage with $ remaining at Allen's age 87

Percentage with $ remaining at Allen's age 92Minimum (worst case) result

Original Retirement Capital estimate

Percentage with $ remaining at Allen's age 82

*Percent of times money is remaining at last life expectancy.

$0

$2,477,744

$24,081,945

88%

97%

100%

72%

The bold line is the estimated retirement capital value over time using fixed rates.

Current after tax rate of return is 6.52% in the original estimate and varies from 5.99% to 7.17%, with portfolio changes.

This simulation used a 4.25% 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 -2.51% and 15.67%).

A standard deviation rate of 2.00% was applied to the inflation rate used on personal expenses.

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.


The original capital estimate indicated a possibility of having $2,074,952 in assets remaining at last life expectancy.Monte Carlo simulation, using 10,000 trials of the same assets, income and expenses, resulted in a 72% probability of

having funds remaining at last life expectancy, and an average amount of $2,477,744 remaining.




F5Monte Carlo Details

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, annual expenses,amount of money currently invested and rates of return on retirement assets. The analysis of potential fundsavailable for use in retirement included an assumed "fixed" or "static" rate of return on each asset type -taxable, tax-free, tax-deferred, equity and retirement accounts.

Use of a fixed or static rate (where the initial rate used remains static throughout the analysis) can be helpful forvisualizing potential future values to see how long your money might last, but may not reflect what happens inthe real world of finance.

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 preparation of10,000 separate projections of your financial future, where a rate of return is randomly selected every year ineach of the 10,000 simulations.

Standard Deviation:

Fixed or Static rates:

Variable Rates:

Original Result -vs.- Monte Carlo:

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 Carlo results. Allvalues are based on results at the life expectancy of the last to die or the ages shown.

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 rate basedon the assumption that our portfolio will consist of various asset components. Assets like CD's, bonds andsavings will be conservative and have a low variation in rate. Other assets like stocks, mutual funds, real estate,etc. will likely show a greater degree of variability in rate of return. It is also assumed that the mix of assets willchange as your goals and time horizon changes.

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 each year.The Monte Carlo illustration shows additional lines representing the range of results using variable rates ofreturn each year for each of the 10,000 Monte Carlo simulations. The Monte Carlo "tornado" chart makes itclear that there is a great range of potential outcomes that could be realized in the future.

This represents the lowest return of 10,000 simulations. In most cases at least some of theseresults will be zero (0), indicating that funds ran out prior to life expectancy.

This is the average of all positive Monte Carlo simulations. The average may or may not besimilar to the Original Retirement Capital Estimate.

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.

Minimum

Average

Maximum





28% +

14.5 - 25.5%

8 - 12%

4 - 7%

16%+

11 - 15%

8 - 10%

4 - 7%

1 - 3%

Standard DeviationWeighted average

portfolio rate

Standard Deviations

Since 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.

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.

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 CD's, bonds, savings, moneymarket accounts and other fixed rate of return assets. Those with higher volatility include stocks, mutual fundsand 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.

F5aStandard 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.

Standard Deviation

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 lowstandard deviation rate used if the portfolio rate is low and a higher standard deviation rate used for higherportfolio rates. This method may result in a standard deviation rate lower than reported on some specificasset classes, but will provide a reasonable illustration of a mixed portfolio as described above.


