Life Goals Sample

Bob Sanders and

Meredith Sanders Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only 10735 David Taylor Drive Suite 350 Charlotte, North Carolina 28262 Phone: 1-800-438-6017 Mobile Phone: (704) 549-1100 Fax: (704) 549-5700 E-mail: [email protected]

Disclosure This analysis provides only broad, general guidelines, which may be helpful in shaping your thinking about your financial needs. It can serve as a guide for discussions with your professional advisors. The quality of this analysis is dependent upon the accuracy of data provided by you. Calculations contained in this analysis are estimates only. Actual results may vary substantially from the figures shown. All rates of return are hypothetical and are not a guarantee of future performance of any asset, including insurance or other financial products. All inflation rates are estimates provided by you. This analysis contains very specific computations concerning the value of your assets today. These computations are based on assumptions you provided concerning the value of your assets today and the rate at which the assets will appreciate. These assumptions must be carefully reviewed for their reasonableness. These assumptions are only a "best guess". The actual values and rates of growth may be significantly different from those illustrated. No guarantee can be made regarding values and taxes when actual appreciation rates and tax rates cannot be known at this time. Any assumptions are for illustrative purposes and not to be considered as legal advice; only your legal counsel should provide such advice. No legal or accounting advice is being rendered either by this report or through any other oral or written communications. Please discuss legal and accounting matters directly with your counselors in each of those areas. Because your financial concerns and goals may change in the future, periodically monitoring actual results and making appropriate adjustments are essential components of your program. Annual updating allows a year of estimated values to be replaced with actual results and can be very helpful in your determining whether your analyses are on your desired course. Strategies may be proposed, including the acquisition of insurance and other financial products. When this occurs, additional information about the specific product (including a prospectus, if required) will be provided for your review. IMPORTANT: The projections or other information generated by this investment analysis tool (Life Goals) regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, this notice is to inform you that any U.S. federal tax advice contained in this presentation is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this presentation.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

Version 1.00.00 c. 1.0.0.0 August 30, 2007 2 of 32

Defining Your Financial Goals There are many potential financial goals in your life. This presentation considers the information you have shared—your assets, your wishes, and your thoughts about the future—to determine your progress toward the following fundamental financial goals:

Survivor Needs Goal If something were to happen to you or your spouse, would your family have enough to live comfortably?

Monthly Savings Goal for Retirement Will your current annual savings be enough for a financially secure retirement?

Monthly Savings Goal for Education Are you saving enough each year to ensure a quality education for your children?

Disability Income Needs Goal If you or your spouse loses the ability to earn an income as a result of an accident or illness, how would you maintain your lifestyle?

Getting Started 1. Confirm your information to ensure an accurate presentation specific to your situation. 2. Analyze your current progress towards each of your goals. 3. Prioritize which goals require immediate action and consider solutions.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 3 of 32

Confirmation of Facts Personal Information Bob Sanders, Male Born: Feb. 10, 1967 Meredith Sanders, Female Born: Apr. 15, 1967 • Bob and Meredith are married. • Include Social Security in analysis.

1612 Windy Gap Drive Charlotte, North Carolina 28232 Home Phone: 704 545-8754 Business Phone: 704 330-7550 Email Address: [email protected]

Dependents: Robbie Born: Feb. 01, 1997 Sarah Born: Aug. 12, 2001

Earnings Bob's Current Salary: $75,000 Meredith's Current Salary: $62,000

Assets Total Assets: $15,000 Total Monthly Savings: $200 Average Growth Rate: 6%

Debts Total Mortgage Balance: $180,000 Total Other Debts: $0

Retirement Assets Total Retirement Assets: $28,500 Total Monthly Contributions: $600 Growth Rate: 5.77% Description

Owner

Current Amount

Monthly Savings

Company Match

Growth Rate

401k 401k IRA

Bob Meredith Meredith

$15,000 $10,000 $3,500

$200 $200 $0

$100 $100 $0

6.00% 5.00% 7.00%

Survivor Goal Survivor Income Needs: 70% of current household income while the children are at home. Survivor Income Needs: 60% of current household income for remaining years. Current Life Insurance Policies: Description

Insured

Death Benefit

Premium

Group Policy

Meredith

$50,000

$0

Retirement Goal Bob retires at 65, Meredith retires at 65. Bob starts Social Security benefits at 67, Meredith starts Social Security benefits at 67. Retirement Income Needs: 80% of current household income for life.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 4 of 32

Confirmation of Facts Education Goal Robbie: Provide 100% of the total cost of Clemson University ($27,014 this year) for 4 years Sarah: Provide 100% of the total cost of The University of North Carolina at Chapel Hill ($27,527 this year) for 4 years Current Savings Amount: $0 Current Monthly Savings: $0 Growth Rate: 5.00%

Disability Income Goal Replace 60% of Bob's salary. Replace 60% of Meredith's salary.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 5 of 32

Summary of Your Financial Goals Financial goals are best achieved through preparation that starts today. This presentation charts your current progress toward each of your financial goals and what is needed to achieve 100% of those goals.

Bob's Survivor Needs Goal 3%

Additional Amount Needed to Meet 100% of Goal

0%

100%

You currently have 3% of the amount needed to meet your goal.

$1,460,121

Goal: Provide immediate cash and continuing income needs for your survivors in the event of your death today. Considers: Total available assets of $43,500

Meredith's Survivor Needs Goal 7%

Additional Amount Needed to Meet 100% of Goal

0%

100%

You currently have 7% of the amount needed to meet your goal.

$1,197,176

Goal: Provide immediate cash and continuing income needs for your survivors in the event of your death today. Considers: Total available assets of $93,500

Retirement Savings Goal 48%

0%

Additional Monthly Savings Needed to Meet 100% of Goal 100%

You are currently saving 48% of the monthly savings amount needed to meet your goal.

