final capstone project_gene_m_gorrell_01_29_2016

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Financial Plan

For more information, please call:

Gene Gorrell Financial Planner

Gorrell & Son 2663 Canyon Drive Plainfield, IL 60586

Prepared for: Naresh and Vanita Agarwal

January 29, 2016

Gorrell and Son

Insurance Planning and

Risk Management

Life-Cycle Financial Planning

Tax Planning

Investment Planning

Retirement Planning

Estate Planning

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Title Page.................................................................................................................................. 1

Table of Contents...................................................................................................................... 2

Disclaimer................................................................................................................................. 3

Introduction............................................................................................................................... 4

Net Worth.................................................................................................................................. 5

Cash Flow ................................................................................................................................ 6

SWOT Analysis ……………………………………………………………….…………………… 7-8

Asset Allocation …………………………………………………………………...……………… 9-11

Recommended New Asset Allocation ……………...............................................…………12-14

Retirement Income Adequacy ……………………....................………………………………… 15

Insurance .......................................................................................................................... 16-17

Taxation ………………………………………………………..............................…………… 18-19

Estate Planning ................................................................................................................. 20-21

Gifting and Life Insurance in Estate Planning......................................................................... 22

Tasks for Client and Planner ............................................................................................ 23-24

Assumptions used ……....................……………………………………………………………… 25

Summary of Results ……………………………………………………………………………. 26-29

Appendix A …………. MoneyGuidePro® Comparative Analysis – Current Status vs. New Plan

Appendix B ……………………..……………... Survivorship Universal Life Insurance Illustration

Appendix C ………………………………………………………………..……………….……. Notes

Table of Contents

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This financial plan is hypothetical in nature and is intended to help you in making decisions on your financial future based on information that you have provided and reviewed.

IMPORTANT: The projections or other information generated by MoneyGuidePro® regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.

Criteria, Assumptions, Methodology, and Limitations of Plan

The assumptions used in this financial plan are based on information provided and reviewed by you. Please review all assumptions in the Appendix - Plan Data Summary section before reviewing the rest of the report to ensure the accuracy and reasonableness of the assumptions. Those assumptions must be reconsidered on a frequent basis to ensure the results are adjusted accordingly. The smallest of changes in assumptions can have a dramatic impact on the outcome of this financial plan. Any inaccurate representation by you of any facts or assumptions used in this financial plan invalidates the results.

We have made no attempt to review your property and liability insurance policies (auto and homeowners, for example). We strongly recommend that in conjunction with this financial plan, you consult with your property and liability agent to review your current coverage to ensure it continues to be appropriate. In doing so, you may wish to review the dollar amount of your coverage, the deductibles, the liability coverage (including an umbrella policy), and the premium amounts.

This plan does not constitute advice in the areas of legal, accounting or tax. It is your responsibility to consult with the appropriate professionals in those areas either independently or in conjunction with this planning process.

Results May Vary with Each Use and Over Time

The results presented in this financial plan are not predictions of actual results. Actual results may vary to a material degree due to external factors beyond the scope and control of this financial plan. Historical data is used to produce future assumptions used in the financial plan, such as rates of return. Past performance is not a guarantee or predictor of future performance.

The results are based on your representation of risk and include information current as of January 29, 2016. You are responsible for confirming that the answers you provided to determine your individual risk tolerance used in this financial plan are accurately represented. The proposed asset allocation presented in this plan is based on your answers to a risk tolerance questionnaire and may represent a different investment strategy than your current allocation in terms of risk. Actual return rates and performance may vary to a significant degree from that represented in this plan.

Investments Considered

This plan does not consider the selection of individual securities; the plan provides model portfolios. The results contained herein do not constitute an actual offer to buy, sell or recommend a particular investment or product. All investments are inherently risky. The asset classes and return rates used in the plan are broad in nature. The illustrations are not indicative of the future performance of actual investments, which will fluctuate over time and may lose value. Refer to the Asset Allocation section of this report for details on return rate assumptions used throughout this plan.

There are risks associated with investing, including the risk of losing a portion or all of your initial investment.

Disclaimer

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Why develop a plan? By developing a financial plan, you and your family:

Will have a better understanding of your current financial situation.

Determine attainable retirement, insurance, estate plan, and other financial goals.

Review goals, funding strategies, and alternatives where goals have to be compromised.

Have the necessary financial resources set aside to fund your goals as they occur.

Reduce the effect of unexpected events, such as disability, premature death, etc.

Planning is a life-long journey.

For the planning process to evolve successfully, changing circumstances or life-stage requirements must be factored in. Your advisor will want to know when personal or financial events occur, anticipated or not, to clarify whether your goals are affected and if there are new decisions needed.

When do we review the plan?

While simply having a plan in place will give you a better understanding of your financial situation, regularly reviewed and updated, the likelihood of achieving the desired results is greatly enhanced. Some of the events for which you may need to review your strategies are: changes in your career status, marital situation, and the well-being of your loved ones.

Introduction

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This net worth summary provides a snap shot showing a financial situation at a certain point in time. It includes what you own (assets), what you owe to creditors (liabilities), and the net value or difference between the two (net worth). In simple terms, the net worth statement shows how much money would be left if everything you owned was converted into cash and used to pay off your debts (before taxes).

The following information is a description of items likely to appear in the report below. Your report may contain some or all of the items listed:

Lifestyle assets include your home, vacation homes and collectibles.

Non-Registered assets include stocks, bonds, mutual funds and cash.

Registered assets include your registered and locked-in retirement plans, such as RRSPs, RRIFs, LIFs andLRIFs.

Liabilities include your mortgages, loans, personal lines of credits and credit cards.

Cash Flow Surplus is the amount of surplus funds from your cash flow statement. In other words,income you did not spend which may be representative of your checking account, for instance.

Net Worth Summary

As of January 29, 2016

Asset Amount Liability Amount

Cash equivalents (J) $70,000 Primary Mortgage1 $152,934

Brokerage Account (T)2 350,000 HELOC3 25,000

Brokerage Account (T)4 600,000 Credit Cards5 4,000

Stock Options (H)6 92,000

401(k) (H)7 1,200,000 Total Liabilities $181,934

401(k) (W)8 550,000

IRA (H) 123,000

IRA (W) 90,000 Net Worth $3,471,066

Residence (T)9 386,000

Personal Property (T)10 150,000

Vehicles (J) 42,000

Total Assets $3,653,000

Net Worth

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The cash flow report below outlines your current sources of income and expenses. Your income includes employment income, investment income and any other sources. Your expenses include your daily living expenses, debt payments, including your mortgage, current investment contributions and insurance premiums.

Inflows Annual Amount

Naresh's Basic Pension $48,750

Vanita's Basic Pension 30,000

Interest Income:

Municipal Bonds 17,000

Other 8,000

Dividend Income 10,000

Total Inflows $113,750

Outflows

Mortgage P & I $21,584

Real Estate Taxes 6,800

HELOC Payments 5,400

Credit Cards 1,000

Homeowners' Insurance 850

Auto Insurance 1,300

Disability Insurance 1,933

Long-term Care Insurance 542

Medical Expenses 4,000

Umbrella Disability Premium 240

Food 5,000

Clothing 4,000

Utilities 5,600

Home Maintenance/Repair 4,900

Charitable Gifts 10,000

Personal Gifts 6,000

Federal Income Tax 8,000

State Income Tax 5,000

Total Outflows $92,149

Surplus $21,601

Cash Flow

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Financial Position SWOT

Strengths Weaknesses Opportunities Threats

An excellent asset-to-liability ratio, leaving a substantial and diverse

net worth.

The asset allocation of investments is more aggressive than the desired “moderately conservative” profile, yet still not performing optimally.

The investments are only yielding a composite of 6.74% annually.

Reallocating into better performing stock funds, while changing to a more conservative mix should be both safer and even yield a better

gain.

Investments are currently 62% in stock equities. This is higher than the

Agarwal’s desired profile. Current Stock/Income/Cash mix is 62%/32%/6%. Preferred is

40%/55%/5%.

Funds in the brokerage accounts are fairly well diversified, and have paid out in interest and dividends.

The stock funds in the brokerage accounts, with the exception of

PepsiCo, have performed below the market.

Reduce some of the over-emphasis on individual municipal bonds, and balance that with more municipal

bond funds; take advantage of PepsiCo’s current risk/reward ratio; IBM, 3M, and the current Large Cap

Value are under-performing; emerging markets, and Large Cap

Growth are good substitutes.

Underperforming stocks and over-investing in one area (individual

municipal bonds) leaves the brokerage accounts vulnerable to under-

performing.

The Agarwal’s have taken advantage of their companies’

401(k) programs and reserved a large reserve.

Both accounts are too dependent on company stock. While it’s common

to invest in and natural to believe in one’s company, over-dependence on

its performance is not recommended.

Getting out of Employers’ stocks is a move toward safety in

retirement; shifting a large amount of these funds into corporate and

international bonds is a good opportunity now, as well as more

diversified stock funds, rather than individual stocks.

The heavy reliance on Employers’ stock could turn into an erosion of

retirement funds, as they are susceptible to both systemic and non-

systemic risk. The Agarwal’s have earned, and are earning (through

pensions) quite a good income from their companies. Putting their bets on

the companies is a risk, both financially and emotionally.

The Agarwal’s have each set up an IRA.

The IRA’s are not diversified, and is under-performing several available funds; the opportunity to execute a

direct rollover from their 401(k) accounts into the IRA’s is not necessary, but has not been

discussed either.

An opportunity to move Naresh’s funds from the ETF into

International equities should be considered; splitting Vanita’s funds into at least 2 funds will help begin

diversifying her IRA.

Right now, the IRAs are not performing much higher than the rate

of inflation. At this early stage of retirement, the Agarwal’s are missing out on an opportunity to earn on their investments before age necessitates the funds to be largely conservative.

Client is in position to exercise stock options at a gain.

The NQSO (5 Year Plan) shares are have gone down in value, though

they still have 2 years left to be fully vested.

Exercise the NQSO (3 Year Plan) and ISO options at a gain of $26,000. This cash can be reinvested into the IRA or

Brokerage account to retirement funds. This will ensure a gain which can also mitigate any losses from the NQSO (5 Year Option) stocks.

Not exercising the NQSO (3 Year Plan) and ISO options could subject the

client to risk a loss of the gains currently available. It would also make

the client vulnerable to not having gains that make sure the options as a

whole do not lose value, as the remaining fund has already lost value.

SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)

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Cash Flow SWOT Analysis

Strengths Weaknesses Opportunities Threats

Annual Income is more than adequate and coming from

multiple sources.

The current projected income for retirement assumes that both

Naresh and Vanita have elected “Plan A” for their pension

annuities. Should either spouse die, no pension benefits remain for the

survivor.

The opportunity for each spouse to continue to receive survivor’s pensions of 100% of the living

benefit with only a 10% reduction in the annual pension amount leaves both spouses well-protected, and

provides a “built-in” life insurance, so to speak.

The death of either spouse completely eliminates the

surviving spouse’s rights to any of their departed spouse’s pension

annuity.

The Agarwal’s have planned ahead for disability and long-term

care needs

The disability insurance policy is one geared toward protected a

client’s ability to earn income. The Agarwal’s are retired, and the

option to convert this to an LTC policy should be considered; the

benefit for their current LTCI policies is very low, at only $1,500

per month.

The Agarwal’s can probably just cancel the disability insurance

policy, rather than convert it; at the same time, they should increase the

benefit on their Long-term Care Insurance policies, so that they

cover up to $300 per day, with an inflation allowance of 4-5% per

year.

The disability policy, as is, will not pay a benefit, as it only replaces

earned income; the Agarwal’s also face disaster if either should need long-term care; $1,500 per month is just $50 a day; long-term care could easily cost $250-$300 per

day.

SWOT Analysis (cont’d) (Strengths, Weaknesses, Opportunities, Threats)

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These pie graphs illustrate your current asset mix and suggested asset mix for your entire portfolio.

However, the suggested asset mix will not be used in the proposed plan. Due to modifications the assumed asset mix on the following page will be used instead.

54%30%

9%7%

CURRENT ASSET ALLOCATION MIX

U.S. Stocks Bonds Cash International Stocks

30%

55%

5%10%

RECOMMENDED ASSET ALLOCATIONMODERATELY CONSERVATIVE

U.S. Stocks Bonds Cash International Stocks

Rate of Return 6.75% Rate of Return 8.22% Standard Deviation 10.21% Standard Deviation 5.58%

Asset Allocation

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Brokerage account in Naresh’s Revocable Living Trust: Asset FMV Return

Individual Municipal Bonds $200,000 6% Municipal Bond Funds $40,000 3.85% IBM $21,000 5% PepsiCo $39,000 20% 3M $50,000 9.34%

Total: $350,000 6.59% (Composite)

Brokerage account in Vanita’s Revocable Living Trust: Asset FMV Return

Individual Municipal Bonds $200,000 4% Corporate Bonds $150,000 5% Large Cap Value Fund $120,000 9.15% Mid Cap Growth $130,000 11%


Naresh’s 401(k) (Beneficiary is Vanita): Asset FMV Return

Employer’s Common Stock $650,000 7% Small Cap Value $100,000 12% International Index Fund $120,000 13% Corporate High Yield Bond Fund $180,000 7% TIPS Fund $150,000 3%

Total: $1,200,000 7.52% (Composite)

Vanita’s 401(k) (Beneficiary is Naresh): Asset FMV Return

Employer’s Common Stock $200,000 7% S & P 500 Index Fund $180,000 10% TIPS Fund $170,000 2%


Naresh’s IRA (Beneficiary is Vanita):

Asset FMV Return

Total Stock Market ETF $123,000 5.5%


Detailed Summary of current investment holdings

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Vanita’s IRA (Beneficiary is Naresh):

Asset FMV Return

Vanguard European Stock Index $90,000 7%


Composite of All Investment Holdings:

Holding FMV Return

Brokerage account in Naresh’s RLT $350,000 6.59% Brokerage account in Vanita’s RLT $600,000 6.80% Naresh’s 401(k) $1,200,000 7.52% Vanita’s 401(k) $550,000 6.44% Naresh’s IRA $123,000 5.50% Vanita’s IRA $90,000 7.00%


Additional

Stock Options (type) Number of Shares Grant Price FMV per Share Exercise Value

Plan #1: Non-Qualified 4,000 $24 $32 $32,000 Plan #2: Incentive 5,000 $20 $32 $60,000

Total: $92,000

Total Investment Assets: $3,005,000 6.75% (includes exercised options)

Current Allocation:

U.S. Stocks $1,613,000 55% Bonds $920,000 30% International Equities $262,000 9% Money Market $210,000 7%

Current allocation is characterized as: Moderate

Investor’s Preference is: Moderately Conservative

Detailed Summary of current investment holdings (cont’d)

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Explanation of The Agarwal’s current portfolio is, essentially, a moderately allocated mix. According New Allocation: to their preferred conservatively moderate investing preference, they would need to

consider reducing their U.S. Stock investment portion from 55% to 30%, increasing their Bond holdings from 32% to 55%, slightly increasing their International Equities from 7% to 10%, and allocate the remaining 5% in cash. Also, even a moderately conservative portfolio should expect at least 8% annual returns, if not 10%. The current allocation is earning less than 7%, indicating we should be able to reallocate the funds and expect a higher annual return.

Review of Available Investments:

U.S. Stocks: Asset Class Average Return Standard Deviation Deviation/Return

PepsiCo 20% 19% 0.95 U.S. Large Cap 11% 20% 1.82 Large Cap Value 9.15% 18% 1.89 Mid-Cap and Small Cp. 12% 24% 2.00 S & P 500 10% 20% 2.00 Emerging Markets 14% 30% 2.14 Small Cap Value 12% 26% 2.17 Mid Cap Growth 11% 25% 2.27 3M 9.34% 24% 2.60 Employer’s Stock 7% 22% 3.14 Total Market ETF 5.5% 18% 3.27 IBM 5% 23% 4.60

Recommendation: The bottom four funds do not perform well, especially in relation to their Standard deviation to Return ratios. The funds allocated to U.S. Stocks should be dedicated to the remaining 8 asset classes.

Bonds: Asset Class Average Return Standard Deviation Deviation/Return

TIPS Fund 3% 3% 1.00 Corporate (High Yield) 7% 8% 1.14 Corporate 5% 6% 1.20 International Bonds 7% 9% 1.29 Individual Municipal 4% 6% 1.50 Long-Term-Domestic 5% 8% 1.60 Municipal Funds 3.85% 7% 1.82

New Allocation Plan (moderately conservative)

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Recommendation: The corporate bond funds, International Bond Fund, and Long-term (Domestic) funds perform the best, so we will want to allocate more into those funds, while allocating less into the Municipal Fund and TIP Funds.

Recommendation: The International Equity Fund out-performs the Vanguard European Stock Index; therefore, we will want to recommend investing the larger share of those resources into the International Equities Fund.

Recommendation: We will make a slight adjustment and lower our Money Market Fund investment to $150,000.

Recommendation: We recommend a direct rollover of hour 401(k) accounts into your IRAs in order to reduce the complexity associated with managing many accounts which serve the same purpose. A direct rollover incurs no penalty tax.