3%




Net Worth ReportSample Plan - TOTAL Cash-Flow-Based Planning

Ages

F6

Savingsand

Investments

Retirementand RothAccounts

Real EstateMarket

Value

1 2 3 4 5 6 7

Autos &PersonalProperty

Life Insur.Cash

ValuesNet

Worth

TotalAsset

ValuesLess

Liabilities

8

$1,137,110 51 $248,800 ($356,640)53 $69,600 $513,050 $647,000 $15,300 $1,493,750

1,253,828 52 272,381 (344,569)54 66,860 578,089 659,940 21,127 1,598,397

1,378,355 53 297,533 (331,889)55 64,310 648,309 673,139 26,953 1,710,244

1,503,323 54 315,506 (318,567)56 61,936 725,067 686,602 32,780 1,821,890

1,593,530 55 291,553 (304,566)57 59,725 807,878 700,334 38,606 1,898,096

1,688,727 56 264,957 (289,848)58 57,666 897,179 714,340 44,433 1,978,575

1,829,568 57 275,863 (274,371)59 55,748 993,441 728,627 50,260 2,103,938

1,980,856 58 288,534 (258,090)60 53,960 1,097,166 743,200 56,086 2,238,946

2,079,083 59 238,259 (240,957)61 52,294 1,209,511 758,064 61,913 2,320,040

2,285,365 60 286,089 (222,921)62 50,740 1,330,492 773,225 67,739 2,508,286

2,505,490 61 337,136 (203,926)63 49,292 1,460,732 788,689 73,566 2,709,415

2,742,892 62 394,774 (184,574)64 47,941 1,600,896 804,463 79,393 2,927,466

2,993,913 63 454,618 (164,851)65 46,680 1,751,695 820,552 85,219 3,158,764

3,088,906 64 280,172 (499,282)66 45,503 1,884,001 1,289,726 88,786 3,588,188

3,110,677 65 114,748 (461,293)67 44,405 2,006,461 1,315,520 90,835 3,571,969

3,087,450 66 (421,419)68 43,379 2,030,774 1,341,831 92,885 3,508,869

3,095,939 67 (379,566)69 42,421 1,969,482 1,368,667 94,935 3,475,505

3,134,178 68 (335,637)70 41,526 1,935,264 1,396,041 96,984 3,469,815

3,337,939 69 268,256 (264,758)71 40,690 2,056,405 1,138,312 99,034 3,602,697

3,409,177 70 186,045 (243,822)72 39,908 2,164,884 1,161,079 101,083 3,652,999

3,475,784 71 118,597 (221,816)73 39,178 2,252,392 1,184,300 103,133 3,697,600

3,540,892 72 45,619 (198,683)74 38,494 2,342,293 1,207,986 105,183 3,739,575

3,590,805 73 (174,367)75 37,855 2,387,939 1,232,146 107,232 3,765,172

3,657,528 74 (148,807)76 37,257 2,403,008 1,256,789 109,282 3,806,335

3,721,590 75 (121,939)77 36,697 2,413,576 1,281,924 111,331 3,843,529

3,782,505 76 (93,696)78 36,173 2,419,085 1,307,563 113,381 3,876,202

3,839,704 77 (64,009)79 35,682 2,418,886 1,333,714 115,431 3,903,713

3,892,642 78 (32,803)80 35,223 2,412,353 1,360,389 117,480 3,925,444

3,940,687 7981 34,792 2,398,769 1,387,596 119,530 3,940,687

3,998,966 8082 34,388 2,427,650 1,415,348 121,579 3,998,966

4,051,483 8183 34,010 2,450,189 1,443,655 123,629 4,051,483

4,101,217 8284 33,656 2,469,355 1,472,528 125,679 4,101,217

4,145,813 8385 33,323 2,482,783 1,501,979 127,728 4,145,813

4,184,572 8486 33,011 2,489,765 1,532,018 129,778 4,184,572

4,216,759 8587 32,718 2,489,554 1,562,659 131,827 4,216,759

4,241,530 8688 32,444 2,481,297 1,593,912 133,877 4,241,530

4,257,991 8789 32,186 2,464,088 1,625,790 135,927 4,257,991

4,297,432 8890 31,944 2,469,206 1,658,306 137,976 4,297,432

4,247,851 8991 31,716 2,473,065 1,691,472 51,597 4,247,851

4,260,650 9092 31,503 2,451,484 1,725,302 52,361 4,260,650

