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SampleComprehensiveFinancial PlanEspecially Prepared For:John and Jane DoeBy: Brad E.S. TinnonCERTIFIED FINANCIAL PLANNER September 2013
B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
NET WORTH SUMMARYJanuary 2011 302,518September 2012 375,821September 2013 447,001B.E.S.T. Wealth Management, LLC
NET WORTH STATEMENTJohn and Jane DoeSeptember 30, 2013Personal Assets - JohnABC Company 401(k) 120,000------------ 120,000529 College Savings - JohnMissouri MOST 529 (fbo Johnny)Personal Assets - JaneParkway School District 403(b)B.E.S.T. Wealth Roth IRAPublic School Retirement Pension 300,000--------------- 300,000Joint PropertyFirst Bank CheckingFirst Bank SavingsB.E.S.T. Wealth Non IRA AcctPersonal ResidenceFurnishingsVehicles 6,000 30,000 105,000 300,000 30,000 25,000------------ 496,000251------------ 0Life Insurance Net D.B.s - JaneSpousal Group PolicyRockwood Group PolicyDebts & LiabilitiesMortgage 50,000 50,000--------------- 100,000 225,000------------ 225,000Gross Estate ValuesJohnAssets Life Insurance 668,000JaneAssets Life Insurance 389,001Joint Property529 Plans( 15,000)Other AssetsTotal AssetsKnown Debts and Liabilities( 225,000)Total Net WorthTotal Estate Value Minus Debt/Liabilities 817,001 Assets Assets Assets Assets Assets1100% vested.2Contributing 5% of salary. No company match.3Principal and Interest pmt 1,074 / month. Interest rate 4.00%. 30 Year Loan. Payoff Date October 2043.4Contributing 10% of salary. Company matches 4% of salary.5Contributing 458 / mo.B.E.S.T. Wealth Management, LLC 25,000 16,000 1------------ 41,001Other Assets 15,000------------ 15,000Life Insurance Net D.B.s - JohnABC Company Group PolicyCurrent Values 120,000 41,001 496,000 15,000 0 672,001( 225,000) 447,00143
OObjectivesB.E.S.T. Wealth Management, LLC
OBJECTIVESAccording to the information gathered in our previous meetings, yourobjectives are:1.Maintain an adequate emergency fund.2.Review the overall asset allocation of your investments.3.Have the financial option to retire at John’s age 65 and coverretirement expenses (required desired expenses) of 6,000 permonth ( 7,500 / mo with taxes factored in) until Jane’s age 90.4.Fund college education for your child.5.Assure that in the event of an untimely death, the surviving spouseis able to maintain his/her desired lifestyle.6.Analyze current estate and determine appropriate action to take.B.E.S.T. Wealth Management, LLCBrad E.S. Tinnon
B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
RECOMMENDATIONSThe following recommendations are not listed in order of priority or importance.Some recommendations should be implemented immediately while others aregiven as long-term concepts to consider.1.OBJECTIVE: Maintain an adequate emergency fund.An appropriate emergency fund usually covers three to six months ofexpenses, but could be more depending on the security of your jobs.When two spouses are employed and job security is relatively high,a three month emergency reserve can suffice. Since both spouseswork, an emergency fund consisting of 3 months of expenses wouldbe appropriate. Your monthly basic living expenses are estimated tobe 6,000; therefore, a 3 month emergency fund of 18,000 wouldbe appropriate. These funds should be held in an FDIC guaranteedtype account such as a money market account or a savings account.You currently have approximately 30,000 that qualifies asemergency funds so this goal is overfunded by 12,000. It isrecommended that you utilize this excess to either fund your child’seducation goal or your retirement.2.OBJECTIVE: Reviewthe overall asset allocation of yourinvestments.In reviewing the overall asset allocation of your retirementinvestments, your time horizon and risk tolerance suggests that the“Moderate Growth” portfolio (54% stocks / 20% bonds / 26%alternatives) may be most appropriate.Since we review whether your accounts need to be rebalanced on adaily basis, your allocation is already in order.B.E.S.T. Wealth Management, LLCBrad E.S. Tinnon