NEWLY PROPOSED INVESTMENT ASSET ALLOCATION

Brokerage account in Naresh’s Revocable Living Trust:

Asset FMV Return

Individual Municipal Bonds $85,000 4% Municipal Bond Funds $144,000 3.85% PepsiCo $180,000 20% Total: $409,000 10.99% (Composite)

Naresh’s IRA (Beneficiary is Vanita):

Asset FMV Return

International Equity Fund $121,000 13% Small Cap Value $90,000 12% International Bonds $334,000 7% Corporate High Yield Bond Fund $335,000 7% U.S. Large Cap Stocks $117,000 11% Mid-Cap and Small Cap Stocks $135,000 12% Long-term Bonds-Domestic $27,000 5% TIPS Fund $164,000 3% Total: $1,323,000 8.22% (Composite)

Recommendations and Recommended New Allocation

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NEWLY PROPOSED INVESTMENT ASSET ALLOCATION (cont’d)

Brokerage account in Vanita’s Revocable Living Trust:

Asset FMV Return

Individual Municipal Bonds $80,000 4% Corporate High Yield Bonds $248,000 5% Large Cap Value Fund $45,000 9.15% Emerging Market Equities $136,000 14% U.S. Large Cap Growth Stocks $13,000 11% Mid Cap Growth $90,000 11%


Vanita’s IRA:

Asset FMV Return

International Equity Fund $101,000 13% Vanguard European Stock Index $76,000 7% S & P 500 Index Fund $90,000 10% Long-term Bonds-Domestic $223,000 5% Money Market Fund $150,000 2%


Composite of All Investment Holdings:

Holding FMV Return

Brokerage account in Naresh’s RLT $409,000 10.99% Naresh’s IRA $1,323,000 8.22% Brokerage account in Vanita’s RLT $612,000 8.18% Vanita’s IRA $640,000 6.50%


CONCLUSION: The recommended course of action in order to improve return on holdings while maintaining a moderately conservative investor profile is as follows: Exercise Naresh’s stock options and reinvest the gains, along with the reallocation strategy shown above. This gives Naresh and Vanita a $2,984,000 portfolio, with an improvement on expected annual returns from the present 6.75% to an expected future return of 8.22%.

NOTE: In our recommended plan, we have removed the IBM stock, as Naresh has indicated his desire to gift that to his nephew, Kiran. A proposed plan for handling that transaction will be outlined.

Recommendations and Recommended New Allocation (cont’d)

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RECOMMENDATIONS:

• We suggest that you both choose option D from your retirement annuity choices--Joint and 100%Survivor, with 10% reduction in annuity payment, as an assurance that both Naresh and Vanita willhave the full amount of income available in the event of the loss of a spouse. Retirement incomeadequacy – Option D Joint and 100% Survivorship @ 10% less than full single annuity amount. Westrongly recommend that neither of you opt for option “A” for your pension annuity plans. In the eventof an untimely passing of one spouse, the survivor will have lost all payments from the deceasedspouse’s retirement annuity. Consider how happy you are with your current attorney. It is surprisingthat he or she would recommend that each of you opt to take the single life annuity option from yourretirement benefits, as a surviving spouse would lose all of the retirement benefit their spouse workedfor, in the event of their passing away. This will provide your household with combined retirementannuities of $70,875 for life.

• Next, be sure to wait until Naresh reaches age 66 years, 8 months in 2024 before beginning to takeyour Social Security benefit. This will provide your maximum benefit, which should begin at $33,454 forthe first year, and adjust for inflation thereafter. And for Vanita, delay taking any Social Securitybenefits until you reach age 67 in 2027, which will provide you with your maximum benefit amount,which should start at $29,027 and adjust with inflation thereafter.

• In order to lock in your budget just a little better, I recommend that you adjust your budget to includea one-time $4,000 payoff of your 11.9% credit card debt. There is plenty of surplus written into thecurrent budget to allow for that. It would be a help to also pay in a little extra to your mortgage andHELOC next month. Every extra dollar above your regular payment will reduce the principal owed onboth loans. The recommended amount you have available for this is about $3,100 for your mortgageand $1,700 for your HELOC.

• Other adjustments to your budget will be recommended as we address your insurance needs and yourestate planning below. You will see in our appendix that your income needs are securely met with thisproposal, as you will be receiving $70,875 annually, in addition to your investment income. And whenVanita reaches age 67, you should be receiving no less than $62,481 in combined Social Securitybenefits, which totals $133,356 combined, before even factoring in investment income.

Retirement Income Adequacy

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LIFE INSURANCE

• With our newly laid out asset allocation and current income plan, we have substantial protection in theevent of the death of a spouse. The survivor will continue to receive 100% of the annuity from theirspouse’s retirement plan, as well as a social security benefit, income from the Bypass Trust (which willbe addressed in the Estate Planning portion), and funds at their disposal in the Marital Trust (alsoaddressed in “Estate Planning”). With that, you may continue to keep your company-paid life insurancepolicies until the benefits are reduced to zero, but will no longer need personal life insurance policiesbeyond the policies that we will be recommending below for Kiran, Varun, and Paavai to purchase as Iwill also explain in the “Estate Planning” section.

DISABILITY INSURANCE

• Now that Naresh and Vanita are both retired, you are both no longer in need of, nor can you normallyreceive a benefit from this policy. You have the option of pricing the $1,933 annual premium forconversion into an LTC plan for Naresh, and then finding equivalent coverage for Vanita, or shoppingfor a plan for both of you and freeing up the $1,933, as well as the current $542 LTC policy premium togo toward a full coverage policy. Using these funds to go towards greater Long Term Care insurance ishighly recommended, and will be outlined in more detailed just a bit farther down in this report.

HEALTH INSURANCE

• You are in an excellent position with your employer-paid health insurance policy. This is good coverageuntil age 65. After that, the provision is made for Medicare Supplement coverage. When the timecomes, you will also be well-equipped to cover the cost, which will likely begin at about $1,325 permonth when Naresh reaches age 65, and will apply to both of you at a rate of about $2,414 per monthwhen Vanita reaches age 65 in 2025. Remember, one of the greatest costs during your retirementyears will almost always be health care. So we will consistently re-visit these expenses.

LONG-TERM CARE INSURANCE

• Your current LTC policies cover for $1500 benefit per month. This is a very low benefit amount, and willput a substantial amount of your estate at risk. A quality full care facility today costs $300 per day. Forexample, 3 years in a quality, fully staffed facility will cost $385,500. You will pay the first $27,000 forthe 90-day elimination period, and your insurer, only covering $1,500 per month, will pay out only$49,500 for the remaining 33 months. So in all, you will have paid out $336,000. If you are to have along term care insurance policy, you should have coverage for the full daily cost of care, adjusted forinflation as well. Though the premiums are much higher than the current $542 per year you are payingnow, the new premiums provide actual adequate coverage, while the current policy, in the examplejust discussed has you paying 87% of the cost of care. A full coverage policy with the same eliminationperiod will only cost you the $27,000 for the first 90 days, which is just 7% of the entire cost, bycomparison. And for the purposes of wealth protection, this is a sound investment, as our society haslonger life expectancy, and, frankly, a much higher rate of seniors needing full time nursing care atleast at some point during their golden years. An unfortunate truth is that among married seniors, atleast one of two spouses will in all likelihood, actually use this policy.

Insurance

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LONG-TERM CARE INSURANCE (CONT’D)

• The current statistics show that 60% of people who reach age 75 will need this coverage, and that outof all married couples, 70% of them will see a time when at least one spouse will need it. So it must beadequate enough to provide full coverage after the elimination period. Now that you are retired,disability insurance is no longer of benefit. You have the option of pricing the $1,933 annual premiumfor conversion into an LTC plan for Naresh, and then finding equivalent coverage for Vanita, orshopping for a plan for both of you and freeing up the $1,933, as well as the current $542 LTC policypremium to go toward a full coverage policy. For budgeting purposes for this report, I have located aplan that has an annual premium of $4,479 for Naresh and $4,302 for Vanita. These policies do carry aheavy premium, but the statistics are quite indicative that this is an area where seniors can ill-afford tocut corners on. You will see, even with all other expenses, as well as these new premiums, our assetallocation strategy will still allow you to preserve as much, and likely a generous amount more wealththan you are currently on course for, while providing a solid plan of protection for you, as well as aprotection of the substantial benefit you desire to leave with Kiran, Varun, and Paavai.

HOMEOWNERS INSURANCE

• Your current HO-3 policy, covering $325,000 for the dwelling is quite adequate. The standardrequirement for coverage is for an amount equaling 80% of the replacement cost of your home. Thefull replacement cost of your home is $336,000 ($386,000 fair market value minus $50,000 land value).Thus, only $269,000 coverage will insure your home fully. Some homeowners are now opting for a 90-10 plan, which you are still above at this point. You have the option of changing coverage to the loweramount, but the premium savings will not have much of an impact, and you still have room in yourplan for your real estate to appreciate and still be covered under the current plan.

AUTOMOBILE INSURANCE

• Your current $500,000 combined single limit policy is normally very adequate for your automobiles.You are in good standing with your coverage. You also have the safety net of your Umbrella Policy incase of an extreme situation.

PERSONAL CATASTROPHE INSURANCE (UMBRELLA POLICY)

• I recommend you continue with this policy. This provides an excellent safety net in the case of any rareevent for which you could possibly be found liable. The $2,000,000 is a common amount to carry in thepolicy, as it is consistently adequate. Also, your automobile and homeowners’ policies meet the$300,000 required underlying limits, as they both provide liability coverage of at least $300,000.

Insurance (cont’d)

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GETTING STARTED

• Our first priority here is to plan to retain the services of an experienced CPA to help us navigate the TaxCode as it pertains to you in your golden years. We will want to know when and where to withdrawfunds when needed to finance your goals without incurring extra tax “penalties”. We will also integrateour tax planning along with our Estate Planning. As you will soon see, these two are very inter-related,and the amount your different forms of income are taxed has a large impact on the financing of yourgoals; conversely, your Estate Planning will have a large impact on the amount taxes your estate willowe when you leave your legacy behind.

• We will discuss gifting in the “Estate Planning” section; but let’s note right now that you have not usedup any of your Estate and Gift exemption currently allowed under the IRS code. This is good, as you willwant to preserve that amount as much as possible. Remember, that as of now each of you can gift upto $14,000 to an individual during a tax year without incurring a tax. As a couple, then, you may gift aperson up to $28,000 in a year, and you may also gift as many people as you want up to that $28,000per year with no tax due. This will come into play again in “Estate Planning”.

• One very import issue is where you decide to withdraw funds from when needed. You can call me anytime a question arises in this area. This is the recommended plan: Do not take distributions from yourretirement accounts until the year you reach age 59-1/2, or a penalty tax will be assessed. Any fundsbeyond your regular income needed to finance your goals can be drawn from your brokerage accountsuntil age 59-1/2. Again, when you need to withdraw funds, use only your brokerage accounts up untilthe year you turn 59-1/2, respectively. Otherwise, you will incur a 10% tax penalty for withdrawals bywithdrawing from your IRAs.

• At that time (when you reach the year that you will reach age 59-1/2), we will work together and stopwithdrawing from your brokerage accounts. We will then begin to take any necessary funds from yourretirement accounts only, and this is why: When you reach age 70, you will not want to have anextreme amount of your savings in just your retirement accounts. This is because, beginning at age 70,you are required to begin following the Uniform Lifetime Table for minimum withdrawals from all ofyour qualified retirement accounts. So, between age 59-1/2 and age 70, you should be using yourretirement accounts for needed funds, and NOT your brokerage account. The minimum withdrawalamount at each age from 70 and up is in proportion to the amount you have in the retirementaccounts, and is calculated according to the Uniform Lifetime Table. At age 70, you are required to takethe amount in your accounts, divide that amount by 27.4, and make a withdraw at least that size. Forexample, if you are 70 and you have $9 million in your IRA accounts, you are required to take out ($9million / 27.4), or $328,467 that one year alone. At age 71, the divisor decreases to 26.5, and at 72, itdecreases to 25.6, and so on. I will provide you with the current table, and an updated copy when thetime nears. This why, once you reach the year you turn 59-1/2, it will be time to take penalty freewithdrawals from your IRAs when you need funds, and NOT your brokerage accounts. That way, whenyou do reach 70, you will not have to take more money out of your IRAs than you need, and you can letthe remainder in your IRAs and brokerage accounts continue to grow/produce income, as the case maybe.

Taxation

19 | P a g e

• Recall that our new asset allocation plan includes doing a direct rollover of your 401(k) plans into yourIRAs, for simplicity in the management of your investment funds. I can work with your IRA manager tofacilitate the direct rollover properly, so that no taxes are incurred, as is the rule. You cannot simplywithdraw from our 401(k) any way, and move the money into an IRA. You could have up to 20% of youraccount funds withheld, and pay a big tax penalty. With a direct rollover, the transaction will by tax-free.

• One feature in your 401(k) plans is that you can begin enjoying payments immediately without penaltyunder the IRS SEPP (Substantially Equal Periodic Payment) code, which provides that persons whoretire at age 55 or later will not be assessed the 10% penalty for early withdrawal that is normallyassessed to withdrawals made prior to age 59-1/2. For this reason, we will consult our professionalsabout our direct rollover plan, to make sure delaying withdrawals for this 4-year period will not put usat any disadvantage. It would appear that funding from your IRAs from age 59-1/2 until age 70 willadequately reduce the dollar values in the account to keep from having to withdraw more thannecessary once you do reach 70.

• We will clearly want to work with a CPA and an Estate Attorney from this point forward. They canreview our taxation and estate planning, and help us to proceed legally and efficiently. You will see thatthey will be critical in properly establishing your trusts, so that you can properly leave behind yourwealth without incurring unnecessary taxes.

Taxation (cont’d)

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ESTABLISHING THE MARITAL TRUST AND THE RESIDUAL, (OR “BYPASS TRUST)

• We shall assume, for now, that our Estate Attorney will agree with this common course of action:Because the Revocable Living Trust is set up with a reduce-to-zero formula, the bypass trust willreceive proceeds of the deceased spouse’s trust until the amount adds up to $5,430,000 (less anygifts made above the annual gift tax exclusion during the lifetime of the deceased). This “reduces tozero”, or “uses up” the entire Federal Estate and Gift amount that is exempt from taxation (underthe Unified Tax Credit code) at the transfer of those funds into said bypass trust.

• Any proceeds from the estate of the deceased beyond this will be put into a Marital DeductionTrust, with the surviving spouse as the beneficiary, putting to use funds at his or her owndiscretion. The instructions left for the Bypass Trust are to provide income for the surviving spouse,as well as the two nephews and niece, Kiran, Varun, and Paavai. An experienced Estate Attorneyshall be needed to properly establish the trusts. Also, Naresh must make sure the attorney providesclear language as to how the funds within the trusts will be distributed to the surviving spouse andthe nephews and niece. With the instructions legally binding, it is then advised that we name acorporate trustee to administer the funds. Although we will pay fees for this service, it will give us afew advantages that we need: (1) We have professionals in service to act as impartial fiduciaries,charged with legally investing and distributing the funds from the Bypass Trust. (Many peoplesuffer heartache and lawsuits because they do not have the experience, knowledge and legal savvyto properly and legally carry out the duties of a Trustee). (2) It will remove any undue stress on thesurviving spouse, as the duties of a trustee are not simple and require careful attention, especiallyin Vanita’s case, for instance, as she is still in the early stages of learning wealth management, anddoes not need this heavy responsibility weighing on her. And (3) It is to the family’s advantage forthe sake of the peace of mind provided by having an impartial third party distribute the incomeprovided by the Bypass Trust. No matter how closely related the beneficiaries of a trust may be, or,perhaps not so closely related, the issue of having one of the beneficiaries named the trustee andthe other parties as co-beneficiaries has a history of lawsuits behind it. Along with this can comeimmeasurable grief if the trustee should make a legal mistake, a poor investment, or eveninadvertently fail to follow the instructions of the Trust maker. So let’s work with our estateattorney, agree upon a written investment and distribution strategy that the corporate trustee willhave a very clear, concise set of instructions that make sure the Bypass Trust is invested per thewishes of Naresh and Vanita, as well as the generated income be distributed within the specifiedparameters that they wish for the survivor and the three young relatives to be paid. We will needconsultation from our attorney on how to choose a trustee, as some corporate trustees will onlyadminister trusts drafted by their own attorney, as will be discussed just below.

