PersonalFinancialPlan.pdf

Personal Financial Plan
For

John and Mary Sample

July 1, 2018

Prepared by

John Smith

2430 NW Professional Dr.

Corvallis, OR 97330

877-421-9815

Cover page text, cover page logo, and report headers are customizable.

Additional text can be included on the cover page.

This presentation provides a general overview of some aspects of your personal financial position. It is designed
to provide educational and / or general information and is not intended to provide specific legal, accounting,
investment, tax or other professional advice. For specific advice on these aspects of your overall financial plan,
consult with your professional advisors. Asset or portfolio earnings and / or returns shown, or used in the
presentation, are not intended to predict nor guarantee the actual results of any investment products or particular
investment style.

IMPORTANT: The projections or other information generated by Money Tree’s Silver regarding the likelihood of various
investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future
results. Additionally, it is important to note that information in this report is based upon financial figures input on the date
above; results provided may vary with subsequent uses and over time.

Sample Financial Plan – Silver Financial Planner John and Mary Sample

About Your Personal Financial Plan
We appreciate that you have questions and concerns as you work to attain and preserve financial security. Today’s
financial environment is complex and in many regards, uncertain. The decisions you make regarding work,
spending, investment, and retirement, both now and in the future, will significantly affect your financial condition
over the long term.

In an effort to aid you in learning, understanding, and formulating a personal basis for decision making, this
‘Personal Financial Plan’ is offered to help enhance your knowledge of various topics and communicate some of the
intricacies of the financial world. The plan represents a framework to clarify and structure your financial matters.

This plan is based upon confidential information you provided regarding your present resources and objectives.
While illustrations within this plan can be a valuable aid in the examination of your finances, it does not represent
the culmination of your planning efforts. Financial planning is an ongoing process.

This hypothetical illustration of mathematical principles is custom made to model some potential situations and
transitions you may face in your financial future. Hypothetical assumptions used in this illustration are specifically
chosen to communicate and demonstrate your current financial position and highlight for discussion with your
advisor the complex future interacting effects of combined incomes, expenses, savings, asset growth, taxes,
retirement benefits, and insurance.

This document is not an advertisement or solicitation for any specific investment, investment strategy, or service.
No recommendations or projections of specific investments or investment strategies are made or implied. Any
illustrations of asset growth contained herein are strictly used to demonstrate mathematical concepts and
relationships while presenting a balanced and complete picture of certain financial principles. Growth assumptions
are applied to generalized accounts based upon differing tax treatment. Illustrations, charts and tables do not predict
or project actual future investment performance, or imply that any past performance will recur.

This plan does not provide tax or legal advice, but may illustrate some tax rules or effects and mention potential
legal options for educational purposes. Information contained herein is not a substitute for consultation with a
competent legal professional or tax advisor and should only be used in conjunction with his or her advice.

The results shown in this illustration are not guarantees of, or projections of future performance. Results shown are
for illustrative purposes only. This presentation contains forward-looking statements and there can be no guarantees
that the views and opinions expressed will come to pass. Historical data shown represents past performance and
does not imply or guarantee comparable future results. Information and statistical data contained herein have been
obtained from sources believed to be reliable but in no way are guaranteed as to accuracy or completeness.

The Assumptions page contains information you provided that is used throughout the presentation. The asset listing
herein is not an account statement and does not necessarily include current or complete balances, holdings, and
returns. Please review the information for accuracy and notify your Financial Advisor promptly if discrepancies in
the assumptions are present; discrepancies may materially alter the presentation.

Your actual future investment returns, tax levels and inflation are unknown. This illustration uses representative
assumptions in a financial planning calculation model to generate a report for education and discussion purposes.
Calculations and assumptions within this report may not reflect all potential fees, charges, and expenses that might
be incurred over the time frame covered by these illustrations which, if included, would result in lower investment
returns and less favorable illustration results. Do not rely upon the results of this report to predict actual future
investment performance, market conditions, tax effects or inflation rates.

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.7/1/2018 Page 2 of 71

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Sample Financial Plan – Silver Financial Planner John and Mary Sample

Summary
This report uses financial models to present a picture of your current financial situation and illustrations of
possible directions your finances may take. Future economic and market conditions are unknown, and will change.
The assumptions used are representative of economic and market conditions that could occur, and are designed to
promote a discussion of appropriate actions that may need to be taken, now or in the future, to help you manage
and maintain your financial situation under changeable conditions.