$3,497

Goal: Provide 80% of your current lifestyle, adjusted for inflation, for 23 years of retirement starting when Bob retires at age 65. Considers: Existing retirement income. Assets and savings assume your average rate of return of 5.85%

Education Savings Goal 0%

Additional Monthly Savings Needed to Meet 100% of Goal

0%

100%

You currently have no funds available for this goal.

$1,954

Goal: Provide funds needed to meet estimated expenses of education objectives. Considers: Current balance of $0 and monthly savings of $0.00 assume a 5.00% rate of return

Bob's Disability Needs Goal 0%

Additional Disability Income Needed to Meet 100% of Goal

0%

100%

$45,000

Goal: Provide 60% of current salary in the event you become disabled today.

You currently have no funds available for this goal.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 6 of 32

Summary of Your Financial Goals Meredith's Disability Needs Goal 0%

Additional Disability Income Needed to Meet 100% of Goal

0%

100%

$37,200

Goal: Provide 60% of current salary in the event you become disabled today.

You currently have no funds available for this goal.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 7 of 32

Survivor Needs Goal Assumes Bob Dies Today

Objective In the event of Bob's death today, provide funds for: • Immediate Cash Needs—to fund final expenses, debts, or emergency funds • Continuing Income Needs—to help support your family’s ongoing lifestyle

Immediate Cash Needs Due at Bob's Death 1%

Final Expenses Present Debts Emergency Fund Education Needs Total Immediate Cash Needs

39% 53%

$5,000 $180,000 $34,250 $243,390 $462,640

7%

Continuing Income Needs for Meredith $360,000 270,000 180,000 90,000 0

50

Social Security

60

70

80

Salary & Other Income Add'l Income Needed

Total Survivor Income Needed Total Survivor Income Sources Total Continuing Income Needs

Total Survivor Needs

$2,749,249 $1,708,268 $1,040,981

$1,503,621

Assets Available to Fund Survivor Needs 34%

35%

Bob's Retirement Assets Meredith's Retirement Assets Bob's Life Insurance Other Assets Total Available Assets

31%

Remaining Survivor Needs1,2

$15,000 $13,500 $0 $15,000 $43,500

$1,460,121

3%

Survivor Needs Goal Progress 0%

1

2

100%

Remaining Survivor Needs equals ‘Total Survivor Needs’ (Immediate Cash Needs + Continuing Income Needs) minus ‘Assets Available to Fund Survivor Needs’. Additional amount needed to fund Total Immediate Cash Needs Portion ONLY = $419,140 assuming Total Available Assets are only used for these needs.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 8 of 32

Survivor Needs Goal Details Assumes Bob Dies Today

Immediate Cash Needs Due at Bob's Death

$462,640

Final Expenses—Money to pay doctor bills, hospital stays, and funeral arrangements $5,000 Present Debts—Pay off the existing debts listed below to protect the family from creditors $180,000 • Mortgage Balance $180,000 Emergency Fund—3 months household income to protect against a family emergency $34,250 Education Needs— A college fund to protect your children's future $243,390 • Robbie: Providing $27,014 a year starting at age 18 for 4 years would require $118,244 today. • Sarah: Providing $27,527 a year starting at age 18 for 4 years would require $125,146 today.

Continuing Income Needs for Meredith

$1,040,981

Survivor Income Needed Period Based on Meredith's Age

Current Household Income

Percent of Household Income

Annual Need Today

Annual Amount at Start of Period

Lump Sum Value Today

$137,000 $137,000

70% 60%

$95,900 $82,200

$95,900 $117,198

$1,037,576 $1,711,673

40 - 51 52 - 88

Total Amount Needed Today to Fund Survivor Income Needs

$2,749,249

Survivor Income Sources 1

Income Source

Annual Amount when Income Source Begins

Annual Increase

Lump Sum Value Today

$62,000 $27,665

3% 3%

$1,242,439 $465,829

Employment Social Security2

Total Amount Today of All Survivor Income Sources

$1,708,268

Assumptions & Notes Assumed Years of Death • This presentation assumes Bob dies immediately and Meredith dies at age 88. Income Needs Assumption • Meredith will require 70% of current household income while the children are at home. When the youngest child turns 18, Meredith will require 60% of current household income. Interest Rate Assumptions • Education costs are assumed to increase at a 6% annual inflation rate. • All other living expenses are assumed to increase at a 3% annual inflation rate. • All lump sum values in today's dollars are assumed to grow at 5% annually. Social Security Assumptions • Bob and Meredith's Social Security benefit amounts based on their current salaries. Social Security survivor benefit ends when youngest child turns 16, however children's benefits are paid until age 18. Social Security retirement benefit begins at Meredith's age 67. No Social Security benefits will be paid if there are years after the youngest child turns 18, but before Meredith's age 67. 1 2

See Confirmation of Facts for income details. See Assumptions & Notes section for details.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 9 of 32

