Sample: John and Jane Smith

LifeView® Financial Plan
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John and Jane Smith
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Prepared by:
Morgan Stanley
Financial Advisor
December 03, 2012
This is a Sample LifeView Financial Plan only. It is intended to demonstrate the type of analysis your Financial Advisor can create for you. Your actual Financial Plan will be based on
information provided by you and will therefore differ from this Sample Plan.
CRC# 475298 Revised 12/12

Table Of Contents
IMPORTANT DISCLOSURE INFORMATION 1-8 Risk Management
Life Insurance Needs Analysis 53
Summary of Goals and Resources Life Insurance Needs Analysis Detail 54 - 56
Personal Information and Summary of Financial Goals 9 - 10 Disability Needs Analysis - John 57 - 59
Net Worth Summary - All Resources 11 Disability Needs Analysis - Jane 60 - 62
Net Worth Detail - All Resources 12 Long-Term Care Needs Analysis - John 63
Resources Summary 13 - 14
Current Portfolio Allocation 15 - 16 Estate Analysis
Estate Introduction 64 - 65
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Risk and Portfolio Information Estate Assumptions 66
Target Band 17 Estate Analysis Results Combined Summary 67 - 68
Estate Analysis Results Flowchart 69 - 72
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Results Estate Analysis What If Results Combined Summary 73 - 74
Worksheet Detail - Allocation Comparison 18 - 19 Estate Analysis What If Results Flowchart 75 - 78
Results - Current and Recommended 20 - 22
What If Worksheet 23 - 28 Appendix
Worksheet Detail - Combined Details 29 - 32 Risk Assessment 79 - 81
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Worksheet Detail - Retirement Distribution Cash Flow Chart 33 - 41
Worksheet Detail - Sources of Income and Earnings 42 Tax and Inflation Assumptions 82
Worksheet Detail - Inside the Numbers Final Result 43 Return Methodology 83 - 85
Worksheet Detail - Special Asset Test 44 Glossary of Terms 86 - 89
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Worksheet Detail - Portfolio Probability Matrix 45
Worksheet Detail - Social Security Maximization 46
Employer Stock Plans

Stock Options 47 - 48
Stock Options Summary 49 - 52
IMPORTANT DISCLOSURE INFORMATION
Your Morgan Stanley Financial Advisor should have provided you with the ADV Asset Allocation Information
brochure, the brochure supplement, and the Privacy Notice at the back of this Any asset allocation information presented herein, which may take into account your assets
Financial Plan. Please contact your Financial Advisor if you have not received these in one or more Employee Retirement Income Security Act of 1974, as amended
disclosure documents. ("ERISA")-covered employee benefit plans and/or one or more individual retirement
IMPORTANT: The projections or other information generated by LifeView® Advisor accounts, is for general asset allocation education and information purposes only, and
regarding the likelihood of various investment outcomes (including any assumed should not be viewed as fiduciary investment advice or specific recommendations with
rates of return) are hypothetical in nature, do not reflect actual investment results, respect to any particular investment or asset allocation mix under the Investment Advisers
and are not guarantees of future results. Act of 1940 as amended, ERISA, the Internal Revenue Code or any other applicable law. In
applying any particular asset allocation model to your individual circumstances, you should
Every individual’s financial circumstances, needs and risk tolerances are different. This consider your other assets, income and investments, in addition to any interest(s) you may
LifeView® Financial Plan (the "Financial Plan") is based on the information you provided to have in ERISA-covered employee benefit plans or individual retirement accounts. Thus, it is
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us, the assumptions you have asked us to make and the other assumptions indicated herein very important for you to insure that you review this Financial Plan to make sure that it
as of the date of the Financial Plan. It is not an official account statement. The purpose of includes all of your assets, income and investments.
taking the time to organize your financial life is to gain better control of your financial
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future. This Financial Plan should be considered a working document that can assist you Assumptions and Limitations
with this objective. You should carefully review the information and suggestions found in LifeView Advisor offers several methods of calculating results, each of which provides one
this Financial Plan and then decide on future steps. outcome from a wide range of possible outcomes. LifeView Advisor does not purport to
recommend or implement an investment strategy. Financial forecasts, rates of return, risk,
LifeView Advisor Assumptions and Limitations inflation, and other assumptions may be used as the basis for illustrations in LifeView
Information Provided by You Advisor. They should not be considered a guarantee of future performance or a guarantee
of achieving overall financial objectives. All results use simplifying estimates and
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Information that you provided about your assets, financial goals, and personal situation are
assumptions that are not tailored to your specific circumstances. No Financial Plan has the
key assumptions for the calculations and projections in this Financial Plan. Please review all
ability to accurately predict the future, eliminate risk or guarantee investment results. As
the information thoroughly to ensure that it is correct and complete. In particular, please
investment returns, inflation, taxes, and other economic conditions vary from the LifeView
review the Financial Plan sections titled "Personal Information and Summary of Financial
Advisor assumptions, your actual results will vary (perhaps significantly) from those
Goals", "Current Portfolio Allocation", and "Tax and Inflation Assumptions" to verify the
presented in this Financial Plan.
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accuracy of these assumptions. If any of the assumptions are incorrect, you should notify
your Financial Advisor. Even small changes in assumptions can have a substantial impact on The assumed return rates in LifeView Advisor are not reflective of any specific investment
the results shown in this Financial Plan. The information provided by you should be reviewed and do not include any fees or expenses that may be incurred by investing in specific
periodically and updated when either the information or your circumstances change. products. The actual returns of a specific investment may be more or less than the returns
Morgan Stanley has no responsibility and is under no obligation to monitor or update this used in LifeView Advisor. The return assumptions are based on historic rates of return of
Financial Plan in the future unless expressly engaged by you to do so at that time. securities indices which serve as proxies for the broad asset classes. It is not possible to
directly invest in an index. Moreover, different forecasts may choose different indices as a
proxy for the same asset class, thus influencing the return of the asset class. LifeView
Advisor results may vary with each use and over time.
LifeView Advisor is powered by MoneyGuidePro™
Prepared for : John and Jane Smith Prepared by: Morgan Stanley
12/03/2012 Page 1 of 89
The return assumptions used in this Financial Plan are estimates based on average annual Rate of Return Methodology
returns for the index used as a proxy for each asset class. The portfolio returns are
The analysis contained in the financial plan is conducted using the Morgan Stanley Wealth
calculated by weighting individual return assumptions for each asset class according to your
Management Global Investment Committee’s Strategic Return Estimates (“GIC Estimate”).
portfolio allocation. During the preparation of these analyses, your Morgan Stanley Financial
GIC Estimate approved returns are generated based on proprietary formulas which include
Advisor may have refined the asset allocation strategy to develop a strategy which optimizes
studying historical return averages of the broad market indices and making strategic
the potential returns that could be achieved with the appropriate level of risk that you
adjustments for more recent market conditions and other factors deemed relevant by the
would be willing to assume. Asset classes not included may have characteristics similar or
forecaster. The Return Methodology section includes a description of the return
superior to those being analyzed.
methodology that has been used to prepare this Financial Plan. The methodology should be
carefully considered in evaluating the results presented to you.
Hypothetical performance results have inherent limitations. There are frequently large
differences between hypothetical and actual performance results subsequently achieved by
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any particular asset allocation or trading strategy. Hypothetical performance results do not
represent actual trading and are generally designed with the benefit of hindsight. They
cannot account for all factors associated with risk, including the impact of financial risk in
actual trading or the ability to withstand losses or to adhere to a particular trading strategy
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in the face of trading losses. There are numerous other factors related to the markets in
general or to the implementation of any specific trading strategy that cannot be fully
accounted for in the preparation of hypothetical performance results and all of which can
adversely affect actual trading results.
Morgan Stanley cannot give any assurances that any estimates, assumptions or
other aspects of the analyses will prove correct. They are subject to actual known
to differ materially from those shown.
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and unknown risks, uncertainties and other factors that could cause actual results
These analyses speak only as of the date of this Financial Plan. Morgan Stanley
expressly disclaims any obligation or undertaking to update or revise any
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statement or other information contained herein to reflect any change in past
results, future expectations or circumstances upon which that statement or other
information is based.
LifeView Advisor is powered by MoneyGuidePro™
12/03/2012 Page 2 of 89
Report Is a Snapshot and Does Not Provide Legal, Tax, or Accounting Advice Results Using Class Sensitivity
This Report provides a snapshot of your current financial position and can help you to focus The Results Using Class Sensitivity are calculated by using different return assumptions for
on your financial resources and goals, and to create a plan of action. Because the results one or more asset classes during the years you select. These results show how your Plan
are calculated over many years, small changes can create large differences in future results. would be affected if the annual returns for one or more asset classes were different than
You should use this Report to help you focus on the factors that are most important to you. the average returns for a specified period in your Plan.
This Report does not provide legal, tax, or accounting advice. Before making decisions with
legal, tax, or accounting ramifications, you should consult appropriate professionals for Results Using Monte Carlo Simulations
advice that is specific to your situation. Monte Carlo simulations are used to show how variations in rates of return each year can
affect your results. A Monte Carlo simulation calculates the results of your Plan by running
What If Scenarios
it many times, each time using a different sequence of returns. Some sequences of returns
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What If Worksheets allow you to review and compare the results of your LifeView Advisor. will give you better results, and some will give you worse results. These multiple trials
The Worksheets provide you with tools to consider alternative solutions. provide a range of possible results, some successful (you would have met all your goals) and
some unsuccessful (you would not have met all your goals). The percentage of trials that
LifeView Advisor Methodology were successful is shown as the probability that your Plan, with all its underlying
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LifeView Advisor offers several methods of calculating results, each of which provides one assumptions, could be successful. In LifeView Advisor, this is the Probability of Success.
outcome from a wide range of possible outcomes. The methods used are: “Average Analogously, the percentage of trials that were unsuccessful is shown as the Probability of
Returns,” “Bad Timing,” “Class Sensitivity,” and “Monte Carlo Simulations.” Failure. The Results Using Monte Carlo Simulations indicate the likelihood that an event
may occur as well as the likelihood that it may not occur. In analyzing this information,
Results Using Average Returns please note that the analysis does not take into account actual market conditions, which
may severely affect the outcome of your goals over the long-term.
The Results Using Average Returns are calculated using one average return for your
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pre-retirement period and one average return for your post-retirement period. Average LifeView Advisor uses a specialized methodology called Beyond Monte Carlo™, a statistical
Returns are a simplifying assumption. In reality, investment returns can (and often do) vary analysis technique that provides results that are as accurate as traditional Monte Carlo
widely from year to year and vary widely from a long-term average return. simulations with 10,000 trials, but with fewer iterations and greater consistency. Beyond
Monte Carlo™ is based on Sensitivity Simulations, which re-runs the Plan only 50 to 100
Results with Bad Timing times using small changes in the return. This allows a sensitivity of the results to be
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Results with Bad Timing are calculated by using low returns in one or two years, and calculated, which, when analyzed with the mean return and standard deviation of the
average returns for all remaining years of the Plan. For most Plans, the worst time for low portfolio, allows the Probability of Success for your Plan to be directly calculated.
returns is when you begin taking substantial withdrawals from your portfolio. The Results
with Bad Timing assume that you earn a low return in the year(s) you select and then an LifeView Advisor Presentation of Results
Adjusted Average Return in all other years. This Adjusted Average Return is calculated so The Results Using Average Returns, Bad Timing, and Class Sensitivity display the results
that the average return of the Results with Bad Timing is equal to the return(s) used in using an “Estimated % of Goal Funded” and a “Safety Margin.”
calculating the Results Using Average Returns. This allows you to compare two results with
the same overall average return, where one (the Results with Bad Timing) has low returns in
one or two years.
The default for the first year of low returns is two standard deviations less than the average
return, and the default for the second year is one standard deviation less than the average
return.
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Estimated % of Goal Funded Regardless of whether you are using historical or projected returns for all other LifeView
Advisor results, the Bear Market Loss and Bear Market Test use returns calculated from
For each Goal, the “Estimated % of Goal Funded” is the sum of the assets used to fund the
historical indices. If you are using historical returns, the indices in the Bear Market Loss and
Goal divided by the sum of the Goal’s expenses. All values are in current dollars. A result of
the Bear Market Test may be different from indices used in other calculations. These results
100% or more does not guarantee that you will reach a Goal, nor does a result under
are calculated using only three asset classes – Cash, Bonds, and Stocks. Alternative asset
100% guarantee that you will not. Rather, this information is meant to identify possible
classes (e.g., real estate, commodities), if applicable, are included in the Stocks asset class.
shortfalls in this Plan, and is not a guarantee that a certain percentage of your Goals will be
The indices and the resulting returns for the Great Recession and the Bond Bear Market are:
funded. The percentage reflects a projection of the total cost of the Goal that was actually
funded based upon all the assumptions that are included in this Plan, and assumes that you Asset Index Great Recession Bond Bear Market
execute all aspects of the Plan as you have indicated. Class Return Return
Safety Margin 11/2007 – 02/2009 07/1979 – 02/1980
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The Safety Margin is the estimated value of your assets at the end of this Plan, based on all Cash Ibbotson U.S. 30-day 1.97% 7.08%
the assumptions included in this Report. Only you can determine if that Safety Margin is Treasury Bills
sufficient for your needs. Bonds Ibbotson Intermediate-Term 10.90% -8.89%
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Government Bonds – Total
Bear Market Loss and Bear Market Test Return
The Bear Market Loss shows how a portfolio would have been impacted during the worst Stocks Ibbotson Large Company -48.81% 14.61%
bear market since the Great Depression. Depending on the composition of the portfolio, Stocks – Total Return
the worst bear market is either the "Great Recession" or the "Bond Bear Market."
Because the Bear Market Loss and Bear Market Test use the returns from asset class indices
The Great Recession, from November 2007 through February 2009, was the worst bear rather than the returns of actual investments, they do not represent the performance for
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market for stocks since the Great Depression. In LifeView Advisor, the Great Recession any specific portfolio, and are not a guarantee of minimum or maximum levels of losses or
Return is the rate of return, during the Great Recession, for a portfolio comprised of cash, gains for any portfolio. The actual performance of your portfolio may differ substantially
bonds, and stocks, with an asset mix equivalent to the portfolio referenced. from those shown in the Great Recession Return, the Bond Bear Market Return, the Bear
Market Loss, and the Bear Market Test.
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The Bond Bear Market, from July 1979 through February 1980, was the worst bear market
for bonds since the Great Depression. In LifeView Advisor, the Bond Bear Market Return is
the rate of return, for the Bond Bear Market period, for a portfolio comprised of cash,
bonds, and stocks, with an asset mix equivalent to the portfolio referenced.
The Bear Market Loss shows: 1) either the Great Recession Return or the Bond Bear Market
Return, whichever is lower, and 2) the potential loss, if you had been invested in this
cash-bond-stock portfolio during the period with the lower return. In general, most
portfolios with a stock allocation of 20% or more have a lower Great Recession Return, and
most portfolios with a combined cash and bond allocation of 80% or more have a lower
Bond Bear Market Return.
The Bear Market Test, included in the Stress Tests, examines the impact on your Plan results
if an identical Great Recession or Bond Bear Market, whichever would be worse, occurred
this year. The Bear Market Test shows the likelihood that you could fund your Needs,
Wants and Wishes after experiencing such an event.
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A Note on Tax-Qualified/Tax-Deferred Assets
If your portfolio contains assets which are tax-qualified or tax-deferred under the Internal
Revenue Code, you should consider the tax effects of any portfolio withdrawal from such
amounts, as opposed to from fully taxable accounts, with your tax and/or legal advisor(s).
Generally speaking, the withdrawal of tax-qualified or tax-deferred amounts can result in
income tax liability where no such liability would exist if the amounts had been withdrawn
from a taxable account. Furthermore, (a) tax penalties can occur when such assets are
withdrawn prior to age 59½, (b) such withdrawals can have detrimental effects on specific
tax planning strategies (e.g., “72(t) payments”), and (c) certain qualified or tax-deferred
assets are eligible for or receive special treatment upon withdrawal (e.g., net unrealized
appreciation treatment, eligibility for rollover). In light of the foregoing, we strongly
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recommend that you consult your tax and/or legal advisors in connection with this Financial
Plan and any withdrawals that you make from your portfolio.
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IMPORTANT NOTES AND DISCLOSURES FROM MORGAN STANLEY This Financial Plan will be deemed to create an investment advisory relationship between
you and Morgan Stanley that begins upon delivery of the Financial Plan to you and ends
Morgan Stanley provides its existing and prospective customers with a number of financial
thirty days later, during which time your Financial Advisor is available to review the LifeView
tools that produce certain reports to assist customers in managing their wealth and assets.
Financial Plan with you. This advisory relationship means that the services we offer are
This LifeView Financial Plan was generated by using a computer software program
governed by different laws and separate contracts than those relating to a brokerage
developed by MoneyGuidePro, a third party software provider. Results may vary with each
relationship. Our investment advisory relationship is separate and distinct from any
use of the software and over time. Enhancements and changes to the software may be
brokerage relationship that you may have with Morgan Stanley on any of your accounts.
made in the future. Morgan Stanley is not responsible for the accuracy of the assumptions
When Morgan Stanley is acting in its capacity as your broker, Morgan Stanley is governed
made in the Financial Plan, or the calculations in the analysis. Future Financial Plans that are
by securities laws which regulate broker-dealers such as the Securities Exchange Act of 1934
generated may contain information capabilities, and other content, that is more expansive
and the Securities Act of 1933. However, when acting in an advisory capacity, Morgan
or otherwise different from the content of this Financial Plan.
Stanley will be subject to different laws which govern investment advisers, such as the
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Investment Advisers Act of 1940. For example, investment advisers, unlike brokers, are
This Financial Plan does not constitute an offer to buy, sell, or recommend any particular
required to disclose to their advisory clients if any of the investment adviser’s affiliates
investment or asset, nor does it recommend that you engage in any particular investment,
receive any additional compensation as a result of the advisory relationship. Additionally,
manager or trading strategy. It reflects only allocations among broad asset classes. All
investment advisers may have an obligation to monitor their clients’ advisory accounts and
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investments have risks. The decisions as to when and how to invest are solely your
to make ongoing recommendations to them, while a broker has no such obligations. When
responsibility.
preparing a Financial Plan, Morgan Stanley may take into consideration assets held in your
Morgan Stanley brokerage accounts. However, those accounts will remain brokerage
By providing you this Financial Plan, neither Morgan Stanley nor your Financial
accounts and will not become advisory accounts as a result of the Financial Plan. That
Advisor is acting as a fiduciary for purposes of ERISA or section 4975 of the Code means that Morgan Stanley will not have advisory duties on those accounts and that you
with respect to any ERISA-covered employee benefit plan or any individual will continue to be responsible for monitoring and making all investment decisions with
retirement account in either the planning, execution or provision of this analysis. respect to those accounts. For additional answers to questions about the difference
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Unless otherwise provided in a written agreement between you and Morgan between our investment advisory and brokerage services, please visit our web site at
Stanley, Morgan Stanley, its affiliates and their respective employees, agents and http://www.morganstanley.com/ourcommitment/ or contact us at 866-866-7426.
representatives, including your Financial Advisor: (a) do not have discretionary
authority or control with respect to the assets in any ERISA-covered employee
benefit plan or any individual retirement account included in this Financial Plan, (b)
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will not be deemed an "investment manager" as defined under ERISA, or otherwise
have the authority or responsibility to act as a "fiduciary" (as defined under ERISA)
with respect to such assets, and (c) will not provide "investment advice," as defined
by ERISA and/or section 4975 of the Code, as amended, with respect to such assets.
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IMPORTANT NOTES AND DISCLOSURES FROM MORGAN STANLEY (continued) 3) you understand that Morgan Stanley and your Financial Advisor are not fiduciaries under
ERISA or the Internal Revenue Code with respect to this Financial Plan or your use or our use
Morgan Stanley is both a registered broker-dealer and investment adviser and its Financial
(on your behalf) of the software which generated this Financial Plan, or your IRA and
Advisors act in dual capacities as broker-dealer and investment advisory representatives.
retirement plan accounts unless otherwise provided in a written agreement between you
Many Morgan Stanley Financial Advisors may use the designation Certified Financial Planner
and Morgan Stanley. The information in this Financial Plan is provided to you on the
or "CFP," a certification mark owned by the Certified Financial Planner Board of Standards,
understanding that, for purposes of ERISA and the Code, it is intended to be educational
Inc. Each of these Financial Advisors also is licensed to act as a broker-dealer representative
material, will not form a primary basis for any investment decision made by you or on your
on behalf of Morgan Stanley. When any of these Financial Advisors assists clients by
behalf, and will not be viewed for ERISA or Code purposes as fiduciary investment advice or
providing them a Financial Plan, he/she is doing so as a CFP and investment advisory
specific recommendations with respect to asset allocation or any particular investment, and
representative of Morgan Stanley. However, in providing other services to customers, such
that (unless otherwise provided in a written agreement) you remain solely responsible for
as assisting customers in implementing a Financial Plan once it has been delivered, providing
your assets and all investment decisions with respect to your assets; and
financial tools/reports to customers, or effecting transactions for the customer's brokerage
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account, the Financial Advisor carrying a CFP designation is only acting as a broker-dealer 4) you understand and accept each of the terms of the attached Engagement Agreement.
representative unless the Financial Advisor and client have entered into a written agreement
that creates an investment advisory relationship. Powered by MoneyGuidePro™ and MoneyGuidePro™ are marks of PIEtech, Inc.
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Please keep in mind that Morgan Stanley is not a tax or legal advisor and this Financial Plan © 2012 Morgan Stanley Smith Barney LLC. Member SIPC.
does not constitute tax, legal or accounting advice. You should discuss any tax and legal
information outlined in this document with your accounting, tax and legal advisors prior to
taking action. Your Morgan Stanley Financial Advisor can work with you and these advisors
to answer your questions and, if you choose, help you implement the options you decide
upon. There is no requirement, however, that you implement any strategies at all. In
addition, you are not obligated to implement any options shown in this Financial Plan or to
otherwise conduct business through Morgan Stanley or its affiliates.
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Timing for implementing, monitoring and adjusting your strategies is a critical element in
achieving your financial objectives. You are responsible for implementing, monitoring and
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periodically reviewing and adjusting your investment strategies.
By accepting delivery of this Financial Plan, you are deemed to acknowledge and agree that:
1) you have reviewed and accept the information contained within this Financial Plan and
understand the disclaimers, assumptions and methods included with it;
2) you believe that all information provided by you is complete and accurate to the best of
your knowledge;
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Engagement Agreement for your LifeView Financial Plan • In order to ensure that your brokerage accounts remain as such, and thus you can take
advantage of the full range of services and investment products offered through those
This agreement is designed to provide you with information that will ensure that you
accounts, please understand that if the assets of any ERISA-covered employee benefit plan,
understand the nature of your financial planning relationship with Morgan Stanley Smith
Keogh Plan or IRA (“Retirement Assets”) are taken into account in the LifeView Financial
Barney LLC (“MSSB”). There are certain items that reflect limitations on the duration of
Plan, all information and materials provided in the LifeView Financial Plan are (a) as noted
your financial planning relationship, which are designed to ensure that MSSB will be able to
above, based upon the information provided by you, and various assumptions, (b) intended
continue to service your brokerage or other advisory needs with maximum flexibility. If any
for educational purposes only, and (c) provided to you by MSSB with the understanding
of these items do not reflect your understanding, you should immediately contact your
that, for the purposes of ERISA and the Internal Revenue Code, the reports are general in
Financial Advisor or PWM Private Wealth Advisor (together referred to herein as your
nature, and will not form a primary basis for any investment decision made by you or on
“Financial Advisor”) as applicable.
your behalf. These understandings are designed to ensure that MSSB and its Financial
• The LifeView Financial Plan is a financial planning service for which MSSB may charge a Advisors, in providing this product, are not and will not be viewed (by you or anyone else) as
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fee as agreed to by you and your Financial Advisor. If a fee is charged, you will be provided fiduciary investment advice or specific recommendations with respect to asset allocation or
with a Financial Planning Fee Consent Form that will set forth the fee amount and payment any particular investment for those Retirement Assets, and thus MSSB and its Financial
options for the LifeView Financial Plan. Advisors will not be acting as a fiduciary under either ERISA or the Internal Revenue Code
with respect to such assets.
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• The LifeView Financial Plan is reliant on the information you provide to MSSB. The quality
of the plan MSSB prepares for you is dependent on the completeness and accuracy of this • You understand that MSSB and its Financial Advisors do not provide tax or legal advice,
information. Furthermore, your Financial Advisor and MSSB will only be responsible for and that you should consult with your personal advisors with respect to the tax and legal
correcting and updating the information you provided and/or the LifeView Financial Plan implications of the LifeView Financial Plan, as appropriate.
(e.g., to reflect future changes in your life, financial situation, goals, and market or
economic conditions) if you engage them to do so. As a result, the LifeView Financial Plan • An assignment of this Engagement Agreement and financial planning relationship to a
may very well become outdated or inaccurate as these factors change over time, unless you new investment adviser firm will not be made without your prior consent, which may be
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take steps to work with your Financial Advisor to correct and update the LifeView Financial obtained by providing you at least seven days’ prior notice of the assignment.
Plan.
• You have sole responsibility for making all investment decisions with respect to the
• All investments have risks. The performance and attainment of financial objectives is not implementation of the LifeView Financial Plan. You may implement the LifeView Financial
Plan at MSSB or at another firm. If you engage or have engaged MSSB, it will act as your
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guaranteed. All estimates and assumed data, including returns, are hypothetical and do not
represent a guarantee or promise of future results. broker, unless you ask it, in writing, to act as your investment adviser on any particular
account.
• An investment advisory relationship is created between you and MSSB that begins upon
delivery of the financial plan to you and ends thirty days later, during which time your As noted above, if the foregoing does not reflect your understanding of your relationship
Financial Advisor is available to review the LifeView Financial Plan with you. This advisory with MSSB and your Financial Advisor and the nature of the firm’s financial planning
relationship is separate from the relationship(s) created by other accounts and services that services, including the services that are provided to in connection with the preparation of
you may have with MSSB. You and your Financial Advisor can reopen the planning your LifeView Financial Plan, you should immediately contact your Financial Advisor.
relationship at any time.
© 2012 Morgan Stanley Smith Barney LLC. Member SIPC.
• When preparing the LifeView Financial Plan, MSSB may consider assets held in your MSSB
brokerage accounts. However, those accounts will remain brokerage accounts and will not
become advisory accounts as a result of the LifeView Financial Plan. You will continue to be
responsible for monitoring and making all investment decisions for those accounts.
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Summary of Goals and Resources