Your Current Situation:

You have assets of approximately $982,000.
You have liabilities of approximately $240,000.
Your net worth is approximately $742,000.
You now have $526,000 in working assets and are adding $26,950 per year.

Your Goals:

John wants to retire at age 65 and Mary wants to retire at age 63.
Monthly after-tax income needed at that time is $7,083 (in today’s dollars).
You will need the income until the last life expectancy of age 95.
To meet your education goals you need to save $10,141 annually ($845 monthly).

Analysis Details:
Asset Allocation: Type of Investor – Somewhat Aggressive

Long-term care assets at risk: $681,738

Net Estimated Life Insurance Needs Shortage for John: $219,000

Net Estimated Life Insurance Needs Shortage for Mary: $275,000

John and Mary both have Wills.

John and Mary do not have Durable Powers of Attorney.

John and Mary do not have Living Wills.

John and Mary do not have Health Care Powers of Attorney.

Retirement Analysis

Using the information you provided, calculations have been made to estimate whether your current retirement
program will meet your stated retirement goals. The analysis begins now and extends through life expectancy. It
includes tax advantaged, taxable investments, defined benefit pensions, if applicable, and Social Security benefits.
The analysis calculates growth and depletion of capital assets over time. This analysis is the basis for the following
summarized statement.

Actions:
It appears you may run out of money before the last life expectancy of age 95. The range of possible options you
might consider to improve your situation include the following:

Increase the rate of return on your investments.
Increase your annual savings by $3,600/year ($300 month).
Reduce your retirement spending needs by $3,100 to $81,900/year ($6,823/month).
Defer your retirement by about 1 year.
Combine any of the above and lower the requirements for each.

This report is for informational and educational purposes only. The information and assumptions used are
estimates. The resulting calculations are designed to help illustrate financial concepts and general trends.

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.7/1/2018 Page 3 of 71

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Growth

Sample Financial Plan – Silver Financial Planner John and Mary Sample

Assumptions
Mary

46

63

90

95

$250,000

Mary

$70,500
$32,668

67
2.00%

Ret.
6.00%
6.00%
4.00%
6.00%

20.00%

100.00%
100.00%

2.00%
2.00%

Ret.
$85,000

$75,000

3.00%

3.00%

$192,400

Asset Allocations:
Cash & Reserves
Income
Income &
Growth
Aggressive
GrowthOther
Risk Tolerance

Other Expenses (After-Tax)

Item Start Inc.
Description Year Rate

World Travel – 2 2034 3.00
Years Post 3.00%Replace Roof 2019
Retirement 3.00%Kitchen and 2020
Bath Renovation %

Current Suggested
7.60% 5.00%
1.90% 0.00%
5.70% 15.00%
60.46% 40.00%
24.33% 40.00%
0.00% 0.00%

Somewhat Aggressive

Number Amount per
of Years Year

2 ($20,000)
1 ($12,000)
1 ($32,000)

Client Information:
Birth Date
Age
Retirement Age
Life Expectancy
Alternate Life Expectancy
Life Insurance
Term Insurance
Insurance Cash Values

Income (Annual)

Earned Income
Social Security

Start Age

Increase Rate
Pension 1

Start Age

Increase Rate (Pre. Ret.)

Increase Rate (Ret.)
Pension Survivor %

Pension 2
Start Age
Increase Rate (Pre. Ret.)
Increase Rate (Ret.)
Pension Survivor %

Rate Assumptions
Taxable Returns
Tax-Deferred & Roth Returns
Tax-Free Returns
Return on Annuities
Effective Tax Rates

Cost Basis for Taxable Assets
Cost Basis for Annuity Assets

Additions Increase Rate: Taxable

John

48
65

85
90

$500,000

John

$80,000
$33,503

67
2.00%

$7,200

65
0.00%

2.00%
0%

Pre-Ret.
7.00%
7.00%
5.00%
6.00%

25.00%

Additions Incr Rate: Tax-Def 2.00%

Expenses (After-Tax ) Pre-Ret.
Expenses $90,000

Survivor Expenses $80,000

Inflation Rate 3.00%

Survivor Inflation Rate 3.00%

Estimated Education Costs
Total Costs at 6% Inflation

Note: These assumptions are based upon information provided by you, combined with representative forward looking values intended to provide a reasonable financial illustration for education and
discussion purposes. The investment returns, tax rates, benefit increase rates, inflation rates, and future expense values used in this report were selected based on your age, assets, income, goals and other
information you provided. These assumptions do not presuppose or analyze any particular investments or investment strategy, or represent a guarantee of future results.