Survivor Needs Goal Details Assumes Bob Dies Today Income

Assets

Year

Meredith's Age

Annual Income Needed

Salary & Other Income

Estimated Social Withdrawals Security From Assets

2008 2009 2010 2011 2012

40 41 42 43 44

$95,900 98,777 101,740 104,793 107,936

$62,000 63,860 65,776 67,749 69,782

$27,665 28,495 29,349 30,230 31,137

2013 2014 2015 2016 2017

45 46 47 48 49

111,174 114,510 117,945 121,483 125,128

71,875 74,031 76,252 78,540 80,896

2018 2019 2020 2021 2022

50 51 52 53 54

128,882 132,748 117,198 120,713 124,335

2023 2024 2025 2026 2027

55 56 57 58 59

2028 2029 2030 2031 2032

Annual Shortfall

Asset Balance

Cumulative Shortfall

$0 0 0 0 0

$6,235 6,422 6,615 6,814 7,018

$0 0 0 0 0

$6,235 12,658 19,273 26,087 33,105

32,071 33,033 34,024 17,522 18,048

0 0 0 0 0

7,229 7,445 7,669 25,421 26,184

0 0 0 0 0

40,333 47,778 55,447 80,868 107,052

83,323 85,822 88,397 91,049 93,781

18,589 19,147 0 0 0

0 0 0 0 0

26,969 27,778 28,800 29,664 30,554

0 0 0 0 0

134,021 161,800 190,600 220,265 250,819

128,065 131,907 135,864 139,940 144,138

96,594 99,492 102,477 105,551 108,717

0 0 0 0 0

0 0 0 0 0

31,471 32,415 33,388 34,389 35,421

0 0 0 0 0

282,290 314,705 348,092 382,481 417,902

60 61 62 63 64

148,462 152,916 157,504 162,229 167,096

111,979 115,338 118,798 122,362 126,033

0 0 0 0 0

0 0 0 0 0

36,483 37,578 38,705 39,866 41,062

0 0 0 0 0

454,386 491,964 530,669 570,535 611,598

2033 2034 2035 2036 2037

65 66 67 68 69

172,109 177,272 182,590 188,068 193,710

0 0 0 0 0

35,471 38,155 40,967 42,196 43,462

0 0 0 0 0

136,637 139,117 141,623 145,871 150,247

0 0 0 0 0

748,235 887,352 1,028,975 1,174,846 1,325,093

2038 2039 2040 2041 2042

70 71 72 73 74

199,521 205,507 211,672 218,022 224,563

0 0 0 0 0

44,766 46,109 47,492 48,917 50,385

0 0 0 0 0

154,755 159,397 164,179 169,105 174,178

0 0 0 0 0

1,479,848 1,639,246 1,803,425 1,972,530 2,146,707

2043 2044 2045 2046 2047

75 76 77 78 79

231,299 238,238 245,386 252,747 260,330

0 0 0 0 0

51,896 53,453 55,057 56,708 58,410

0 0 0 0 0

179,403 184,785 190,329 196,039 201,920

0 0 0 0 0

2,326,111 2,510,896 2,701,225 2,897,264 3,099,184

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 10 of 32

Survivor Needs Goal Details Assumes Bob Dies Today Income

Assets

Year

Meredith's Age

Annual Income Needed

Salary & Other Income

2048 2049 2050 2051 2052

80 81 82 83 84

268,140 276,184 284,469 293,003 301,793

0 0 0 0 0

60,162 61,967 63,826 65,741 67,713

2053 2054 2055

85 86 87

310,847 320,173 329,778

0 0 0

69,744 71,837 73,992

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

Estimated Social Withdrawals Security From Assets

Annual Shortfall

Asset Balance

Cumulative Shortfall

0 0 0 0 0

207,977 214,217 220,643 227,263 234,081

0 0 0 0 0

3,307,161 3,521,378 3,742,021 3,969,284 4,203,364

0 0 0

241,103 248,336 255,786

0 0 0

4,444,467 4,692,803 4,948,589

August 30, 2007 11 of 32

Survivor Needs Recommendation Assumes Bob Dies Today

Objective In the event of your death today, provide funds for: • Immediate Cash Needs—to fund final expenses, debts, or education expenses • Continuing Income Needs—to help support your family’s ongoing lifestyle

$1,500,0001

Proposed New Life Insurance

Remaining Survivor Needs With No New Life Insurance

Remaining Survivor Needs With New Life Insurance

$360,000

$360,000

270,000

270,000

180,000

180,000

90,000

90,000

0

45

50

55

60

65

70

75

80

85

0

Withdrawals from Assets and Life Insurance Social Security

45

50

55

60

65

70

75

80

85

Salary & Other Income Additional Survivor Need

Summary of Survivor Needs

less

Remaining Survivor Needs

$1,460,121

Proposed New Life Insurance Proceeds

$1,500,000

Your survivor needs appear to be funded.

100%

Survivor Needs Goal Progress 0%

1

100%

Life insurance policy premiums are not illustrated in this presentation.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 12 of 32

Survivor Needs Goal Assumes Meredith Dies Today

Objective In the event of Meredith's death today, provide funds for: • Immediate Cash Needs—to fund final expenses, debts, or emergency funds • Continuing Income Needs—to help support your family’s ongoing lifestyle

Immediate Cash Needs Due at Meredith's Death 1%

Final Expenses Present Debts Emergency Fund Education Needs Total Immediate Cash Needs

39% 53%

$5,000 $180,000 $34,250 $243,390 $462,640

7%

Continuing Income Needs for Bob $360,000 270,000 180,000 90,000 0

50

Social Security

60

70

80

Salary & Other Income Add'l Income Needed

Total Survivor Income Needed Total Survivor Income Sources Total Continuing Income Needs

Total Survivor Needs

$2,749,249 $1,921,213 $828,036

$1,290,676

Assets Available to Fund Survivor Needs 16%

16%

Bob's Retirement Assets Meredith's Retirement Assets Meredith's Life Insurance Other Assets Total Available Assets

14%

54%

Remaining Survivor Needs1,2

$15,000 $13,500 $50,000 $15,000 $93,500

$1,197,176

7%

Survivor Needs Goal Progress 0%

1

2

100%

Remaining Survivor Needs equals ‘Total Survivor Needs’ (Immediate Cash Needs + Continuing Income Needs) minus ‘Assets Available to Fund Survivor Needs’. Additional amount needed to fund Total Immediate Cash Needs Portion ONLY = $369,140 assuming Total Available Assets are only used for these needs.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 13 of 32