Personal Information and Summary of Financial Goals
John and Jane Smith
Needs
10 Retirement - Living Expense

John 65 / 2026
Jane 63 / 2026
Both Retired (2026-2051) $225,000
Jane Alone Retired (2052-2055) $175,000
Base Inflation Rate (2.00%)
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8 College - Jimmy
4 years starting in 2016 $26,832
Attending College - Average All Base Inflation Rate plus 4.00% (6.00%)
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Wants
7 Travel
When John retires $15,000
Wishes
Recurring every year for a total of 20 times
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3 Leave Bequest
End of Jane's plan $500,000
No Inflation
See IMPORTANT DISCLOSURE INFORMATION at the beginning of this document for explanations of assumptions, limitations, and methodologies.
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Personal Information and Summary of Financial Goals
Personal Information Participant Name Date of Birth Age Relationship
John Jimmy 07/07/1998 14 Child

Male - born 05/10/1961, age 51 ABC Charity 0 Charity
Employed - $250,000
Jane
Female - born 10/05/1963, age 49
Employed - $250,000
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Married, US Citizens living in NY
• This section lists the Personal and Financial Goal information you provided, which will
be used to create your Report. It is important that it is accurate and complete.
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Net Worth Summary - All Resources
This is your Net Worth Summary as of 12/03/2012. 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 Total
Investment Assets
Employer Retirement Plans $650,000
Individual Retirement Accounts $75,000
College Saving Plans $125,000
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Taxable and/or Tax-Free Accounts $700,000
Total Investment Assets: $1,550,000
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Other Assets
Personal Asset : $750,000
Business and Property : $400,000
Cash Value Life : $200,000
Stock Options $25,000
Investment Assets $1,550,000

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Liabilities
$1,375,000
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Personal Real Estate Loan: $400,000
Other Assets + $1,375,000
Total Liabilities: $400,000
Total Assets $2,925,000
Net Worth: $2,525,000
Total Liabilities - $400,000
Net Worth $2,525,000
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Net Worth Detail - All Resources
This is your Net Worth Detail as of 12/03/2012. 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 John Jane Joint Total