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.7/1/2018 Page 4 of 71

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Sample Financial Plan – Silver Financial Planner John and Mary Sample

Net Worth Statement
John and Mary Sample

July 1, 2018

ASSETS
Savings And Investments

Money Market Accounts/Funds $40,000
Annuities 30,000
Municipal Bonds and Funds 10,000
Stock Mutual Funds 85,000

Retirement Accounts
$165,000

Qualified Plans-John
Qualified Plans-Mary
IRA Assets-Mary
Roth Assets-John
Roth Assets-Mary

Other Assets

$160,000
128,000
34,000
12,000
27,000

$361,000

Residence
Personal Property
Cars

$400,000
20,000
36,000

TOTAL ASSETS
$456,000

$982,000

LIABILITIES

Residence Mortgage
Credit Card Debt
Car Loans

$220,000
5,000

15,000

$240,000

Net Worth (Assets less Liabilities) $742,000

Note: Potential taxes due on unrealized gains or assets in tax-deferred retirement plans are not accounted for in this Net Worth Statement.
This asset information is based upon information you provided and sources believed to be reliable. The asset listing herein is not an account
statement and does not necessarily include current or complete balances, holdings, and returns. Please review this information for accuracy.

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.7/1/2018 Page 5 of 71

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Sample Financial Plan – Silver Financial Planner John and Mary Sample

Asset Worksheet
Description

Current
Amount

Annual
Additions*

Addition
Period

Asset
Class

Account
Taxation

Asset
Type

Checking / Savings 40,000 Cash Taxable (1) Money Market
Municipal Bond Fund 10,000 Income Tax-Free (J) Muni Bonds & Funds
Stock Mutual Funds 85,000 Growth Taxable (J) Mutual Funds (Stock)
IRA 34,000 Growth IRA (2) Stocks
401k 160,000 11,900 2018-2034 Growth Tax-Deferred (1) Bond Mutual Funds
401k 128,000 10,050 2018-2034 Agg. Gro. Tax-Deferred (2) Mutual Funds (Stock)
Annuity 30,000 Inc./Gro. Annuity (1) Annuities
Roth IRA 12,000 2,500 2018-2034 Growth Roth IRA (1) Money Market
Roth IRA 27,000 2,500 2018-2034 Growth Roth IRA (2) Money Market

Totals: $526,000 $26,950

*Annual IRA addition amounts used in the analysis are limited to the maximums allowed by law.
Note: This asset information is based upon information you provided and sources believed to be reliable. The asset listing herein is not an account
statement and does not necessarily include current or complete balances, holdings, and returns. Please review this information for accuracy.

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.7/1/2018 Page 6 of 71

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Sample Financial Plan – Silver Financial Planner John and Mary Sample

Your Current Asset Allocation
The information from the Asset Worksheet was used to create the following chart.

It is important to the success of your planning that your asset allocation is consistent with your goals. You should compare
your current allocation to the Suggested Asset Allocation below which may be more appropriate and beneficial to your
situation.

Suggested Asset Allocation
Based upon information you provided, we believe you should consider an investment mix similar to the one below.

We have illustrated a broad-based allocation. Effectiveness might be further increased by diversifying the types of securities
held within the asset mix. See your Financial Advisor for further analysis.

Asset Allocation
Cash & Reserves
Income

Income & Growth

Current
$40,000
10,000

30,000

8%
2%

6%

Suggested *
$26,300 **

0

78,900

5%
0%

15%

Change
($13,700)

(10,000)

48,900

Growth

Aggressive Growth

Other

318,000

128,000

0

60%

24%

0%

210,400

210,400

0

40%

40%

0%

(107,600)

82,400

0

Total $526,000 100% $526,000 100% 0

* These suggested asset allocation percentages are representative portfolio target values.
** Does not include any provision for an Emergency Fund.
Note: Asset Allocation does not guarantee a profit or protect against loss in declining markets.

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.7/1/2018 Page 7 of 71

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Sample Financial Plan – Silver Financial Planner John and Mary Sample

Retirement Profile
Developing A Retirement Plan

Developing a retirement plan means understanding your current situation, deciding among
alternatives, and taking appropriate action today. This report will help you define your

current retirement goals, identify your current planning, and estimate the results for your review.

Your Current Retirement Goals John Mary

Age: 48 46

Retirement Age: 65 63

Years until Retirement: 17 17

Years of Retirement: 25 32

Annual Retirement Spending (After-tax): $85,000 (expressed in today’s dollars)

Additional Objectives Please see the attached Education Funding Illustration.
Education Costs have been included in the Retirement Analysis.