Survivor Needs Recommendation Assumes Meredith Dies Today

Objective In the event of your death today, provide funds for: • Immediate Cash Needs—to fund final expenses, debts, or education expenses • Continuing Income Needs—to help support your family’s ongoing lifestyle

$800,0001

Proposed New Life Insurance

Remaining Survivor Needs With No New Life Insurance

Remaining Survivor Needs With New Life Insurance

$360,000

$360,000

270,000

270,000

180,000

180,000

90,000

90,000

0

45

50

55

60

65

70

75

80

85

Withdrawals from Assets and Life Insurance Social Security

0

45

50

55

60

65

70

75

80

85

Salary & Other Income Additional Survivor Need

Summary of Survivor Needs Remaining Survivor Needs less

$1,197,176

Proposed New Life Insurance Proceeds

$800,000

Survivor Needs Left Unfunded

$397,176

69%

Survivor Needs Goal Progress 0%

1

100%

Life insurance policy premiums are not illustrated in this presentation.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 14 of 32

Social Security Benefits Social Security provides benefits when you die, become disabled, or retire. Most workers are covered by Social Security, exceptions include railroad employees, some state and local government employees, and federal workers hired prior to 1984. Benefits are based on earnings and the length of time employed. Spouses and children of eligible workers may also receive benefits based on the worker's record. Qualifications differ for each kind of benefit, as does the size of the benefit payable. Monthly benefits increase each January based on changes in the cost of living during the preceding year. You and your employer each contribute 6.2% of earnings up to the maximum taxable amount for Social Security and 1.45% of all earnings for Medicare. Self-employed workers pay both employee and employer amounts. Calculations of benefits are based on the Primary Insurance Amount (PIA) which is based on your Average Indexed Monthly Earnings (AIME) over your employment history. Both the PIA and the AIME are calculated by formulas published each year by the Social Security Administration. You may get an estimate of your benefits by filling out a Request for Earnings and Benefit Estimate Statement from the Social Security Administration. In return you receive a report which shows your earnings history, AIME and estimated retirement, disability and survivor benefits.

Survivor Benefits Family members of an eligible worker may receive monthly benefits based on the earnings record of the deceased individual. Benefits are paid to children under 18 and spouses who are retired, disabled or caring for children under 16. In addition, a one-time death benefit of $255 is payable. Monthly survivor benefits are limited to a Maximum Family Benefit, approximately 150%-188% of the calculated PIA. Each child's benefit is equal to 75% of the PIA; a spouse caring for a child under age 16 receives an equal benefit. If there are no children under age 16, the spouse can receive a monthly benefit if disabled and over age 50 or retired and age 60 or more. The benefit is adjusted if the spouse is less than the normal retirement age.

Disability Benefits If you become fully disabled, you and your family may qualify for disability benefits. To be eligible, you must be disabled for more than 6 months and unable to perform any meaningful employment. Benefits start after a five-month waiting period and continue as long as you are fully disabled. Family members of an eligible worker may also receive monthly benefits. Benefits are paid to children under 18 and spouses who are retired, disabled or caring for children under 16. The maximum family benefit is 150% of the disabled individual's benefit.

Retirement Benefits Retired workers who are age 62 or older receive retirement benefits based on earnings history. In addition, spouse is eligible for retirement benefits based on the workers record, if that benefit exceeds the spouse's own retirement benefit. Normal retirement age (NRA) is based on the year of birth. For persons born before 1938, NRA is age 65; NRA gradually increases to 67 for individuals born after 1960. If you retire before your normal retirement age, your benefits will be reduced by a percentage for each month prior to NRA. If you retire later than your normal retirement age, benefits will be increased by a percentage up to 8% of the PIA per year.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 15 of 32

Types of Life Insurance Policies Life insurance is an important part of your wealth management strategy. The main purpose of buying a life insurance policy is to protect your loved ones after your death. With appropriate life insurance coverage, your beneficiaries may not have to worry about expenses associated with your death, and you increase the possibility for them to maintain their lifestyle. The market offers a wide variety of life insurance products designed to provide solutions for different needs. Given the different characteristics of each one of the policies available, it is very important for you to spend some time understanding the type of protection offered by each policy and their costs.

The most widely used policy types are: • Term Life Insurance—Term insurance is used to provide death benefit protection for a set period of time at an affordable premium. • Whole Life Insurance—Whole life insurance policies provide permanent death benefit protection for a fixed premium and remain in force as long as premium payments are made. Whole life policies accumulate guaranteed cash values and often pay dividends as well. These policies are better suited for protecting your long-term goals. • Universal Life Insurance—Universal Life policies are also known as “Flexible Premium” policies. These flexible policies have an adjustable benefit and accumulate account value. Universal life insurance is used to provide death benefit protection with flexibility to adjust to your future insurance needs. In addition to the different types of insurance policies, there is also two different policy categories—Fixed and Variable. • Fixed policies—offer a predetermined death benefit and rate of return on policy values that are guaranteed through the policy contract. • Variable policies—are designed to provide death benefit protection but may NOT offer the guarantees that fixed policies do. The rate of return on your policy values, as well as the death benefit, may fluctuate up and down depending on your investment choices and performance. Variable policies are subject to market risk and therefore require the delivery of a prospectus. Keep in mind that in order to obtain more detailed information on how a specific life insurance policy works, the premiums associated and any additional information, you must carefully review the policy details and prospectus.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 16 of 32

Life Insurance Uses Life insurance is a fundamental tool designed to provide liquidity after your death. The proceeds generated from a life insurance policy can be used to pay for many of the expenses associated with your death, so that your heirs and your business partners (if applicable) are more equipped to handle financial burdens during that difficult time.