Investment Assets
John's 401k $350,000 $350,000
Jane's 401k $300,000 $300,000
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Jane's IRA $75,000 $75,000
Jimmy's 529 Plan $125,000 $125,000
John's Investments $200,000 $200,000
PL
Joint Investment Account $500,000 $500,000
Total Investment Assets: $675,000 $375,000 $500,000 $1,550,000
Other Assets
NY Home $750,000 $750,000
Real Estate Investment
Life Insurance - John
Morgan Stanley
M $200,000
$25,000
$400,000 $400,000
$200,000
$25,000
SA
Total Other Assets: $225,000 $0 $1,150,000 $1,375,000
Liabilities
Mortgage $400,000 $400,000
Total Liabilities: $0 $0 $400,000 $400,000
Net Worth: $2,525,000
12/03/2012 Page 12 of 89
Resources Summary
Investment Assets
Description Owner Current Value Additions Assign to Goal

Jane's 401k Jane $300,000 $25,000 Fund All Goals
Account Total $300,000
Jane's IRA Jane $75,000 Fund All Goals
Jimmy's 529 Plan John $125,000 College - Jimmy
E
John's 401k John $350,000 $23,400 Fund All Goals
PL
John's Investments John $200,000 Fund All Goals
Cash $100,000
Morgan Stanley $50,000
Toronto-Dominion Bank $50,000
Joint Investment Account Joint Survivorship $500,000 $10,000 Fund All Goals
Taxable Account Total $500,000
Total Investment Assets :
M $1,550,000
SA
Other Assets
Description Owner Current Value Future Value Assign to Goal

NY Home Joint $750,000 Not Funding Goals
Real Estate Investment Joint $400,000 $500,000 at John's Fund All Goals
retirement
Life Insurance - John John $200,000 Not Funding Goals
Total of Other Assets : $1,350,000
12/03/2012 Page 13 of 89
Resources Summary
Insurance Policies
Description Owner Insured Beneficiary Annual Premium Cash Value Death Benefit Premium Paid
Cash Value Life Insurance Policies Summary (included in Assets)
Life Insurance - John John John Co-Client of Insured $1,200 $200,000 $1,000,000 For 10 years
Other Asset - 100%
Total Death Benefit of All Policies : $1,000,000

If the assets include a Variable Life Investment Asset, the value shown for this policy in the Premium column reflects only the assumed
annual increase in the cash value of the insurance policy and not the total premium.
E
Social Security
PL
Description Owner Value File Status Assign to Goal
Social Security John $30,634 starting At John's Normal Fund All Goals
Full Retirement Age
Social Security Jane $30,634 starting At Jane's Normal Fund All Goals
Full Retirement Age
Retirement Income
Description
Pension Income
Owner
John
MValue
$15,000 from John's
Increase Rate
No
Assign to Goal
Fund All Goals
SA
Retirement to End of Plan
(100% to Survivor)
Liabilities
Type Description Owner Outstanding Balance Interest Rate Monthly Payment

1st Mortgage Mortgage Joint $400,000 6.00% $1,500
Total Outstanding Balance : $400,000
12/03/2012 Page 14 of 89
Current Portfolio Allocation
This page shows how your Investment Assets are currently allocated among the different Asset Classes. It includes only those Assets you
have identified to fund Goals in this Plan.
Projected Assumptions
Total Return 7.19%
Base Inflation Rate 2.00%
Total Stock Real Return 5.19%
61%
Standard Deviation 9.31%
E
Bear Market Returns
Great Recession November 2007 thru February 2009 -29%
Bond Bear Market July 1979 thru February 1980 10%
PL
Investment Portfolio
Asset Class Rate of Return
Value % of Total Assets
Cash - USD (90-day Tbills) 3.00% $478,750 31%
M
Global Corporate/Securitized Bonds (hedged to USD) 5.60% $125,000 8%
US Large-Cap Value Stocks 9.30% $498,750 32%
US Large-Cap Growth Stocks 9.30% $25,000 2%
SA
US Mid-Cap Value Stocks 9.90% $113,750 7%
US Small-Cap Value Stocks 10.30% $82,500 5%
US Small-Cap Growth Stocks 10.30% $31,250 2%
Developed Markets ex US Stocks (unhedged) 8.90% $142,500 9%
Global Emerging Market Stocks (unhedged) 11.10% $52,500 3%
Total : $1,550,000 100%

Effect of Stock Options
Value of Vested Stock Options (before tax) $25,000
Value of Portfolio with Vested Stock Options $1,575,000
Total Stock Including Stock Options 62%
12/03/2012 Page 15 of 89
Current Portfolio Allocation
Tax-Free Rates of Return
Cash - USD (90-day Tbills) 2.30%
Global Govt / Govt-Related Bonds (hedged to 3.90%
USD)
Global Short-Term Government Bonds (hedged to 3.10%
USD)
E
PL
M
SA
12/03/2012 Page 16 of 89
E
PL
M
SA
Risk and Portfolio Information

Target Band
The Risk-Based Portfolio was selected from this list of Model Portfolios, based upon the answers you provided in your Risk Tolerance
Questionnaire. The Target Portfolio was selected based on your investment objectives and risk tolerance. The Target Portfolio will be the
same as the Risk Based Portfolio unless you choose a Alternative Portfolio or Model Portfolio. The Average Real Return is equal to the
Average Total Return minus the inflation rate of 2.00%.
Average Return
Current Risk Target Name Cash Bond Stock Alternative Total Real Standard
Based Band Deviation
Model 1 25% 75% 0% 0% 4.47% 2.47% 2.19%
Model 2 13% 60% 16% 11% 5.91% 3.91% 4.05%
E
Model 3 8% 48% 28% 16% 6.84% 4.84% 6.18%
Current 31% 8% 61% 0% 7.19% 5.19% 9.31%
Model 4 5% 40% 35% 20% 7.42% 5.42% 7.79%
PL
Model 5 3% 32% 44% 21% 7.97% 5.97% 9.53%
Model 6 2% 18% 58% 22% 8.61% 6.61% 11.67%
Model 7 0% 0% 75% 25% 9.27% 7.27% 13.75%
Model 8 0% 0% 75% 25% 9.39% 7.39% 14.10%
Return vs. Risk Graph
M
When deciding how to invest your money, you must determine the amount of risk you are
willing to assume to pursue a desired return. The Return versus Risk Graph reflects a set of
SA
portfolios that assume a low relative level of risk for each level of return, or conversely an
optimal return for the degree of investment risk taken. The graph also shows the position of
the Current, Target, Risk-Based, and Alternative Portfolios. The positioning of these
portfolios illustrates how their respective risks and returns compare to each other as well as
the optimized level of risk and return represented by the Portfolios.
This graph shows the relationship of return and risk for each Portfolio in the chart above.
12/03/2012 Page 17 of 89
E
PL
M
SA
Results
Worksheet Detail - Allocation Comparison
Scenario: Model 6 - Target
These charts compare your Current Portfolio with the Target Portfolio you selected and show the allocation changes you should consider.
Target Portfolio
Current Portfolio
Model 6
Projected Assumptions
7.19% Total Return 8.61%
2.00% Base Inflation Rate 2.00%
5.19% Real Return 6.61%
E
9.31% Standard Deviation 11.67%
Bear Market Returns
PL
-29% Great Recession -38%
10% Bond Bear Market 10%
Portfolio Comparison with Allocation Changes

Current Amount % of Total Asset Class % of Total Target Amount Increase / (Decrease)
$478,750
$0
31%
0%
M
Cash - USD (90-day Tbills)
Global Govt / Govt-Related Bonds (hedged to
USD)
2%
2%
$31,000
$31,000
-$447,750
$31,000
SA
$125,000 8% Global Corporate/Securitized Bonds (hedged 1% $15,500 -$109,500
to USD)
$0 0% Global Short-Term Government Bonds 3% $46,500 $46,500
(hedged to USD)
$0 0% Global High Yield Bonds (hedged to USD) 6% $93,000 $93,000
$0 0% Global Emerging Markets Local Debt 4% $62,000 $62,000
(unhedged)
$498,750 32% US Large-Cap Value Stocks 10% $155,000 -$343,750
$25,000 2% US Large-Cap Growth Stocks 10% $155,000 $130,000
$113,750 7% US Mid-Cap Value Stocks 2% $31,000 -$82,750
$0 0% US Mid-Cap Growth Stocks 2% $31,000 $31,000
$82,500 5% US Small-Cap Value Stocks 2% $31,000 -$51,500
$31,250 2% US Small-Cap Growth Stocks 2% $31,000 -$250
$142,500 9% Developed Markets ex US Stocks (unhedged) 23% $356,500 $214,000
12/03/2012 Page 18 of 89
Worksheet Detail - Allocation Comparison
Scenario: Model 6 - Target
Portfolio Comparison with Allocation Changes
Current Amount % of Total Asset Class % of Total Target Amount Increase / (Decrease)
$52,500 3% Global Emerging Market Stocks (unhedged) 7% $108,500 $56,000
$0 0% Global REITs (unhedged) 4% $62,000 $62,000
$0 0% Commodities 3% $46,500 $46,500
$0 0% Global Inflation-Linked Securities (unhedged) 2% $31,000 $31,000
$0 0% Broad Fund of Hedge Funds 10% $155,000 $155,000
E
$0 0% Managed Futures 5% $77,500 $77,500
$1,550,000 $1,550,000
PL
M
SA
12/03/2012 Page 19 of 89
Results - Current and Recommended
Results Current Scenario Recommended Scenario
Average Return Bad Timing Average Return Bad Timing
Estimated % of Goals Funded 100% 100% 100% 100%

Likelihood of Funding All Goals
E
Your Confidence Zone: 70% - 90% Probability of Success: 64% Probability of Success: 86%
PL
Below Confidence Zone In Confidence Zone
Results Current Scenario Model 6 - Target Change In Value
Retirement
Retirement Ages
John
Jane M 65 in 2026
63 in 2026
65 in 2026
63 in 2026
SA
Planning Ages
John 90 in 2051 90 in 2051
Jane 92 in 2055 92 in 2055
12/03/2012 Page 20 of 89
Goals
Needs
10 Retirement - Living Expense
Both Retired $225,000 $225,000
Jane Alone Retired $175,000 $175,000
8 College - Jimmy $26,832 $26,832
Years of School 4 4
E
Start Year 2016 2016
Wants
7 Travel $15,000 $15,000
PL
Starting At John's retirement At John's retirement
Years between occurrences 1 1
Number of occurrences 20 20
Wishes
3 Leave Bequest $500,000 $500,000
Starting End of Jane's plan End of Jane's plan
M
Total Spending for Life of Plan $7,457,328 $7,457,328
Savings
SA
Qualified $48,400 $48,400
Taxable $10,000 $10,000
Total Savings This Year $58,400 $58,400
12/03/2012 Page 21 of 89
Investments
Portfolio Value $1,550,000 $1,550,000

Allocation Before Retirement Current Model 6 3% Less Stock
Percentage Stock 61% 58%
Total Return 7.19% 8.61%
E
Standard Deviation 9.31% 11.67%
Great Recession Return 11/07 - 2/09 -29% -38%
Bond Bear Market Return 7/79 - 2/80 10% 10%
PL
Allocation During Retirement Current Model 6 3% Less Stock
Percentage Stock 61% 58%
Total Return 7.19% 8.61%
Standard Deviation 9.31% 11.67%
M
Great Recession Return 11/07 - 2/09 -29% -38%
Bond Bear Market Return 7/79 - 2/80 10% 10%
Inflation 2.00% 2.00%
SA
12/03/2012 Page 22 of 89
What If Worksheet
This Worksheet allows you to analyze and compare the results of one or more scenarios that you created by varying the Plan assumptions.
Estimated % of Goal Funded
Goals Current Scenario Model 6 - Target Model 5 - Risk Based Incl. LTC Premiums
Average Return Bad Timing Average Return Bad Timing Average Return Bad Timing Average Return Bad Timing
Needs
10 Retirement 100% 100% 100% 100% 100% 100% 100% 100%
E
9 LTC for John N/A N/A N/A N/A N/A N/A 100% 100%
8 College - Jimmy 124% 124% 134% 134% 130% 130% 134% 134%
PL
Wants
7 Travel 100% 100% 100% 100% 100% 100% 100% 100%
Wishes
3 Leave Bequest 100% 100% 100% 100% 100% 100% 100% 100%
Safety Margin (Value at End of Plan)