3.OBJECTIVE: Have the financial option to retire at John’s age 65and cover retirement expenses (required desired expenses) of 6,000 per month ( 7,500 / mo with taxes factored in) untilJane’s age 90.At retirement, your investments need to be valued at approximately 4,928,126 in order to cover your retirement expenses. Based on theassumptions utilized, your investments are projected to grow to 4,876,049 at retirement. This leaves a shortfall of 52,077. As a resultof the shortfall, it is recommended that John set up a Roth IRA andattempt to fund it with the maximum amount allowed (currently 458 / mo).4.OBJECTIVE: Fund college education for your child.In order to fully fund the college education of Johnny you will need toset aside approximately 239 per month. If you desire to startsetting money aside for this goal, I suggest doing so in your existing529 College Savings Account. We will further discuss this goalwhen we meet and whether or not this goal should take priority overother goals you’ve established.B.E.S.T. Wealth Management, LLCBrad E.S. Tinnon
5.OBJECTIVE: Assure that in the event of an untimely death, thesurviving spouse is able to maintain his or her desired lifestyle.The survivor analysis suggests that Jane would have a Capital Shortfallof 1,244,989 in the event of John’s untimely death. In other words, toprovide Jane with her standard of living until her age 90, additionalinsurance coverage of 1,244,989 is needed on John’s life.The survivor analysis suggests that John would have a Capital Shortfallof 297,186 in the event of Jane’s untimely death. In other words, toprovide John with his standard of living until his age 90, additionalinsurance coverage of 297,186 is needed on Jane’s life.Ideally, I like to see insurance in place up until the point you reachretirement. At that point, a death will not cause a financial hardship, solong as the retirement goal has been met. In essence, the goal is to selfinsure when you enter retirement.Therefore, I am recommending that each of you obtain a 30 year termpolicy. Additionally, I recommend that you add a child rider to the policy tocover you financially in the event that Johnny would unexpectedly passaway. See below for quote of proposed coverage.Proposed CoverageCoverageMonthly Cost* 1,300,000 10830 Year Term 300,000 31TOTALS 1,600,000 139John30 Year TermJane* Assumes Preferred Non-Tobacco rating for husband and wife.B.E.S.T. Wealth Management, LLCBrad E.S. Tinnon
6.OBJECTIVE: Analyze current estate and determine appropriateaction to take.To help ensure your wishes are carried out (and in the most taxefficient fashion), you should have all legal documents prepared andthen reviewed on a periodic basis. You currently do not have anyestate planning documents. As such, the first item of interest iswhether you should have a Will or whether you should have a Trust.If a Will is drafted, a portion of your estate will eventually be subjectto probate. The disadvantages of probate is that it is expensive,lengthy, and public (i.e. your Will can be viewed by the public). ATrust on the other hand will not be subject to probate, which meansthat your heirs will end up with a larger estate than if a Will wereutilized. Additionally, a Trust usually passes assets to heirs moreefficiently than a Will.If you don’t have any estate planning documents and you both passaway while your child is a minor, then the courts will appoint aconservator to manage your assets for the benefit of your child. Thiswould be true even if you had a Simple Will. This is a very timeconsuming and expensive process as the conservator has to appearbefore the courts each year and give an accountability of the fundsspent on your child. You can avoid this issue by having a Trustdrafted. Due to the disadvantages of probate and the conservatorissue, I recommend that a Revocable Living Trust be drafted.In addition to having a Will or a Trust, it will be prudent for you tohave the following estate planning documents drafted: (1) HealthCare Power of Attorney, and (2) Financial Power of Attorney. AHealthcare Power of Attorney is a document in which you appointsomeone to handle your health related matters in the event youcannot do so. A Durable Power of Attorney is a document in whichyou appoint someone to handle your financial related matters in theevent you cannot do so. Without these documents, you could findyourself in a very expensive and time consuming situation wherebythe courts become involved. If you do not have an attorney that youutilize, our firm can refer one to you.B.E.S.T. Wealth Management, LLCBrad E.S. Tinnon
RECOMMENDATION SUMMARY1.Use excess 12,000 in savings to fund education or retirement goal.2.Set up Roth IRA for John and begin funding at 458 / mo.3.Begin saving 239 per month to Missouri MOST 529 College SavingsAccount.4.Consider obtaining life insurance of 1,300,000 for John ( 108 / mo) and 300,000 for Jane ( 31 / mo).5.Have Revocable Living Trust, Healthcare Power of Attorney, and FinancialPower of Attorney drafted.B.E.S.T. Wealth Management, LLCBrad E.S. Tinnon