Common Uses for Life Insurance Protect Your Family • Income Replacement—Life insurance can replace your income in the event of your untimely death. Upon your death, your beneficiary would receive the death benefit proceeds and could help your surviving spouse and children maintain the lifestyle you created for them. • Education Funding—In the event of your premature death, life insurance can help supplement your children’s education funds through the death proceeds of the policy and provide for them at your death what you would have provided during your lifetime. Final Expenses • Funeral Expenses— There are many costs associated with funerals. These costs may include but are not limited to cemetery plots, caskets, funeral home facilities, limousines, transportation, and grave markers. Through life insurance, you may be able to take care of these expenses before your death and avoid placing financial burdens on your family members. • Medical Expenses—Illness or accidents often result in large medical bills that need to be paid after your death. Use life insurance to help protect your family from unnecessary financial strains. Debts • Mortgage Protection—A mortgage is often the largest debt and largest monthly payment for the surviving heirs, but a necessary one. Most people are not willing to give up their home, but sometimes they are forced to for financial reasons. Insurance can help pay remaining mortgages. • Other Loans—All individual loans must be settled at death, often using cash assets intended for other purposes. Life insurance can help provide cash to eliminate these debts at your death. • Consumer Debt—The balances of all individual credit cards are due at the time of death and any jointly owned cards can no longer be used. Life insurance can help provide cash to eliminate these debts at your death. Charitable Contributions • Charitable Institutions—Life insurance proceeds can be donated to a designated charity upon death. To some, this gives the lifetime satisfaction of knowing that you are helping others and allows you to enjoy potential tax benefits. Estate Expenses • Probate Fees—Probate is the legal process of ensuring that all assets are transferred to the proper heirs and in accordance with all legal documents. Probate fees are the expenses required to handle the legal concerns associated with death, and they can be expensive. Life insurance can help offset these expenses and keep them from eroding away your estate and your heirs’ inheritance. • Administrative Fees—These are usually the fees for various professional services that may be required to settle the estate, such as legal and accounting services. Administrative fees are often combined with probate fees. Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 17 of 32

Life Insurance Uses Common Uses for Life Insurance Taxes • Property Taxes—All property taxes must be paid for the year of death. • Income Taxes—State and federal income taxes must be paid for a portion of the year in which death occurred. Also, income taxes are due on earnings from assets between death and the distribution of those assets. • Estate Taxes—For larger estates, estate taxes are due in cash within nine months of death and can be as high as 55%. Unless Congress changes the present law, estate taxes are reduced each year through 2009, are not in effect in 2010, and return to the 2001 rates in 2011 and thereafter. Business • Protecting Business Interests—Business partners or co-owners that are concerned about the continuation of their business in the event of their partner’s premature death can use life insurance to help protect their interests in the business. Typically, each business partner or the business itself, purchases life insurance and upon death, the proceeds are used to buy the business and continue operation.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 18 of 32

Emergency Funds Occasionally, unexpected and unplanned situations requiring cash may occur. Therefore, it is important that you are financially prepared for these small emergencies. Keep in mind that a small emergency can have a big effect on your cash flow. Therefore, it is important to get advice to put in place a strategy for the unexpected. The goal of an Emergency Fund is to have enough cash reserves to cover an unexpected need. When the amount of cash reserves is not sufficient, assets must be sold or funds will need to be borrowed. Emergency funds can often protect financial strategies put in place, and assist in reaching long-term financial objectives. Emergency funds should be kept in cash or any other form of liquid assets that can quickly provide the resources needed after a short-term financial crisis. The standard recommendations by financial advisors are: • Married couples: three months of combined salary PLUS 5% of total investments • Single individuals: six months salary PLUS 5% of total investments. The example below for married couples, illustrates an annual income of $96,000 and investments that total $80,000. In this example, you will need approximately $24,000 (3 months of $96,000 annually) to cover the salary portion and $4,000 (5% of $80,000) to cover the investments portion, totaling $28,000 for emergency funds. Emergency Funds Annual salary Investments Emergency funds needed

$96,000 $80,000 $28,000

Emergency Funds Required $30,000.00 $25,000.00 $20,000.00 $15,000.00 $10,000.00 $5,000.00 $0.00 3 months salary

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

5% of investments

Emergency funds

August 30, 2007 19 of 32

Retirement Savings Goal Objective • Bob retires at age 65, Meredith retires at age 65 • Retirement lasts for 23 years • Provide retirement lifestyle (80% of $137,000 current household income, adjusted for inflation)

Retirement Results $600,000

400,000

200,000

0

70

75

Withdrawals from Assets Social Security

80

85

Other Income Additional Retirement Need

Shortfall Occurs at Bob's Age 69 Total Value of Shortfall at Retirement

$2,254,019

Additional Monthly Savings Required Until Retirement …assuming 4%

assuming your average rate of return of 5.85% …assuming 6% …assuming 8%

$4,510 per month

$3,497 per month $3,424 per month $2,569 per month

An Alternative Savings Strategy Consider thinking of your savings requirement as a percentage of your current salary. This may allow you to have a more affordable savings requirement today, but still achieve your long-term retirement savings goal since your monthly savings amount will increase as your salary increases. Assumed Rate of Return

Monthly Savings (as a Percent of Salary)

This Year’s Additional Monthly Savings Amount

4%

27.65%

$3,157

5.85%

21.62%

$2,469

6% 8%

21.18% 16.02%

$2,419 $1,829 48%

Retirement Savings Goal Progress 0%

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

100%

August 30, 2007 20 of 32

Retirement Savings Goal Details Amount Needed to Fund Retirement Lifestyle at Retirement Retirement Period Based on Bob's Age