Estate Planning

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LEGACY PLANNING FOR NEPHEWS AND NIECE

• Now we must address another concern, and that is seeing to it that the estate does, indeed, fulfillthe wishes of Naresh and Vanita to favor your nephews and niece, Kiran, Varun, and Paavai. First, Icall attention to the plan to give Kiran the IBM stock. As a young grad school student, this is anexcellent opportunity for Kiran to begin his journey of wealth management and planning for hisfuture. Kiran is undoubtedly very bright, and will catch on quickly to the needs he will soon face, solong as Naresh and Vanita give, along with this favor, the gift of a good foundation in becomingeducated in wealth management. I recommend the following as a form of giving the IBM shares toKiran: (1) Schedule a ½-hour meeting with me, and allow Naresh, Vanita and Kiran to have a briefdiscussion about long term disability insurance, and the essential value it has at this stage of hislife. As he is nearing his entry into the workforce, especially, we must protect the income he iscurrently using to fund graduate school, and later, the income from his new career. A good policyfor a young healthy upstart can be an affordable $540 per year, or just $45 a month, and will pay80% of his salary at his new job if an injury or illness befalls him. So I recommend that 2 years’worth of premiums, or about $1,080 from the IBM stock gift be set aside specifically to start Kiranon a disability insurance policy. (2) As a brand new investor, I recommend that you consider helpingKiran open up his own brokerage account and diversify the value of the IBM shares. Kiran can learnfrom Naresh and Vanita why their income strategy is now moderately conservative, and learn that,as a brand new investor, far from retirement, his strategy, according to his risk tolerance, willprobably be maximum growth potential, or at least, some asset mix which is designed for long termgrowth. The value of diversifying will be another good lesson for the young investor. I will providecopies of our office’s “Portfolio Strategies” guide to help him devise a strategy for his first account.This will also prepare him to manage his retirement account(s) that he will want to open as soon ashe becomes employed. This is my recommendation. We have seen that the IBM stock has earned areturn, but a modest return, and this is a great opportunity to have Kiran diversify into some funds,and keep some of the IBM shares if he so desires, as part of his portfolio.

Estate Planning (cont’d)

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GIFTING TO NEPHEWS AND NIECE FOR PROVIDE FUNDS FOR SURVIVORHSIP UNIVERSAL LIFE POLICIES

• Next, we must consider how best to protect your wishes to favor your nephews and niece. The risk,as of now, is that they may not receive the substantial gift that you intend for them to receive. It isnot uncommon for a retired married couple to pass away within a few short years of one another,when that time comes. Should you pass away within a short period of time relative to one another,then that short time period is the only time your nephews and niece will be receiving distributionsfrom the Bypass Trust. Once the survivor passes, the remaining principal, at your wishes, will be leftto the American Red Cross. A way to protect your nephews and niece from not receiving theblessing you intend to give them is to gift them annually, beginning this first year of retirement. Youcan gift them each equal amounts, and have them each use the gift to purchase a SurvivorshipUniversal Life Insurance policy on the two of you. This policy, though rather expensive, pays offquite substantially for the beneficiary, and will be a vehicle for your nephews and niece to receivean excellent payout. The Survivorship Universal Life Insurance policy provides that, after the deathof the surviving spouse, the beneficiary is paid a scheduled benefit. The policy I recommend is onewith payments for a predefined number of years, 7 years in your case, which can be extended ifyou find yourself a “centenarians”, at which point the guarantee of benefits may have eroded, asonly 7 years’ premiums had been paid. This will require a simple “upkeep” of the policy, returningto the process of gifting equal amounts to each beneficiary, who will pay the annual premiums. Ihave already run a test quote for you, and a recommended procedure: The annual tax exemptamount that the 2 of you can gift to any one individual is $28,000 ($14,000 each). Anything beyondthat amount will begin to use up your Estate and Gift exemption that we want to preserve for yourBypass Trust. So, I have found a policy with a $27,275 annual premium, which has both a cashsurrender value and a guaranteed minimum interest rate. The policy’s death benefit is $725,000,which grows at least at the guaranteed 2%, and sometimes up to 3.85%. For example, the lifeinsurance illustration report, which I will include in the appendix, shows that if you should bothpass away earlier than expected, at 76 to 78 years old, each of your three beneficiaries wouldreceive a benefit of approximately $900,000, even at the guaranteed minimum interest rate. Thisplan puts a safety measure in place to fulfill your desire to bless your nephews and niece. Shouldyou both die the same year, for example, they would receive very little, or perhaps no benefit fromthe Bypass Trust. But they would receive a substantial life insurance policy benefit, giving youpeace of mind, and them a legacy and a blessing to remember you by.

Gifting and Estate Planning for Your Beneficiaries

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CLIENTS’ TASKS

1) Exercise stock options and invest the funds with brokerage account manager.2) Work with Planner to implement direct rollover of 401(k) plans into IRAs.3) Work with Planner and IRA manager to implement new asset allocation strategy.4) Work with Planner and Brokerage account manager to implement new asset allocation strategy.5) Work with Brokerage account manager to sell IBM shares.6) Work with planner, nephew Kiran, and insurance agent to select and buy a Disability Insurance policy.7) Work with planner, nephew Kiran, and Brokerage account manager to open an investment account.8) Submit formal request to implement Option D for both retirement annuities: Joint and 100%

Survivorship.9) Pay off credit card debt.10) Consider paying down principals on Home Equity Line of Credit and Mortgage loans.11) Work with Insurance agent to replace the current disability policy and Long Term Care policies with

new Long Term Care policies that provide a daily benefit of at least $300, an elimination period of 60 or90 days, and a 5-year benefit period.

12) Retain an experienced CPA to review your new retirement strategy and establish the relationshipnecessary to review tax implications of the plan.

13) Meet with your Estate Attorney and explain your intention to implement the Joint and 100%Survivorship Annuities. If not comfortable with your Estate Attorney’s level of experience, consultPlanner to give you some names of Estate Attorneys to consider.

14) Lay out a plan to only withdraw funds from your Brokerage Account until age 59-1/2. If morecomfortable with 401(k) withdrawals, let Planner know that you opt to not implement the directrollover of the 401(k) funds into your IRAs.

15) Work with your Estate Attorney to establish a reduce-to-zero Marital Deduction Trust with themaximum allowable funds to go into the Bypass Trust, and the remaining funds to go into the MaritalTrust. Before meeting, write down your goals and stipulations for distributions of income funds fromthe Bypass Trust to the surviving spouse and to Kiran, Varun, and Paavai. Work with Planner and EstateAttorney to selected a qualified Trustee with limited authority who will faithfully administer the BypassTrust. Make clear all of the wishes you have written down, as well as the last beneficiary designated asthe American Red Cross, only after the death of the surviving spouse.

16) Bring in Kiran, Varun, and Paavai to become educated about your plan to gift them each $27,725 peryear for the next seven years, which they will use as premium payments for their $725,000Survivorship Universal Life Insurance policies.

17) Discuss with family, write down end of life decisions, and work with Attorney to draw up “Living Wills”(Declarations to Physicians).

Tasks for Clients and Planner

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PLANNER’S TASKS

1) Call and meet IRA manager to communicate the intentions of Clients’ to implement a direct rollover of401(k) plans into IRAs.

2) Inform IRA manager about clients’ new asset allocation strategy; answer any questions if necessary.3) Call and meet Brokerage account manager to help clients communicate the new asset allocation

strategy.4) Work with Brokerage account manager and CPA to determine any unforeseen concerns with the sale

and/or gifting of the IBM shares.5) Work with clients, nephew Kiran, and insurance agent talk about selecting and purchasing a Disability

Insurance policy.6) Work with clients, nephew Kiran, and Brokerage account manager to open an investment account.7) Call Company, introduce self as Clients’ planner and inform them that the clients are ready to

implement Option D for both retirement annuities: Joint and 100% Survivorship.8) Provide a list of reputable CPAs to review Clients’ new retirement strategy and establish the

relationship necessary to review tax implications of the plan.9) If requested by Clients, provide a list of experienced attorneys who specialize in Estate Planning.10) Work with clients’ Estate Attorney to talk through the establishing of the reduce-to-zero Marital

Deduction Trust, along with the Bypass Trust, and be with clients and Estate Attorney if allowed, inorder to be unified in helping clients accurately communicate the specific instructions desired in theBypass Trust and the Marital Trust.

11) Bring in Kiran, Varun, and Paavai to become educated about the plan to gift them each $27,725 peryear for the next seven years, which they will use as premium payments for their $725,000Survivorship Universal Life Insurance policies. Be available to assist Client when they select an agentand policy.

12) Follow up with Clients by February 15, 2016, to chart progress on their tasks and offer any assistance.

Tasks for Clients and Planner (cont’d)

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• Naresh and Vanita will want to get away and celebrate their retirement sometime this year;$16,000 is budgeted for a celebration trip.

• Naresh and Vanita will want the freedom to travel and see places they’ve never seen before.$25,000 per year, increasing annually with inflation is budgeted into the plan.

• The Agarwal’s drive two cars. Each one will be taken in for a trade-in purchase every five years, at anet cost of $21,000 today, adjusted for 3% annual inflation.

• Moderate economic growth environment, with 3% GDP anticipated.

• Inflation is expected to be 3% annually.

• Social Security will keep pace with inflation.

• Health Care policy premiums will have an inflation rate of 7% annually.

• Long Term Care insurance policies will have an inflation rate of 5% annually.

• Risk free rate is 3%.

• Domicile: Non-Community Property State (Common Law) (Madison, WI)

• Long-term capital gains and qualifying dividends: as per recent legislation.

• Continued graduated income tax system.

• State income tax: 5% of Federal Adjusted Gross Income (AGI).

• Life Expectancy: 90 years.

• Naresh and Vanita’s investment profile is moderately conservative.

Assumptions used

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This financial plan is written with fiduciary responsibilities to the Clients. Planner will only share Clients’ information contained within this plan to other professionals with Clients’ expressed consent.

If this plan is fully implemented, the data below, generated by MoneyGuidePro® Software, is a calculated estimate of the results anticipated as a result, when compared to current asset allocation and before implementing other proposed strategies. Results are based on past performance of funds and are in no way guaranteed. Any investment strategy is exposed to risk and is in no way guaranteed by Planner nor by Planner’s office and staff. A complete report from MoneyGuidePro® will follow in the Appendix section.

Key “Takeaways”: As will be shown below and in the Appendix section, MoneyGuidePro® has calculated that if the Clients’ Plan is fulfilled in 2050 (per clients’ input instructions), that the entire investment portfolio in the Estate will have accumulated to a cash value of $16,431,449, as compared to the current conditions yielding a predicted portfolio cash value of $13,734,055. In addition to this predicted increase in portfolio value of $2,697,000, the Plan, as designed accomplishes the following:

1) The beginning of an income protection plan and Life-Cycle financial plan for your nephew, Kiran.2) Solidification of annuity income for life with the selection of the Joint and 100% Survivorship

retirement annuities.3) Elimination of credit card debt.4) Provision of wealth protection through the purchase of a more comprehensive Long Term Care

insurance policy for both Naresh and Vanita.5) An investment withdrawal strategy which will allow a maximum amount of assets to be earning passive

income for Naresh and Vanita, by avoiding the Minimum Withdrawals as stipulated by the UniformLifetime Table.

6) The establishing of Marital Deduction and Bypass Trusts which will minimize the tax burden on theEstate left to the beneficiaries.

7) The securing of passing a Legacy on to your nephews and niece, Kiran, Varun, and Paavai, with thegifting of funds to purchase Survivorship Universal Life insurance policies that will pay them each$725,000 plus a substantial interest accrued.

8) The peace of mind and securing the drafting and filing all Estate Planning documents, include the LivingWills and the designation of funds through the Bypass Trust, designed to provide income for a survivingspouse and the nephews and niece, Kiran, Varun, and Paavai.

9) The new investment allocation predicts a higher return (8.22% versus 6.75%), with a lower Beta(Standard Deviation) (5.58% versus 10.21%). The portfolio is now positioned to earn more on theirinvestment at a lower risk.

BRIEF SUMMARY

Summary of Results

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ILLUSTRATION OF PREDICTED RETURNS AND FUTURE PORFOLIO CASH VALUE

58 / 56 2016 0 2,984,000 0 0 78,750 199,086 24,975 100,249 3,136,612 59 / 57 2017 0 3,136,612 0 0 78,750 208,972 24,630 106,594 3,293,110 60 / 58 2018 0 3,293,110 0 0 78,750 217,874 23,890 131,403 3,434,441 61 / 59 2019 0 3,434,441 0 0 78,750 228,754 23,382 111,741 3,606,822 62 / 60 2020 0 3,606,822 0 0 78,750 238,625 22,320 138,086 3,763,792 63 / 61 2021 0 3,763,792 0 0 78,750 251,073 21,711 110,858 3,961,046 64 / 62 2022 0 3,961,046 0 0 78,750 264,207 21,403 113,760 4,168,839 65 / 63 2023 0 4,168,839 0 0 78,750 275,677 20,562 152,070 4,350,634 66 / 64 2024 0 4,350,634 0 0 121,128 291,716 31,858 130,018 4,601,602 67 / 65 2025 0 4,601,602 0 0 122,399 307,372 31,175 150,537 4,849,662 68 / 66 2026 0 4,849,662 0 0 123,709 325,726 31,265 127,990 5,139,841 69 / 67 2027 0 5,139,841 0 0 165,237 347,189 43,238 133,070 5,475,960 70 / 68 2028 0 5,475,960 0 0 167,832 365,115 83,443 168,330 5,757,134 71 / 69 2029 0 5,757,134 0 0 170,505 385,753 88,144 143,960 6,081,287 72 / 70 2030 0 6,081,287 0 0 173,257 403,749 113,512 181,563 6,363,218 73 / 71 2031 0 6,363,218 0 0 176,092 424,422 120,858 155,918 6,686,957 74 / 72 2032 0 6,686,957 0 0 179,013 445,740 128,697 162,334 7,020,679 75 / 73 2033 0 7,020,679 0 0 182,021 465,356 136,472 203,775 7,327,809 76 / 74 2034 0 7,327,809 0 0 185,119 487,828 145,521 176,128 7,679,106 77 / 75 2035 0 7,679,106 0 0 188,310 508,435 154,535 220,367 8,000,949 78 / 76 2036 0 8,000,949 0 0 191,597 531,966 165,184 191,329 8,367,999 79 / 77 2037 0 8,367,999 0 0 194,982 556,055 175,945 199,508 8,743,583 80 / 78 2038 0 8,743,583 0 0 198,469 577,954 186,773 248,342 9,084,891 81 / 79 2039 0 9,084,891 0 0 202,060 602,942 198,800 217,139 9,473,954 82 / 80 2040 0 9,473,954 0 0 205,760 625,513 210,748 269,331 9,825,148 83 / 81 2041 0 9,825,148 0 0 209,570 651,246 224,291 236,639 10,225,034

Portfolio Value over Time (Current Conditions) Portfolio Value over Time (Proposed Plan)

Age | Year | Beginning Portfolio Value | Income | Invstmnt. Earnings | Taxes | Funds Used | Ending Value Portfolio Performance (Current Conditions)

Summary of Results (cont’d)

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84 / 82 2042 0 10,225,034 0 0 213,495 677,338 238,566 247,159 10,630,142 85 / 83 2043 0 10,630,142 0 0 217,537 700,630 251,928 304,882 10,991,499

86 / 84 2044 0 10,991,499 0 0 221,701 727,222 266,783 269,899 11,403,740 87 / 85 2045 0 11,403,740 0 0 225,989 750,737 280,934 331,675 11,767,857 88 / 86 2046 0 11,767,857 0 0 230,406 777,643 296,551 295,137 12,184,218 89 / 87 2047 0 12,184,218 0 0 234,956 804,692 312,702 308,790 12,602,373 Naresh's Plan 2048 0 12,602,373 0 0 239,642 828,239 327,094 377,265 12,965,895 Ends - / 89 2049 0 12,965,895 0 0 118,730 854,965 316,507 245,208 13,377,876 Vanita's Plan 2050 0 13,377,876 0 0 121,392 878,054 330,402 312,865 13,734,05

Ends

58 / 56 2016 0 2,984,000 0 0 70,875 232,654 20,673 191,120 3,075,735 59 / 57 2017 0 3,075,735 0 0 70,875 239,856 18,486 193,884 3,174,095 60 / 58 2018 0 3,174,095 0 0 70,875 245,768 16,699 218,857 3,255,183 61 / 59 2019 0 3,255,183 0 0 70,875 253,907 15,058 199,364 3,365,543 62 / 60 2020 0 3,365,543 0 0 70,875 260,661 12,962 225,883 3,458,234 63 / 61 2021 0 3,458,234 0 0 70,875 269,151 26,002 198,834 3,573,425 64 / 62 2022 0 3,573,425 0 0 70,875 279,568 22,724 201,921 3,699,223 65 / 63 2023 0 3,699,223 0 0 70,875 295,706 9,473 158,596 3,897,734 66 / 64 2024 0 3,897,734 0 0 113,253 316,710 21,326 136,740 4,169,632 67 / 65 2025 0 4,169,632 0 0 114,524 335,595 44,029 157,460 4,418,262 68 / 66 2026 0 4,418,262 0 0 115,834 358,986 31,746 135,121 4,726,215 69 / 67 2027 0 4,726,215 0 0 157,362 387,398 30,292 140,415 5,100,269 70 / 68 2028 0 5,100,269 0 0 159,957 412,343 68,811 175,895 5,427,863 71 / 69 2029 0 5,427,863 0 0 162,630 441,199 73,804 151,752 5,806,136 72 / 70 2030 0 5,806,136 0 0 165,382 467,075 104,302 189,588 6,144,703 73 / 71 2031 0 6,144,703 0 0 168,217 496,733 113,314 164,184 6,532,155 74 / 72 2032 0 6,532,155 0 0 171,138 527,742 123,135 170,849 6,937,051 75 / 73 2033 0 6,937,051 0 0 174,146 557,273 133,116 212,545 7,322,808 76 / 74 2034 0 7,322,808 0 0 177,244 590,873 145,156 185,162 7,760,607 77 / 75 2035 0 7,760,607 0 0 180,435 622,832 157,462 229,671 8,176,741 78 / 76 2036 0 8,176,741 0 0 183,722 658,964 172,129 200,912 8,646,385 79 / 77 2037 0 8,646,385 0 0 187,107 696,437 187,318 209,379 9,133,232 80 / 78 2038 0 9,133,232 0 0 190,594 731,883 203,138 258,509 9,594,062 81 / 79 2039 0 9,594,062 0 0 194,185 771,744 221,072 227,611 10,111,308 82 / 80 2040 0 10,111,308 0 0 197,885 809,340 239,404 280,117 10,599,011 83 / 81 2041 0 10,599,011 0 0 201,695 851,436 260,154 247,748 11,144,240 84 / 82 2042 0 11,144,240 0 0 205,620 894,658 282,465 258,602 11,703,451 85 / 83 2043 0 11,703,451 0 0 209,662 935,180 304,278 316,668 12,227,346

Age | Year | Beginning Portfolio Value | Income | Invstmnt. Earnings | Taxes | Funds Used | Ending Value

Portfolio Performance (Current Conditions) (cont’d)

Portfolio Performance (Recommended Financial Plan)


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86 / 84 2044 0 12,227,346 0 0 213,826 980,379 328,638 282,039 12,810,874 87 / 85 2045 0 12,810,874 0 0 218,114 1,022,534 352,826 344,179 13,354,517 88 / 86 2046 0 13,354,517 0 0 222,531 1,069,461 379,600 308,016 13,958,893 89 / 87 2047 0 13,958,893 0 0 227,081 1,117,220 407,882 322,055 14,573,257 Naresh's Plan 2048 0 14,573,257 0 0 231,767 1,161,416 434,624 390,928 15,140,888 Ends - / 89 2049 0 15,140,888 0 0 159,605 1,213,411 451,472 253,226 15,809,206 Vanita's Plan 2050 0 15,809,206 0 0 162,267 1,262,011 480,911 321,124 16,431,44

Ends

Naresh and Vanita,

It has truly been a pleasure to spend time with you and help you prepare for a healthy, happy retirement. My services most certainly do not end here. You are now an appreciated partner, and more than welcomed to contact me anytime you are in need of consultation. I will check back with you after 2 or 3 weeks to let you know what I found out for you from my task list, and to see if you are in need of assistance making adjustments or completing any of the tasks that are listed in this report. And remember, as written in the Introduction, please do contact me in the event of any life situation changes that will have an effect on our planning process.