4,264,356 9193 31,302 2,420,121 1,759,808 53,125 4,264,356

4,257,948 9294 31,114 2,377,942 1,795,004 53,889 4,257,948

4,240,318 9395 30,936 2,323,825 1,830,904 54,653 4,240,318

4,210,260 9496 30,770 2,256,552 1,867,522 55,417 4,210,260

4,166,473 9597 30,613 2,174,807 1,904,872 56,181 4,166,473

4,048,658 9698 30,465 2,075,223 1,942,970 4,048,658 C3 B21, C23 F7 B22C3 B24b




Personal AssetsSample Plan - TOTAL Cash-Flow-Based Planning

Ages

F7

Art, Antiques Autos Boats, RVs

1 2 3 4 5 6 7

Personal Prop.Jewelry, Furs

TotalPersonal

AssetsOther

51 $69,600 53 $69,600

52 66,860 54 66,860

53 64,310 55 64,310

54 61,936 56 61,936

55 59,725 57 59,725

56 57,666 58 57,666

57 55,748 59 55,748

58 53,960 60 53,960

59 52,294 61 52,294

60 50,740 62 50,740

61 49,292 63 49,292

62 47,941 64 47,941

63 46,680 65 46,680

64 45,503 66 45,503

65 44,405 67 44,405

66 43,379 68 43,379

67 42,421 69 42,421

68 41,526 70 41,526

69 40,690 71 40,690

70 39,908 72 39,908

71 39,178 73 39,178

72 38,494 74 38,494

73 37,855 75 37,855

74 37,257 76 37,257

75 36,697 77 36,697

76 36,173 78 36,173

77 35,682 79 35,682

78 35,223 80 35,223

79 34,792 81 34,792

80 34,388 82 34,388

81 34,010 83 34,010

82 33,656 84 33,656

83 33,323 85 33,323

84 33,011 86 33,011

85 32,718 87 32,718

86 32,444 88 32,444

87 32,186 89 32,186

88 31,944 90 31,944

89 31,716 91 31,716

90 31,503 92 31,503

91 31,302 93 31,302

92 31,114 94 31,114

93 30,936 95 30,936

94 30,770 96 30,770

95 30,613 97 30,613

96 30,465 98 30,465




Withdrawal RatesSample Plan - TOTAL Cash-Flow-Based Planning

Ages

F8

AccountBalance

Personal &CompanyAdditions

AnnualReturn

TotalFunds

Available

PersonalWithdrawals

and RMD

NetWithdrawal

Rate (%)Surplus

or (Shortage)

TotalWithdrawal

Account *

53 $761,850 $532 51 $849,939 $37,040 $51,049 $532

54 850,470 596 52 945,246 37,644 57,132 596

0.77 55 945,842 (8,107)53 1,048,680 39,206 63,632 (8,107)

4.45 56 1,040,573 (51,207)54 1,150,638 39,861 70,204 (51,207)

4.45 57 1,099,431 (54,176)55 1,216,312 40,528 76,353 (54,176)

1.37 58 1,162,136 (17,608)56 1,286,912 41,212 83,564 (17,608)

1.19 59 1,269,304 (16,699)57 1,402,400 41,909 91,186 (16,699)

5.11 60 1,385,700 (78,045)58 1,525,815 43,218 96,897 (78,045)

61 1,447,770 19,984 59 1,596,597 43,961 104,866 19,984

62 1,616,581 20,025 60 1,777,843 44,722 116,540 20,025

63 1,797,868 23,100 61 1,972,570 45,499 129,203 23,100

64 1,995,670 21,504 62 2,184,810 46,292 142,848 21,504

8.18 65 2,206,313 (192,868)63 2,357,041 17,807 132,921 (192,868)

7.64 66 2,164,173 (175,516)64 2,296,725 132,552 (175,516)

9.66 67 2,121,209 (217,176)65 2,247,949 126,740 (217,176)

8.65 68 2,030,774 (186,591)66 2,156,073 125,299 (186,591)

7.49 69 1,969,482 (156,610)67 2,091,874 122,392 (156,610)

70 1,935,264 258,052 68 2,066,609 131,345 (4,490) 262,542

4.72 71 2,324,661 (116,371)69 2,467,300 142,639 (24,315) (92,056)

5.06 72 2,350,929 (126,406)70 2,497,394 146,465 (51,365) (75,041)

5.23 73 2,370,989 (131,709)71 2,519,620 148,631 (54,546) (77,163)

5.86 74 2,387,912 (148,526)72 2,536,465 148,553 (57,917) (90,609)