B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
John and Jane DoePortfolio Summary - 9/30/2013 (Retirement Accounts)InceptionTotalTotalDateContributions WithdrawalsACCOUNTS UNDER MANAGEMENTFBOB.E.S.T. Wealth Non-IRA AccountJoint1/1/11 92,228B.E.S.T. Wealth Roth IRAJane1/1/11 14,050Total NetContributionsCurrentValueNetGrowthMODELPercent ofPortfolio 0 92,228 105,00013.85%80-2086.8% 0 14,050 16,00013.88%80-2013.2% 106,278 121,00013.85%TOTAL PORTFOLIO UNDER MANAGEMENTCurrent Portfolio100.0%Proposed tives26%B.E.S.T. Wealth Management, LLCAlternatives26%
B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
RETIREMENT ASSUMPTIONS1.Retirement expenses (required desired expenses) are projected to be 6,000 per month ( 7,500 per month with taxes factored in) from John’sage 65 to Jane’s age 90.2.Combined federal / state tax rate of 20% utilized.3.All retirement assets were assigned a rate of return of 7% duringpre-retirement and 5% during retirement.4.Social Security was NOT factored into the analysis.5.Missouri Public School Retirement System pension NOT factored into the analysis.6.John will continue to contribute 10% ( 833 / mo) to his 401(k) andthe company will match up to 4% of salary ( 333 / mo) until heretires at age 65.7.Jane will continue to contribute 5% to her 403(b) until she retires atage 63. There is no company match.8.Jane will continue to contribute 458 / mo to her Roth IRA until sheretires at age 63.B.E.S.T. Wealth Management, LLCBrad E.S. Tinnon
Retirement ObjectiveHow much do you need?Retirement Income ObjectiveAnnual Income 500,000 400,000 300,000 200,000 100,000 987-89John's AgeJane's AgeAssuming: John's mortality age 90, Jane's mortality age 90Your retirement income objective has been illustrated above. Your objective in the first year ofretirement results in the following:Total annual income objective in first year of retirementTotal annual income objective in today's dollars* 231,757 90,000In order to meet your income objective throughout your retirement, the amount of money needed at thebeginning of retirement, in an account earning 5.00%, would be the following:Total capitalized income objective 4,928,126The goal of the retirement analysis is to determine if your objective above can be met with expectedincome sources (e.g., Social Security) and withdrawals from assets (e.g., 401(k), IRA).*Calculated using a long-term inflation rate of 3.00%.B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
Retirement Income SourcesWhat income will be available?Social SecurityDefined BenefitAnnuity BenefitsEarningsMisc. IncomeAnnual Income 1 1 1 0 0 987-89John's AgeJane's AgeAssuming: John's mortality age 90, Jane's mortality age 90Charted above are your expected income sources. Income sources will be guaranteed to varying degreesand should be matched to the appropriate needs. Social Security benefits, for example, could be viewedas fairly guaranteed when compared to the income from a personally managed rental property. Ideally,the most important needs should be covered by your most guaranteed income sources, while lessimportant needs can be covered by less guaranteed income and investment assets.Generally in this analysis, income sources are used to pay expenses each year before withdrawals fromassets are made. If there is more than enough income, the excess will be spent.B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
What income will be 3848586878889---SocialSecurity 000000000000000000000000000DefinedBenefits 000000000000000000000000000JohnAnnuityBenefits 000000000000000000000000000B.E.S.T. Wealth Management, LLCSeptember 30, 2013Earnings 000000000000000000000000000Misc.Age 4757677787980818283848586878889SocialSecurity 000000000000000000000000000DefinedBenefits 000000000000000000000000000JaneAnnuityBenefits 000000000000000000000000000Earnings 000000000000000000000000000Misc. 000000000000000000000000000TotalIncomeSources 000000000000000000000000000John and Jane DoePresented by: Brad E.S. Tinnon, CFP