65 - 87

$4,306,497

Household Income Today

% of Household Income Needed During Retirement

Annual Need Starting at Retirement

Lump Sum Needed at Retirement

$137,000

80%

$229,478

$4,306,497

Less the Value of Retirement Income Sources at Retirement

$1,184,018

Retirement Income Sources Income Source During Retirement

Social Security1

Income Recipient

Annual Increase

Age When Income Received

Bob Meredith

3% 3%

67 67

Annual Amount Lump Sum Value When Income at Retirement of Source Begins Income Source

$74,834

Total Value of Assets Needed at Retirement Less the Value of Existing Retirement Assets at Retirement Retirement Plan

Current Value

Bob $15,000 Meredith $13,500 Total Value of Retirement Plans at Retirement Current Value

Other Assets $15,000 Total Value of Other Assets at Retirement

Monthly Contributions

Rate of Return

$300 $300

5.77% 5.77%

Monthly Savings

Rate of Return

$200

6.00%

Retirement Asset Shortfall at Retirement

$1,184,018

$3,122,479 $868,458 Value at Retirement

$317,165 $311,068 $628,233 Value at Retirement

$240,225 $240,225

$2,254,019

Assumptions & Notes Years Illustrated • This presentation continues until Bob reaches age 88. Income Needs Assumption • Bob and Meredith require 80% of current household income during retirement.

1

See Assumptions & Notes section for details.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 21 of 32

Retirement Savings Goal Details Assumptions & Notes (Continued) Interest Rate Assumptions • All income needs are assumed to increase at a 3% annual general inflation rate. • Income sources and asset balances increase annually based on the rate listed on the Confirmation of Facts page. • All lump sum values at retirement are assumed to grow at 5% annually. • All interest rates compounded annually with all monthly contributions for the year added at the end of the year. • Percent of Salary based on total household income of $137,000 this year and a 3% annual inflation rate. This Year's Inflation Adjusted Monthly Savings Amount assumes future year contribution amounts will increase at 3%. Social Security Assumptions • Bob's and Meredith's Social Security benefit amounts based on their current salaries and their age when the benefit begins.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 22 of 32

Retirement Savings Goal Details Income

Assets

Year

Bob/ Meredith's Ages

Annual Income Needed

Salary & Other Income

Estimated Social Withdrawals Security From Assets

2008 2009 2010 2011 2012

40/40 41/41 42/42 43/43 44/44

$109,600 112,888 116,275 119,763 123,356

$137,000 141,110 145,343 149,704 154,195

$0 0 0 0 0

2013 2014 2015 2016 2017

45/45 46/46 47/47 48/48 49/49

127,056 130,868 134,794 138,838 143,003

158,821 163,585 168,493 173,548 178,754

2018 2019 2020 2021 2022

50/50 51/51 52/52 53/53 54/54

147,293 151,712 156,263 160,951 165,780

2023 2024 2025 2026 2027

55/55 56/56 57/57 58/58 59/59

2028 2029 2030 2031 2032

Annual Shortfall

Asset Balance

Cumulative Shortfall

$0 0 0 0 0

$0 0 0 0 0

$43,500 55,644 68,785 82,989 98,327

$0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

114,874 132,710 151,921 172,596 194,831

0 0 0 0 0

184,117 189,640 195,329 201,189 207,225

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

218,727 244,394 271,944 301,500 333,190

0 0 0 0 0

170,753 175,876 181,152 186,587 192,184

213,442 219,845 226,440 233,233 240,230

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

367,151 403,530 442,478 484,161 528,751

0 0 0 0 0

60/60 61/61 62/62 63/63 64/64

197,950 203,888 210,005 216,305 222,794

247,437 254,860 262,506 270,381 278,493

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

576,432 627,399 681,859 740,032 802,149

0 0 0 0 0

2033 2034 2035 2036 2037

65/65 66/66 67/67 68/68 69/69

229,478 236,362 243,453 250,757 258,280

0 0 0 0 0

0 0 74,834 77,079 79,391

229,478 236,362 168,619 173,678 134,801

0 0 0 0 44,087

670,930 456,296 302,060 134,801 0

0 0 0 0 44,087

2038 2039 2040 2041 2042

70/70 71/71 72/72 73/73 74/74

266,028 274,009 282,229 290,696 299,417

0 0 0 0 0

81,773 84,226 86,753 89,355 92,036

0 0 0 0 0

184,255 189,783 195,476 201,340 207,381

0 0 0 0 0

228,342 418,125 613,601 814,942 1,022,322

2043 2044 2045 2046 2047

75/75 76/76 77/77 78/78 79/79

308,399 317,651 327,181 336,996 347,106

0 0 0 0 0

94,797 97,641 100,570 103,587 106,695

0 0 0 0 0

213,602 220,010 226,610 233,409 240,411

0 0 0 0 0

1,235,924 1,455,935 1,682,545 1,915,954 2,156,365

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 23 of 32

Retirement Savings Goal Details Income

Assets

Year

Bob/ Meredith's Ages

Annual Income Needed

Salary & Other Income

2048 2049 2050 2051 2052

80/80 81/81 82/82 83/83 84/84

357,519 368,245 379,292 390,671 402,391

0 0 0 0 0

109,896 113,193 116,589 120,086 123,689

2053 2054 2055

85/85 86/86 87/87

414,463 426,897 439,704

0 0 0

127,400 131,222 135,158

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

Estimated Social Withdrawals Security From Assets

Annual Shortfall

Asset Balance

Cumulative Shortfall

0 0 0 0 0

247,623 255,052 262,704 270,585 278,702

0 0 0 0 0

2,403,988 2,659,040 2,921,744 3,192,329 3,471,031

0 0 0

287,063 295,675 304,546

0 0 0

3,758,095 4,053,770 4,358,315

August 30, 2007 24 of 32

Education Savings Goal Objective Robbie: Provide 100% of the total cost of Clemson University ($27,014 this year) for 4 years Sarah: Provide 100% of the total cost of The University of North Carolina at Chapel Hill ($27,527 this year) for 4 years Name