5.33 75 2,387,939 (135,288)73 2,538,296 150,357 (59,454) (75,834)

5.50 76 2,403,008 (140,578)74 2,554,154 151,146 (59,543) (81,035)

5.70 77 2,413,576 (146,125)75 2,565,210 151,634 (59,104) (87,021)

5.91 78 2,419,085 (151,981)76 2,570,867 151,782 (58,112) (93,869)

6.15 79 2,418,886 (158,083)77 2,570,436 151,550 (56,559) (101,524)

6.42 80 2,412,353 (164,480)78 2,563,249 150,896 (54,071) (110,409)

4.81 81 2,398,769 (122,635)79 2,550,284 151,515 (50,658) (71,977)

4.99 82 2,427,650 (128,800)80 2,578,989 151,339 (49,066) (79,734)

5.19 83 2,450,189 (135,238)81 2,604,593 154,404 (46,607) (88,631)

5.41 84 2,469,355 (141,981)82 2,624,764 155,409 (43,478) (98,503)

5.65 85 2,482,783 (149,045)83 2,638,810 156,027 (39,205) (109,840)

5.91 86 2,489,765 (156,427)84 2,645,981 156,216 (33,295) (123,132)

6.21 87 2,489,554 (164,181)85 2,645,478 155,924 (25,727) (138,454)

6.54 88 2,481,297 (172,305)86 2,636,393 155,096 (16,139) (156,166)

5.66 89 2,464,088 (148,217)87 2,617,423 153,335 (4,080) (144,137)

5.76 90 2,469,206 (151,208)88 2,624,273 155,067 (151,208)

6.70 91 2,473,065 (176,009)89 2,627,493 154,428 (176,009)

7.07 92 2,451,484 (184,097)90 2,604,218 152,734 (184,097)

7.49 93 2,420,121 (192,570)91 2,570,512 150,391 (192,570)

7.98 94 2,377,942 (201,448)92 2,525,273 147,331 (201,448)

8.54 95 2,323,825 (210,752)93 2,467,304 143,479 (210,752)

9.21 96 2,256,552 (220,501)94 2,395,308 138,756 (220,501)

10.01 97 2,174,807 (230,721)95 2,305,944 131,137 (230,721)

98 2,075,223 96 2,075,223 C3a C3a C3a B7 B7

* Negative percent equals withdrawal, positive equals deposit. N/A or blank indicates capital is fully consumed.




Withdrawal Rates AnalysisSample Plan - TOTAL Cash-Flow-Based Planning

F8a

The following graph measures your spending as a percent of capital each year. It uses a "moving average" method tosmooth the lines into an average withdrawal rate over one, three, five and ten year periods.

Withdrawal Rate Averages

Annual range (rate for each year) 10.01%

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 represents thedollar amounts withdrawn from your assets to meet spending requirements.

High Low *

0.00%

Average

5.07%

9.25% 0.00% 5.08%Three year average range

8.64% 1.02% 5.08%Five year average range

6.79% 1.74% 5.09%Ten year average range

* Years when there is a positive cash flow and no withdrawals are required result in a 0% withdrawal rate.