Current dollars (in thousands) :
Future dollars (in thousands) :
$2,689
$6,427
M $248
$592
$7,646
$18,274
$5,507
$13,162
$5,199
$12,425
$3,284
$7,849
$7,570
$18,093
$5,345
$12,775
SA
Monte Carlo Results Likelihood of Funding All Goals
Your Confidence Zone: 70% - 90%
Probability of Success: 64% Probability of Success: 86% Probability of Success: 88% Probability of Success: 85%
Below Confidence Zone In Confidence Zone In Confidence Zone In Confidence Zone
Indicates different data between the Scenario in the first column and the Scenario in any other column.
12/03/2012 Page 23 of 89
What If Worksheet
Key Assumptions Current Scenario Model 6 - Target Model 5 - Risk Based Incl. LTC Premiums
Stress Tests
Method(s) Bad Timing Bad Timing Bad Timing Bad Timing
Program Estimate Program Estimate Program Estimate Program Estimate
Years of bad returns: Years of bad returns: Years of bad returns: Years of bad returns:
2026: -11.43% 2026: -14.74% 2026: -11.09% 2026: -14.74%
2027: -2.12% 2027: -3.06% 2027: -1.56% 2027: -3.06%
Funding Order
Assets - Ignore Earmark No No No No
E
Retirement Income - Ignore Earmark No No No No
Hypothetical Average Rate of Return
Before Retirement : Current Model 6 Model 5 Model 6
PL
Total Return : 7.19% 8.61% 7.97% 8.61%
Standard Deviation : 9.31% 11.67% 9.53% 11.67%
Total Return Adjustment : 0.00% 0.00% 0.00% 0.00%
Adjusted Real Return : 5.19% 6.61% 5.97% 6.61%
After Retirement : Current Model 6 Model 5 Model 6
Total Return :
Standard Deviation :
Total Return Adjustment : M
7.19%
9.31%
0.00%
8.61%
11.67%
0.00%
7.97%
9.53%
0.00%
8.61%
11.67%
0.00%
SA
Adjusted Real Return : 5.19% 6.61% 5.97% 6.61%
Base inflation rate : 2.00% 2.00% 2.00% 2.00%
Tax-Free Options
Before Retirement
Reallocate a portion of bonds to tax-free: No No No No
Percent of bond allocation to treat as tax-free: 0.00% 0.00% 0.00% 0.00%
After Retirement
Reallocate a portion of bonds to tax-free: No No No No
Percent of bond allocation to treat as tax-free: 0.00% 0.00% 0.00% 0.00%
12/03/2012 Page 24 of 89
What If Worksheet
Goals
Living Expense
Retirement Age
John 65 65 65 65
Jane 63 63 63 63
Planning Age
John 90 90 90 90
E
Jane 92 92 92 92
One Retired
PL
John Retired and Jane Employed $79,200 $79,200 $79,200 $79,200
Jane Retired and John Employed $79,200 $79,200 $79,200 $79,200
Both Retired
Both Retired $225,000 $225,000 $225,000 $225,000
One Alone - Retired
M
Jane Alone Retired $175,000 $175,000 $175,000 $175,000
John Alone Retired $127,200 $127,200 $127,200 $127,200
One Alone - Employed
John Alone Employed $79,200 $79,200 $79,200 $79,200
SA
Jane Alone Employed $79,200 $79,200 $79,200 $79,200
College - Jimmy
Year : 2016 2016 2016 2016
Years of Education : 4 4 4 4
Annual Cost : $26,832 $26,832 $26,832 $26,832
Travel
Year : At John's retirement At John's retirement At John's retirement At John's retirement
Cost : $15,000 $15,000 $15,000 $15,000
Is recurring : Yes Yes Yes Yes
Years between occurrences : 1 1 1 1
Number of occurrences : 20 20 20 20
12/03/2012 Page 25 of 89
What If Worksheet
Goals
Leave Bequest
Cost : $500,000 $500,000 $500,000 $500,000
Retirement Income
Pension Income
Annual Income : $15,000 $15,000 $15,000 $15,000
Start Year : John's retirement John's retirement John's retirement John's retirement
E
Select when income will end : End of plan End of plan End of plan End of plan
Year to end retirement income : 2055 2055 2055 2055
PL
Survivor Benefit : 100% 100% 100% 100%
Social Security
Select Social Security Strategy At FRA At FRA At FRA At FRA
John
Select Filing Method: Normal Normal Normal Normal
M
Select when benefits will begin: At John's Full Retirement At John's Full Retirement At John's Full Retirement At John's Full Retirement
Age Age Age Age
Age to begin retirement benefits: 67 yrs 0 mos 67 yrs 0 mos 67 yrs 0 mos 67 yrs 0 mos
Select benefit to use: Use the Program Estimate Use the Program Estimate Use the Program Estimate Use the Program Estimate
SA
Social Security Amount: $30,634 $30,634 $30,634 $30,634
Widower annual benefit: $0 $0 $0 $0
Reduce benefits by: 0% 0% 0% 0%
Jane
Select Filing Method: Normal Normal Normal Normal
Select when benefits will begin: At Jane's Full Retirement At Jane's Full Retirement At Jane's Full Retirement At Jane's Full Retirement
Age Age Age Age
Age to begin retirement benefits: 67 yrs 0 mos 67 yrs 0 mos 67 yrs 0 mos 67 yrs 0 mos
Select benefit to use: Use the Program Estimate Use the Program Estimate Use the Program Estimate Use the Program Estimate
Social Security Amount: $30,634 $30,634 $30,634 $30,634
Widower annual benefit: $0 $0 $0 $0
Reduce benefits by: 0% 0% 0% 0%
12/03/2012 Page 26 of 89
What If Worksheet
Asset Additions
John's 401k 10.00% 10.00% 10.00% 10.00%
Roth: 0.00% 0.00% 0.00% 0.00%
Maximum contribution each year: No No No No
% Designated as Roth: 0.00% 0.00% 0.00% 0.00%
Plan addition amount: $23,400 $23,400 $23,400 $23,400
Year additions begin: 2012 2012 2012 2012
E
John - Fund All Goals
Jane's 401k 5.00% 5.00% 5.00% 5.00%
PL
Roth: 0.00% 0.00% 0.00% 0.00%
Maximum contribution each year: No No No No
% Designated as Roth: 0.00% 0.00% 0.00% 0.00%
Plan addition amount: $25,000 $25,000 $25,000 $25,000
M
Jane - Fund All Goals
Joint Investment Account
After-Tax Addition: $10,000 $10,000 $10,000 $10,000
Tax-Free Addition: $0 $0 $0 $0
SA
Joint - Fund All Goals
Extra Savings by Tax Category
John's Qualified $0 $0 $0
Jane's Qualified $0 $0 $0
John's Roth $0 $0 $0
Jane's Roth $0 $0 $0
John's Tax-Deferred $0 $0 $0
Jane's Tax-Deferred $0 $0 $0
Taxable $0 $0 $0
12/03/2012 Page 27 of 89
What If Worksheet
Stock Options
Morgan Stanley
Include in plan : Yes Yes Yes Yes
Exercise Scenario : Exercise Scenario 2 Exercise Scenario 2 Exercise Scenario 2 Exercise Scenario 2
Select Special Amount : Expected Expected Expected Expected
Vesting Termination Year : 2022 2022 2022 2022
Return : 9.30% 9.30% 9.30% 9.30%
E
Other Assets
PL
Include in Plan : Yes Yes Yes Yes
Select special amount : Expected Expected Expected Expected
When received : John's retirement John's retirement John's retirement John's retirement
Amount of cash received : $500,000 $500,000 $500,000 $500,000
Insurance Premiums
M
Buy Long Term Care Policy for John
Include in Plan? No No Yes
Benefits : $200/day for 10 years $200/day for 10 years $200/day for 10 years
SA
Annual Premium : $1,000 $1,000 $1,000
When payments stop : At end of John's Plan At end of John's Plan At end of John's Plan
Tax Options
Include Tax Penalties : Yes Yes Yes Yes
Change Tax Rate? No No No No
Year To Change :
Change Tax Rate by this % (+ or -) : 0.00% 0.00% 0.00% 0.00%
12/03/2012 Page 28 of 89
Worksheet Detail - Combined Details
Scenario : Model 6 - Target using Average Returns
These pages provide a picture of how your Investment Portfolio may hypothetically perform over the life of this Plan. The graph shows the
effect on the value of your Investment Portfolio for each year. The chart shows the detailed activities that increase and decrease your
Investment Portfolio value each year including the funds needed to pay for each of your Goals. Shortfalls that occur in a particular year are
denoted with an 'X' under the Goal column.
Total Portfolio Value Graph
E
PL
M
SA
x - denotes shortfall
12/03/2012 Page 29 of 89
Beginning Portfolio Value Funds Used
Event or Ages Year Earmarked Fund All Additions Other Stock Post Investment Taxes Retirement College - Travel Leave Ending
Goals To Assets Additions Options Retirement Earnings Jimmy Bequest Portfolio
Income Value
51/49 2012 125,000 1,425,000 58,400 0 0 0 138,483 22,070 0 0 0 0 1,724,813
52/50 2013 135,763 1,589,051 58,918 0 0 0 153,579 24,248 0 0 0 0 1,913,062
53/51 2014 147,452 1,765,611 59,936 0 0 0 169,875 25,881 0 0 0 0 2,116,992
54/52 2015 160,147 1,956,845 60,954 0 0 0 187,521 27,602 0 0 0 0 2,337,866
E
55/53 2016 173,936 2,163,930 61,472 0 0 0 203,666 29,416 0 33,875 0 0 2,539,713
56/54 2017 152,120 2,387,592 62,990 0 0 0 221,001 31,329 0 35,907 0 0 2,756,468
57/55 2018 126,219 2,630,249 64,008 0 95,029 0 247,748 36,381 0 38,062 0 0 3,088,810
PL
58/56 2019 95,748 2,993,062 65,026 0 51,351 0 272,493 40,311 0 40,345 0 0 3,397,024
59/57 2020 60,172 3,336,852 65,544 0 0 0 298,127 42,813 0 0 0 0 3,717,882
60/58 2021 65,353 3,652,529 67,062 0 0 0 325,884 45,451 0 0 0 0 4,065,377
61/59 2022 70,980 3,994,397 68,080 0 0 0 355,891 48,232 0 0 0 0 4,441,116
62/60 2023 77,092 4,364,024 69,616 0 0 0 388,374 51,163 0 0 0 0 4,847,942
63/61 2024 83,729 4,764,213 70,634 0 0 0 423,489 54,254 0 0 0 0 5,287,812
M
64/62 2025 90,938 5,196,874 71,652 0 0 0 461,450 57,511 0 0 0 0 5,763,403
John & Jane 2026 98,768 5,664,635 0 500,000 0 15,000 513,305 38,016 296,883 0 19,792 0 6,437,017
Retire
66/64 2027 107,272 6,329,745 0 0 0 15,000 527,708 33,481 302,820 0 20,188 0 6,623,235
SA
67/65 2028 116,508 6,506,727 0 0 0 57,054 546,530 39,885 308,877 0 20,592 0 6,857,466
68/66 2029 126,539 6,730,926 0 0 0 57,895 566,200 35,577 315,054 0 21,004 0 7,109,926
69/67 2030 137,435 6,972,491 0 0 0 102,507 590,574 42,997 321,355 0 21,424 0 7,417,231
70/68 2031 149,268 7,267,964 0 0 0 104,257 614,392 71,889 327,783 0 21,852 0 7,714,356
71/69 2032 162,120 7,552,236 0 0 0 106,042 639,310 71,913 334,338 0 22,289 0 8,031,168
72/70 2033 176,078 7,855,090 0 0 0 107,863 665,898 72,017 341,025 0 22,735 0 8,369,152
73/71 2034 191,238 8,177,913 0 0 0 109,720 690,352 124,177 347,845 0 23,190 0 8,674,012
74/72 2035 207,704 8,466,308 0 0 0 111,614 715,508 131,939 354,802 0 23,653 0 8,990,739
75/73 2036 225,587 8,765,152 0 0 0 113,547 741,610 140,692 361,898 0 24,127 0 9,319,178
76/74 2037 245,010 9,074,168 0 0 0 115,518 768,597 150,513 369,136 0 24,609 0 9,659,034
77/75 2038 266,106 9,392,928 0 0 0 117,528 796,518 161,153 376,519 0 25,101 0 10,010,307
78/76 2039 289,018 9,721,289 0 0 0 119,578 825,319 173,343 384,049 0 25,603 0 10,372,208
79/77 2040 313,902 10,058,306 0 0 0 121,670 855,018 186,069 391,730 0 26,115 0 10,744,981
12/03/2012 Page 30 of 89
Beginning Portfolio Value Funds Used
Event or Ages Year Earmarked Fund All Additions Other Stock Post Investment Taxes Retirement College - Travel Leave Ending
Goals To Assets Additions Options Retirement Earnings Jimmy Bequest Portfolio
Income Value
80/78 2041 340,929 10,404,052 0 0 0 123,803 885,532 200,589 399,565 0 26,638 0 11,127,526
81/79 2042 370,283 10,757,243 0 0 0 125,980 916,834 216,097 407,556 0 27,170 0 11,519,516
82/80 2043 402,164 11,117,351 0 0 0 128,199 948,864 233,145 415,707 0 27,714 0 11,920,012
83/81 2044 436,791 11,483,222 0 0 0 130,463 981,536 251,852 424,022 0 28,268 0 12,327,870
E
84/82 2045 474,398 11,853,471 0 0 0 132,772 1,014,749 272,545 432,502 0 28,833 0 12,741,511
85/83 2046 515,244 12,226,267 0 0 0 135,128 1,050,964 295,792 441,152 0 0 0 13,190,658
86/84 2047 559,606 12,631,051 0 0 0 137,530 1,087,666 321,019 449,975 0 0 0 13,644,861
PL
87/85 2048 607,789 13,037,072 0 0 0 139,981 1,124,806 347,511 458,975 0 0 0 14,103,162
88/86 2049 660,119 13,443,043 0 0 0 142,481 1,162,227 376,008 468,154 0 0 0 14,563,708
89/87 2050 716,955 13,846,753 0 0 0 145,030 1,199,726 406,500 477,517 0 0 0 15,024,447
John's Plan Ends 2051 778,685 14,245,762 0 0 0 147,631 1,237,294 437,513 487,068 0 0 0 15,484,792
-/89 2052 845,730 14,639,062 0 1,000,000 0 82,642 1,365,608 490,591 386,407 0 0 0 17,056,044
-/90 2053 918,547 16,137,496 0 0 0 83,995 1,412,846 525,394 394,135 0 0 0 17,633,356
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-/91 2054 997,634 16,635,721 0 0 0 85,374 1,460,594 561,835 402,018 0 0 0 18,215,471
Jane's Plan Ends 2055 1,083,531 17,131,940 0 0 0 86,782 1,465,707 583,534 410,058 0 0 500,000 18,274,368
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Notes
• IMPORTANT: The projections or other information generated by this tool regarding the • Investment Earnings are calculated on all assets after any withdrawals for 'Goal Expense',
likelihood of various investment outcomes are hypothetical in nature, do not reflect actual 'Taxes on Withdrawals' and 'Tax Penalties' are subtracted.
investment results, and are not guarantees of future results. • The taxes column is a sum of (1) taxes on retirement income, (2) taxes on strategy income,
(3) taxes on withdrawals from qualified assets for Required Minimum Distributions, (4) taxes
• Results may vary with use and over time.
on withdrawals from taxable assets' untaxed gain used to fund Goals in that year, (5) taxes
• The return assumptions used are estimates based on average annual returns for the index on withdrawals from tax-deferred or qualified assets used to fund goals in that year, and (6)
used as a proxy for each asset class. The portfolio returns were calculated by weighting taxes on the investment earnings of taxable assets. Tax rates used are detailed in the Tax
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individual return assumptions for each asset class according to the portfolio allocation and Inflation Options page. (Please note, the Taxes column does not include any taxes
selected by you or your Financial Advisor. The portfolio returns may have also been modified owed from the exercise of Stock Options or the vesting of Restricted Stock.)
by your Financial Advisor to reflect the outcome of a different return by conducting a Total
Return Adjustment or selecting an Alternative Portfolio. For a explanation of the • Tax Penalties can occur when Qualified and Tax-Deferred Assets are used prior to age
59½. If there is a value in this column, it illustrates that you are using your assets in this
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methodology used to calculate returns, please review the Important Disclosure Information
and Return Methodology sections. Plan in a manner that may incur tax penalties. Generally, it is better to avoid tax penalties
whenever possible.
• The return assumptions in this tool are not reflective of any specific product and do not
include any fees or expenses that may be incurred by investing in specific products. The • These calculations do not incorporate penalties associated with use of 529 Plan
actual returns of a specific product may be more or less than the returns used in this tool. withdrawals for non-qualified expenses.
• Funds for each Goal Expense are used first from Earmarked Assets. If sufficient funds are
• No investment strategy or allocation can eliminate risk or guarantee investment results. not available from Earmarked Assets, Fund All Goals Assets will be used to fund the
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• Additions and withdrawals occur at the beginning of the year. remaining portion of the Goal Expense, if available in that year.
• Other Additions come from items entered in the Other Assets section and any applicable • All funds needed for a Goal must be available in the year the Goal occurs. Funds from
proceeds from insurance policies. Earmarked Assets that become available after the goal year(s) have passed are not included
• Stock Options and Restricted Stock values are after-tax and based on the Exercise Scenario in the funding of that Goal, and accumulate until the end of the Plan.
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selected. • Ownership of Qualified Assets is assumed to roll over to the surviving spouse at the death
• Strategy Income is based on the particulars of the Goal Strategies selected. Strategy of the original owner. It is also assumed the surviving spouse inherits all assets of the
Income from immediate annuities and 72(t) distributions is pre-tax. Strategy Income from original owner.
Net Unrealized Appreciation (NUA) is after-tax.
• Post Retirement Income includes the following: Social Security, pension, annuity, rental
property, royalty, alimony, part-time employment, trust, and any other retirement income as
entered in the Plan.
• If either Social Security Program Estimate or Use This Amount and Evaluate Annually is
selected for a participant, the program will default to the greater of the selected benefit or
the age adjusted spousal benefit based on the other participant's benefit.
12/03/2012 Page 32 of 89
Worksheet Detail - Retirement Distribution Cash Flow Chart
Year 2026 2027 2028 2029 2030 2031 2032 2033