Other Expenses
World Travel – 2 Years Post Retirement: ($20,000)/year starting 2034, increase rate of 3%, for 2 years.

Replace Roof: ($12,000)/year starting 2019, increase rate of 3%, for 1 year.

Kitchen and Bath Renovation: ($32,000)/year starting 2020, increase rate of 3%, for 1 year.

Assumptions Pre-Retirement Retirement

Inflation Rate: 3.0% 3.0%

Income Tax Rate (Average): 25.0% 20.0%

Return on Investments (Average): 6.9% 6.0%

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.7/1/2018 Page 8 of 71

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Sample Financial Plan – Silver Financial Planner John and Mary Sample

Resources Available for Retirement
Funds to meet your goals can come from several sources: Personal Investing, Retirement Plans,
Defined Benefit Pensions, Social Security, and Other Income.
Here is a summary of your situation.

Personal Investments
Current Balances

Money Market Accounts/Funds
Annuities
Municipal Bonds and Funds
Stock Mutual Funds

$40,000
30,000
10,000
85,000

$165,000

Retirement Plans

Qualified Plans-John
Qualified Plans-Mary
IRA Assets-Mary
Roth Assets-John
Roth Assets-Mary

$160,000
128,000
34,000
12,000
27,000

$361,000

Total Investment Assets $526,000

See Asset Worksheet for detailed annual savings information.

Social Security

Full Benefit Age
Benefit (After-tax)

John

67
$33,503

Mary

67
$32,668

Pension Plans John Mary
Pension Amount

Pension Starting Age
Increase Rate Pre-Retirement

$5,760*
65

0.0%

N/A

Increase Rate in Retirement 2.0%

Survivor Percentage 0%

*Annual amount, after taxes.

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.7/1/2018 Page 9 of 71

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Sample Financial Plan – Silver Financial Planner John and Mary Sample

Retirement Summary

Retirement Capital Illustration
The analysis begins at your current age and extends through your life expectancy. It includes all assets, both tax
advantaged and taxable, all expenses, including education funding if applicable, other income and expense
estimates, defined benefit pensions, and Social Security benefits. The graph illustrates the growth and depletion of
capital assets as seen in Retirement Capital Analysis.

General Assumptions: Retirement Spending Needs* $85,000

Rates of Return Before and After
Retirement Used in Illustration:

Taxable RORs: 7% 6%

Tax Def. RORs: 7% 6%

Tax Free RORs: 5% 4%

Annuity RORs: 6% 6%

Survivor Spending Needs*

Retirement Age

Retirement Age

Inflation – Current

Inflation – Retirement

Tax Rate – Current
Tax Rate – Retirement

$75,000

John – 65

Mary – 63
3%

3%

25%
20%

* Spending needs are stated in today’s after tax-dollars. See Assumptions page for complete listing of assumptions.

Actual future returns, taxes, expenses, and benefits are unknown. This illustration uses representative estimates and
assumptions for educational and discussion purposes only. Do not rely on this report for investment analysis.

Retirement Capital Illustration Results:
It appears you may run out of money before the last life expectancy of age 95. The range of possible options you
might consider to improve your situation include the following:

Increase the rate of return on your investments.
Increase your annual savings by $3,600/year ($300 month).
Reduce your retirement spending needs by $3,100 to $81,900/year ($6,823/month).
Defer your retirement by about 1 year.
Combine any of the above and lower the requirements for each.

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.7/1/2018 Page 10 of 71

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Sample Financial Plan – Silver Financial Planner John and Mary Sample

Monte Carlo Simulation Explanation
The financial planning process can help you evaluate your status in relationship to your financial goals and
objectives. In preparing a hypothetical financial illustration for discussion, a series of representative fixed
assumptions are made, such as inflation rates, rates of return, retirement benefits and tax rates. While such static
hypothetical illustrations are still useful for education and discussion purposes, they are based upon unchanging
long-term assumptions. In fact, economic and financial environments are unpredictable and constantly changing.

Monte Carlo Simulation is one way to visualize the effect of unpredictable financial market volatility on your
retirement plan. Monte Carlo Simulation introduces random uncertainty into the annual assumptions of a retirement
capital illustration model, and then runs the model a large number of times. Observing results from all these
changing results can offer a view of trends, patterns and potential ranges of future outcomes illustrated by the
randomly changing simulation conditions. While Monte Carlo Simulation cannot and does not predict your
financial future, it may help illustrate for you some of the many different possible hypothetical outcomes.