What-If Graph F12


Ending Retirement Capital

Monte Carlo Success %

$2,075,223

72%

$3,076,939

80%

$4,503,887

92%

Rent 5k/Yr VacationHome, No Purchase

Downsize to Condo at65

Sample Plan - TOTALCash-Flow-BasedPlanning

Assets

Corvallis Home

65 Age at Sale

0.00 %6.00 %0.00 % Sales Cost %

$0$375,000$0 Replacement Cost

0.00 %80.00 %0.00 % % Financed

0.00 %4.50 %0.00 % Mortgage Interest Rate

30 Mortgage Duration

Vacation Home - purchase @ 65

AllenAllen Owner

NoNo Available for Withdrawal

2.00 %2.00 % Appreciation Rate

6565 Age at Sale

$350,000$350,000 Replacement Cost

80.00 %80.00 % % Financed

5.00 %5.00 % Mortgage Interest Rate

1515 Mortgage Duration

Other Incomes and Expenses

Vacation Rental




($5,000) Annual Amount

3.20 % Increase Rate

Yes Increase Prior To Start Age

Yes Increase After Start Age

65 Start Age

Yes Recurring

1 Recurring Every Years

80 Recurring Until Age

Age Changes

-53-

$0 Annual Amount


-65-

($5,000) Annual Amount


-81-

$0 Annual Amount


Life Insurance

Whole Life

NWMLMet LifeNWML Company

$650$1,900$650 Annual Premium

$60,000$100,000$60,000 Face Amount

$2,850$12,450$2,850 Cash Value

$650$1,900$650 Retired Annual Premium

$60,000$100,000$60,000 Retired Face Value

$32,500$55,000$32,500 Retired Cash Value

$0$2,500$0 Loan Amt

BettyAllenBetty Owner Type

AllenBettyAllen Beneficiary Type

BettyAllenBetty Insured

Whole Life

Met LifeNWMLMet Life Company

$1,900$650$1,900 Annual Premium

$100,000$60,000$100,000 Face Amount

$12,450$2,850$12,450 Cash Value

$1,900$650$1,900 Retired Annual Premium

$100,000$60,000$100,000 Retired Face Value

$55,000$32,500$55,000 Retired Cash Value

$2,500$0$2,500 Loan Amt




AllenBettyAllen Owner Type

BettyAllenBetty Beneficiary Type

AllenBettyAllen Insured




Real Estate




Assumptions - Fourth Street Rental G1


General

Current market value

Appreciation rate

Purchase Price

Original downpayment

Year purchased

Adjusted cost basis

Current Equity

Annual Depreciation

Remaining years

Client age at sale

Sales cost

2000

$25,000

$88,000

$200,000

2.00%

$175,000

$82,000

6.00%

$5,867

15

70

Mortgages First Mortgage Second Mortgage

Monthly payment

Original amount

Current balance

Interest rate

$800

$118,000

6.00%

Date opened

$130,000

10/23/2000

Income: Amount

Scheduled rents $21,600

2.00%Increase rate

Vacancy 2.00%

Other income

Increase rate

Annual Expenses: Amount Increase Rate

Management $1,440 0.00%

Repair/ Maintenance $500 0.00%

Insurance $500 0.00%

0.00%$2,500Property Tax

Other expenses

AmountCapital Improvements: YearIncrease Rate

New Roof $20,000 0.02% 2025





Annual Summary - Fourth Street Rental G1a

321 654

Market Value

Ages

7

Mortgage Information

8 9

$200,000

2.00%

Total

Income

Total

Expenses Balance #1

$118,000 6.00%

Interest

$9,600

Principal Balance #2 Interest Principal

$200,000 $21,168 ($4,940) $118,000 $7,080 $2,52053 51

204,000 21,591 (4,940) 115,480 6,928 2,67254 52

208,080 22,023 (4,940) 112,808 6,768 2,83255 53

212,242 22,464 (4,940) 109,976 6,598 3,00256 54

216,486 22,913 (4,940) 106,974 6,418 3,18257 55

220,816 23,371 (4,940) 103,792 6,227 3,37358 56

225,232 23,839 (4,940) 100,419 6,025 3,57559 57

229,737 24,315 (27,914) 96,844 5,810 3,79060 58

234,332 24,802 (4,940) 93,054 5,583 4,01761 59

239,019 25,298 (4,940) 89,037 5,342 4,25862 60

243,799 25,804 (4,940) 84,779 5,086 4,51463 61

248,675 26,320 (4,940) 80,265 4,815 4,78564 62

253,648 26,846 (4,940) 75,480 4,528 5,07265 63

258,721 27,383 (4,940) 70,408 4,224 5,37666 64

263,896 27,931 (4,940) 65,032 3,901 5,69967 65

269,174 28,489 (4,940) 59,333 3,559 6,04168 66

274,557 29,059 (4,940) 53,292 3,197 6,40369 67

280,048 29,640 (4,940) 46,889 2,813 46,88970 68

71 69

72 70

73 71

74 72

75 73

76 74

77 75

78 76

79 77

80 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96




Income & Tax Analysis - Fourth Street RentalSample Plan - TOTAL Cash-Flow-Based Planning

TaxableIncome/

(loss)

Deprec.