Age (John / Jane) 65/63 66/64 67/65 68/66 69/67 70/68 71/69 72/70
Income and Earnings Assign To
Pension Income Fund All Goals 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000
Social Security - John Fund All Goals 0 0 42,054 42,895 43,753 44,628 45,521 46,431
Social Security - Jane Fund All Goals 0 0 0 0 43,753 44,628 45,521 46,431
Life Insurance - John Fund All Goals 0 0 0 0 0 0 0 0
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Real Estate Investment Fund All Goals 500,000 0 0 0 0 0 0 0
Investment Earnings 513,305 527,708 546,530 566,200 590,574 614,392 639,310 665,898
Total Income and Earnings 1,028,305 542,708 603,584 624,096 693,081 718,648 745,352 773,761
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Cash Used To Fund Goals
Retirement - Living Expense 100% 296,883 302,820 308,877 315,054 321,355 327,783 334,338 341,025
Travel 100% 19,792 20,188 20,592 21,004 21,424 21,852 22,289 22,735
Leave Bequest 100% 0 0 0 0 0 0 0 0
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Total Goal Funding (316,675) (323,008) (329,469) (336,058) (342,779) (349,635) (356,627) (363,760)
Total Taxes and Tax Penalty (38,016) (33,481) (39,885) (35,577) (42,997) (71,889) (71,913) (72,017)
Cash Surplus/Deficit (Net Change in Portfolio) 673,614 186,218 234,230 252,460 307,305 297,125 316,812 337,983
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Portfolio Value
Future Dollars
Beginning Value 5,763,403 6,437,017 6,623,235 6,857,466 7,109,926 7,417,231 7,714,356 8,031,168
Cash Surplus/Deficit 673,614 186,218 234,230 252,460 307,305 297,125 316,812 337,983
Investment Asset Additions 0 0 0 0 0 0 0 0
Ending Value 6,437,017 6,623,235 6,857,466 7,109,926 7,417,231 7,714,356 8,031,168 8,369,152
Current Dollars
Ending Value 4,782,798 4,824,668 4,897,345 4,978,081 5,091,416 5,191,540 5,298,770 5,413,494
Taxes
Total Taxes 38,016 33,481 39,885 35,577 42,997 71,889 71,913 72,017
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Year 2026 2027 2028 2029 2030 2031 2032 2033

Age (John / Jane) 65/63 66/64 67/65 68/66 69/67 70/68 71/69 72/70
Tax Penalty 0 0 0 0 0 0 0 0
Federal Marginal Tax Rate 25.00% 25.00% 25.00% 25.00% 25.00% 28.00% 28.00% 28.00%
State Marginal and Local Tax Rate 6.85% 6.85% 6.85% 6.85% 6.85% 6.85% 6.85% 6.85%
Estimated Required Minimum Distribution (RMD)
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John 0 0 0 0 0 100,114 108,324 117,191
Jane 0 0 0 0 0 0 0 0
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Portfolio Withdrawal Rate 4.82% 4.78% 4.16% 4.10% 3.53% 3.63% 3.57% 3.50%
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Year 2034 2035 2036 2037 2038 2039 2040 2041

Age (John / Jane) 73/71 74/72 75/73 76/74 77/75 78/76 79/77 80/78
Income and Earnings
Social Security - John Fund All Goals 47,360 48,307 49,273 50,259 51,264 52,289 53,335 54,402
Social Security - Jane Fund All Goals 47,360 48,307 49,273 50,259 51,264 52,289 53,335 54,402
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Real Estate Investment Fund All Goals 0 0 0 0 0 0 0 0
Investment Earnings 690,352 715,508 741,610 768,597 796,518 825,319 855,018 885,532
Total Income and Earnings 800,072 827,122 855,156 884,114 914,046 944,897 976,688 1,009,336
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Travel 100% 23,190 23,653 24,127 24,609 25,101 25,603 26,115 26,638
Leave Bequest 100% 0 0 0 0 0 0 0 0
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Portfolio Value
Future Dollars
Beginning Value 8,369,152 8,674,012 8,990,739 9,319,178 9,659,034 10,010,307 10,372,208 10,744,981
Ending Value 8,674,012 8,990,739 9,319,178 9,659,034 10,010,307 10,372,208 10,744,981 11,127,526
Current Dollars
Ending Value 5,500,676 5,589,736 5,680,327 5,772,039 5,864,659 5,957,533 6,050,631 6,143,183
Taxes
Total Taxes 124,177 131,939 140,692 150,513 161,153 173,343 186,069 200,589
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Year 2034 2035 2036 2037 2038 2039 2040 2041

Age (John / Jane) 73/71 74/72 75/73 76/74 77/75 78/76 79/77 80/78
Tax Penalty 0 0 0 0 0 0 0 0
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John 126,765 137,102 148,256 160,289 172,447 186,372 200,343 215,265
Jane 142,606 154,279 166,885 180,492 195,176 211,017 227,024 245,356
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Year 2042 2043 2044 2045 2046 2047 2048 2049

Age (John / Jane) 81/79 82/80 83/81 84/82 85/83 86/84 87/85 88/86
Income and Earnings
Social Security - John Fund All Goals 55,490 56,600 57,732 58,886 60,064 61,265 62,490 63,740
Social Security - Jane Fund All Goals 55,490 56,600 57,732 58,886 60,064 61,265 62,490 63,740
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Real Estate Investment Fund All Goals 0 0 0 0 0 0 0 0
Investment Earnings 916,834 948,864 981,536 1,014,749 1,050,964 1,087,666 1,124,806 1,162,227
Total Income and Earnings 1,042,814 1,077,063 1,111,999 1,147,521 1,186,092 1,225,197 1,264,787 1,304,708
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Travel 100% 27,170 27,714 28,268 28,833 0 0 0 0
Leave Bequest 100% 0 0 0 0 0 0 0 0
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Portfolio Value
Future Dollars
Beginning Value 11,127,526 11,519,516 11,920,012 12,327,870 12,741,511 13,190,658 13,644,861 14,103,162
Ending Value 11,519,516 11,920,012 12,327,870 12,741,511 13,190,658 13,644,861 14,103,162 14,563,708
Current Dollars
Ending Value 6,234,891 6,325,155 6,413,312 6,498,529 6,595,693 6,689,027 6,778,134 6,862,233
Taxes
Total Taxes 216,097 233,145 251,852 272,545 295,792 321,019 347,511 376,008
12/03/2012 Page 37 of 89
Year 2042 2043 2044 2045 2046 2047 2048 2049

Age (John / Jane) 81/79 82/80 83/81 84/82 85/83 86/84 87/85 88/86
Tax Penalty 0 0 0 0 0 0 0 0
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John 231,187 248,156 266,215 285,405 303,695 322,825 342,771 363,489
Jane 263,748 283,393 304,354 326,692 350,467 375,731 399,809 424,994
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12/03/2012 Page 38 of 89
Year 2050 2051 2052 2053 2054 2055

Age (John / Jane) 89/87 90/88 -/89 -/90 -/91 -/92
Income and Earnings
Pension Income Fund All Goals 15,000 15,000 15,000 15,000 15,000 15,000
Social Security - John Fund All Goals 65,015 66,315 0 0 0 0
Social Security - Jane Fund All Goals 65,015 66,315 67,642 68,995 70,374 71,782
Life Insurance - John Fund All Goals 0 0 1,000,000 0 0 0
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Real Estate Investment Fund All Goals 0 0 0 0 0 0
Investment Earnings 1,199,726 1,237,294 1,365,608 1,412,846 1,460,594 1,465,707
Total Income and Earnings 1,344,757 1,384,925 2,448,250 1,496,841 1,545,968 1,552,489
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Retirement - Living Expense 100% 477,517 487,068 386,407 394,135 402,018 410,058
Travel 100% 0 0 0 0 0 0
Leave Bequest 100% 0 0 0 0 0 500,000
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Total Goal Funding (477,517) (487,068) (386,407) (394,135) (402,018) (910,058)
Total Taxes and Tax Penalty (406,500) (437,513) (490,591) (525,394) (561,835) (583,534)
Cash Surplus/Deficit (Net Change in Portfolio) 460,739 460,345 1,571,252 577,312 582,115 58,897
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Portfolio Value
Future Dollars
Beginning Value 14,563,708 15,024,447 15,484,792 17,056,044 17,633,356 18,215,471
Cash Surplus/Deficit 460,739 460,345 1,571,252 577,312 582,115 58,897
Investment Asset Additions 0 0 0 0 0 0
Ending Value 15,024,447 15,484,792 17,056,044 17,633,356 18,215,471 18,274,368
Current Dollars
Ending Value 6,940,517 7,012,914 7,573,058 7,675,873 7,773,794 7,646,009
Cash Surplus/Deficit 212,838 208,486 697,652 251,306 248,429 24,642
Taxes
Total Taxes 406,500 437,513 490,591 525,394 561,835 583,534
12/03/2012 Page 39 of 89
Year 2050 2051 2052 2053 2054 2055

Age (John / Jane) 89/87 90/88 -/89 -/90 -/91 -/92
Tax Penalty 0 0 0 0 0 0
Federal Marginal Tax Rate 35.00% 35.00% 35.00% 35.00% 35.00% 35.00%
State Marginal and Local Tax Rate 8.97% 8.97% 8.97% 8.97% 8.97% 8.97%
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John 384,916 403,389 0 0 0 0
Jane 451,252 478,527 886,440 928,981 971,597 1,013,869
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Portfolio Withdrawal Rate 2.62% 2.59% 2.01% 1.99% 1.96% 4.69%
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12/03/2012 Page 40 of 89
Notes
• IMPORTANT: The projections or other information generated by this tool regarding the • Stock Options and Restricted Stock values are after-tax and based on the Exercise Scenario
likelihood of various investment outcomes are hypothetical in nature, do not reflect actual selected.
investment results, and are not guarantees of future results. • Income from Other Assets and proceeds from Insurance Policies are after-tax values. Any
• Results may vary with use and over time. remaining asset value after 72(t) distributions have been completed is a pre-tax value.
• The return assumptions used are estimates based on average annual returns for the index • Investment Earnings are calculated on all assets after any withdrawals for funding goals,
used as a proxy for each asset class. The portfolio returns were calculated by weighting taxes on withdrawals, and tax penalties, if applicable, are subtracted.
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individual return assumptions for each asset class according to the portfolio allocation • Shortfalls that occur in a particular year are denoted with an 'x' in the Cash Used to Fund
selected by you or your Financial Advisor. The portfolio returns may have also been modified Goals section of the chart.
by your Financial Advisor to reflect the outcome of a different return by conducting a Total • The Total Taxes are a sum of (1) taxes on retirement income, (2) taxes on strategy income,
Return Adjustment or selecting an Alternative Portfolio. For a explanation of the (3) taxes on withdrawals from qualified assets for Required Minimum Distributions, (4) taxes
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methodology used to calculate returns, please review the Important Disclosure Information on withdrawals from taxable assets' untaxed gain used to fund Goals in that year, (5) taxes
and Return Methodology sections. on withdrawals from tax-deferred or qualified assets used to fund goals in that year, and (6)
• The return assumptions in this tool are not reflective of any specific product and do not taxes on the investment earnings of taxable assets. Tax rates used are detailed in the Tax
include any fees or expenses that may be incurred by investing in specific products. The and Inflation Options page. (Please note, the Total Taxes do not include any taxes owed
actual returns of a specific product may be more or less than the returns used in this tool. from the exercise of Stock Options or the vesting of Restricted Stock.)
• No investment strategy or allocation can eliminate risk or guarantee investment results. • Tax Penalties can occur when Qualified and Tax-Deferred Assets are used prior to age
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59½. If there is a value in this row, it illustrates that you are using your assets in this Plan in
• The values shown for income and investment earnings are estimates based on the a manner that may incur tax penalties. Generally, it is better to avoid tax penalties whenever
assumptions included in this report, such as rates of return, inflation rate, asset values, asset possible.
additions, tax rates, income sources and amounts, and goal expenses. Any changes in
assumptions will also change these values. • The Cash Surplus/Deficit is the net change in the Portfolio Value for the specified year.
This value is your income and earnings minus what was spent to fund goals minus taxes.
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• Additions and withdrawals occur at the beginning of the year.
• The Ending Value of the Portfolio in Current Dollars is calculated by discounting the
• The Income section includes Retirement Income, Strategy Income, Stock Options, Ending Value of the Portfolio in Future Dollars by the Base Inflation Rate for this Plan.
Restricted Stock, Other Assets, proceeds from Insurance Policies, and any remaining asset
• The Cash Surplus/Deficit in Current Dollars is calculated by discounting the Cash
value after 72(t) distributions have been completed.
Surplus/Deficit in Future Dollars by the Base Inflation Rate for this Plan.
• Retirement Income includes the following: Social Security, pension, annuity, rental • These calculations do not incorporate penalties associated with use of 529 Plan
property, royalty, alimony, part-time employment, trust, and any other retirement income as withdrawals for non-qualified expenses.
entered in the Plan.
• Ownership of Qualified Assets is assumed to roll over to the surviving spouse at the death
• If either Social Security Program Estimate or Use This Amount and Evaluate Annually is of the original owner. It is also assumed the surviving spouse inherits all assets of the
selected for a participant, the program will default to the greater of the selected benefit or original owner.
• Strategy Income is based on the particulars of the Goal Strategies selected. Strategy
Income from immediate annuities and 72(t) distributions is pre-tax. Strategy Income from
Net Unrealized Appreciation (NUA) is after-tax.
12/03/2012 Page 41 of 89
Worksheet Detail - Sources of Income and Earnings
This graph shows the income sources and earnings available in each year from retirement through the End of the Plan.
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Notes
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• IMPORTANT: The projections or other information generated by this tool regarding the • All Retirement Income, Immediate Annuity Strategy Income, 72(t) Strategy Income, the
likelihood of various investment outcomes are hypothetical in nature, do not reflect actual remaining asset value after 72(t) distributions, and Investment Earnings are pre-tax, future
investment results, and are not guarantees of future results. values.
• Results may vary with use and over time. • NUA Strategy Income, Stock Options, Restricted Stock, Other Assets, and proceeds from
Insurance Policies are after-tax future values.
• Sources of Income can include Retirement Income, Strategy Income, Stock Options,
Restricted Stock, Other Assets, proceeds from Insurance Policies, and any remaining asset • If either Social Security Program Estimate or Use This Amount and Evaluate Annually is
value after 72(t) distributions have been completed. selected for a participant, the program will default to the greater of the selected benefit or
• Investment Earnings are calculated on all assets after any withdrawals for funding goals,
taxes on withdrawals, and tax penalties, if applicable, are subtracted.
12/03/2012 Page 42 of 89
Worksheet Detail - Inside the Numbers Final Result
Inside the Numbers - Final Result For Model 6 - Target
• The graph below shows the results for a Sample of 100 Monte Carlo Trials, but that is not enough Trials to determine your Probability of Success.
• Your Probability of Success, as shown by the meter, uses a mathematical simulation, equivalent to 10,000 Trials, to calculate your Final Result.
• Your Probability of Success represents the percentage of 10,000 Trials in which you could expect to attain all your Goals.
Final Result
Simulation Equivalent to
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10,000 Trials
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Probability of Success: 86%
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(70% - 90%)
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The table below is a numerical representation of the above Sample of 100 trials. It is In the Sample of 100 Trials table, the trials are ranked from best to worst (from 1 to 100)
provided for informational purposes to illustrate the general range of results you might based on the End of Plan value. For each trial listed (1st, 25th, 50th, 75th and 100th), the
expect. However, neither the graph nor the table reflects the Final Result, which is your corresponding portfolio values for that trial will be illustrated in the years of the trial that
Probability of Success as shown by the meter to the right. are indicated.
Trials Year 5 Year 10 Year 15 Year 20 Year 25 End of Plan Year Money Goes to $0
Best $2,915,290 $5,626,061 $11,410,253 $20,628,194 $46,830,532 $247,104,247
25th $2,083,197 $2,361,125 $5,458,787 $7,722,823 $12,469,675 $21,956,981
50th $3,293,423 $6,847,228 $9,791,390 $10,277,983 $9,354,163 $10,327,307
75th $2,010,362 $3,843,657 $5,705,477 $5,153,942 $5,379,916 $0 2055
Worst $1,505,420 $1,572,677 $2,205,963 $377,044 $0 $0 2032
12/03/2012 Page 43 of 89
Worksheet Detail - Special Asset Test
Special Asset Test for Model 6 - Target
Likelihood of Funding Goals
Low Expected High
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Probability of Success: 83% Probability of Success: 86% Probability of Success: 87%
In Confidence Zone In Confidence Zone In Confidence Zone
Future Amounts
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Description When Sold
Low Expected High
Real Estate Investment at John's retirement $300,000 $500,000 $700,000