Best Regards,

Gene Gorrell

Financial Planner

Portfolio Performance (Recommended Financial Plan) (cont’d)


Naresh and Vanita Agarwal

January 29, 2016

Financial Goal Plan

Prepared by:

Gene GorrellFinancial Consultant

Appendix AMoneyGuidePro® Comparative Analysis – Current Status vs. New Plan

a

Table Of Contents

IMPORTANT DISCLOSURE INFORMATION 1 - 5

Glossary 6 - 9

Summary of Goals and Resources

Personal Information and Summary of Financial Goals 10 - 12

Current Financial Goals Graph 13

Net Worth Summary - All Resources 14

Net Worth Detail - All Resources 15 - 16

Resources Summary 17 - 19

Risk and Portfolio Information

Risk Assessment 20

Target Band 21

Results

What If Worksheet 22 - 28

Worksheet Detail - Combined Details 29 - 42

IMPORTANT DISCLOSURE INFORMATION

01/29/2016

Prepared for : Naresh and Vanita Agarwal Prepared by: Gene Gorrell

Page 1 of 42

The return assumptions in MoneyGuidePro are not reflective of any specific product, and donot include any fees or expenses that may be incurred by investing in specific products. Theactual returns of a specific product may be more or less than the returns used inMoneyGuidePro. It is not possible to directly invest in an index. Financial forecasts, rates ofreturn, risk, inflation, and other assumptions may be used as the basis for illustrations. Theyshould not be considered a guarantee of future performance or a guarantee of achievingoverall financial objectives. Past performance is not a guarantee or a predictor of futureresults of either the indices or any particular investment.

IMPORTANT: The projections or other information generated by MoneyGuidePro regardingthe likelihood of various investment outcomes are hypothetical in nature, do not reflectactual investment results, and are not guarantees of future results.

MoneyGuidePro results may vary with each use and over time.

Information that you provided about your assets, financial goals, and personal situation arekey assumptions for the calculations and projections in this Report. Please review theReport sections titled "Personal Information and Summary of Financial Goals", "CurrentPortfolio Allocation", and "Tax and Inflation Options" to verify the accuracy of theseassumptions. If any of the assumptions are incorrect, you should notify your financialadvisor. Even small changes in assumptions can have a substantial impact on the resultsshown in this Report. The information provided by you should be reviewed periodically andupdated when either the information or your circumstances change.

Information Provided by You

MoneyGuidePro Assumptions and Limitations

All asset and net worth information included in this Report was provided by you or yourdesignated agents, and is not a substitute for the information contained in the officialaccount statements provided to you by custodians. The current asset data and valuescontained in those account statements should be used to update the asset informationincluded in this Report, as necessary.

Assumptions and Limitations

MoneyGuidePro offers several methods of calculating results, each of which provides oneoutcome from a wide range of possible outcomes. All results in this Report are hypotheticalin nature, do not reflect actual investment results, and are not guarantees of future results.All results use simplifying assumptions that do not completely or accurately reflect yourspecific circumstances. No Plan or Report has the ability to accurately predict the future. Asinvestment returns, inflation, taxes, and other economic conditions vary from theMoneyGuidePro assumptions, your actual results will vary (perhaps significantly) from thosepresented in this Report.

All MoneyGuidePro calculations use asset class returns, not returns of actual investments.The average annual historical returns are calculated using the indices contained in thisReport, which serve as proxies for their respective asset classes. The index data are for theperiod 1970 - 2014. The portfolio returns are calculated by weighting individual returnassumptions for each asset class according to your portfolio allocation. The portfolio returnsmay have been modified by including adjustments to the total return and the inflation rate.The portfolio returns assume reinvestment of interest and dividends at net asset valuewithout taxes, and also assume that the portfolio has been rebalanced to reflect the initialrecommendation. No portfolio rebalancing costs, including taxes, if applicable, arededucted from the portfolio value. No portfolio allocation eliminates risk or guaranteesinvestment results.

MoneyGuidePro does not provide recommendations for any products or securities.


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Historical Return IndexAsset Class

Cash & Cash Alternatives Ibbotson U.S. Treasury Bills - Total Return (1926-2014)

Cash & Cash Alternatives (Tax-Free) U.S. 30-Day Treasury Bill adjusted by Donoghue TF discount (1970-1981)Tax-Free Money Market Average (1982-2014)

Short Term Bonds 50% Ibbotson U.S. Treasury Bills and 50% Ibbotson Intermediate-Term GovernmentBonds (1970-1978)BofA Merrill Lynch 1-3 Year Govt Bonds (1979-2014)

Short Term Bonds (Tax-Free) 50% Ibbotson U.S. T-Bill and 50% Ibbotson Intermediate-Term Government Bondsadjusted by Barclays Capital 3-year Muni discount (1970-1990)Barclays Capital 3-year Muni Bonds (1991-2014)

Intermediate Term Bonds Ibbotson Intermediate-Term Government Bonds - Total Return (1926-2014)

Intermediate Term Bonds (Tax-Free) Ibbotson Long-Term Government Bonds - Total Return adjusted by Barclays Capital10-year Muni discount (1970-1979)Barclays Capital 10-year Muni Bonds (1980-2014)

Long Term Bonds Ibbotson Long-Term Corporate Bonds - Total Return (1926-2014)

Long Term Bonds (Tax-Free) Ibbotson Long-Term Government Bonds - Total Return adjusted by Barclays Capital LongMuni Bonds discount (1970-1980)Barclays Capital Long Muni Bonds (1981-2014)

Large Cap Value Stocks S&P 500 Composite Total Return (1970-1994)S&P 500 Value Total Return(1995-2014)

Large Cap Growth Stocks S&P 500 Composite Total Return (1970-1994)S&P 500 Growth Total Return (1995-2014)

Mid Cap Stocks S&P 500 Composite Total Return (1970-1979)Russell Midcap (1980-2014)

Small Cap Stocks Ibbotson Small Company Stocks - Total Return (1926-2014)

International Developed Stocks MSCI EAFE Equity (1970-2014)

International Emerging Stocks MSCI EAFE Equity (1970-1975)IFC Global Emerging Markets Index (1976-1987)MSCI EM (Emerging Markets) (1988-2014)


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Risks Inherent in Investing

Investing in fixed income securities involves interest rate risk, credit risk, and inflation risk.Interest rate risk is the possibility that bond prices will decrease because of an interest rateincrease. When interest rates rise, bond prices and the values of fixed income securities fall.When interest rates fall, bond prices and the values of fixed income securities rise. Creditrisk is the risk that a company will not be able to pay its debts, including the interest on itsbonds. Inflation risk is the possibility that the interest paid on an investment in bonds willbe lower than the inflation rate, decreasing purchasing power.

Cash alternatives typically include money market securities and U.S. treasury bills. Investingin such cash alternatives involves inflation risk. In addition, investments in money marketsecurities may involve credit risk and a risk of principal loss. Because money marketsecurities are neither insured nor guaranteed by the Federal Deposit Insurance Corporationor any other government agency, there is no guarantee the value of your investment will bemaintained at $1.00 per share. U.S. Treasury bills are subject to market risk if sold prior tomaturity. Market risk is the possibility that the value, when sold, might be less than thepurchase price.

Investing in stock securities involves volatility risk, market risk, business risk, and industryrisk. The prices of most stocks fluctuate. Volatility risk is the chance that the value of a stockwill fall. Market risk is chance that the prices of all stocks will fall due to conditions in theeconomic environment. Business risk is the chance that a specific company’s stock will fallbecause of issues affecting it. Industry risk is the chance that a set of factors particular to anindustry group will adversely affect stock prices within the industry. (See “Asset Class –Stocks” in the Glossary section of this Important Disclosure Information for a summary ofthe relative potential volatility of different types of stocks.)

International investing involves additional risks including, but not limited to, changes incurrency exchange rates, differences in accounting and taxation policies, and political oreconomic instabilities that can increase or decrease returns.

Report Is a Snapshot and Does Not Provide Legal, Tax, or Accounting Advice

This Report provides a snapshot of your current financial position and can help you to focuson your financial resources and goals, and to create a plan of action. Because the resultsare calculated over many years, small changes can create large differences in future results.You should use this Report to help you focus on the factors that are most important to you.This Report does not provide legal, tax, or accounting advice. Before making decisions withlegal, tax, or accounting ramifications, you should consult appropriate professionals foradvice that is specific to your situation.

MoneyGuidePro Methodology

MoneyGuidePro offers several methods of calculating results, each of which provides oneoutcome from a wide range of possible outcomes. The methods used are: “AverageReturns,” “Historical Test,” “Historical Rolling Periods,” “Bad Timing,” “Class Sensitivity,”and “Monte Carlo Simulations.” When using historical returns, the methodologies availableare Average Returns, Historical Test, Historical Rolling Periods, Bad Timing, and Monte CarloSimulations. When using projected returns, the methodologies available are AverageReturns, Bad Timing, Class Sensitivity, and Monte Carlo Simulations.

Results Using Average Returns

The Results Using Average Returns are calculated using one average return for yourpre-retirement period and one average return for your post-retirement period. AverageReturns are a simplifying assumption. In the real world, investment returns can (and oftendo) vary widely from year to year and vary widely from a long-term average return.

Results Using Historical Test

Results Using Historical Rolling Periods

The Results Using Historical Rolling Periods is a series of Historical Tests, each of which usesthe actual historical returns and inflations rates, in sequence, from a starting year to anending year, and assumes that you would receive those returns and inflation rates, insequence, from this year through the end of your Plan. If the historical sequence is shorterthan your Plan, the average return for the historical period is used for the balance of thePlan.

Indices in Results Using Historical Rolling Periods may be different from indices used in otherMoneyGuidePro calculations. Rolling Period Results are calculated using only three assetclasses -- Cash, Bonds, and Stocks. The indices used as proxies for these asset classes whencalculating Results Using Historical Rolling Periods are:

• Cash - Ibbotson U.S. 30-day Treasury Bills (1926-2014)

• Bonds - Ibbotson Intermediate-Term Government Bonds - Total Return (1926-2014)

• Stocks - Ibbotson Large Company Stocks - Total Return (1926-2014)

The Results Using Historical Test are calculated by using the actual historical returns andinflation rates, in sequence, from a starting year to the present, and assumes that youwould receive those returns and inflation rates, in sequence, from this year through the endof your Plan. If the historical sequence is shorter than your Plan, the average return for thehistorical period is used for the balance of the Plan. The historical returns used are those ofthe broad-based asset class indices listed in this Important Disclosure Information.


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Results with Bad Timing

Results with Bad Timing are calculated by using low returns in one or two years, andaverage returns for all remaining years of the Plan. For most Plans, the worst time for lowreturns is when you begin taking substantial withdrawals from your portfolio. The Resultswith Bad Timing assume that you earn a low return in the year(s) you select and then anAdjusted Average Return in all other years. This Adjusted Average Return is calculated sothat the average return of the Results with Bad Timing is equal to the return(s) used incalculating the Results Using Average Returns. This allows you to compare two results withthe same overall average return, where one (the Results with Bad Timing) has low returns inone or two years.

When using historical returns, the default for one year of low returns is the lowest annualreturn in the historical period you are using, and the default for two years of low returns isthe lowest two-year sequence of returns in the historical period. When using projectedreturns, the default for the first year of low returns is two standard deviations less than theaverage return, and the default for the second year is one standard deviation less than theaverage return.

Results Using Class Sensitivity

The Results Using Class Sensitivity are calculated by using different return assumptions forone or more asset classes during the years you select. These results show how your Planwould be affected if the annual returns for one or more asset classes were different thanthe average returns for a specified period in your Plan.

Results Using Monte Carlo Simulations

Monte Carlo simulations are used to show how variations in rates of return each year canaffect your results. A Monte Carlo simulation calculates the results of your Plan by runningit many times, each time using a different sequence of returns. Some sequences of returnswill give you better results, and some will give you worse results. These multiple trialsprovide a range of possible results, some successful (you would have met all your goals) andsome unsuccessful (you would not have met all your goals). The percentage of trials thatwere successful is the probability that your Plan, with all its underlying assumptions, couldbe successful. In MoneyGuidePro, this is the Probability of Success. Analogously, thepercentage of trials that were unsuccessful is the Probability of Failure. The Results UsingMonte Carlo Simulations indicate the likelihood that an event may occur as well as thelikelihood that it may not occur. In analyzing this information, please note that the analysisdoes not take into account actual market conditions, which may severely affect theoutcome of your goals over the long-term.

MoneyGuidePro uses a specialized methodology called Beyond Monte Carlo™, a statisticalanalysis technique that provides results that are as accurate as traditional Monte Carlosimulations with 10,000 trials, but with fewer iterations and greater consistency. BeyondMonte Carlo™ is based on Sensitivity Simulations, which re-runs the Plan only 50 to 100times using small changes in the return. This allows a sensitivity of the results to becalculated, which, when analyzed with the mean return and standard deviation of theportfolio, allows the Probability of Success for your Plan to be directly calculated.

MoneyGuidePro Presentation of Results

The Results Using Average Returns, Historical Test, Historical Rolling Periods, Bad Timing,and Class Sensitivity display the results using an “Estimated % of Goal Funded” and a“Safety Margin.”

Estimated % of Goal Funded

For each Goal, the “Estimated % of Goal Funded” is the sum of the assets used to fund theGoal divided by the sum of the Goal’s expenses. All values are in current dollars. A result of100% or more does not guarantee that you will reach a Goal, nor does a result under100% guarantee that you will not. Rather, this information is meant to identify possibleshortfalls in this Plan, and is not a guarantee that a certain percentage of your Goals will befunded. The percentage reflects a projection of the total cost of the Goal that was actuallyfunded based upon all the assumptions that are included in this Plan, and assumes that youexecute all aspects of the Plan as you have indicated.

Safety Margin

The Safety Margin is the estimated value of your assets at the end of this Plan, based on allthe assumptions included in this Report. Only you can determine if that Safety Margin issufficient for your needs.

Bear Market Loss and Bear Market Test

The Bear Market Loss shows how a portfolio would have been impacted during the worstbear market since the Great Depression. Depending on the composition of the portfolio,the worst bear market is either the "Great Recession" or the "Bond Bear Market."

The Great Recession, from November 2007 through February 2009, was the worst bearmarket for stocks since the Great Depression. In MoneyGuidePro, the Great RecessionReturn is the rate of return, during the Great Recession, for a portfolio comprised of cash,bonds, stocks, and alternatives, with an asset mix equivalent to the portfolio referenced.


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The Bond Bear Market, from July 1979 through February 1980, was the worst bear marketfor bonds since the Great Depression. In MoneyGuidePro, the Bond Bear Market Return isthe rate of return, for the Bond Bear Market period, for a portfolio comprised of cash,bonds, stocks, and alternatives, with an asset mix equivalent to the portfolio referenced.