Monte Carlo Simulation Technique:
Based upon the trends, changes, and values shown in your hypothetical financial program, the simulation process
uses a different random rate of return for each year of a new hypothetical financial plan. Ten thousand full financial
plan calculations are performed utilizing the volatile annual rates of return. The result is ten thousand new
hypothetical financial plan results illustrating possible future financial market environments.

By using random rates from a statistically appropriate collection of annual returns, and repeating the process
thousands of times, the resulting collection can be viewed as a representative set of potential future results. The
tendencies within the group of Monte Carlo Simulation results; the highs, lows and averages, offer insight into
potential plan performance which may occur under various combinations of broad market conditions.

Note: No investment products, investment strategy or particular investment style is projected or illustrated by this process.
Simulation results demonstrate effects of volatility on rate of return assumptions for education and discussion purposes only.

Standard Deviation:
The simulated level of volatility in future financial markets is represented by a Standard Deviation value. This
statistical measure of variation is used within the Monte Carlo Simulation to indicate how dramatically return rates
can change year by year. The Standard Deviation controls the magnitude of the random changes in each annual rate
of return as it is varied each year above or below the average annual rate to simulate market volatility.

The simulation model uses a Standard Deviation based upon the rate of return assumptions used in the Retirement
Capital Illustration, and limits the rate of return variation to plus or minus five standard deviations in any year. Low
assumed return rates generate low Standard Deviation values, higher returns relate to higher Standard Deviations.

The Bold Line
The bold line in the Monte Carlo Simulation Results graph tracks the value of assets over the length of the
illustration if all rates of return are held stable at the assumed rates of return (see Assumptions). The estimate uses
annual expected portfolio rates of return and inflation rates to model the growth and use of assets as indicated under
Assumptions. The bold line represents the values shown in the Retirement Capital Analysis.

Percentage of Monte Carlo Results Above Zero at Selected Ages
These results represent the percentage of Monte Carlo simulation outcomes that show positive retirement asset
value remaining at different ages. A percentage above 70 at last life expectancy is an indication that the underlying
retirement plan offers a substantial probability of success even under volatile market conditions. Additional ages
shown give the percentage of simulation outcomes with positive asset amounts at various ages.

Monte Carlo Simulation Minimum, Average and Maximum Dollar Results

These values indicate the best, worst and average dollar results at the end of the ten thousand Monte Carlo
Simulations. These show the range of results (high and low), and the average of all Monte Carlo results. All values
are based on results at the life expectancy of the last to die.

IMPORTANT: The projections or other information generated by the Personalized Financial Plan regarding the likelihood of various
investment 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 and over time.

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.7/1/2018 Page 11 of 71

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Sample Financial Plan – Silver Financial Planner John and Mary Sample

Monte Carlo Retirement Simulation
Results from 10,000 Monte Carlo Simulation Trials

* The bold line is the estimated retirement capital value over time using fixed rates.

Success Rate of Your Plan – 32%

This indicates an unacceptable risk of attaining your retirement goals. Monitor your plan regularly.

Changes in assumptions may have a significant impact on the results of this plan.

This Monte Carlo Retirement Simulation illustrates possible variations in growth and/or depletion of retirement
capital under unpredictable future conditions. The simulation introduces uncertainty by fluctuating annual rates of
return on assets. The graph and related calculations do not presuppose or analyze any particular investment or
investment strategy. This long-term hypothetical model is used to help show potential effects of broad market
volatility and the possible impact on your financial plans. 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
capital assets, both tax advantaged and taxable, all expenses, including education funding if applicable, pension
benefits, and Social Security benefits. Observing results from this large number of simulations may offer insight
into the shape, trends, and potential range of future retirement plan outcomes under volatile market conditions.

Retirement Capital Analysis Results, at Life Expectancy, of 10,000 Monte Carlo Simulations:

Percent with funds at last life expectancy 32% Retirement Capital Estimate $0

Percent with funds at age 87 83% Minimum (Worst Case) result $0

Percent with funds at age 75 > 95% Average Monte Carlo result $621,096

Percent with funds at age 65 > 95% Maximum Monte Carlo result $20,011,071

Life insurance proceeds are not included in the final year balances of these calculations.
Illustration based on random rates of return which average 6.3%, with a std. dev. of 6.2% (95% of values fall between -6.1% and 18.7%).

IMPORTANT: The projections or other information generated in this report regarding the likelihood of various investment outcomes are
hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each report
and over time. Results of this simulation are neither guarantees nor projections of future performance. Information is for illustrative
purposes only. Do not rely upon the results of this …