Income Applied toRetirement ObjectiveCan your retirement assets provide the rest?Social SecurityDefined BenefitAnnuity BenefitsMisc. IncomeRetirement Income NeedEarningsAnnual Income 500,000 400,000 300,000 200,000 100,000 987-89John's AgeJane's AgeAssuming: John's mortality age 90, Jane's mortality age 90In the chart above, the analysis has applied your expected income sources against your retirement incomeneeds. In any year that a shortfall exists (where the total need is larger than the available income), theanalysis will attempt to cover the shortfall through withdrawals from your retirement portfolio (e.g.401(k), and IRA). In any year where there is more income than need, the excess income will be spent.The table below summarizes the analysis so far.Capitalized Value*Total capitalized income objectiveCapitalized applied income sourcesCapitalized amount needed from assetsAmount 4,928,126 0 4,928,126% of Total100%0%100%*Capitalization is a way of treating a series of cash flows as a lump sum, deposited in a hypothetical account with areturn of 5.00%.B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
Retirement Capital AvailableHow Much Will You Have at Retirement?Non-Qualified Accts.Qualified Accts. 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0Bank Accts. Roth alifiedDeductiblequalifiedThe capitalized value of your retirement need after applying available income sources is 4,928,126. Thismeans that if you had this amount sitting in a taxable account at retirement earning 5.00%, yourretirement needs would be covered. However, the types of assets you own (e.g., qualified accounts,investment accounts) and their expected return will significantly change the actual amount required. Theretirement analysis will apply the assets listed below to your remaining retirement need to determine ifyour objective has been met.Retirement CapitalBank AccountsRoth AccountsInvestment AccountsDeferred Annuity AccountsNon-deductible Qualified AccountsDeductible Qualified AccountsTotal Capital Available for RetirementTotal Value at Retirement 0752,745915,103003,208,201 4,876,049These results are hypothetical and are not a promise of future performance.B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
How Much Will You Have at Retirement?AccountsOwnerCurrentMarketValueClient B12,000TotalValueTodayMarketValue atRetirementTotalValue atRetirementRoth AccountsB.E.S.T. Wealth Roth IRATotal752,74512,000752,745Investment AccountsB.E.S.T. Wealth Non-IRA le Qualified AccountsABC Company 401kParkway 403bTotalClient AClient B120,00025,000Total Capital Available for Retirement2,695,957512,244145,0003,208,201 262,000 4,876,049These results are hypothetical and are not a promise of future performance.B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
Retirement Analysis ResultsHas the objective been met?Social SecurityAdditional IncomeDistribution StrategiesRequired DistributionsWithdrawals from AssetsRetirement Income NeedAnnual Income 500,000 400,000 300,000 200,000 100,000 987-89John's AgeJane's AgeAssuming: John's mortality age 90, Jane's mortality age 90Based on the analysis of your retirement needs, expected income sources and available assets, yourobjective will be satisfied until age 89. Out of 27 retirement years, 26 years had no unmet needs.Capitalized Value*Capitalized income objectiveCapitalized applied income sourcesCapitalized applied assetsUnmet NeedAmount 4,928,126 0 4,876,049 52,076% of Total100%0%99%1%Below are several options to consider which might improve your results. As an alternative, a blend ofsaving more, spending less or earning more may be preferable for your situation:Increase average expected portfolio return from 6.40% to 6.42%Save 55 more per month (level) in a hypothetical account earning 5.00%Reduce desired future monthly income need from 19,313 to 19,109These results are hypothetical and are not a promise of future performance.*Capitalization treats a series of cash flows as a lump sum, deposited in a hypothetical account with a return of 5.00%.B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
Retirement Capital ResultsAssets At Work Over TimeQualified Accts.Non-Qualified Accts. 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 987-89John's AgeJane's AgeAssuming: John's mortality age 90, Jane's mortality age 90Portfolio performance is a key factor to retirement success. How much your portfolio provides will bedependent on four things: 1) How much you put in; 2) The amount and timing of withdrawals; 3) Thetypes of investments (e.g., tax-advantaged); and 4) The growth of your portfolio as compared to inflation.Performance MilestonesAverage expected portfolio returnRetirement capital todayPre-retirement portfolio additionsPre-retirement portfolio withdrawalsPre-retirement portfolio growthCapital available at retirementPortfolio additions during retirementPortfolio withdrawals during retirementPortfolio growth during retirementCapital remaining at end of planAmount6.40% 262,000 703,488 0 3,910,561 4,876,049 0 9,249,594 4,373,545 0These results are hypothetical and are not a promise of future performance.B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