Annual Amount

Funding Goal

Annual Funding Amount

Current Age

Start at Age

Number of Years

Funds Needed Today

Robbie Sarah

$27,014 $27,527

100% 100%

$27,014 $27,527

10 6

18 18

4 4

$118,244 $125,146

Your Current Education Savings Current Amount: $0 assuming a 5.00% rate of return Monthly Contributions: $0.00

Education Funding Details $90,000 60,000 30,000 2016

2021

Education Assets

Education Shortfall

Total Value Today of Education Funding Needs

$243,390

Education Funds Needed Today

$243,390

Monthly Education Savings Required

$1,954

An Alternative Savings Strategy Consider thinking of your savings requirement as a percentage of your current salary. This may allow you to have a more affordable savings requirement today, but still achieve your long-term education savings goal since your monthly savings amount will increase as your salary increases. Monthly Savings Required (as a Percent of Salary)

13.5%

This Year’s Additional Monthly Savings Amount

$1,542

0%

Education Savings Goal Progress 0%

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

100%

August 30, 2007 25 of 32

Disability Needs Goal Assumes Bob Becomes Disabled Today

Objective • Provide for 60% of your current salary ($75,000) if you become disabled today.

Your Disability Statistics Bob, before your age 65, a long-term disability is 2.82 times more likely to occur than death!1 Assuming your salary increases at… 0% 2% 4%

Cost of Disability (in Terms of Lost Salary) 2 Year

$150,000 $151,500 $153,000

3 Year

5 Year

15 Year

To Age 67

$225,000 $229,500 $234,150

$375,000 $390,300 $406,200

$1,125,000 $1,296,975 $1,501,800

$2,025,000 $2,650,800 $3,531,300

If You Become Disabled Today 100%

Current Annual Salary Percent of Salary Needed During Disability Annual Income Needed

75% 50%

less 25%

$75,000 60% $45,000

Annual Disability Income Benefit

Additional Annual Income Needed

$0

$45,000

0%

Not Everyone Qualifies for Social Security Disability Benefits Just being eligible for Social Security benefits is not enough. In order to qualify for Social Security disability benefits, you must NOT be able to perform ANY substantial employment. If you qualify, benefits begin after a full five-month waiting period and continue as long as you remain disabled. You should carefully consider the likelihood of receiving Social Security disability benefits when determining your disability needs. Additional Annual Income Needed

$17,340

(Assuming potential annual Social Security Disability Benefits of $27,660)

0%

Disability Needs Goal Progress 0%

1

100%

Based on a disability expected to last more than 2 years following a 60 day elimination period (see “Assumptions & Notes” section).

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 26 of 32

Disability Needs Goal Details Assumes Bob Becomes Disabled Today

Your First Year of Disability Beginning of Month

Monthly Income Need

Monthly Disability Policy Benefit

Potential Social Security Benefit

Additional Income Needed

$3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750

$0 0 0 0 0 0 0 0 0 0 0 0

$0 0 0 0 0 2,305 2,305 2,305 2,305 2,305 2,305 2,305

$3,750 3,750 3,750 3,750 3,750 1,445 1,445 1,445 1,445 1,445 1,445 1,445

1 2 3 4 5 6 7 8 9 10 11 12

Additional Income Needs in Year 1 (With Social Security) Additional Income Needs in Year 1 (With NO Social Security)

$28,862 $45,000

Assumptions & Notes Assumed Disability • This presentation assumes Bob becomes disabled immediately. Income Needs Assumption • Bob will require 60% of current household income during disability. Disability versus Death Probability • The probabilities of dying before age 65 are based on the 1990-1995 U.S. Basic Male and Female Tables (Age Nearest Birthday) developed by the Society of Actuaries. The probabilities of becoming disabled before age 65 are based on the 1985 Commissioner's Individual Disability A Tables for occupation class 1 (white collar) and a 60-day elimination period. Disability is assumed to last at least two years or longer. Social Security Assumptions • Bob's Social Security benefit amount is based on his current salary.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 27 of 32

Disability Needs Goal Details Assumes Bob Becomes Disabled Today Income

Shortfall

Year

Bob's Age

Annual Income Needed

Estimated Social Security

Disability Policy Benefit

Annual Shortfall

Annual Shortfall No SS

Shortfall (% of Salary)