The Bear Market Loss shows: 1) either the Great Recession Return or the Bond Bear MarketReturn, whichever is lower, and 2) the potential loss, if you had been invested in thiscash-bond-stock-alternative portfolio during the period with the lower return. In general,most portfolios with a stock allocation of 20% or more have a lower Great RecessionReturn, and most portfolios with a combined cash and bond allocation of 80% or morehave a lower Bond Bear Market Return.

The Bear Market Test, included in the Stress Tests, examines the impact on your Plan resultsif an identical Great Recession or Bond Bear Market, whichever would be worse, occurredthis year. The Bear Market Test shows the likelihood that you could fund your Needs,Wants and Wishes after experiencing such an event.

Regardless of whether you are using historical or projected returns for all otherMoneyGuidePro results, the Bear Market Loss and Bear Market Test use returns calculatedfrom historical indices. If you are using historical returns, the indices in the Bear Market Lossand the Bear Market Test may be different from indices used in other calculations. Theseresults are calculated using only four asset classes – Cash, Bonds, Stocks, and Alternatives.The indices and the resulting returns for the Great Recession and the Bond Bear Market are:

Because the Bear Market Loss and Bear Market Test use the returns from asset class indicesrather than the returns of actual investments, they do not represent the performance forany specific portfolio, and are not a guarantee of minimum or maximum levels of losses orgains for any portfolio. The actual performance of your portfolio may differ substantiallyfrom those shown in the Great Recession Return, the Bond Bear Market Return, the BearMarket Loss, and the Bear Market Test.

MoneyGuidePro Risk Assessment

The MoneyGuidePro Risk Assessment highlights some – but not all – of the trade-offs youmight consider when deciding how to invest your money. This approach does not provide acomprehensive, psychometrically-based, or scientifically-validated profile of your risktolerance, loss tolerance, or risk capacity, and is provided for informational purposes only.

Based on your specific circumstances, you must decide the appropriate balance betweenpotential risks and potential returns. MoneyGuidePro does not and cannot adequatelyunderstand or assess the appropriate risk/return balance for you. MoneyGuidePro requiresyou to select a risk score. Once selected, three important pieces of information are availableto help you determine the appropriateness of your score: a cash-bond-stock portfolio, theimpact of a Bear Market Loss (either the Great Recession or the Bond Bear Market,whichever is lower) on this portfolio, and a graph showing how your score compares to therisk score of others in your age group.

MoneyGuidePro uses your risk score to select a risk-based portfolio on the Target Bandpage. This risk-based portfolio selection is provided for informational purposes only, andyou should consider it to be a starting point for conversations with your advisor. It is yourresponsibility to select the Target Portfolio you want MoneyGuidePro to use. The selectionof your Target Portfolio, and other investment decisions, should be made by you, afterdiscussions with your advisor and, if needed, other financial and/or legal professionals.

Asset Class Index Great RecessionReturn

11/2007 – 02/2009

Bond Bear MarketReturn

07/1979 – 02/1980

Cash Ibbotson U.S. 30-dayTreasury Bills

2.31% 7.08%

Bond Ibbotson Intermediate-TermGovernment Bonds – TotalReturn

15.61% -8.89%

Stock S&P 500 - Total Return -50.95% 14.61%

Alternative HFRI FOF: Diversified*S&P GSCI Commodity - TotalReturn**

-19.87%N/A

N/A20.28%

*Hedge Fund Research Indices Fund of Funds

**S&P GSCI was formerly the Goldman Sachs Commodity Index

Glossary

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Glossary

Asset Allocation is the process of determining what portions of your portfolio holdings areto be invested in the various asset classes.

Asset Allocation

This optional strategy simulates creating a separate account for funds that you want toinvest differently than your Target Portfolio. You specify the expected return assumptions,and the Program calculates a range of possible results using those assumptions. Generally,this strategy is included when you have excess funds after fulfilling your financial goals, andused to create a legacy or to fund discretionary objectives.

Aspirational Cash Reserve Strategy

Bonds

Bonds are either domestic (U.S.) or global debt securities issued by either privatecorporations or governments. (See the “Risks Inherent in Investing” section in thisImportant Disclosure Information for a summary of the risks associated with investing inbonds. Bonds are also called “fixed income securities.”)

Domestic government bonds are backed by the full faith and credit of the U.S.Government and have superior liquidity and, when held to maturity, safety of principal.Domestic corporate bonds carry the credit risk of their issuers and thus usually offeradditional yield. Domestic government and corporate bonds can be sub-divided basedupon their term to maturity. Short-term bonds have an approximate term to maturity of 1to 5 years; intermediate-term bonds have an approximate term to maturity of 5 to 10years; and, long-term bonds have an approximate term to maturity greater than 10 years.

Asset Class

Asset Class is a standard term that broadly defines a category of investments. The threebasic asset classes are Cash, Bonds, and Stocks. Bonds and Stocks are often furthersubdivided into more narrowly defined classes. Some of the most common asset classes aredefined below.

Cash and Cash Alternatives

Cash typically includes bank accounts or certificates of deposit, which are insured by theFederal Deposit Insurance Corporation up to a limit per account. Cash Alternatives typicallyinclude money market securities, U.S. treasury bills, and other investments that are readilyconvertible to cash, have a stable market value, and a very short-term maturity. U.S.Treasury bills are backed by the full faith and credit of the U.S. Government and, whenheld to maturity, provide safety of principal. (See the “Risks Inherent in Investing” sectionin this Important Disclosure Information for a summary of the risks associated withinvesting in cash alternatives.)

Stocks

Stocks are equity securities of domestic and foreign corporations. (See the “Risks Inherentin Investing” section in this Important Disclosure Information for a summary of the risksassociated with investing in stocks.)

Domestic stocks are equity securities of U.S. corporations. Domestic stocks are oftensub-divided based upon the market capitalization of the company (the market value of thecompany's stock). "Large cap" stocks are from larger companies, "mid cap" from themiddle range of companies, and "small cap" from smaller, perhaps newer, companies.Generally, small cap stocks experience greater market volatility than stocks of companieswith larger capitalization. Small cap stocks are generally those from companies whosecapitalization is less than $500 million, mid cap stocks those between $500 million and $5billion, and large cap over $5 billion.

Large cap, mid cap and small cap may be further sub-divided into "growth" and "value"categories. Growth companies are those with an orientation towards growth, oftencharacterized by commonly used metrics such as higher price-to-book andprice-to-earnings ratios. Analogously, value companies are those with an orientationtowards value, often characterized by commonly used metrics such as lower price-to-bookand price-to-earnings ratios.

International stocks are equity securities from foreign corporations. International stocks areoften sub-divided into those from "developed" countries and those from "emergingmarkets." The emerging markets are in less developed countries with emerging economiesthat may be characterized by lower income per capita, less developed infrastructure andnascent capital markets. These "emerging markets" usually are less economically andpolitically stable than the "developed markets." Investing in international stocks involvesspecial risks, among which include foreign exchange volatility and risks of investing underdifferent tax, regulatory and accounting standards.

Asset Mix

Asset Mix is the combination of asset classes within a portfolio, and is usually expressed as apercentage for each asset class.

Base Inflation Rate

The Base Inflation Rate is the default inflation rate in the Program. You can adjust this ratein financial goal expenses, retirement income sources, savings rates, and in each What Ifscenario. Also see “Inflation Rate.”

Glossary

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Bear Market Test

The Bear Market Test, included in the Stress Tests, examines the impact on your Plan resultsif a Bear Market Loss occurred this year. The Bear Market Test shows the likelihood that youcould fund your Needs, Wants and Wishes after experiencing such an event. See BearMarket Loss.

Bond Bear Market Return

The Bond Bear Market Return is the rate of return for a cash-bond-stock-alternativeportfolio during the Bond Bear Market (July 1979 through February 1980), the worst bearmarket for bonds since the Great Depression. MoneyGuidePro shows a Bond Bear MarketReturn for your Current, Risk-based, and Target Portfolios, calculated using historical returnsof four broad-based asset class indices. See Great Recession Return.

Cash Receipt Schedule

A Cash Receipt Schedule consists of one or more years of future after-tax amounts receivedfrom the anticipated sale of an Other Asset, exercising of Stock Options grants, or proceedsfrom Restricted Stock grants.

Confidence Zone

See Monte Carlo Confidence Zone.

Concentrated Position

A Concentrated Position is when your portfolio contains a significant amount (as apercentage of the total portfolio value) in individual stock or bonds. Concentrated Positionshave the potential to increase the risk of your portfolio.

Current Portfolio

Your Current Portfolio is comprised of all the investment assets you currently own (or asubset of your assets, based on the information you provided for this Plan), categorized byAsset Class and Asset Mix.

Current Dollars

The Results of MoneyGuidePro calculations are in Future Dollars. To help you comparedollar amounts in different years, we also express the Results in Current Dollars, calculatedby discounting the Future Dollars by the sequence of inflation rates used in the Plan.

Fund All Goals

Fund All Goals is one of two ways for your assets and retirement income to be used to fundyour goals. The other is Earmark, which means that an asset or retirement income isassigned to one or more goals, and will be used only for those goals. Fund All Goals meansthat the asset or income is not earmarked to fund specific goals, and can be used to fundany goal, as needed in the calculations.

Expense Adjustments

When using historical returns, some users of MoneyGuidePro include Expense Adjustments.These adjustments (which are specified by the user) reduce the return of the affected AssetClasses and are commonly used to account for transaction costs or other types of feesassociated with investing. If Expense Adjustments have been used in this Report, they willbe listed beside the historical indices at the beginning of this Report.

Future Dollars

Future Dollars are inflated dollars. The Results of MoneyGuidePro calculations are in FutureDollars. To help you compare dollar amounts in different years, we discount the FutureDollar amounts by the inflation rates used in the calculations and display the Results in theequivalent Current Dollars.

Great Recession Return

The Great Recession Return is the rate of return for a cash-bond-stock-alternative portfolioduring the Great Recession (November 2007 through February 2009), the worst bearmarket for stocks since the Great Depression. MoneyGuidePro shows a Great RecessionReturn for your Current, Risk-based, and Target Portfolios, calculated using historical returnsof four broad-based asset class indices. See Bond Bear Market Return.

Inflation Rate

Inflation is the percentage increase in the cost of goods and services for a specified timeperiod. A historical measure of inflation is the Consumer Price Index (CPI). InMoneyGuidePro, the Inflation Rate is selected by your advisor, and can be adjusted indifferent scenarios.

Liquidity

Liquidity is the ease with which an investment can be converted into cash.

Bear Market Loss

The Bear Market Loss shows how a portfolio would have been impacted during the GreatRecession (November 2007 through February 2009) or the Bond Bear Market (July 1979through February 1980). The Bear Market Loss shows: 1) either the Great Recession Returnor the Bond Bear Market Return, whichever is lower, and 2) the potential loss, if you hadbeen invested in this cash-bond-stock-alternative portfolio during the period with the lowerreturn. See Bear Market Test, Great Recession Return, and Bond Bear Market Return.

Glossary

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Monte Carlo Confidence Zone

The Monte Carlo Confidence Zone is the range of probabilities that you (and/or youradvisor) have selected as your target range for the Monte Carlo Probability of Success inyour Plan. The Confidence Zone reflects the Monte Carlo Probabilities of Success withwhich you would be comfortable, based upon your Plan, your specific time horizon, riskprofile, and other factors unique to you.

Monte Carlo Probability of Success / Probability of Failure

The Monte Carlo Probability of Success is the percentage of trials of your Plan that weresuccessful. If a Monte Carlo simulation runs your Plan 10,000 times, and if 6,000 of thoseruns are successful (i.e., all your goals are funded and you have at least $1 of SafetyMargin), then the Probability of Success for that Plan, with all its underlying assumptions,would be 60%, and the Probability of Failure would be 40%.

Monte Carlo Simulations

Monte Carlo simulations are used to show how variations in rates of return each year canaffect your results. A Monte Carlo simulation calculates the results of your Plan by runningit many times, each time using a different sequence of returns. Some sequences of returnswill give you better results, and some will give you worse results. These multiple trialsprovide a range of possible results, some successful (you would have met all your goals) andsome unsuccessful (you would not have met all your goals).

Needs / Wants / Wishes

In MoneyGuidePro, you choose an importance level from 10 to 1 (where 10 is the highest)for each of your financial goals. Then, the importance levels are divided into three groups:Needs, Wants, and Wishes. Needs are the goals that you consider necessary for yourlifestyle, and are the goals that you must fulfill. Wants are the goals that you would reallylike to fulfill, but could live without. Wishes are the “dream goals” that you would like tofund, although you won’t be too dissatisfied if you can’t fund them. In MoneyGuidePro,Needs are your most important goals, then Wants, then Wishes.

Portfolio Set

A Portfolio Set is a group of portfolios that provides a range of risk and return strategies fordifferent investors.

Portfolio Total Return

A Portfolio Total Return is determined by weighting the return assumption for each AssetClass according to the Asset Mix. Also see “Expense Adjustments.”

Probability of Success / Probability of Failure

See Monte Carlo Probability of Success / Probability of Failure.

Real Return

The Real Return is the Total Return of your portfolio minus the Inflation Rate.

Recommended Scenario

The Recommended Scenario is the scenario selected by your advisor to be shown on theResults page, in Play Zone, and in the Presentation.

Retirement Start Date

For married couples, retirement in MoneyGuidePro begins when both the client and spouseare retired. For single, divorced, or widowed clients, retirement begins when the clientretires.

Risk

Risk is the chance that the actual return of an investment, asset class, or portfolio will bedifferent from its expected or average return.

Risk-based Portfolio

The risk-based portfolio is the Model Portfolio associated with the risk score you selected.

Retirement Cash Reserve Strategy

This optional strategy simulates creating a cash account to provide funding for near-termgoal expenses. You select the number of years of Needs, Wants, and Wishes to be includedin the cash account. The Program then funds the Retirement Cash Reserve with thedesignated amounts, and simulates rebalancing your remaining investments to match theselected Target Portfolio.

Standard Deviation

Safety Margin

The Safety Margin is the hypothetical portfolio value at the end of the Plan. A Safety Marginof zero indicates the portfolio was depleted before the Plan ended.

Standard Deviation is a statistical measure of the volatility of an investment, an asset class,or a portfolio. It measures the degree by which an actual return might vary from theaverage return, or mean. Typically, the higher the standard deviation, the higher thepotential risk of the investment, asset class, or portfolio.

Glossary

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Star Track

Star Track provides a summary of your Plan results over time, using a bar graph. Each barshows the Monte Carlo Probability of Success for your Recommended Scenario, on the datespecified, compared to the Monte Carlo Probability of Success for a scenario using all Targetvalues.

Target Band

The Target Band is the portfolio(s) that could be appropriate for you, based upon therisk-based portfolio.

Target Portfolio

Target Portfolio is the portfolio you have selected based upon your financial goals and yourrisk tolerance.

Target Retirement Age

Target Retirement Age is the age at which you would like to retire.

Target Savings Amount

In the Resources section of MoneyGuidePro, you enter the current annual additions beingmade to your investment assets. The total of these additions is your Target SavingsAmount.

Time Horizon

Time Horizon is the period from now until the time the assets in this portfolio will begin tobe used.

Target Goal Amount

The Target Goal Amount is the amount you would expect to spend, or the amount youwould like to spend, for each financial goal.

Total Return

Total Return is an assumed, hypothetical growth rate for a specified time period. The TotalReturn is either (1) the Portfolio Total Return or (2) as entered by you or your advisor. Alsosee “Real Return.”

Wants

See "Needs / Wants / Wishes".

Willingness

In MoneyGuidePro, in addition to specifying Target Goal Amounts, a Target SavingsAmount, and Target Retirement Ages, you also specify a Willingness to adjust these Targetvalues. The Willingness choices are Very Willing, Somewhat Willing, Slightly Willing, andNot at All.

Wishes

See "Needs / Wants / Wishes".

Worst One-Year Loss

The Worst One-Year Loss is the lowest annual return that a portfolio with the specified assetmix and asset class indices would have received during the historical period specified.

Summary of Goals and Resources

Personal Information and Summary of Financial Goals

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See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary.


Needs

Retirement - Living Expense10

Both Retired (2016-2048) Mortgage Reduction of $21,584 (2025) HELOC Reduction of $5,400 (2021) Credit Cards Reduction of $996 (2021)Vanita Alone Retired (2049-2050)

$59,149

$51,803Base Inflation Rate (3.00%)

Health Care10

Both Retired Before Medicare (2016-2022)Naresh Medicare / Vanita Retired Before Medicare (2023-2024)Both Medicare (2025-2048)Vanita Alone Medicare (2049-2050)

$4,000$9,902$15,759$7,858Base Inflation Rate plus 4.00% (7.00%)

Naresh's Vehicle (after trade-in)8

In 2018Recurring every 5 years until end of Naresh's plan


Vanita's Vehicle (after trade-in)8

In 2020Recurring every 5 years until end of Vanita's plan


Wants

Travel7

In 2017Recurring every year until end of plan



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Annual Charities7



Gift or Donation7



Gift to Nephew Kiran Pandya7

In 2016Recurring every year for a total of 7 times

$0No Inflation

Gift to Nephew Varun Singh7


$0No Inflation

Gift to Niece Paavai Chitturi7


$0No Inflation

Pay off Credit Cards7

In 2016 $260No Inflation


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Pay Down Principal on HELOC7

In 2016 $1,723No Inflation

Pay Down Principal on Mortgage7

In 2016 $3,117No Inflation

Trip - Celebrate Retirement7

In 2016 $16,000Base Inflation Rate (3.00%)

Personal Information

Naresh

Male - born 01/02/1958, age 58

Vanita

Female - born 01/02/1960, age 56

Married, US Citizens living in WI

Retired

Retired

• This section lists the Personal and Financial Goal information you provided, which willbe used to create your Report. It is important that it is accurate and complete.