Ages

Net CashFlow

(before tax)

CapitalGain on

Sale

Sale inCost Basis

$5,867

15 years

Tax Saved/(due)

Annual ROR on

MarketValue

Equity

CapitalImprove-

ments$113,000

Unrecaptured§ 1250 Gain

2035

6.00%

G1b

3 4 92 5 81 6 7 10

$5,867 53 51 $3,281 $6,628 ($722) 2.95 7.20 $107,133

5,867 54 52 3,857 7,051 (848) 3.04 7.01 101,267

5,867 55 53 4,449 7,483 (979) 3.13 6.83 95,400

5,867 56 54 5,059 7,924 (1,113) 3.21 6.66 89,533

5,867 57 55 5,688 8,373 (1,251) 3.29 6.50 83,667

5,867 58 56 6,338 8,831 (1,394) 3.37 6.36 77,800

5,867 59 57 7,007 9,299 (1,542) 3.44 6.21 71,933

6,292 60 58 7,273 (13,198) (1,600) (6.44) (11.14) 22,974 88,615

6,718 61 59 7,561 10,262 (1,890) 3.57 5.93 81,897

6,718 62 60 8,298 10,758 (2,075) 3.63 5.79 75,180

6,718 63 61 9,060 11,264 (2,265) 3.69 5.66 68,462

6,718 64 62 9,847 11,780 (2,462) 3.75 5.53 61,745

6,718 65 63 10,661 12,306 (1,599) 4.22 6.01 55,027

6,718 66 64 11,502 12,843 4.96 6.82 48,310

6,718 67 65 12,372 13,391 (1,856) 4.37 5.80 41,592

851 68 66 19,139 13,949 (4,785) 3.40 4.37 40,741

851 69 67 20,071 14,519 (5,018) 3.46 4.29 39,890

851 70 68 21,036 238,244 (1,110) 84.68 101.70 39,039 263,245 65,272 158,934

71 69

72 70

73 71

74 72

75 73

76 74

77 75

78 76

79 77

80 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96




Income & Expense Summary - Fourth Street Rental

Ages

Vacancy


Rents

9

Management

$21,600

5

TotalIncome

2.00%

Net rents

63

Other

10 11

CapitalOtherImprovements

Prop. Tax

2

Rep./Maint. Insur.

1 74 8

2.00%

Income Summary Expense Summary

TotalExpenses

12

($500)($1,440) ($500) ($2,500)

G1c

/Downpayment

53 51 $21,600 (432) $21,168 $21,168 ($1,440) ($500) ($500) ($2,500) ($4,940)

54 52 22,032 (441) 21,591 21,591 (1,440) (500) (500) (2,500) (4,940)

55 53 22,473 (449) 22,023 22,023 (1,440) (500) (500) (2,500) (4,940)

56 54 22,922 (458) 22,464 22,464 (1,440) (500) (500) (2,500) (4,940)

57 55 23,381 (468) 22,913 22,913 (1,440) (500) (500) (2,500) (4,940)

58 56 23,848 (477) 23,371 23,371 (1,440) (500) (500) (2,500) (4,940)

59 57 24,325 (487) 23,839 23,839 (1,440) (500) (500) (2,500) (4,940)

60 58 24,812 (496) 24,315 24,315 (1,440) (500) (500) (2,500) (22,974) (27,914)

61 59 25,308 (506) 24,802 24,802 (1,440) (500) (500) (2,500) (4,940)

62 60 25,814 (516) 25,298 25,298 (1,440) (500) (500) (2,500) (4,940)

63 61 26,330 (527) 25,804 25,804 (1,440) (500) (500) (2,500) (4,940)

64 62 26,857 (537) 26,320 26,320 (1,440) (500) (500) (2,500) (4,940)

65 63 27,394 (548) 26,846 26,846 (1,440) (500) (500) (2,500) (4,940)