Morgan Stanley 2018 $71,701 $146,380 $179,774
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Cash Schedule: 2018 $57,022 $95,029 $111,798
2019 $14,680 $51,351 $67,977
It is often difficult to predict the value that will be received from the sale of assets in the future. This creates a hidden risk to your plan.
These results show your Probability of Success using the three estimates you provided for the amount of after-tax cash you might receive
from the sale of each Special Asset shown in the table. For each result calculated, all assets are assumed to receive the Low, Expected or
High amount. All other assumptions in the plan remain unchanged.
There is a Risk that you will receive the Low values (or less than the Low values). If this causes your Probability of Success to fall below your
Confidence Zone, you should consider what adjustments might be necessary.
12/03/2012 Page 44 of 89
Worksheet Detail - Portfolio Probability Matrix
Portfolio Probability Matrix for Model 6 - Target
Risk Based Portfolio used in Both before and during Retirement with Results Bear Market Loss
Portfolio Model 6 - Target same portfolio Probability of Safety Margin Great Recession Bond Bear Market
Success (Current Dollars) Return Return
Model 1 < 40% $24,993 12% -5%
Model 2 < 40% $89,861 -4% 0%
Model 3 63% $1,530,026 -15% 3%
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Current 64% $2,689,052 -29% 10%
Model 4 88% $3,486,724 -22% 5%
Model 5 88% $5,198,603 -28% 7%
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Model 6 86% $7,646,009 -38% 10%
Model 7 82% $10,860,503 -51% 15%
Model 8 82% $11,534,791 -51% 15%
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12/03/2012 Page 45 of 89
Worksheet Detail - Social Security Maximization
Social Security Maximization for Model 6 - Target
John begins at John Jane

Strategy Used
age 70 and files/suspends, files/suspends,
Social Security Strategy in Model 6 - At retirement At FRA At age 70
Jane begins at Jane restricted John restricted
Target
FRA application application
Start age
John 67 65 67 70 70 70 69
Jane 67 63 67 70 67 67 70
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First year benefit in current dollars
John $30,634 $26,550 $30,634 $37,987 $37,987 $37,987 $15,317
Jane $30,634 $22,976 $30,634 $37,987 $30,634 $15,317 $37,987
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Maximization Based on Cash Received
Total lifetime benefit in current dollars $1,531,714 $1,393,860 $1,531,714 $1,671,406 $1,623,617 $1,717,358 $1,686,724
Break Even Point
John N/A 80 82 81 80 81
Jane N/A 78 80 79 78 79
Maximization Based on Overall Plan Result

Probability of success 86%
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85% 86% 86% 86% 86% 86%
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Notes
• The Program does not include Social Security benefits prior to a recipient’s retirement age. The
Start Age for each Social Security Strategy is the earliest the Program will include a Social Security
benefit for each recipient.
12/03/2012 Page 46 of 89
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Employer Stock Plans

Stock Options
Introduction to Your Stock Options Although the exercise of an ISO is generally not a taxable event for regular tax purposes,
the difference between the strike price and the stock price on the date of exercise is
This section of your report summarizes your Stock Option plan and calculates your current
considered a preference item for federal, and possibly state, alternative minimum tax
option equity value for all fully vested shares. It also calculates an estimate of the potential
(AMT) purposes. Depending on the circumstances, the exercise of ISOs can cause a
future option equity values, that may be available to help fund your goals each year based
taxpayer to be subject to the AMT and incur a higher tax liability even though shares have
upon the assumptions you have made.
not yet been sold and gains have yet to be realized.
We believe this information is an important step in a financial goal plan. We look forward
Nonqualified Stock Options (NQOs) - Unlike ISOs, the spread on NQOs is immediately
to helping you make informed decisions regarding your stock option strategy.
recognized as compensation income upon exercise, for regular tax purposes, and is
This Report is for your information only and does not constitute the solicitation to purchase therefore subject to federal, and possibly state income tax, as well as Medicare and FICA
or sell any specific security. tax. If the stock is held after exercise, any subsequent appreciation is treated as capital
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gain (long-term, if held for more than one year) when the stock is sold.
General Discussion
Exercise Scenarios
Your stock options can be a significant component of your financial portfolio. Stock options
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can give you the opportunity to benefit from the potential appreciation in your company's The future potential after-tax option equity cash flows illustrated in this analysis, for each
stock. As with any other investments, there are certain risks associated with stock options exercise scenario, were calculated based on selecting one or more Timing Methods and
which you should take into consideration. Therefore, it is critical that you are familiar with certain assumptions described below:
your stock options, how they function, and the financial implications they may have on your
overall portfolio. Stock options provide employees with the right to buy company stock at a Available Timing Methods
specified price, known as the strike price, within a certain period of time. A company can All exercise scenarios assume a cashless exercise strategy.
grant two types of stock options - incentive stock options (ISOs) and non-qualified stock • Now - All Vested Only - Currently vested options that are in-the-money by any amount
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options (NQOs).
are exercised now; all remaining options are lost.
Incentive Stock Options (ISOs) - One advantage of an ISO is that no regular income tax is • Now and As Vested - Currently vested options that equal or exceed the minimum
recognized upon exercising the option. In addition, if the acquired stock is held for two percentage gain are exercised now. Remaining options are either exercised in the first year
years from the date of grant and one year from the date of exercise, favorable long-term they are both vested and exceed the minimum percentage gain or are exercised in the year
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capital gains rates will apply to all of the appreciation (between the strike price and sale they expire if they are in-the-money by any amount.
price) upon the subsequent sale of the stock. The sale of any shares prior to satisfying • Now and At Expiration - Currently vested options that equal or exceed the minimum
either of these holding period requirements will be treated as a "disqualifying disposition." percentage gain are exercised now. All remaining options are exercised in the year they
If the acquired stock is not held for one year from exercise, the bargain element (the expire if they are in-the-money by any amount.
difference between the value of the stock on exercise and the strike price, also referred to
as "spread") is treated as ordinary income and any post-exercise gain is short-term capital • Start Year and As Vested - Beginning in the exercise start year, vested options that equal
gain. If the stock is held for one year from exercise but not two years from grant, the or exceed the minimum percentage gain are exercised. After the exercise start year,
bargain element (or spread) is ordinary income and any post-exercise gain is long-term remaining options are either exercised in the first year they are both vested and exceed the
capital gain. minimum percentage gain or are exercised in the year they expire if they are in-the-money
by any amount.
• Start Year and At Expiration - Beginning in the exercise start year, vested options that
equal or exceed the minimum percentage gain are exercised. After the exercise start year,
remaining options are exercised in the year they expire if they are in-the-money by any
amount.
• At Expiration - Options are exercised in the year they expire if they are in-the-money by
any amount.
12/03/2012 Page 47 of 89
Stock Options
Other Assumptions • The after-tax calculations within the Option Equity Schedule and Price Sensitivity Analysis
• Return assumption for this Stock - The projected return for the asset class category assume that all ISOs are disqualified and the Regular Tax Rate is applied. In addition, the
Vesting Schedule does not calculate whether ISO grants meet the $100,000 limitation.
selected, unless otherwise indicated by you. If a Stock Option Plan with Exercise Scenarios is
treated as a Special Asset, the return assumption for this stock includes three growth rates • Exercise costs for NQOs and ISOs have not been considered nor have any dividends that
-- labeled Low, Expected and High returns. The Program default for all three returns is the might have been received from ISOs that are exercised and held for one year.
projected return for the asset class category selected, and can be changed by you. This • Grants expected to be received in the future are not represented in this Stock Option
approach can help illustrate financial risk not otherwise reflected in the Plan results. Summary.
• Minimum percentage gain to exercise - The minimum percentage gain in the stock price
above the exercise price that is required before exercising options. Applying this minimum Cash Receipt Schedule
defers the exercise of options with only relatively small spread between the stock price and The future potential after-tax option equity cash flows illustrated in this analysis, for each
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the option price. Cash Receipt Schedule, are the amounts you entered, based on your own calculations.
• Vesting Termination Year - A year in which it is assumed that vesting ends prematurely.
All remaining unvested options are lost. Assumptions
• Exercise Start Year - A year in which it is expected that you will begin to exercise vested • The Current Value should represent the current value of all vested stock options in this
PL
options, if different than the current year. Stock Option Plan.
• Hold ISO for One Year - If it is indicated that ISO shares are not to be "Held for One • The Value if the Owner dies today should represent the value to be paid by the Stock
Year", then it is assumed that the ISO shares are disqualified and a Regular Tax Rate is Option Plan if the owner dies today.
applied. If it is indicated that ISO shares are to be "Held for One Year", it is assumed that • The Cash Receipts Table shows expected after-tax amounts for one or more years in the
those shares will have been held for at least two years from the date of grant and over one future, based on your own calculations and as entered by you.
year from the date of exercise, thus qualifying for long-term capital gains treatment and the • If a Stock Option Plan with a Cash Receipt Schedule is treated as a Special Asset, the Cash
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Long-Term Tax Rate is applied. Receipts Table shows the Low, Expected, and High after-tax amounts for each year in the
General Assumptions future, based on your own calculation and as entered by you. This approach can help
illustrate financial risk not otherwise reflected in the Plan results.
• The Regular Tax Rate is the estimated tax rate applied to the potential option equity on all
NQOs exercised and sold and on any ISO shares sold that were not held for one year. This • The possible impact of the Alternative Minimum Tax (AMT) and any other cost and taxes
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rate should be the total estimate for all applicable taxes, including Federal, State, and Local associated with exercising Stock Options are not reflected in any calculations, unless its
Income taxes. Unless included in this rate, Medicare and FICA taxes are not applied impact was taken into account, by you, when entering the cash receipt amounts.
separately to NQO equity.
• The Long-Term Tax Rate is the estimated tax rate applied to the potential option equity on
any ISO shares sold that were held for more than one year after exercise (as well as two
years from date of grant). This rate should be the total estimate for all applicable taxes,
including Federal, State, and Local Income taxes.
• The possible impact of the Alternative Minimum Tax (AMT) is not reflected in any
calculations. Since the exercise of ISOs can have substantial AMT consequences, you should
consult with your personal tax advisor.
12/03/2012 Page 48 of 89
Stock Options Summary
Morgan Stanley (MS)
Owner : John
Options Outstanding Options Assumptions
Granted : 20,000 Vested : 16,000 Regular Tax Rate : 40.0%
Exercised : 0 Not Vested : 4,000 Long-Term Tax Rate : 20.0%
Option Equity After Tax : $15,000
Market Price* : $16.75 on 12/03/2012
Asset Class : US Large-Cap Value Stocks
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Options Vest at Death : Yes
Special Asset : Yes
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* Security prices included in the stock option analysis are based on the market price that you entered for the date referenced and are included only
because the system requires it for analysis purposes. This Report is for your information only and does not constitute the solicitation to purchase or
sell any specific security and you should not rely on the information presented when making an investment or liquidation decision. We make no
warranty with respect to any security price and do not guarantee that the price listed will be available to you should you choose to exercise your
options. The actual price available to you should you choose to exercise your options may be more or less than indicated on the report.
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Vesting Schedule
The Vesting Schedule below is a summary showing the percentage of each option grant that becomes exercisable over time according to the
information you have provided.
Name % Vested by Year
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1 2 3 4 5 6 7 8 9 10
MS Vest 20% 20% 20% 20% 20% 0% 0% 0% 0% 0%
12/03/2012 Page 49 of 89
Option Equity Schedule