Participant Name Date of Birth Age Relationship

Kiran Pandya 0 Other Beneficiary

Paavai Chitturi 0 Other Beneficiary

Varun Singh 0 Other Beneficiary

American Red Cross 0 Charity

Current Financial Goals Graph

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This graph shows the annual costs for your Financial Goals, as you have specified. Because these costs will be used to create your Plan, it isimportant that they are accurate and complete. All amounts are in after-tax, future dollars.

Net Worth Summary - All Resources

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This is your Net Worth Summary as of 01/29/2016. Your Net Worth is the difference between what you own (your Assets) and what youowe (your Liabilities). To get an accurate Net Worth statement, make certain you have entered all of your Assets and Liabilities.

+ $642,900Other Assets

Investment Assets $2,984,000

Total Liabilities $176,834

Net Worth $3,450,066

$3,626,900Total Assets

-

Description Total

Investment Assets

Employer Retirement Plans $1,965,000

Individual Retirement Accounts $90,000

Taxable and/or Tax-Free Accounts $929,000

Total Investment Assets: $2,984,000

Other Assets

Home and Personal Assets $642,900

Total Other Assets: $642,900

Liabilities

Personal Real Estate Loan: $173,094

Other Personal Debt: $3,740

Total Liabilities: $176,834

Net Worth: $3,450,066

Net Worth Detail - All Resources

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This is your Net Worth Detail as of 01/29/2016. Your Net Worth is the difference between what you own (your Assets) and what you owe(your Liabilities). To get an accurate Net Worth statement, make certain you have entered all of your Assets and Liabilities.

Description TotalJointVanitaNaresh

Investment Assets

Employer Retirement Plans

Naresh's 401(k) $1,200,000$1,200,000

Naresh's Exercised Stock Options $92,000$92,000

Naresh's IRA $123,000$123,000

Vanita's 401(k) $550,000$550,000

Individual Retirement Accounts

Vanita's IRA $90,000$90,000

Taxable and/or Tax-Free Accounts

Naresh's Brokerage Account $329,000$329,000

Vanita's Brokerage Account $600,000$600,000

Total Investment Assets: $2,984,000$1,744,000 $1,240,000 $0

Other Assets

Home and Personal Assets

Home $386,000$386,000

Money Market (Cash Reserve) $64,900$64,900

Personal Property $150,000$150,000

Vehicles $42,000$42,000

Total Other Assets: $642,900$0 $536,000 $106,900

Liabilities

Personal Real Estate Loan:

HELOC $23,277$23,277

Home Mortgage $149,817$149,817

Other Personal Debt:

Credit Cards $3,740$3,740

Net Worth Detail - All Resources

01/29/2016


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Total Liabilities: $176,834$0 $173,094 $3,740

Net Worth: $3,450,066

Resources Summary

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Description Owner Current Value Additions Assign to Goal

Investment Assets

NareshNaresh's 401(k) $1,200,000 Fund All Goals

NareshNaresh's Brokerage Account $329,000 Fund All Goals

NareshNaresh's Exercised Stock Options $92,000 Fund All Goals

NareshNaresh's IRA $123,000 Fund All Goals

VanitaVanita's 401(k) $550,000 Fund All Goals

VanitaVanita's Brokerage Account $600,000 Fund All Goals

VanitaVanita's IRA $90,000 Fund All Goals

$2,984,000Total Investment Assets :

Description Owner Current Value Future Value Assign to Goal

Other Assets

Home Vanita $386,000 Not Funding Goals

Personal Property Vanita $150,000 Not Funding Goals

Vehicles Joint Common $42,000 Not Funding Goals

Money Market (Cash Reserve) Joint Common $64,900 Not Funding Goals

$642,900Total of Other Assets :

Annual Premium Cash ValueDescription Owner BeneficiaryInsured Death Benefit Premium Paid

Insurance Policies

Insurance Policies Summary (not included in Assets)

Employer Paid Group Term

Naresh Co-Client of Insured- 100%

Naresh $130,000


Vanita Co-Client of Insured- 100%

Vanita $80,000



Naresh $130,000



Naresh $130,000

Resources Summary

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Annual Premium Cash ValueDescription Owner BeneficiaryInsured Death Benefit Premium Paid

Insurance Policies



Naresh $130,000



Naresh $130,000



Vanita $80,000



Vanita $80,000



Vanita $80,000



Vanita $80,000

$1,933American Protection Insurance Personal

Naresh

$4,479LTCI Nursing Home Care

Naresh

$4,302LTCI Nursing Home Care

Vanita

$650American Auto Insurance I Auto

$650American Auto Insurance II Auto

$850American Homeowners Homeowners

$240American Protection Insurance Umbrella

$1,050,000Total Death Benefit of All Policies :

When the insured dies, the Cash Value of that policy is included in the Total Investment Assets.

Resources Summary

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Social Security

Description Value Assign to Goal

Social Security Naresh will file a normal application at age 66 Years, 8 Months.He will receive $33,454 in retirement benefits at age 66.

Fund All Goals

Social Security Vanita will file a normal application at age 67.She will receive $29,027 in retirement benefits at age 67.

Fund All Goals

Retirement Income

Description Value Assign to GoalOwner Inflate?

Pension Income Naresh $48,750 from 2016 to Endof Naresh's Plan

Fund All GoalsNo

Pension Income Vanita $30,000 from 2016 to Endof Vanita's Plan

Fund All GoalsNo

Type Outstanding Balance Monthly PaymentDescription Interest RateOwner

Liabilities

Credit Cards Credit Cards $3,740 $8311.900%Joint

Equity Line HELOC $23,277 $4506.000%Vanita

1st Mortgage Home Mortgage $149,817 $1,7996.000%Vanita

$176,834Total Outstanding Balance :

Risk and Portfolio Information

Risk Assessment

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Compare Me to my Group

Average Age 50 to 64

Bear Market Loss

Capital Preservation II

$2,984,000Portfolio Value

-10%Great Recession Return from November2007 through February 2009

-$298,400Potential loss of Portfolio Value

You are a Much Lower than Average Risk-Taker

You selected a Risk Score for your Household of 35.

• The Bell Curve above shows the normal distribution of risk scores for your group. The average score is 50.

• Your Score corresponds to a Capital Preservation II Portfolio with 38% Stock .

• You know that the Capital Preservation II Portfolio you selected had a -10% return during the Great Recession and are willing to acceptthe risk that you could experience a similar or worse result.

• Your Score indicates that you are a Much Lower than Average Risk-Taker (scores 30-37) as compared to other Investors of similar age.

Portfolio Appropriate for Score

Capital Preservation II

Average Return: 8.11%

HouseholdNaresh Vanita

Risk Score: 35 3535

Portfolio Selected: Capital Preservation II Capital Preservation IICapital Preservation II

% Stock : 38% 38%38%

Average Return: 8.11% 8.11%8.11%

Great Recession Return: -10% -10%-10%

Bond Bear Market Return: 1% 1%1%

Target Band

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The Risk-Based Portfolio was selected from this list of Portfolios, based upon the risk assessment. The Target Band is comprised of theportfolio(s) that could be appropriate for you, based upon the Risk-Based Portfolio indicated. The Target Portfolio was selected by you. TheAverage Real Return is equal to the Average Total Return minus the inflation rate of 4.22%. Refer to the Worst 1-Year Loss and StandardDeviation columns in the chart below to compare the relative risks of your Current Portfolio to the Target Portfolio.

RiskBased

TargetBand

Name Total Worst 1 YearLoss

Stock RealCurrent

Average Return

StandardDeviation

BondCash Alternative

Capital Preservation I 7.75% -5.59%28% 3.53% 5.77%67%5% 0%

Capital Preservation II 8.11% -10.06%38% 3.89% 7.01%57%5% 0%

Balanced I 8.35% -13.08%45% 4.13% 8.02%51%4% 0%

Balanced II 8.64% -17.32%54% 4.42% 9.35%42%4% 0%

Current 8.68% -21.00%59% 4.46% 10.21%27%15% 0%

Total Return I 8.89% -21.11%61% 4.67% 10.49%35%4% 0%

Total Return II 9.26% -26.29%72% 5.04% 12.32%25%3% 0%

Capital Growth I 9.71% -30.73%82% 5.49% 14.05%16%2% 0%

Capital Growth II 9.99% -35.19%91% 5.77% 15.59%9%0% 0%

Equity Growth 10.27% -39.57%100% 6.05% 17.19%0%0% 0%

Efficient Frontier Graph

This graph shows the relationship of return and risk for each Portfolio in the chart above.

When deciding how to invest your money, you must determine the amount of risk you arewilling to assume to pursue a desired return. The Efficient Frontier Graph reflects a set ofportfolios that assume a low relative level of risk for each level of return, or conversely anoptimal return for the degree of investment risk taken. The graph also shows the position ofthe Current, Target, Risk-Based, and Custom Portfolios, if applicable. The positioning ofthese portfolios illustrates how their respective risks and returns compare to each other aswell as the optimized level of risk and return represented by the Portfolios.

** The Investment Assets allocated to Asset Class 'Unclassified' are not included in thecalculation of the Portfolio Total Return and Standard Deviation.

Results

What If Worksheet

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This Worksheet allows you to analyze and compare the results of one or more scenarios that you created by varying the Plan assumptions.

Goals

Estimated % of Goal Funded

Current Scenario Recommended Scenario Previous Scenario

Average Return Bad Timing Average Return Bad Timing Average Return Bad Timing

100% 100% 100% 100% 100% 100%All Goals

$4,881

$13,734

Current dollars (in thousands) :

Future dollars (in thousands) :

$5,839

$16,431

Safety Margin (Value at End of Plan)

$5,008

$14,091

$4,112

$11,570

$4,579

$12,885

$4,760

$13,393

Your Confidence Zone: 70% - 90%

Likelihood of Funding All GoalsMonte Carlo Results

Total Spending : $3,446,334 $4,203,993 $3,446,334

Key Assumptions Current Scenario Recommended Scenario Previous Scenario

Stress Tests

Method(s) Bad Timing Program Estimate Years of bad returns: 2016: -7.23% 2017: -12.45%

Bad Timing Program Estimate Years of bad returns: 2016: -6.28% 2017: -4.91%

Bad Timing Program Estimate Years of bad returns: 2016: 0.06% 2017: 1.56%

False 0

Indicates different data between the Scenario in the first column and the Scenario in any other column.

What If Worksheet

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Funding Order

Assets - Ignore Earmarks No No No False 1

Retirement Income - Ignore Earmarks No No No False 1

Hypothetical Average Rate of Return

After Retirement : Entered Return Entered Return Entered Return False 1

Total Return : 6.75% 8.22% 6.75% False 1

Standard Deviation : 10.21% 5.58% 3.69% False 1

Total Return Adjustment : 0.00% 0.00% 0.00% False 1

Adjusted Real Return : 3.75% 5.22% 3.75% False 1

Base inflation rate : 3.00% 3.00% 3.00% False 1

Tax-Free Options

After Retirement True 1

Reallocate a portion of bonds to tax-free: No Yes Yes False 1

Percent of bond allocation to treat as tax-free: 0.00% 18.80% 47.80% False 1


What If Worksheet

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Goals

Living Expense True 1

Planning Age True 1

Naresh 90 90 90 False 1

Vanita 90 90 90 False 1

Both Retired True 1

Both Retired $59,149 $64,455 $59,149 False 1

One Alone - Retired True 1

Vanita Alone Retired $51,803 $54,826 $51,803 False 1

Naresh Alone Retired $0 $55,003 $53,720 False 1

Health Care True 1

Cost determined by Schedule : See details See details See details False 1

Naresh's Vehicle (after trade-in) True 1

Year : 2018 2018 2018 False 1

Cost : $21,000 $21,000 $21,000 False 1

Is recurring : Yes Yes Yes False 1

Years between occurrences : 5 5 5 False 1

This goal will end at End of Naresh's plan. False 1

Vanita's Vehicle (after trade-in) True 1

Year : 2020 2020 2020 False 1

Cost : $21,000 $21,000 $21,000 False 1



This goal will end at End of Vanita's plan. False 1

Travel True 1

Year : 2017 2017 2017 False 1

Cost : $25,000 $25,000 $25,000 False 1




What If Worksheet

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Goals

This goal will end at End of plan. False 1

Annual Charities True 1

Year : 2016 2016 2016 False 1

Cost : $10,000 $10,000 $10,000 False 1




Gift or Donation True 1

Year : 2016 2016 2016 False 1

Cost : $6,000 $6,000 $6,000 False 1




Gift to Nephew Kiran Pandya True 1

Year : 2016 2016 2016 False 1

Cost : $0 $27,275 $0 False 1



Number of occurrences : 7 7 7 False 1

Gift to Nephew Varun Singh True 1

Year : 2016 2016 2016 False 1

Cost : $0 $27,275 $0 False 1




Gift to Niece Paavai Chitturi True 1

Year : 2016 2016 2016 False 1

Cost : $0 $27,275 $0 False 1


What If Worksheet

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Goals




Pay off Credit Cards True 1

Year : 2016 2016 2016 False 1

Cost : $260 $4,000 $260 False 1

Pay Down Principal on HELOC True 1

Year : 2016 2016 2016 False 1

Cost : $1,723 $1,723 $1,723 False 1

Pay Down Principal on Mortgage True 1

Year : 2016 2016 2016 False 1

Cost : $3,117 $3,117 $3,117 False 1

Trip - Celebrate Retirement True 1

Year : 2016 2016 2016 False 1

Cost : $16,000 $16,000 $16,000 False 1


What If Worksheet

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Retirement Income

Pension Income (Naresh) True 1

Annual Income : $48,750 $43,875 $48,750 False 1

Start Year : 2016 2016 2016 False 1

Select when income will end : End of Naresh's Plan End of Plan End of Naresh's Plan False 1

Year to end retirement income : False 1

Survivor Benefit : 0% 100% 0% False 1

Pension Income (Vanita) True 1

Annual Income : $30,000 $27,000 $30,000 False 1

Start Year : 2016 2016 2016 False 1

Select when income will end : End of Vanita's Plan End of Plan End of Vanita's Plan False 1

Year to end retirement income : False 1

Survivor Benefit : 0% 100% 0% False 1

Social Security True 1

Select Social Security Strategy Current Current Current False 1

Naresh True 1

Filing Method : Normal Normal Normal False 1

Age to File Application : 66 Years, 8 Months 66 Years, 8 Months 66 Years, 8 Months False 1

Age Retirement Benefits begin : 66 Years, 8 Months 66 Years, 8 Months 66 Years, 8 Months False 1

First Year Benefit : $33,454 $33,454 $33,454 False 1

Vanita True 1

Filing Method : Normal Normal Normal False 1

Age to File Application : 67 67 67 False 1

Age Retirement Benefits begin : 67 67 67 False 1

First Year Benefit : $29,027 $29,027 $29,027 False 1

Reduce Benefits By : 0% 0% 0% False 1


What If Worksheet

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Tax Options

Include Tax Penalties : Yes Yes Yes False 1

Change Tax Rate? No No No False 1

Year To Change : False 1

Change Tax Rate by this % (+ or -) : 0.00% 0.00% 0.00% False 1


Worksheet Detail - Combined Details

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Total Portfolio Value Graph

These pages provide a picture of how your Investment Portfolio may hypothetically perform over the life of this Plan. The graph shows theeffect on the value of your Investment Portfolio for each year. The chart shows the detailed activities that increase and decrease yourInvestment Portfolio value each year including the funds needed to pay for each of your Goals. Shortfalls that occur in a particular year aredenoted with an 'X' under the Goal column.