66 64 27,942 (559) 27,383 27,383 (1,440) (500) (500) (2,500) (4,940)

67 65 28,501 (570) 27,931 27,931 (1,440) (500) (500) (2,500) (4,940)

68 66 29,071 (581) 28,489 28,489 (1,440) (500) (500) (2,500) (4,940)

69 67 29,652 (593) 29,059 29,059 (1,440) (500) (500) (2,500) (4,940)

70 68 30,245 (605) 29,640 29,640 (1,440) (500) (500) (2,500) (4,940)

71 69

72 70

73 71

74 72

75 73

76 74

77 75

78 76

79 77

80 78

81 79

82 80

83 81

84 82

85 83

86 84

87 85

88 86

89 87

90 88

91 89

92 90

93 91

94 92

95 93

96 94

97 95

98 96




Input Data




3/5/1965

90

51

95

Allen

Bonnie Abbett

Betty

5365

6/8/1966

64

Cover page name

City/State/Zip

Home address Married?

Scenario

Personal Information:

Allen & Betty AbbettSample Plan - TOTAL Cash-Flow-Based Planning

, OR

Footnote

Dependents

Andy Abbett

Age

Prepared by

Retire ageAlternate Life Expectancy

Page 1

Birthdate

1/12/2003

2/28/2001

Entry Date / Cover date 3/30/2018 3/29/2018

Yes3/1/2018 2018

17

Age now

15

Dependent to age

19

19 25,000

Educ cost

25,000

# Years

4

4

Start year

2021

2019

Increase rate on education expenses 5.00% Rate of return on education funds 5.00%

Assets:

Asset Type totals:Starting $ balance $83,800 $165,000

taxable*Fully

deferred*Tax Tax

free*Equity

& other

Ordinary income assets

Dividend rate

Capital gain rate

Interest rate 1.65

3.50 Appreciation rate 4.00 *Rates shown as Dividend, Capital Gain or Appreciation on these accounts will be combined and treated as interest..

5.75 8.00 6.00 Pre-retirement rate 6.00

6.00 Post-retirement rate 6.00 8.00 5.75

Default rates (if no assets are entered with a current rate)

Asset Additions/ WithdrawalsCurrent monthly additionsInitial increase rate

taxable* free*Equity

& otherTaxFully

deferred*Tax

250 500

69,600

447,000

Boats/RVs (Personal)

Personal Property

Jewelry/Furs (Personal)

Residence

Art/Antiques (Personal)

Other (Personal Assets)

Automobiles (Personal)

-3.94%

2.00%

decrease rateIncrease or

valueCurrent

Personal Assets:




5,400

5,400

4,320 7.00%

5,160 3,440

4,320

balance return*Rate of

7.00%

7.00%72,800

110,250

62,500

Page 2

Betty7.00%Allen 267,500

Roth IRA - Allen

Retirement Accounts (Defined Contribution/IRA/Roth):

Roth IRA - Betty

Company*

#3 #4#1

Interest rate on new mortgage loanNew mortgage (% to finance)

350,000

65

#2

15

5.00%

80.00

Number of years for the new loan

Residence for sale:

Yes

Cost of replacement home (in today's dollars)

Account Additions per yearPersonal*

Calculate penalty tax for pre-59.5 distributions

Default rate of return for retirement plans & Roth IRA

*Amounts and rates are for the current year only and may vary in future years.

Sales costs (percent of sale price)

Client age at sale

Current residence market value

2.00%Appreciation rate

Loan and mortgage Loan Balance Interest %Payment / mo.Corvallis home $232,000 $1,600 4.37%Residence Mortgage - BofA

Wells Fargo 6,640 100 13.75%Credit Cards - Wells Fargo

Cash flow management

40

Taxable Tax-Free

60

20 80

Equity/OtherTax-DeferredReinvest surplus cash flow

change to...65 After age

Ignore pre-retirement cash flow surplus or shortage? (1=yes)




Page 3

- or - compute benefit at what % of maximum

Benefit increase rate (cola)

Age to start retirement benefits

Not subject to FICA tax?