Contributions, Withdrawals and GrowthAdditions to PortfolioAgeTotalContributionsWithdrawals from PortfolioLumpSum butionsWithdrawalsfor NeedOtherWithdrawalsTotalGrowthBeginning Balance33 / 3134 / 3235 / 3336 / 3437 / 3538 / 3639 / 3740 / 3841 / 3942 / 4043 / 4144 / 4245 / 4346 / 4447 / 4548 / 4649 / 4750 / 4851 / 4952 / 5053 / 5154 / 5255 / 5356 / 5457 / 5558 / 5659 / 5760 / 5861 / 5962 / 6063 / 6164 / 6265 / 6366 / 6467 / 6568 / 6669 / 6770 / 6871 / 6972 / 7073 / 7174 / 7275 / 7376 / 7477 / 7578 / 7679 / 77 0000000 00000000000000000000000000000000000000000000000 00000000000000000000000000000000000000000000000 200,657 oBalance 262,000 00000000000000000000000000000000000000000000000 88,951180,871 8Continued.B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
Additions to PortfolioAgeTotalContributionsWithdrawals from PortfolioLumpSum butionsWithdrawalsfor NeedOtherWithdrawalsTotalGrowthBeginning Balance80 / 7881 / 7982 / 8083 / 8184 / 8285 / 8386 / 8487 / 8588 / 8689 / 87-- / 88-- / 299,62061,80426,220TotalPortfolioBalance 218,644784,906314,6400The highlighted row indicates the beginning of retirement.These results are hypothetical and are not a promise of future performance.B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
EDUCATION ASSUMPTIONS1.Child will attend University of Missouri – St. Louis for four years at acurrent yearly cost of 9,314 per child (tuition and books only; roomand board not included).2.A 7% inflation factor is given to education costs.3.Analysis assumes that you have assets totaling 15,000 foreducation goal.4.All education assets were assigned a rate of return of 5%.5.There are currently no monthly contributions made toward educationinvestments.B.E.S.T. Wealth Management, LLCBrad E.S. Tinnon
Education GoalsTotal Education Need 99,656Your Education Plan Provides 28,577 99,656MOST 529 28,577 0 20,000 40,000Need 60,000 80,000 100,000Education PlanThis graph illustrates the projected capital needed to meet your education objectives and how your projected current savings and investments arehelping meet the objectives.NameAmount NeededPer Year(Today's )Funding Alternatives1AdditionalAdditionalAdditionalMonthly Level Monthly InflatingSum1SavingsSavings2MOST 529 9,314 33,991 239 193Totals 9,314 33,991 239 1931Single-sum investment alternative assumes that existing savings will continue and Funding Alternatives earn an assumed rate of return of 5.00%.The amount shown is for the first year only; this amount must be increased annually by the assumed inflation rate of 3.00%.These results are hypothetical and are not a promise of future performance.2B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
SummaryInflatedatAmountNeededFutureDollars7.00% 99,656Education Goals:AnnualYearsAmountUntilYearsNeeded Needed NeededGoalNumberNameSchool1MOST 529University ofMissouri: St. Louis 9,314134Total amount needed - future dollars 99,656Assets and Savings Available:AccountsCurrentMarketValueMOST 529MO MOST 529 15,000Total----------------------Monthly Savings -------------------Year SavingsNumber of AssignedAmountStartYears to Saveto Goal 02013171 15,000Funding Alternatives:MOST 529Total12------Additional Amount Needed1 -----MonthlyMonthlyLevelInflatingSingle SumSavingsSavings2AmountNeededFuture DollarsExistingPlanProvides 99,656 28,577 33,991 239 193 99,656 28,577 33,991 239 193All additional savings begin today and assume a rate of return of 5.00%.Inflating savings will increase annually by 3.00%.B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
Existing Planfor MOST 529Amount needed 9,314 per year needed in 13 years for 4 years inflating annually at 7.00%Needed in year 1 of goal, 9,314 inflated by 7.00%Needed in year 2 of goal, 9,314 inflated by 7.00%Needed in year 3 of goal, 9,314 inflated by 7.00%Needed in year 4 of goal, 9,314 inflated by 7.00% 22,44524,01625,69827,496Total amount needed 99,656Capital availableAccountsMOST 529TotalCurrentMarketValue 15,000 15,000MonthlySavings 0AssumedRate ofReturn5.00%AmountAppliedTo Goals 28,577 28,577Year 1 22,445Year 2 6,131Year 3 0Year 4 06,13106,131( 17,885)000( 25,698)000( 27,496)Distribution Plan:MOST 529Total WithdrawalsLiabilitiesNet for Goal(Shortfall)B.E.S.T. Wealth Management, LLCSeptember 30, 201322,445022,445 0John and Jane DoePresented by: Brad E.S. Tinnon, CFP
