LIFETIME INCOME CASE STUDYDiane Kruze

Presented by Puplava Financial Services, Inc.

Creating a Lasting Legacy

Registered Investment Advisor

This is a hypothetical illustration based on real life

examples. Names and circumstances have been

changed. The opinions voiced in this material are

for general information only and are not intended

to provide specific advice or recommendations for

any individual. To determine which investments or

strategies may be appropriate for you, consult

with a financial advisor prior to investing.

Important Notice:

Puplava Financial Services, Inc.Registered Investment Advisor

ESSENTIAL INFORMATION

Client: Diane Kruze.

Age: 68

Retirement: She is semi-retired.

Life expectancy: Age 95.

Risk tolerance: Conservative.

Investment objective: Income & Preservation of Capital.

WHO IS DIANE?

Name: Diane

Age: 68

Job: Professor

Diane came to us looking for guidance shortly after the passing of her husband. Her husband retired a few years ago and left Diane their large nest egg from the recent sale of the family business. Diane is a semi-retired professor, teaching one class a semester because she says she is not ready to “give up her shtick.” Education was always very important to her and her husband and she wants to make sure that her grandkids carry the same high value for higher education learning. She is not too concerned about retirement given her pension and her overall net worth, however she is anxious about managing any potential estate taxes. Diane would like to use the family business’ proceeds to create a lasting and meaningful legacy for her children and grandchildren, but to also maintain flexibility and control of the assets while still alive.

DIANE’S CURRENT RISK STRATEGY

Current Risk Score Portfolio Risk Score

4

Most Conservative 1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 Most Aggressive

5

WHAT IS IMPORTANT TO DIANE?

Accomplishing retirement goals

Estate Planning

Mitigating taxes

Creating a Legacy

DIANE’S RETIREMENT BUDGET

Essentials:

Discretionary:

$66,000

$32,000

Shortfall:

✔

✔

TOTAL: $98,000

-$10,000

Diane’s Pension: $57,000Social Security $31,000

DIANE’S ASSETS

Husband’s Retirement:

Diane’s Retirement:

$401,000

$223,000

$2,559,000

-$25,000

$2,534,000

Total Assets:

Liabilities:

Net Worth:

✔

✔

Non-Investment Assets

Investment Assets

Total Investment Assets $2,204,000

$355,000Primary Residence:✔

$1,460,000Proceeds from sale of business:✔$120,000Checking & Savings:✔

DIANE’S FINANCIAL PLAN CHALLENGES

1. Developing an estate plan that

leaves behind a legacy.

2. Managing the cost of taxes though

retirement.

3. Limiting the impact of WA State

estate taxes.

4. Maintaining flexibility and control of

the nest egg.

DIANE’S RETIREMENT INCOME STRATEGY

Investment Income

1, 2, & 3: Yields are for current portfolio yields as of 4/31/17. Please see disclosures at the end of this presentation for security risks.

Hub’s Retire. $401K Fixed Income & Dividend Payers @ 2.8%1 $16,828Diane’s Retire. $223K Fixed Income & Dividend Payers @ 2.8%2 $14,644Proceeds $1.46M Fixed Income & Dividend Payers @ 2.8%3 $40,880Cash $120K N/A

Total Investment Income $72,352Grand Total Income $160,352

Less Budget $98,000Surplus $62,352

$31,000/YearCombined Social Security$57,000/YearDiane’s Pension

GOAL BASED RECOMMENDATIONS FOR DIANE

Goal Strategy

Creating an estate planSince Diane lives in Washington, she would be subject to Washington State estate taxes which have a threshold of about $2 million. We recommended that she meet with an estate planning attorney to draft a proper trust in preparation for when she passes. We also offered to work with her to develop gifting strategies to lower her estate taxes and help create her a legacy that she can leave behind.

Creating a legacyWe recommended that Diane open a 529 for each of her 6 grandkids and front loaded 5 years of gifting into each account. Doing this would allow Diane to place $70,000 into each of the grandkids’ 529, coming out to $420,000 in total. While being able to maintain complete ownership of the assets, Diane would also be able to mitigate some of the costs of estate taxes.

Managing taxesWhen RMD’s start for Diane in a few years, we recommended that Diane gift her payments to a charity of choice instead. In doing this, this strategy would help achieve her philanthropic goals of leaving a lasting legacy as well as lowering her taxes since she will not have to pay income taxes on the amounts gifted away. In addition, the 529’s would also help with gifting and reduce the potential impact of estate taxes.

Maintaining control and flexibility

This strategy would be carried about by opening the 529’s and drafting a proper trust which would allow Diane to retain control of the assets while living and then fulfill her wishes upon her death.

1. Bonds are subject to market and interest rate risk if sold prior to maturity.

Bond values will decline as interest rates rise and bonds are subject to

availability and change in price.

2. The payment of dividend is not guaranteed. Companies may reduce or

eliminate the payment of dividends at any given time.

3. Fixed annuities are long-term investment vehicles for retirement purposes.

Gains from tax-deferred investments are taxable as ordinary income upon

withdrawal. Guarantees are based on the claims paying ability of the issuing

company. Withdrawals made prior to age 59 1/2 are subject to a 10% IRS

penalty tax and surrender charges may apply.

Disclosures:

Puplava Financial Services, Inc.Registered Investment Advisor

Puplava Financial Services, Inc.

If you have any specific questions or comments, please give us a call at

(858) 487-3939 We’re happy to speak with you.

Post Office Box 503147 - San Diego, CA 92150-3147

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Registered Investment Advisor