Scenario : Current Scenario using Average Returns

x - denotes shortfall


01/29/2016


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Event or Ages Year

Beginning Portfolio Value

Earmarked Fund AllGoals

AdditionsTo Assets

OtherAdditions

PostRetirement

Income

InvestmentEarnings

Taxes

Funds Used

All Goals EndingPortfolio

Value

58 / 56 2016 0 2,984,000 0 0 78,750 199,086 24,975 100,249 3,136,612

59 / 57 2017 0 3,136,612 0 0 78,750 208,972 24,630 106,594 3,293,110

60 / 58 2018 0 3,293,110 0 0 78,750 217,874 23,890 131,403 3,434,441

61 / 59 2019 0 3,434,441 0 0 78,750 228,754 23,382 111,741 3,606,822

62 / 60 2020 0 3,606,822 0 0 78,750 238,625 22,320 138,086 3,763,792

63 / 61 2021 0 3,763,792 0 0 78,750 251,073 21,711 110,858 3,961,046

64 / 62 2022 0 3,961,046 0 0 78,750 264,207 21,403 113,760 4,168,839

65 / 63 2023 0 4,168,839 0 0 78,750 275,677 20,562 152,070 4,350,634

66 / 64 2024 0 4,350,634 0 0 121,128 291,716 31,858 130,018 4,601,602

67 / 65 2025 0 4,601,602 0 0 122,399 307,372 31,175 150,537 4,849,662

68 / 66 2026 0 4,849,662 0 0 123,709 325,726 31,265 127,990 5,139,841

69 / 67 2027 0 5,139,841 0 0 165,237 347,189 43,238 133,070 5,475,960

70 / 68 2028 0 5,475,960 0 0 167,832 365,115 83,443 168,330 5,757,134

71 / 69 2029 0 5,757,134 0 0 170,505 385,753 88,144 143,960 6,081,287

72 / 70 2030 0 6,081,287 0 0 173,257 403,749 113,512 181,563 6,363,218

73 / 71 2031 0 6,363,218 0 0 176,092 424,422 120,858 155,918 6,686,957

74 / 72 2032 0 6,686,957 0 0 179,013 445,740 128,697 162,334 7,020,679

75 / 73 2033 0 7,020,679 0 0 182,021 465,356 136,472 203,775 7,327,809

76 / 74 2034 0 7,327,809 0 0 185,119 487,828 145,521 176,128 7,679,106

77 / 75 2035 0 7,679,106 0 0 188,310 508,435 154,535 220,367 8,000,949

78 / 76 2036 0 8,000,949 0 0 191,597 531,966 165,184 191,329 8,367,999

79 / 77 2037 0 8,367,999 0 0 194,982 556,055 175,945 199,508 8,743,583

80 / 78 2038 0 8,743,583 0 0 198,469 577,954 186,773 248,342 9,084,891

81 / 79 2039 0 9,084,891 0 0 202,060 602,942 198,800 217,139 9,473,954

82 / 80 2040 0 9,473,954 0 0 205,760 625,513 210,748 269,331 9,825,148

83 / 81 2041 0 9,825,148 0 0 209,570 651,246 224,291 236,639 10,225,034

84 / 82 2042 0 10,225,034 0 0 213,495 677,338 238,566 247,159 10,630,142

85 / 83 2043 0 10,630,142 0 0 217,537 700,630 251,928 304,882 10,991,499

86 / 84 2044 0 10,991,499 0 0 221,701 727,222 266,783 269,899 11,403,740

87 / 85 2045 0 11,403,740 0 0 225,989 750,737 280,934 331,675 11,767,857




01/29/2016


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Event or Ages Year



AdditionsTo Assets

OtherAdditions

PostRetirement

Income

InvestmentEarnings

Taxes

Funds Used


Value

88 / 86 2046 0 11,767,857 0 0 230,406 777,643 296,551 295,137 12,184,218

89 / 87 2047 0 12,184,218 0 0 234,956 804,692 312,702 308,790 12,602,373

Naresh's PlanEnds

2048 0 12,602,373 0 0 239,642 828,239 327,094 377,265 12,965,895

- / 89 2049 0 12,965,895 0 0 118,730 854,965 316,507 245,208 13,377,876

Vanita's PlanEnds

2050 0 13,377,876 0 0 121,392 878,054 330,402 312,865 13,734,055




01/29/2016


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Event or Ages Year

Funds Used

Retirement Health Care Naresh'sVehicle(after

trade-in)

Vanita'sVehicle(after

trade-in)

Travel AnnualCharities

Gift orDonation

Gift toNephew

KiranPandya

Gift toNephew

Varun Singh

Gift toNiece Paavai

Chitturi

Pay offCreditCards

EndingPortfolio

Value

58 / 56 2016 59,149 4,000 0 0 0 10,000 6,000 0 0 0 260 3,136,612

59 / 57 2017 60,084 4,280 0 0 25,750 10,300 6,180 0 0 0 0 3,293,110

60 / 58 2018 61,047 4,580 22,279 0 26,523 10,609 6,365 0 0 0 0 3,434,441

61 / 59 2019 62,039 4,900 0 0 27,318 10,927 6,556 0 0 0 0 3,606,822

62 / 60 2020 63,061 5,243 0 23,636 28,138 11,255 6,753 0 0 0 0 3,763,792

63 / 61 2021 57,717 5,610 0 0 28,982 11,593 6,956 0 0 0 0 3,961,046

64 / 62 2022 58,801 6,003 0 0 29,851 11,941 7,164 0 0 0 0 4,168,839

65 / 63 2023 59,918 15,900 25,827 0 30,747 12,299 7,379 0 0 0 0 4,350,634

66 / 64 2024 61,068 17,013 0 0 31,669 12,668 7,601 0 0 0 0 4,601,602

67 / 65 2025 40,668 28,973 0 27,400 32,619 13,048 7,829 0 0 0 0 4,849,662

68 / 66 2026 41,889 31,001 0 0 33,598 13,439 8,063 0 0 0 0 5,139,841

69 / 67 2027 43,145 33,171 0 0 34,606 13,842 8,305 0 0 0 0 5,475,960

70 / 68 2028 44,440 35,493 29,941 0 35,644 14,258 8,555 0 0 0 0 5,757,134

71 / 69 2029 45,773 37,978 0 0 36,713 14,685 8,811 0 0 0 0 6,081,287

72 / 70 2030 47,146 40,636 0 31,764 37,815 15,126 9,076 0 0 0 0 6,363,218

73 / 71 2031 48,560 43,481 0 0 38,949 15,580 9,348 0 0 0 0 6,686,957

74 / 72 2032 50,017 46,524 0 0 40,118 16,047 9,628 0 0 0 0 7,020,679

75 / 73 2033 51,518 49,781 34,710 0 41,321 16,528 9,917 0 0 0 0 7,327,809

76 / 74 2034 53,063 53,266 0 0 42,561 17,024 10,215 0 0 0 0 7,679,106

77 / 75 2035 54,655 56,994 0 36,824 43,838 17,535 10,521 0 0 0 0 8,000,949

78 / 76 2036 56,295 60,984 0 0 45,153 18,061 10,837 0 0 0 0 8,367,999

79 / 77 2037 57,984 65,253 0 0 46,507 18,603 11,162 0 0 0 0 8,743,583

80 / 78 2038 59,723 69,820 40,238 0 47,903 19,161 11,497 0 0 0 0 9,084,891

81 / 79 2039 61,515 74,708 0 0 49,340 19,736 11,842 0 0 0 0 9,473,954

82 / 80 2040 63,360 79,937 0 42,689 50,820 20,328 12,197 0 0 0 0 9,825,148

83 / 81 2041 65,261 85,533 0 0 52,344 20,938 12,563 0 0 0 0 10,225,034

84 / 82 2042 67,219 91,520 0 0 53,915 21,566 12,940 0 0 0 0 10,630,142

85 / 83 2043 69,235 97,927 46,647 0 55,532 22,213 13,328 0 0 0 0 10,991,499

86 / 84 2044 71,312 104,781 0 0 57,198 22,879 13,728 0 0 0 0 11,403,740



01/29/2016


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Event or Ages Year

Funds Used


trade-in)


trade-in)


Gift orDonation

Gift toNephew

KiranPandya

Gift toNephew

Varun Singh

Gift toNiece Paavai

Chitturi

Pay offCreditCards

EndingPortfolio

Value

87 / 85 2045 73,452 112,116 0 49,488 58,914 23,566 14,139 0 0 0 0 11,767,857

88 / 86 2046 75,655 119,964 0 0 60,682 24,273 14,564 0 0 0 0 12,184,218

89 / 87 2047 77,925 128,362 0 0 62,502 25,001 15,000 0 0 0 0 12,602,373

Naresh's PlanEnds

2048 80,263 137,347 54,077 0 64,377 25,751 15,450 0 0 0 0 12,965,895

- / 89 2049 63,187 73,276 0 0 66,308 26,523 15,914 0 0 0 0 13,377,876

Vanita's PlanEnds

2050 65,082 78,405 0 57,370 68,298 27,319 16,391 0 0 0 0 13,734,055



01/29/2016


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Event or Ages Year

Funds Used

Pay DownPrincipal on

HELOC

Pay DownPrincipal onMortgage

Trip -CelebrateRetirement

EndingPortfolio

Value

58 / 56 2016 1,723 3,117 16,000 3,136,612

59 / 57 2017 0 0 0 3,293,110

60 / 58 2018 0 0 0 3,434,441

61 / 59 2019 0 0 0 3,606,822

62 / 60 2020 0 0 0 3,763,792

63 / 61 2021 0 0 0 3,961,046

64 / 62 2022 0 0 0 4,168,839

65 / 63 2023 0 0 0 4,350,634

66 / 64 2024 0 0 0 4,601,602

67 / 65 2025 0 0 0 4,849,662

68 / 66 2026 0 0 0 5,139,841

69 / 67 2027 0 0 0 5,475,960

70 / 68 2028 0 0 0 5,757,134

71 / 69 2029 0 0 0 6,081,287

72 / 70 2030 0 0 0 6,363,218

73 / 71 2031 0 0 0 6,686,957

74 / 72 2032 0 0 0 7,020,679

75 / 73 2033 0 0 0 7,327,809

76 / 74 2034 0 0 0 7,679,106

77 / 75 2035 0 0 0 8,000,949

78 / 76 2036 0 0 0 8,367,999

79 / 77 2037 0 0 0 8,743,583

80 / 78 2038 0 0 0 9,084,891

81 / 79 2039 0 0 0 9,473,954

82 / 80 2040 0 0 0 9,825,148

83 / 81 2041 0 0 0 10,225,034

84 / 82 2042 0 0 0 10,630,142

85 / 83 2043 0 0 0 10,991,499

86 / 84 2044 0 0 0 11,403,740



01/29/2016


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Event or Ages Year

Funds Used


HELOC



EndingPortfolio

Value

87 / 85 2045 0 0 0 11,767,857

88 / 86 2046 0 0 0 12,184,218

89 / 87 2047 0 0 0 12,602,373

Naresh's PlanEnds

2048 0 0 0 12,965,895

- / 89 2049 0 0 0 13,377,876

Vanita's PlanEnds

2050 0 0 0 13,734,055



01/29/2016


Page 36 of 42


Total Portfolio Value Graph

These pages provide a picture of how your Investment Portfolio may hypothetically perform over the life of this Plan. The graph shows theeffect on the value of your Investment Portfolio for each year. The chart shows the detailed activities that increase and decrease yourInvestment Portfolio value each year including the funds needed to pay for each of your Goals. Shortfalls that occur in a particular year aredenoted with an 'X' under the Goal column.

Scenario : Recommended Scenario using Average Returns



01/29/2016


Page 37 of 42


Event or Ages Year



AdditionsTo Assets

OtherAdditions

PostRetirement

Income

InvestmentEarnings

Taxes

Funds Used


Value

58 / 56 2016 0 2,984,000 0 0 70,875 232,654 20,673 191,120 3,075,735

59 / 57 2017 0 3,075,735 0 0 70,875 239,856 18,486 193,884 3,174,095

60 / 58 2018 0 3,174,095 0 0 70,875 245,768 16,699 218,857 3,255,183

61 / 59 2019 0 3,255,183 0 0 70,875 253,907 15,058 199,364 3,365,543

62 / 60 2020 0 3,365,543 0 0 70,875 260,661 12,962 225,883 3,458,234

63 / 61 2021 0 3,458,234 0 0 70,875 269,151 26,002 198,834 3,573,425

64 / 62 2022 0 3,573,425 0 0 70,875 279,568 22,724 201,921 3,699,223

65 / 63 2023 0 3,699,223 0 0 70,875 295,706 9,473 158,596 3,897,734

66 / 64 2024 0 3,897,734 0 0 113,253 316,710 21,326 136,740 4,169,632

67 / 65 2025 0 4,169,632 0 0 114,524 335,595 44,029 157,460 4,418,262

68 / 66 2026 0 4,418,262 0 0 115,834 358,986 31,746 135,121 4,726,215

69 / 67 2027 0 4,726,215 0 0 157,362 387,398 30,292 140,415 5,100,269

70 / 68 2028 0 5,100,269 0 0 159,957 412,343 68,811 175,895 5,427,863

71 / 69 2029 0 5,427,863 0 0 162,630 441,199 73,804 151,752 5,806,136

72 / 70 2030 0 5,806,136 0 0 165,382 467,075 104,302 189,588 6,144,703

73 / 71 2031 0 6,144,703 0 0 168,217 496,733 113,314 164,184 6,532,155

74 / 72 2032 0 6,532,155 0 0 171,138 527,742 123,135 170,849 6,937,051

75 / 73 2033 0 6,937,051 0 0 174,146 557,273 133,116 212,545 7,322,808

76 / 74 2034 0 7,322,808 0 0 177,244 590,873 145,156 185,162 7,760,607

77 / 75 2035 0 7,760,607 0 0 180,435 622,832 157,462 229,671 8,176,741

78 / 76 2036 0 8,176,741 0 0 183,722 658,964 172,129 200,912 8,646,385

79 / 77 2037 0 8,646,385 0 0 187,107 696,437 187,318 209,379 9,133,232

80 / 78 2038 0 9,133,232 0 0 190,594 731,883 203,138 258,509 9,594,062

81 / 79 2039 0 9,594,062 0 0 194,185 771,744 221,072 227,611 10,111,308

82 / 80 2040 0 10,111,308 0 0 197,885 809,340 239,404 280,117 10,599,011

83 / 81 2041 0 10,599,011 0 0 201,695 851,436 260,154 247,748 11,144,240

84 / 82 2042 0 11,144,240 0 0 205,620 894,658 282,465 258,602 11,703,451

85 / 83 2043 0 11,703,451 0 0 209,662 935,180 304,278 316,668 12,227,346

86 / 84 2044 0 12,227,346 0 0 213,826 980,379 328,638 282,039 12,810,874

87 / 85 2045 0 12,810,874 0 0 218,114 1,022,534 352,826 344,179 13,354,517




01/29/2016


Page 38 of 42


Event or Ages Year



AdditionsTo Assets

OtherAdditions

PostRetirement

Income

InvestmentEarnings

Taxes

Funds Used


Value

88 / 86 2046 0 13,354,517 0 0 222,531 1,069,461 379,600 308,016 13,958,893

89 / 87 2047 0 13,958,893 0 0 227,081 1,117,220 407,882 322,055 14,573,257

Naresh's PlanEnds

2048 0 14,573,257 0 0 231,767 1,161,416 434,624 390,928 15,140,888

- / 89 2049 0 15,140,888 0 0 159,605 1,213,411 451,472 253,226 15,809,206

Vanita's PlanEnds

2050 0 15,809,206 0 0 162,267 1,262,011 480,911 321,124 16,431,449




01/29/2016


Page 39 of 42



Event or Ages Year

Funds Used


trade-in)


trade-in)


Gift orDonation

Gift toNephew

KiranPandya

Gift toNephew

Varun Singh

Gift toNiece Paavai

Chitturi

Pay offCreditCards

EndingPortfolio

Value

58 / 56 2016 64,455 4,000 0 0 0 10,000 6,000 27,275 27,275 27,275 4,000 3,075,735

59 / 57 2017 65,549 4,280 0 0 25,750 10,300 6,180 27,275 27,275 27,275 0 3,174,095

60 / 58 2018 66,676 4,580 22,279 0 26,523 10,609 6,365 27,275 27,275 27,275 0 3,255,183

61 / 59 2019 67,837 4,900 0 0 27,318 10,927 6,556 27,275 27,275 27,275 0 3,365,543

62 / 60 2020 69,033 5,243 0 23,636 28,138 11,255 6,753 27,275 27,275 27,275 0 3,458,234

63 / 61 2021 63,869 5,610 0 0 28,982 11,593 6,956 27,275 27,275 27,275 0 3,573,425

64 / 62 2022 65,137 6,003 0 0 29,851 11,941 7,164 27,275 27,275 27,275 0 3,699,223

65 / 63 2023 66,444 15,900 25,827 0 30,747 12,299 7,379 0 0 0 0 3,897,734

66 / 64 2024 67,789 17,013 0 0 31,669 12,668 7,601 0 0 0 0 4,169,632

67 / 65 2025 47,592 28,973 0 27,400 32,619 13,048 7,829 0 0 0 0 4,418,262

68 / 66 2026 49,019 31,001 0 0 33,598 13,439 8,063 0 0 0 0 4,726,215

69 / 67 2027 50,490 33,171 0 0 34,606 13,842 8,305 0 0 0 0 5,100,269

70 / 68 2028 52,005 35,493 29,941 0 35,644 14,258 8,555 0 0 0 0 5,427,863

71 / 69 2029 53,565 37,978 0 0 36,713 14,685 8,811 0 0 0 0 5,806,136

72 / 70 2030 55,172 40,636 0 31,764 37,815 15,126 9,076 0 0 0 0 6,144,703

73 / 71 2031 56,827 43,481 0 0 38,949 15,580 9,348 0 0 0 0 6,532,155

74 / 72 2032 58,532 46,524 0 0 40,118 16,047 9,628 0 0 0 0 6,937,051

75 / 73 2033 60,288 49,781 34,710 0 41,321 16,528 9,917 0 0 0 0 7,322,808

76 / 74 2034 62,096 53,266 0 0 42,561 17,024 10,215 0 0 0 0 7,760,607

77 / 75 2035 63,959 56,994 0 36,824 43,838 17,535 10,521 0 0 0 0 8,176,741

78 / 76 2036 65,878 60,984 0 0 45,153 18,061 10,837 0 0 0 0 8,646,385

79 / 77 2037 67,854 65,253 0 0 46,507 18,603 11,162 0 0 0 0 9,133,232

80 / 78 2038 69,890 69,820 40,238 0 47,903 19,161 11,497 0 0 0 0 9,594,062

81 / 79 2039 71,987 74,708 0 0 49,340 19,736 11,842 0 0 0 0 10,111,308

82 / 80 2040 74,146 79,937 0 42,689 50,820 20,328 12,197 0 0 0 0 10,599,011

83 / 81 2041 76,371 85,533 0 0 52,344 20,938 12,563 0 0 0 0 11,144,240

84 / 82 2042 78,662 91,520 0 0 53,915 21,566 12,940 0 0 0 0 11,703,451

85 / 83 2043 81,022 97,927 46,647 0 55,532 22,213 13,328 0 0 0 0 12,227,346

86 / 84 2044 83,452 104,781 0 0 57,198 22,879 13,728 0 0 0 0 12,810,874



01/29/2016


Page 40 of 42



Event or Ages Year

Funds Used


trade-in)


trade-in)