Education GoalCapital Analysisfor MOST 529: University of Missouri: St. Louis 40,000Capital Available 20,000 0 -20,000 -40,000 -60,000 itive Capital BalanceNegative Capital BalanceCurrent assets availableCurrent monthly savings 15,000 0Current plan providesTotal need1 28,577 99,656Funding Alternatives 2Single sum investmentAdditional level monthly savingsAdditional inflating monthly savings4 33,991 239 1931Assumes that the cost will increase annually by 7.00%Assumes that the additional savings earn a rate of return of 5.00%. All alternatives are in addition to the currentsavings.4 The amount shown is for the first year only; the savings must increase annually by 3.00%.These results are hypothetical and are not a promise of future performance.2B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
Timelinefor MOST 529: University of Missouri: St. 023202420252026202720282029AnnualNeed 000000000000022,44524,01625,69827,496AnnualSavings 00000000000000000CapitalEarnings 347292000LumpSum 00000000000000000CapitalWithdrawals 000000000000022,4456,13100Change inLiabilitiesCapitalAvailableToday: 15,000 0000000000000017,88525,69827,496 71,079)These results are hypothetical and are not a promise of future performance.B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
SURVIVOR NEEDS ASSUMPTIONS(John unexpectedly passes away)1.Monthly expenses estimated to be 6,000 ( 7,500 per month withtaxes factored in) until age 90.2.Combined federal / state tax rate of 20% utilized.3.Jane will continue to work until her age 65 earning 4,167 permonth. Income is assumed to increase 3% per year.4.The calculation includes John’s current life insurance death benefitstotaling 300,000.5.Mortgage and non-mortgage debt will be paid.6.College funding will NOT be provided.7.Your plan provides for funeral expenses of 15,000.8.Your life insurance proceeds are anticipated to grow at 5% annually.9.Social Security survivor benefits were factored into the analysis:a. 3,200 / mo – today until 2024b. 1,600 / mo – 2024 until 202610.All retirement assets are immediately available to fund needs ofJane if needed.11.Jane will not continue to make retirement contributions to her 403(b)as her income is not enough to cover monthly expenses.B.E.S.T. Wealth Management, LLCBrad E.S. Tinnon
3745493341Survivor NeedsCapital AnalysisInIn thethe eventevent ofof John'sJohn's DeathDeathDeficitCapital WithdrawalsSocial SecurityOther Income 500,000Annual Income 400,000 300,000 200,000 100,000 031 35 39 43 47 51 55 59 63 67 71 75 79 83 87Jane's AgeIncome needs:At Jane's age:Annual income desiredIncome available:Annual surplus/(shortage)31 90,00088,404( 1,596)Assets available at John's deathLife insurance death benefits45 136,13375,636( 60,498)63 231,7570( 231,757) 283,000300,000Total capital availableImmediate Cash needs 583,000(225,000)Net capital available for income needs 358,000Additional capital needed today to fund all income shortages and provide for your survivor'sneeds until Jane's age 90 is 1,244,989.1These results are hypothetical and are not a promise of future performance.1 Assumes amount is deposited in the asset designated to receive life insurance benefits, with an initial expected return of 5.00%.B.E.S.T. Wealth Management, LLCSeptember 30, 2013John and Jane DoePresented by: Brad E.S. Tinnon, CFP
SummaryIn the event of John's DeathIncome Needs:ExpensesIncome Available:EmploymentSocial Security SurvivorSocial Security SurvivorAnnual Surplus/(Shortage)At Jane's age:31 90,00050,00438,4000( 1,596)45 136,13363 231,75775,63600000( 60,498) ( 231,757)Capital Available:Assets AvailableLife Insurance Death BenefitsTotal Capital Available 283,000300,000 583,000Additional Cash Needs:Debts/LiabilitiesEmergency Reserve FundTotal additional cash needs 225,0000( 225,000)Net capital available for income nee
have the following estate planning documents drafted: (1) Health Care Power of Attorney, and (2) Financial Power of Attorney. A Healthcare Power of Attorney is a document in which you appoint someone to handle your health related matters in the event you cannot