The Option Equity Schedule below shows a summary of your stock option grants and calculates the pre-tax and after-tax option equity value for all
vested stock options based on the current market price. These values are calculated using the information you provided for each grant, your tax
rate assumption and the current market price of the stock as indicated by you. If your plan includes ISOs, the After Tax Option Equity value assumes
that all ISOs are immediately disqualified and the regular tax rate is applied. This Report does not constitute the solicitation to purchase or sell any
specific security.
Grant Options Outstanding Options Option Equity - Vested Only
Market Price $16.75
Name Date Price Type Expiration Vesting Granted Exercised Vested Not Vested Pre-Tax Tax at 40.0% After Tax
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Date Schedule
2007 Grant 01/01/2007 $14.25 ISO 01/01/2017 MS Vest 10,000 0 10,000 0 $25,000 $10,000 $15,000
2009 Grant 01/01/2009 $20.00 NQO 01/01/2019 MS Vest 10,000 0 6,000 4,000 $0 $0 $0
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Total : 20,000 0 16,000 4,000 $25,000 $10,000 $15,000
Option Equity Value if Die Today - All Options Vested at Death

The option equity value if John dies today is $25,000 pre-tax. Based upon a tax rate of 40.0%, the after-tax value of the options vested at death is $15,000.
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Price Sensitivity Analysis
The Price Sensitivity Analysis shows a summary of your stock option grants and calculates the potential after-tax option equity values for all vested
stock options based on the current market price as indicated by you as well as a variety of higher and lower assumed prices. Understanding the
impact of potential stock price changes on the after-tax option equity value of particular grants can play an important role in determining option
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exercise strategies. If your plan includes ISOs, the After Tax Option Equity value assumes that all ISOs are immediately disqualified and the regular
tax rate is applied.
Grant Option Equity Sensitivity - After Tax for Vested Options Only
Name Date Price Type Expiration Vested -25% -15% Market* +15% +25%
Date Options $12.56 $14.24 $16.75 $19.26 $20.94
2007 Grant 01/01/2007 $14.25 ISO 01/01/2017 10,000 $0 $0 $15,000 $30,075 $40,125
2009 Grant 01/01/2009 $20.00 NQO 01/01/2019 6,000 $0 $0 $0 $0 $3,375
Total : $0 $0 $15,000 $30,075 $43,500
Change In Value: -$15,000 -$15,000 $0 $15,075 $28,500

* Security prices included in the stock option analysis are based on the market price that you entered for the date referenced and are included only
because the system requires it for analysis purposes. This Report is for your information only and does not constitute the solicitation to purchase or
sell any specific security and you should not rely on the information presented when making an investment or liquidation decision. We make no
warranty with respect to any security price and do not guarantee that the price listed will be available to you should you choose to exercise your
options. The actual price available to you should you choose to exercise your options may be more or less than indicated on the report.
12/03/2012 Page 50 of 89
Full Vesting Schedule

The Full Vesting Schedule illustrates the amount of stock options that are currently vested and calculates any additional amounts that vest in future
years based on the applicable Vesting Schedule.
Grant Options Vesting Each Year
Name Date Price Type Expiration Vesting Currently 2012 2013 2014 2015 2016 Beyond
Date Schedule Vested
2007 Grant 01/01/2007 $14.25 ISO 01/01/2017 MS Vest 10,000 0 0 0 0 0 0
2009 Grant 01/01/2009 $20.00 NQO 01/01/2019 MS Vest 6,000 0 2,000 2,000 0 0 0
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Total : 16,000 0 2,000 2,000 0 0 0
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Exercise Scenarios
The Exercise Scenarios show a summary of your stock option grants and, for each scenario, the timing method(s) and other assumptions outlined in
the Stock Options Introduction that will be used to calculate future potential after-tax option equity as summarized in the Cash Flow Schedule.
Grant Outstanding Options Scenario 1 Scenario 2 Scenario 3
Name Date Price Type Expiration Vesting Vested Not Vested Timing Hold Timing Hold Timing Hold
Date Schedule ISO? ISO? ISO?
2007 Grant
2009 Grant
01/01/2007
01/01/2009
$14.25
$20.00
ISO
NQO
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01/01/2017
01/01/2019
MS Vest
MS Vest
10,000
6,000
0 Now And As
Vested
4,000 Now And As
Vested
Yes
N/A
At Expiration
At Expiration
Yes
N/A
Start Year and
As Vested
Start Year and
As Vested
Yes
N/A
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Total : 16,000 4,000
Accelerated Expiration Year : 2022 2022 2022

Minimum percentage gain to exercise : 8.00% 8.00% 8.00%
Exercise Start Year : 2012 2012 2012
Special Growth Rates

Since this Stock Option Plan with Exercise Scenarios is being treated as a Special Asset, the
Growth Rates table shows the Low, Expected and High return assumption applied to each
exercise scenario.
Low Expected High

Growth Rates : 5.00% 9.30% 11.00%
12/03/2012 Page 51 of 89
Cash Flow Schedule

The Cash Flow Schedule below shows the future potential after-tax option equity value for each scenario indicated, on a year-by-year basis. These
are only estimates based on current information and not guarantees that you will obtain a specific value or tax benefit upon exercise of the Stock
Options. This Report does not constitute the solicitation to purchase or sell any specific security.
Year Assign to Goals Scenario 1 - Option Equity (after-tax) Scenario 2 - Option Equity (after-tax) Scenario 3 - Option Equity (after-tax)
2012 Fund All Goals
2013 Fund All Goals $32,462 $32,462
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2014 Fund All Goals
2015 Fund All Goals $11,228 $11,228
2016 Fund All Goals
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2017 Fund All Goals
2018 Fund All Goals $95,029
2019 Fund All Goals $51,351
2020 Fund All Goals
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Total : $43,690 $146,380 $43,690
Important Note on Alternative Minimum Tax (AMT): If your plan includes ISOs, the possible impact of AMT is not reflected in these calculations.
Since the exercise of ISOs can have substantial AMT consequences, you should consult with your personal tax advisor. Also, the possible impact of
the value of ISOs becoming first exercisable during a single year and exceeding the $100,000 limitation, causing the excess ISOs to be disqualified, is
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not reflected in these calculations.
12/03/2012 Page 52 of 89
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Risk Management
Life Insurance Needs Analysis
Scenario : Model 6 - Target
Life insurance can be an important source of funds for your family in the event of your premature death. In this section, we analyze
whether there are sufficient investment assets and other resources to support your family if you were to die this year and, if there is a
deficit, what additional life insurance may be required to provide the income needed by your survivors.
If John Dies If Jane Dies

Living Expenses covered until Jane is 92 Living Expenses covered until John is 90
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PL
$2,240,156
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Life Insurance Needed $2,187,926
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$1,000,000 Existing Life Insurance $0
$1,240,156 Additional Needed $2,187,926
12/03/2012 Page 53 of 89
Life Insurance Needs Analysis Detail
Life Insurance
$1,000,000 Existing Life Insurance $0
$0 Additional Death Benefit $0
Liabilities and Final Expenses

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$400,000 Debts Paid Off $400,000
$10,000 Final Expenses and Estate Taxes $10,000
$0 Bequests $0
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$0 Other Payments $0
Living Expenses for Survivors
Jane's Age Event John's Age

63 Retirement 65
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92 Plan Ends 90

First Living Expense
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$250,800 Annual Expense (current dollars, after-tax) $250,800
92 Cover expense until Co-Client is this age 90
Second Living Expense
$0 Annual Expense (current dollars, after-tax) $0
0 Cover expense until Co-Client is this age 0
Financial Goals
Checked boxes indicate goals to be funded upon death.

College - Jimmy
Travel
Leave Bequest
12/03/2012 Page 54 of 89
Sell Other Assets
$0 Amount of cash provided by sale of Assets (after tax) $0
Your Assets that are not being sold to fund goals are listed below.
Description Current Value

NY Home $750,000
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Checked boxes indicate Other Assets that will be included in this analysis and used to fund goals.
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Stock Options and Restricted Stock

Checked boxes indicate stock options to be included in Life Insurance.
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Include John's Stock Options
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12/03/2012 Page 55 of 89
Other Income (Income other than employment income)
$0 Annual Other Income Amount $0
(current dollars before tax)
No Will this amount inflate? No
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Include Amount Description Amount Include
$15,000 Pension Income $15,000
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Tax Rate (Estimated average tax rate)
Use this Rate Year Federal State Local
Current rate 2012 33.00% 7.85% 0.00%
Change rate in 0 0.00% 0.00% 0.00%
Rate of Return
Use Return in the Plan you selected
Dependents M
Rate of Return
8.61%
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Name Date of Birth Age Relationship
Jimmy 07/07/1998 14 Both Are Parents
12/03/2012 Page 56 of 89
Disability Needs Analysis - John
If John is Disabled
Disability Insurance can provide an important source of funds during the time when you are unable to work due to a prolonged illness or
injury. This section compares your income needs to your income sources for various disability periods. If there is an Income Shortfall, you
may want to consider the purchase of a Disability Insurance Policy.
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PL
Length of
Disability
1 year(s)
Income
Needed
$500,000
Employment
Income
$250,000
Other Income
M$0
Social Security Group*
Benefit
$0
Insurance
$0
Personal
Insurance
$0
Surplus or
(Shortfall)
-$250,000
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2 year(s) $510,004 $255,000 $0 $0 $0 $0 -$255,004
5 year(s) $541,220 $270,608 $0 $0 $0 $0 -$270,612
10 year(s) $597,551 $298,773 $0 $0 $0 $0 -$298,778
15 year(s) $659,745 $329,870 $0 $0 $0 $0 -$329,875
* The benefit amount may include an after-tax portion that has been grossed up to reflect its pre-tax value.
12/03/2012 Page 57 of 89
If John is Disabled
Refine Needs Analysis
Social Security
Do you want to include Social Security Disability Benefits in the analysis? No
Income Needed (pre-tax, current dollars)

During the first year During these years
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Month 1 $41,674 per month Year 2 $41,667 per month $500,004 per year
Month 2 & 3 $41,666 per month Year 3 - 5 $41,667 per month $500,004 per year
Month 4 & 5 $41,666 per month Year 6 to Age 65 $41,667 per month $500,004 per year
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Month 6 - 12 $41,666 per month
Surplus or Shortfall During First Year

All amounts in this table are monthly, pre-tax amounts.
First Year - Income Employment Other Income Social Security Group* Personal Surplus or
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Month Needed Income Benefit Insurance Insurance (Shortfall)
1 $41,674 $20,833 $0 $0 $0 $0 -$20,841
2 $41,666 $20,833 $0 $0 $0 $0 -$20,833
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3 $41,666 $20,833 $0 $0 $0 $0 -$20,833
4 $41,666 $20,833 $0 $0 $0 $0 -$20,833
5 $41,666 $20,833 $0 $0 $0 $0 -$20,833
6 $41,666 $20,833 $0 $0 $0 $0 -$20,833
7 $41,666 $20,833 $0 $0 $0 $0 -$20,833
8 $41,666 $20,833 $0 $0 $0 $0 -$20,833
9 $41,666 $20,833 $0 $0 $0 $0 -$20,833
10 $41,666 $20,833 $0 $0 $0 $0 -$20,833
11 $41,666 $20,833 $0 $0 $0 $0 -$20,833
12 $41,666 $20,833 $0 $0 $0 $0 -$20,833
12/03/2012 Page 58 of 89
If John is Disabled
Surplus or Shortfall by Age

All amounts in this table are annual, pre-tax amounts.
Age Income Employment Other Income Social Security Group* Personal Surplus or
Needed Income Benefit Insurance Insurance (Shortfall)
52 $510,004 $255,000 $0 $0 $0 $0 -$255,004
53 $520,204 $260,100 $0 $0 $0 $0 -$260,104
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54 $530,608 $265,302 $0 $0 $0 $0 -$265,306
55 $541,220 $270,608 $0 $0 $0 $0 -$270,612
56 $552,045 $276,020 $0 $0 $0 $0 -$276,025
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57 $563,086 $281,541 $0 $0 $0 $0 -$281,545
58 $574,347 $287,171 $0 $0 $0 $0 -$287,176
59 $585,834 $292,915 $0 $0 $0 $0 -$292,920
60 $597,551 $298,773 $0 $0 $0 $0 -$298,778
61 $609,502 $304,749 $0 $0 $0 $0 -$304,753
62
63
64
$621,692
$634,126
$646,808
$310,844
$317,060
$323,402
M$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
-$310,849
-$317,066
-$323,407
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65 $659,745 $329,870 $0 $0 $0 $0 -$329,875
Notes
• Disability benefits may be subject to an elimination period or benefit age cap.
• Income Needed is the amount you have indicated is necessary to maintain your standard of living during the disability period.
12/03/2012 Page 59 of 89
Disability Needs Analysis - Jane
If Jane is Disabled
Disability Insurance can provide an important source of funds during the time when you are unable to work due to a prolonged illness or
injury. This section compares your income needs to your income sources for various disability periods. If there is an Income Shortfall, you
may want to consider the purchase of a Disability Insurance Policy.
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PL
Length of
Disability
1 year(s)
Income
Needed
$500,000
Employment
Income
$250,000
Other Income
M$0
Social Security Group*
Benefit
$0
Insurance
$0
Personal
Insurance
$0
Surplus or
(Shortfall)
-$250,000
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2 year(s) $510,000 $255,000 $0 $0 $0 $0 -$255,000
5 year(s) $541,216 $270,608 $0 $0 $0 $0 -$270,608
10 year(s) $597,546 $298,773 $0 $0 $0 $0 -$298,773
17 year(s) $686,393 $343,196 $0 $0 $0 $0 -$343,196
12/03/2012 Page 60 of 89
If Jane is Disabled
Refine Needs Analysis
Social Security
Do you want to include Social Security Disability Benefits in the analysis? No
Income Needed (pre-tax, current dollars)