2008 2009 2010 2011 2012

40 41 42 43 44

$45,000 46,350 47,740 49,173 50,648

$16,138 28,495 29,349 30,230 31,137

$0 0 0 0 0

$28,862 17,855 18,391 18,943 19,511

$45,000 46,350 47,740 49,173 50,648

60 60 60 60 60

2013 2014 2015 2016 2017

45 46 47 48 49

52,167 53,732 55,344 57,005 58,715

32,071 33,033 34,024 35,045 36,096

0 0 0 0 0

20,096 20,699 21,320 21,960 22,619

52,167 53,732 55,344 57,005 58,715

60 60 60 60 60

2018 2019 2020 2021 2022

50 51 52 53 54

60,476 62,291 64,159 66,084 68,067

37,179 38,294 26,295 27,084 27,897

0 0 0 0 0

23,297 23,996 37,864 39,000 40,170

60,476 62,291 64,159 66,084 68,067

60 60 60 60 60

2023 2024 2025 2026 2027

55 56 57 58 59

70,109 72,212 74,378 76,609 78,908

28,734 29,596 30,484 31,398 32,340

0 0 0 0 0

41,375 42,616 43,895 45,211 46,568

70,109 72,212 74,378 76,609 78,908

60 60 60 60 60

2028 2029 2030 2031 2032

60 61 62 63 64

81,275 83,713 86,225 88,811 91,476

33,310 34,310 35,339 36,399 37,491

0 0 0 0 0

47,965 49,404 50,886 52,412 53,985

81,275 83,713 86,225 88,811 91,476

60 60 60 60 60

2033 2034

65 66

94,220 97,047

38,616 39,774

0 0

55,604 57,272

94,220 97,047

60 60

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 28 of 32

Disability Needs Recommendation Assumes Bob Becomes Disabled Today

Objective • Provide for 60% of your current salary ($75,000) if you become disabled today.

Proposed New Disability Policies Description

Proposed DI Policy

Type

Monthly Premium

Monthly Benefit

Elimination Period

Benefit Period

COLA

Individual

$500.00

$3,000

90 Days

Age 65

0%

Annual Disability Income With No New Disability Insurance

Annual Disability Income With New Disability Insurance

100%

100%

75%

75%

50%

50%

25%

25%

0%

0%

Disability Income

Shortfall

Current Salary

Summary of Disability Income Needs Additional Annual Income Needed less

$0

Proposed New Annual Disability Income

$36,000

Annual Disability Income Needs Left Unfunded

$9,000

80%

Disability Needs Goal Progress 0%

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

100%

August 30, 2007 29 of 32

Important Information This is a "blank slate" page advisors can use to customize the presentation for their clients.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 30 of 32

Action Items Procrastination and inaction are two of the biggest reasons why goals are never achieved. Start achieving your goals today! And don't forget to review your progress each year.

Achieve Your Survivor Needs Goals 1. Get a Complete Illustration or Sales Information Before purchasing any new insurance or making any other investment, review a complete, company-provided illustration, prospectus, or other sales materials. 2. It’s Not All About Money! Your survivors need to know your wishes and thoughts for their future. An easy to understand document stating your wishes should accompany any legal documents you keep safe for your loved ones. In fact, a copy of this presentation may serve this purpose when stored with your important papers. 3. Review Your Will At your death, will your remaining property be distributed according to your desired plans? If you don't have a will, the state will make many of these decisions for you. Will your executor still be able to serve? Have you named the trustees and/or guardians to look after your dependents and their assets? Is your will consistent with your other plans, especially your estate planning?

Achieve Your Retirement Goals 1. Choose Funding Option Determine which retirement funding option(s) are appropriate for you based on the available tax incentives and the flexibility of each option. 2. Start Saving Now Set up a systematic savings program to ensure your retirement funding goals are achieved. 3. Determine Your Investments Work with your advisor to determine the most suitable investment options for you based on your feelings regarding potential investment risk and returns.

Achieve Your Education Goals 1. Choose Funding Option Determine which education funding option(s) are appropriate for you based on the available tax incentives and the flexibility of each option. 2. Start Saving Now Set up a systematic savings program to ensure your education funding goals are achieved. 3. Determine Your Investments Work with your advisor to determine the most suitable investment options for you based on your feelings regarding potential investment risk and returns.

Achieve Your Disability Needs Goals 1. Consider Your Options Review all current government or employer funded disability income sources for potential benefits, problems and tax implications. 2. Get a Complete Illustration or Sales Information Before purchasing any new insurance or making any other investment, review a complete, company-provided illustration, prospectus, or other sales materials.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 31 of 32

Assumptions Meredith Survivor Needs Goal Assumptions & Notes Assumed Years of Death • This presentation assumes Meredith dies immediately and Bob dies at age 88. Income Needs Assumption • Bob will require 70% of current household income while the children are at home. When the youngest child turns 18, Bob will require 60% of current household income. Interest Rate Assumptions • Education costs are assumed to increase at a 6% annual inflation rate. • All other living expenses are assumed to increase at a 3% annual inflation rate. • All lump sum values in today's dollars are assumed to grow at 5% annually. Social Security Assumptions • Bob and Meredith's Social Security benefit amounts based on their current salaries. Social Security survivor benefit ends when youngest child turns 16, however children's benefits are paid until age 18. Social Security retirement benefit begins at Bob's age 67. No Social Security benefits will be paid if there are years after the youngest child turns 18, but before Bob's age 67.

Education Savings Goal Assumptions & Notes • Education costs inflation rate: 6% • Education savings rate of return: 5.00% • Current and additional savings begin today and continue until the start of the last dependent’s final year of education. • All interest rates compounded annually with all monthly contributions for the year added at the end of the year. • Percent of Salary based on total household income of $137,000 this year and a 3% annual inflation rate. This Year's Additional Monthly Savings Amount assumes future year contribution amounts will increase at 3%.

Meredith Disability Needs Goal Assumptions & Notes Assumed Disability • This presentation assumes Meredith becomes disabled immediately. Income Needs Assumption • Meredith will require 60% of current household income during disability. Disability versus Death Probability • The probabilities of dying before age 65 are based on the 1990-1995 U.S. Basic Male and Female Tables (Age Nearest Birthday) developed by the Society of Actuaries. The probabilities of becoming disabled before age 65 are based on the 1985 Commissioner's Individual Disability A Tables for occupation class 1 (white collar) and a 60-day elimination period. Disability is assumed to last at least two years or longer. Social Security Assumptions • Meredith's Social Security benefit amount is based on her current salary.

Presented by: John Q. Advisor, CLU, ChFC For Evaluation Purposes Only

August 30, 2007 32 of 32