Gift orDonation

Gift toNephew

KiranPandya

Gift toNephew

Varun Singh

Gift toNiece Paavai

Chitturi

Pay offCreditCards

EndingPortfolio

Value

87 / 85 2045 85,956 112,116 0 49,488 58,914 23,566 14,139 0 0 0 0 13,354,517

88 / 86 2046 88,534 119,964 0 0 60,682 24,273 14,564 0 0 0 0 13,958,893

89 / 87 2047 91,190 128,362 0 0 62,502 25,001 15,000 0 0 0 0 14,573,257

Naresh's PlanEnds

2048 93,926 137,347 54,077 0 64,377 25,751 15,450 0 0 0 0 15,140,888

- / 89 2049 71,205 73,276 0 0 66,308 26,523 15,914 0 0 0 0 15,809,206

Vanita's PlanEnds

2050 73,341 78,405 0 57,370 68,298 27,319 16,391 0 0 0 0 16,431,449



01/29/2016


Page 41 of 42



Event or Ages Year

Funds Used


HELOC



EndingPortfolio

Value

58 / 56 2016 1,723 3,117 16,000 3,075,735

59 / 57 2017 0 0 0 3,174,095

60 / 58 2018 0 0 0 3,255,183

61 / 59 2019 0 0 0 3,365,543

62 / 60 2020 0 0 0 3,458,234

63 / 61 2021 0 0 0 3,573,425

64 / 62 2022 0 0 0 3,699,223

65 / 63 2023 0 0 0 3,897,734

66 / 64 2024 0 0 0 4,169,632

67 / 65 2025 0 0 0 4,418,262

68 / 66 2026 0 0 0 4,726,215

69 / 67 2027 0 0 0 5,100,269

70 / 68 2028 0 0 0 5,427,863

71 / 69 2029 0 0 0 5,806,136

72 / 70 2030 0 0 0 6,144,703

73 / 71 2031 0 0 0 6,532,155

74 / 72 2032 0 0 0 6,937,051

75 / 73 2033 0 0 0 7,322,808

76 / 74 2034 0 0 0 7,760,607

77 / 75 2035 0 0 0 8,176,741

78 / 76 2036 0 0 0 8,646,385

79 / 77 2037 0 0 0 9,133,232

80 / 78 2038 0 0 0 9,594,062

81 / 79 2039 0 0 0 10,111,308

82 / 80 2040 0 0 0 10,599,011

83 / 81 2041 0 0 0 11,144,240

84 / 82 2042 0 0 0 11,703,451

85 / 83 2043 0 0 0 12,227,346

86 / 84 2044 0 0 0 12,810,874



01/29/2016


Page 42 of 42



Event or Ages Year

Funds Used


HELOC



EndingPortfolio

Value

87 / 85 2045 0 0 0 13,354,517

88 / 86 2046 0 0 0 13,958,893

89 / 87 2047 0 0 0 14,573,257

Naresh's PlanEnds

2048 0 0 0 15,140,888

- / 89 2049 0 0 0 15,809,206

Vanita's PlanEnds

2050 0 0 0 16,431,449


Plan: Survivorship Universal Life Date: January 28, 2016Insured 1: New Client

Male, Age 58Insured 2:

Female, Age 56Initial Basic Plan Amount: $725,000

Death Benefit: Option 2 - Death Benefit is Increasing

Premium Mode: Annual

This illustration was produced to be used in Wisconsin.

Summary of Illustrated Coverages and Premium

Benefits and Riders: $725,000 Survivorship Universal Life Premium Class Insured 1: Super Preferred Non-Tobacco Premium Class Insured 2: Elite Preferred Non-Tobacco

The total first year premium outlay illustrated is $27,275.00. Please review this illustration for additional changes in illustrated premiums and coverages in years 2 and later.

Description of Coverage

Plan Survivorship Universal Life (Form Number A10032 - 49) is a flexible premium joint and last todie survivorship adjustable life insurance policy. A Death Benefit is payable when the Survivordies. Flexible premiums are payable while an Insured is alive until the Policy Anniversary whenthe younger of the Insureds is age 121.

How This Plan Works You start with a planned premium and Death Benefit. You may change either in the futuresubject to policy provisions. The Death Benefit is payable at the second death of the twoInsureds. When you pay premiums, we deduct a 5% premium charge. The remaining premium isadded to the Account Value. From this account value we deduct each month the current cost ofinsurance including the charges for any riders. During each of the first 60 months followingissue, an issue charge will be deducted from the Account Value. The issue charge is $0.10 per$1000 of the Initial Basic Plan Amount, subject to a maximum of $500.00 per month. TheAccount Value earns interest at the current interest rate, but a different rate may be credited toany Account Value which you have borrowed. The current interest rate is increased by 0.50% onthe unloaned Account Value that exceeds 10% of the Basic Plan Amount. Surrender chargesapply.

The current monthly cost of insurance rates may be changed by the company at any time, butwill never be more than the maximums given in the policy. The current interest rate can bechanged by the company on a monthly basis, but will never be less than the guaranteed rate of2.00%. The policy is participating, but no dividends are anticipated.

Important Tax Information This policy complies with the definition of life insurance in Internal Revenue Code Section7702. This means that the premium illustrated does not exceed the greater of the GuidelineSingle Premium or the cumulative Guideline Annual Premium. Payment of the GuidelineAnnual Premium will not provide coverage to age 121 under the contract, on the guaranteedbasis. This illustration should not be relied on for tax advice. The tax status of this policyshould be reviewed with the policyowner's legal and tax advisors.

Guideline Single Premium at issue : $141,310Guideline Annual Premium at issue : $27,275

Life Insurance Illustration

6UL003(10/2010)

State Farm Life and Accident Assurance CompanyOne State Farm Plaza

Bloomington, IL 61710 Page 1 of

Appendix B - Survivorship Universal Life Insurance Illustration

Description of Coverage

If at any time during the first 7 years, the total premiums paid exceed the MEC ReferencePremium shown below times the number of years the policy has been in force, the policy will beconsidered a Modified Endowment Contract. This means distributions, which include cashwithdrawals, policy loans, and assignments may be subject to federal income tax to the extentthere is a gain in the contract. An additional 10% penalty tax may also apply prior to thepolicyowner's age 59 1/2.

Reductions in coverages during a 7 year test period will generally result in a lower MECReference Premium retroactive to the beginning of the 7 year test period.

Planned premiums after the 1st year shown on this illustration have not been checked todetermine if the MEC Reference Premium limit has been exceeded.

MEC Reference Premium at issue: $35,343

Definitions

Non-Tobacco Available for those who do not currently use tobacco or other nicotine products and havenot used tobacco or other nicotine products within the 12-month period prior toapplication.

Preferred Non-Tobacco Available for those who can meet underwriting requirements more stringent than thestandard Non-Tobacco risk category.

Super Preferred Non-Tobacco Available for those who currently do not use tobacco or other nicotine products and havenot used tobacco or other nicotine products within the 36-month period prior toapplication and can meet underwriting requirements more stringent than the Preferredrisk category.

Elite Preferred Non-Tobacco Available for those who currently do not use tobacco or other nicotine products and havenot used tobacco or other nicotine products within the 36-month period prior toapplication and can meet underwriting requirements more stringent than the SuperPreferred risk category.

Basic Plan Amount The Initial Basic Plan Amount less any decreases.

Monthly Deductions The sum of the monthly cost of insurance charges, the issue charge, and charges for anyriders.

Guaranteed Values These values are calculated using the illustrated premiums, 5% premium expense charge,guaranteed interest rate of 2.00% and the maximum monthly deductions.


Plan: Survivorship Universal Life Date: January 28, 2016Insured 1: New Client Initial Basic Plan Amount: $725,000

Male, Age 58 Death Benefit: Option 2Insured 2: Premium Mode: Annual

Female, Age 56

6UL003(10/2010)State Farm Life and Accident Assurance Company

One State Farm Plaza, Bloomington, IL 61710 Page 2 of

Definitions

Non-Guaranteed IntermediateValues

These values are calculated using the illustrated premiums, 5% premium expense charge,average of the illustrated and guaranteed interest rates, and the average of the current andmaximum monthly deductions. The intermediate values are not guaranteed. Theydemonstrate the impact of changes in company experience.

Non-Guaranteed IllustratedValues

These values are calculated using the illustrated premiums, 5% premium expense charge,illustrated interest rates, and current monthly deductions. The illustrated interest rate hasbeen increased by 0.50% on the unloaned Account Value that exceeds 10% of the BasicPlan Amount. These values are not guaranteed.

Annualized Premium Outlay The actual cash outlay each year.

Total Annualized Premium Outlay The sum of each year's annualized premium outlay.

Account Value This is the accumulation of premiums shown less a 5% expense charge and monthlydeductions.

Cash Surrender Value This value is the Account Value less the applicable surrender charge. Surrender chargesapply for 20 policy years following issue.

Death Benefit This is the amount payable at the death of the survivor. Any decrease must be approvedby the Company, subject to policy provisions.

Option 2 Under Option 2, the Death Benefit is the Basic Plan Amount of insurance plus theAccount Value. The death benefit may be increased due to Internal Revenue Codeprovisions. Changes in the Death Benefit Option can result in the Basic Plan Amountbeing lowered below the Policy's Minimum Basic Plan Amount. In these cases, theMinimum Basic Plan Amount stated in the policy will be amended to reflect a reducedMinimum Basic Plan Amount.

This illustration assumes that the currently illustrated non-guaranteed elements will continue unchanged for all years shown.This is not likely to occur, and actual results may be more or less favorable than those shown. The assumptions on which theyare based are subject to change by the Company. Cash values and death benefits shown are end of year values. Premiums areassumed to be paid when due. This illustration contains a general description of coverage. A complete statement of coverage isfound in the policy.

Not FDIC Insured

- No Bank Guarantee- May Lose Value




Female, Age 56



Guaranteed and Non-Guaranteed Values Non-Guaranteed

Guaranteed Values Intermediate Values Illustrated Values

Guaranteed Interest Rate: 2.00% Interest Rate: 2.825% Interest Rate: 3.65%

Endof

Year

Insured#1 #2

Age Age

AnnualizedPremium

Outlay

CashSurrender

Value

Death

Benefit

CashSurrender

Value

Death

Benefit

CashSurrender

Value

Death

Benefit

5 63 61 27,275 116,116 856,824 120,065 860,773 124,126 864,834

9 67 65 0 182,151 918,986 195,880 932,715 210,419 947,254

10 68 66 0 185,263 921,022 202,147 937,906 220,181 955,940

14 72 70 0 192,280 924,166 225,475 957,360 262,134 994,020

20 78 76 0 170,647 896,723 246,857 972,933 334,640 1,060,716

28 86 84 0 0** 0** 159,804 884,804 393,984 1,118,984

29 87 85 0 0 0 128,100 853,100 388,956 1,113,956

32 90 88 0 0 0 0** 0** 344,212 1,069,212

39 97 95 0 0 0 0 0 0** 0**

** Beginning in this year, illustrated premiums are insufficient to provide requested benefits on this basis.

I have received a copy of this illustration and understand that any non-guaranteed elements illustrated are subject to change andcould be either higher or lower. The agent has told me they are not guaranteed.

#$S01 #$D01

Applicant Date

I certify that this illustration has been presented to the applicant and that I have explained that any non-guaranteed elementsillustrated are subject to change. I have made no statements that are inconsistent with the illustration.

#$Sagent #$Dagent

Agent Date




Female, Age 56



Guaranteed and Non-Guaranteed Values

Non-GuaranteedGuaranteed Values Illustrated Values

Guaranteed Interest 2.00% Illustrated Interest 3.65%

Endof

Year

Insured#1 #2

Age Age

AnnualizedPremium

Outlay

TotalAnnualized

PremiumOutlay

AccountValue

CashSurrender

ValueDeath

BenefitAccount

Value

CashSurrender

ValueDeath

Benefit

1 59 57 27,275 27,275 25,519 4,001 750,519 25,939 4,421 750,9392 60 58 27,275 54,550 51,475 31,464 776,475 52,779 32,768 777,7793 61 59 27,275 81,825 77,858 59,352 802,858 80,631 62,126 805,6314 62 60 27,275 109,100 104,648 87,649 829,648 109,634 92,635 834,6345 63 61 27,275 136,375 131,824 116,116 856,824 139,834 124,126 864,834

6 64 62 27,275 163,650 160,236 145,604 885,236 172,167 157,535 897,1677 65 63 27,275 190,925 188,991 175,220 913,991 205,829 192,057 930,8298 66 64 0 190,925 191,622 178,926 916,622 213,885 201,190 938,8859 67 65 0 190,925 193,986 182,151 918,986 222,254 210,419 947,254

10 68 66 0 190,925 196,022 185,263 921,022 230,940 220,181 955,940

11 69 67 0 190,925 197,659 187,761 922,659 239,955 230,057 964,95512 70 68 0 190,925 198,809 189,986 923,809 249,305 240,482 974,30513 71 69 0 190,925 199,358 191,396 924,358 258,992 251,031 983,99214 72 70 0 190,925 199,166 192,280 924,166 269,020 262,134 994,02015 73 71 0 190,925 198,062 192,252 923,062 279,385 273,575 1,004,385

16 74 72 0 190,925 195,868 190,919 920,868 290,077 285,127 1,015,07717 75 73 0 190,925 192,389 188,516 917,389 301,077 297,204 1,026,07718 76 74 0 190,925 187,401 184,388 912,401 312,365 309,353 1,037,36519 77 75 0 190,925 180,624 178,687 905,624 323,917 321,981 1,048,91720 78 76 0 190,925 171,723 170,647 896,723 335,716 334,640 1,060,716

21 79 77 0 190,925 160,306 160,306 885,306 347,458 347,458 1,072,45822 80 78 0 190,925 145,946 145,946 870,946 358,944 358,944 1,083,94423 81 79 0 190,925 128,178 128,178 853,178 369,904 369,904 1,094,90424 82 80 0 190,925 106,515 106,515 831,515 379,891 379,891 1,104,89125 83 81 0 190,925 80,281 80,281 805,281 388,036 388,036 1,113,036

26 84 82 0 190,925 48,623 48,623 773,623 392,930 392,930 1,117,93027 85 83 0 190,925 10,839 10,839 735,839 395,106 395,106 1,120,10628 86 84 0 190,925 0** 0** 0** 393,984 393,984 1,118,98429 87 85 0 190,925 0 0 0 388,956 388,956 1,113,95630 88 86 0 190,925 0 0 0 379,409 379,409 1,104,409




Female, Age 56

6

** Beginning in this year, illustrated premiums are insufficient to provide requested benefits on this basis.These figures do not recognize that, because of interest, a dollar in the future has less value than a dollar today.

UL003(10/2010)State Farm Life and Accident Assurance Company


Guaranteed and Non-Guaranteed Values

Non-GuaranteedGuaranteed Values Illustrated Values

Guaranteed Interest 2.00% Illustrated Interest 3.65%

Endof

Year

Insured#1 #2

Age Age

AnnualizedPremium

Outlay

TotalAnnualized

PremiumOutlay

AccountValue

CashSurrender

ValueDeath

BenefitAccount

Value

CashSurrender

ValueDeath

Benefit

31 89 87 0 190,925 0 0 0 364,722 364,722 1,089,72232 90 88 0 190,925 0 0 0 344,212 344,212 1,069,21233 91 89 0 190,925 0 0 0 317,156 317,156 1,042,15634 92 90 0 190,925 0 0 0 282,548 282,548 1,007,54835 93 91 0 190,925 0 0 0 239,507 239,507 964,507

36 94 92 0 190,925 0 0 0 186,737 186,737 911,73737 95 93 0 190,925 0 0 0 123,115 123,115 848,11538 96 94 0 190,925 0 0 0 47,530 47,530 772,53039 97 95 0 190,925 0 0 0 0** 0** 0**




Female, Age 56

6

** Beginning in this year, illustrated premiums are insufficient to provide requested benefits on this basis.These figures do not recognize that, because of interest, a dollar in the future has less value than a dollar today.

UL003(10/2010)State Farm Life and Accident Assurance Company


Date:____________ Notes

Appendix C

final capstone project_gene_m_gorrell_01_29_2016

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