Actual SS monthly benefit $ amount (today's $) 1,872

67

100

200 200

67

100

2,198

Social Security Benefits:

100,000

86,000 2.50%

95,000

2.50%

2.50%

Not qualified for Social Security benefits.

Allen Betty

Income Information:

53

63

68

73

58

78

Age amountPer year

rateIncrease

Allen salary

63

53

Per yearamountAge

Allen self employment

Increaserate

58

73

68

78

76

66

71

56

rateIncrease

Betty salary

Age amountPer year

2.00%

72,000

2.00%72,000

72,000 51

61

2.00%

Betty self empl

Increaserate

Per yearamountAge

2.00%76

56

71

66

61

51

2.00%

2.00%

2.00%

2.00%

8,000

2.00%8,000

8,000

Pension Income:

Allen

SurvivorPer monthtoday's $ percent

State taxexempt

Client Pension 2Client Pension 1

percenttoday's $ exemptState tax

Betty

Per month Survivor

Spouse Pension 1 $200 Spouse Pension 2




Page 4

Tax Data:

Index rate for exemptions, tax tables, retire penalty tax 2 Tax filing status (1 =Single, 2=Joint, 3=Head of H) Joint

State Income Taxes: State Percent

State tax estimate is based on state tax tables. OR

--

% of Gross $ Dollar AnnualItemized Deductions: Income -and/or- Amount Increase %

MiscellaneousCharitable contributions 4,000 2.00%Other deductible interest

Other tax (not prop. or state)

Property tax -% of residence market value 7,400 3.00%Medical expenses 4,000 5.00%

Other Adjustments: $ Amount Increase %

Self employed medical insurance premiums (total amount)Alimony - payable to age ... ...amount/increase rate...

Monte Carlo Simulation standard deviation rates:

Asset standard deviation 4.25%Inflation standard deviation 2.00%

Life Insurance:

amount premium termCompany Insured DescriptionLoanCash value

amountAnnualFace

ANLIC Betty 10 Year Term $250,000 $375

Aetna Allen Group Life 250,000

Met Life Allen Whole Life 100,000 1,900 12,450 2,500

NWML Betty Whole Life 60,000 650 2,850

Miscellaneous Insurance:Company Insured Description PremiumType

Auto Indiv1 Auto PremiumAllen $350

Disability Indiv1 Disability PremiumAllen 600

Homeowners, P&C, Other Indiv1 Other PremiumAllen 900

Auto Indiv2 Auto PremiumBetty 275




Description

Age whenchange

occurs

Amountin

today's $

Increase(decrease)

rate

% Ord.taxable

income

Taxabledollar

amount

Other Income / Expense:

Page 5

53 Betty's Expected Inheritance (~200k)

70 Betty's Expected Inheritance (~200k) 200,000

71 Betty's Expected Inheritance (~200k)

52 Bonnie's Wedding 3.20

53 Bonnie's Wedding 3.20

67 Bonnie's Wedding (35,000) 3.20

68 Bonnie's Wedding

52 Extended travel - first 10 years of retirem 3.20


65 Extended travel - first 10 years of retirem (10,000) 3.20


52 Kitchen and Bath Remodel 3.20

53 Kitchen and Bath Remodel 3.20

60 Kitchen and Bath Remodel (55,000) 3.20

61 Kitchen and Bath Remodel




Current

Per monthDescription

Page 6

Personal Expenses:

Per year Increase

Discretionary Spending 12,000 3.20%

Food and Household Expenses 6,000 3.20%

Utilities and Bills 5,340 3.20%

Auto Operating and Maintenance 4,400 3.20%

Child Related Expenses 6,000 3.20%

Holidays 2,000 3.20%

Household Help 2,640 3.20%

Clothing 3,000 3.20%

Property Improvements/Upkeep 6,000 3.20%

Vacations 4,000 3.20%




Documents

Allen & Betty Abbett...Income Tax Planning (text) - D1a 84 Income Tax Chart (text) - D2 85 Income Tax - Current Year - D3 86 Tax vs Income Graph - D4 87 Tax vs Expense Graph - D5 88