During the first year During these years
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Month 1 $41,674 per month Year 2 $41,667 per month $500,000 per year
Month 2 & 3 $41,666 per month Year 3 - 5 $41,667 per month $500,000 per year
Month 4 & 5 $41,666 per month Year 6 to Age 65 $41,667 per month $500,000 per year
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Month 6 - 12 $41,666 per month
Surplus or Shortfall During First Year

All amounts in this table are monthly, pre-tax amounts.
First Year - Income Employment Other Income Social Security Group* Personal Surplus or
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Month Needed Income Benefit Insurance Insurance (Shortfall)
1 $41,674 $20,833 $0 $0 $0 $0 -$20,841
2 $41,666 $20,833 $0 $0 $0 $0 -$20,833
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3 $41,666 $20,833 $0 $0 $0 $0 -$20,833
4 $41,666 $20,833 $0 $0 $0 $0 -$20,833
5 $41,666 $20,833 $0 $0 $0 $0 -$20,833
6 $41,666 $20,833 $0 $0 $0 $0 -$20,833
7 $41,666 $20,833 $0 $0 $0 $0 -$20,833
8 $41,666 $20,833 $0 $0 $0 $0 -$20,833
9 $41,666 $20,833 $0 $0 $0 $0 -$20,833
10 $41,666 $20,833 $0 $0 $0 $0 -$20,833
11 $41,666 $20,833 $0 $0 $0 $0 -$20,833
12 $41,666 $20,833 $0 $0 $0 $0 -$20,833
12/03/2012 Page 61 of 89
If Jane is Disabled
Surplus or Shortfall by Age

All amounts in this table are annual, pre-tax amounts.
Age Income Employment Other Income Social Security Group* Personal Surplus or
Needed Income Benefit Insurance Insurance (Shortfall)
50 $510,000 $255,000 $0 $0 $0 $0 -$255,000
51 $520,200 $260,100 $0 $0 $0 $0 -$260,100
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52 $530,604 $265,302 $0 $0 $0 $0 -$265,302
53 $541,216 $270,608 $0 $0 $0 $0 -$270,608
54 $552,040 $276,020 $0 $0 $0 $0 -$276,020
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55 $563,081 $281,541 $0 $0 $0 $0 -$281,541
56 $574,343 $287,171 $0 $0 $0 $0 -$287,171
57 $585,830 $292,915 $0 $0 $0 $0 -$292,915
58 $597,546 $298,773 $0 $0 $0 $0 -$298,773
59 $609,497 $304,749 $0 $0 $0 $0 -$304,749
60
61
62
$621,687
$634,121
$646,803
$310,844
$317,060
$323,402
M$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
-$310,844
-$317,060
-$323,402
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63 $659,739 $329,870 $0 $0 $0 $0 -$329,870
64 $672,934 $336,467 $0 $0 $0 $0 -$336,467
65 $686,393 $343,196 $0 $0 $0 $0 -$343,196
Notes
• Disability benefits may be subject to an elimination period or benefit age cap.
• Income Needed is the amount you have indicated is necessary to maintain your standard of living during the disability period.
12/03/2012 Page 62 of 89
Long-Term Care Needs Analysis - John
One of the greatest threats to the financial well-being of many people over 50 is the possible need for an extended period of Long-Term
Care, either at home, in an Assisted Living Facility or in a Nursing Home. This Section demonstrates how these expenses could adversely
affect your Investment Portfolio and how you might protect it with a Long-Term Care policy.
This graph shows what would happen to your portfolio if John enters a Nursing Home at age 80 for 10 years at an annual cost, in Current
Dollars, of $130,670 inflating at 6.00%.
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Total Cost of Long-Term Care : $9,332,276
Total of Existing Long-Term Care Policy $0

Benefits :
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Total Benefits from purchasing a new $3,697,056
Long-Term Care Policy* :
Amount offset by expense reduction $486,125

during care period :
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Net Cost of care to be paid from $5,149,095
Portfolio :
* Assumptions for new LTC policy are 10 year Benefit Period,

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100-day Elimination Period, $200 Daily Benefit Amount, 100%
Home Care Benefit, and Compounded Inflation at 5%.
12/03/2012 Page 63 of 89
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Estate Analysis
Estate Introduction
This section of your report provides a general overview of your current estate situation and It is often said that you cannot take your money with you; however, it is somewhat
shows the projected value of your estate at death. It includes an estimate of Federal Estate comforting to know that you can determine what happens to it after you're gone. A
taxes, expenses, and the amounts to be received by your beneficiaries. If appropriate, this well-designed estate plan can not only help make sure that your assets go where you want
report also illustrates one or more estate planning strategies that you may want to consider. them to, but also make the process simpler, faster, less expensive, and less painful. Such
planning followed by an orderly transition of your estate can have a positive impact on the
Important Note: This analysis is intended solely to illustrate potential estate analysis issues. people you care about.
Prior to taking any action, we recommend that you review the legal and/or tax implication
of this analysis with your personal legal and/or tax advisor.
You have told us the following about your current Estate situation;
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• Both John and Jane have Wills.
• Both John and Jane have Medical Directives.
• Both John and Jane have Power Of Attorney.
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This Estate Analysis assumes that you both maintain valid Wills that bequeaths all assets to
each other (Simple Will). This Estate Analysis may not accurately reflect your current estate
where one or both of you does not have a Simple Will.
It is important that both of you have a Will that is valid and up-to-date. Your Wills should
be periodically reviewed by your legal advisor. You should also discuss the appropriateness
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of a Medical Directive and Power of Attorney with your legal advisor.
You have indicated that you have not made provisions for a Bypass Trust. When this
analysis illustrates the potential benefit of a Bypass Trust, it assumes that your assets will be
properly titled and appropriate to fully fund the amount shown.
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This Estate Analysis assumes that you both maintain valid Wills that bequeaths all assets to
each other (Simple Will). This Estate Analysis may not accurately reflect your current estate
where one or both of you does not have a Simple Will.
It is important that both of you have a Will that is valid and up-to-date. Your Wills should be
periodically reviewed by your legal advisor. You should also discuss the appropriateness of a
Medical Directive and Power of Attorney with your legal advisor.
You have indicated that you have not made provisions for a Bypass Trust. When this analysis
illustrates the potential benefit of a Bypass Trust, it assumes that your assets will be properly
titled and appropriate to fully fund the amount shown.
The Need for Estate Planning

How Will You Be Remembered?
It is often said that you cannot take your money with you; however, it is somewhat
comforting to know that you can determine what happens to it after you're gone. A
well-designed estate plan can not only help make sure that your assets go where you want
See
themIMPORTANT DISCLOSURE
to, but also make INFORMATION
the process simpler, faster,atless
theexpensive,
beginning ofless
and thispainful.
documentSuchfor explanations of assumptions, limitations, and methodologies.
planning followed by an orderly transition of your estate can have a positive impact on the
people you care about.
12/03/2012 Page 64 of 89
Estate Introduction
Goal Planning is Important
When it comes to estate taxes, the tax law seemingly penalizes those who fail to plan
properly. Failure to properly plan can sometimes lead to greater estate taxes due. A
well-designed estate plan can potentially reduce taxes substantially, and leave more money
for your heirs.
Probate - Expense and Delays

Probate is the legal process for settling your Estate, which basically means that all your debts
and taxes are paid and remaining assets are distributed. Probate can be time consuming
and expensive, and is open to public review. A well-designed estate plan can reduce the
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costs of probate, save time, and even avoid probate for many assets.
Your Beneficiaries - Leaving More

The desire to control the ultimate disposition of that which we accumulate during our
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lifetime and to provide for those we care about is a strong motivation in most people. In
this regard, there are many questions to answer:
• Who should get the money, and how much?

• When should they get it - all at once or over time?
• Who will manage the money?
• How much should go to charity?
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• Do you want to place restrictions on some assets such as a business or property?
• Who gets important tangible assets (e.g. wedding rings, family heirlooms)?
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• Which assets do you want sold? Which assets should never be sold?
• Will there be enough liquidity to pay taxes?
You - Having Enough

Estate Planning focuses on what happens after you die and includes strategies you can
employ to increase the amount of your assets that pass to your beneficiaries. Some of
these strategies, such as gifting and purchasing life insurance, can cost you a significant
amount of money during your lifetime. While this is certainly financially helpful for your
heirs, is it financially sound for you? A good estate plan also considers the impact of these
strategies on you, while you're alive. You want to make sure that you will have enough
money to support your own lifestyle, before spending money to help your heirs.
12/03/2012 Page 65 of 89
Estate Assumptions
Important Information on Assumptions • The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
("the Act") modified several provisions of the Federal Estate & Gift Tax for 2011 and 2012.
This analysis makes a number of assumptions that could significantly affect your results
As specified in the Act, this analysis incorporates the 35% estate tax rate, the $5 million per
including, but not limited to, the following:
person applicable exclusion amount, and the unification of the Gift Tax and Estate Tax
• Both of you are U.S. Citizens. systems for the $5 million exclusion amount. In addition, the portability of the deceased
spouse’s unused estate exclusion amount (DSUEA) to the surviving spouse is reflected in this
• All Qualified Retirement Plans, IRAs and Tax-deferred Annuities are assumed to have the analysis. If Congress amends or extends the Act, or amends other provisions of the Federal
spouse as the Beneficiary and its value is available to fund goals after the first death. The Estate & Gift Tax, any analysis for future years should be reviewed by you and your tax
contingent Beneficiary is the estate. advisors.
• State inheritance, estate or gift taxes have not been incorporated.
• Gift taxes are not calculated every year, but are totaled and settled at the death of the
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donor.
• Generation-skipping taxes, if applicable, have not been calculated.
• All custodial accounts (UGMA and/or UTMA) are not included in the estate calculations.
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• All amounts contributed to 529 Savings Plans are treated as completed gifts and there is
no recapture provision for any 5-year pre-funding contribution elections.
• Prior gifts above the annual exclusion and for which no taxes have been paid are included
in your Taxable Estate. Prior gifts above the annual exclusion and for which taxes have been
paid are not included in your Taxable Estate.
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• Financial Goals such as "Gift or Donation" or "Leave a Bequest" are not reflected in the
Estate Analysis.
• Bequests stipulated in your will, including charitable bequests, are not reflected in the
Estate Analysis.
• If applicable, reverted gifts and/or life insurance proceeds transferred to a Trust or
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third-party within three years of death are included in your Gross Estate and Taxable Estate.
• In certain calculations, the Bypass Trust may not be fully funded to the available estate
exemption equivalent amount due to prior gifts, titling of assets, insufficient resources,
and/or other bequests.
• The current values of vested stock options are included in the gross estate. The current
values of unvested stock options are included if you indicated, on the Stock Options page,
that the options vest at death.
• In the event Qualified Retirement Plans, IRAs, and Tax-deferred Annuities are used to fund
the Bypass Trust, the program assumes the spouse has disclaimed the assets and the
contigent beneficiary is a 'qualified' trust.
• In the event Other Assets, such as a Primary Residence or Personal Property, are used to
fund the Bypass Trust, the program assumes these assets have a specific value and can in
fact be used to fund the Bypass Trust.
• If applicable, the value of any payment that continues past death created by the
Immediate Annuity Goal Strategy is not included in the estate calculations.
12/03/2012 Page 66 of 89
Estate Analysis Results Combined Summary
Using Model 6 - Target - Both Die at life expectancy - John Predeceases Jane
Existing Estate Existing Estate
Will without Bypass Trust Will with Bypass Trust
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Total Estate : $18,877,218 $18,877,218
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Federal Estate Tax** : $9,773,467 $9,041,053
Estate Expenses : $478,550 $408,975
Amount to Heirs : $8,625,201 $9,427,189

Additional Value to Heirs : $801,989
Amount to Heirs
Net Estate Value :
Bypass Trust :
Other Life Insurance :
M $8,625,201
$0
$0
$8,035,702
$1,391,487
$0
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Life Insurance in Trust : $0 $0
Total : $8,625,201 $9,427,189
Cash Needed to Pay Tax and Expenses

Shortfall at First Death : $0 $0
Shortfall at Second Death : $0 $0
Bypass Trust Funding

Funding Shortfall : $0 $0
** State Estate Taxes are not included. In some states, the tax may be substantial.
12/03/2012 Page 67 of 89
Estate Analysis Results Combined Summary
Notes
• Prior gifts are not included in the amount to heirs. • The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
systems for the $5 million exclusion amount. In addition, the portability of the deceased
analysis. If Congress amends or extends the Act, or amends other provisions of the Federal
Estate & Gift Tax, any analysis for future years should be reviewed by you and your tax
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advisors.
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M
SA
12/03/2012 Page 68 of 89
Estate Analysis Results Flowchart
Existing Estate without Bypass Trust using Model 6 - Target - Both Die at life expectancy - John Predeceases Jane
John's
Gross Estate
$10,046,436
1st Death
Taxes and Expenses
$32,867
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Marital Deduction Bypass Trust Other Life Insurance
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$10,013,568 Transfer : $0 $0
To Heirs : $0
Jane's
Gross Estate
$18,844,350
M ILIT
Policies Owned by Other
$0
SA
2nd Death
Taxes and Expenses
$10,219,150
Total Amount to Heirs
$8,625,201 + $0 + $0 + $0
= $8,625,201
12/03/2012 Page 69 of 89
Notes
• Gross Estate amounts may include the value of reverted gifts. • The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
• Other Life Insurance includes policies where the first person to die is the owner and
insured and the beneficiary of the policy is not the co-client or estate.
• Gross Estate amounts do not include the value of prior gifts. systems for the $5 million exclusion amount. In addition, the portability of the deceased
• The Bypass Trust may not be fully funded to the available estate exemption equivalent
amount due to prior gifts, titling of assets, insufficient resources, and/or other bequests.
advisors.
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PL
M
SA
12/03/2012 Page 70 of 89
Existing Estate with Bypass Trust using Model 6 - Target - Both Die at life expectancy - John Predeceases Jane
John's
Gross Estate
$10,046,436
1st Death
Taxes and Expenses
$32,867
E
PL
$9,013,568 Transfer : $1,000,000 $0
To Heirs : $1,391,487
Jane's
Gross Estate
$17,452,863
M ILIT
$0
SA
2nd Death
Taxes and Expenses
$9,417,161
$8,035,702 + $1,391,487 + $0 + $0
= $9,427,189
12/03/2012 Page 71 of 89
Notes
advisors.
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PL
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SA
12/03/2012 Page 72 of 89
Estate Analysis What If Results Combined Summary
Existing Estate Estate Scenario 1
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Total Estate : $18,877,218 $19,784,444
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Federal Estate Tax** : $9,773,467 $8,988,412
Estate Expenses : $478,550 $403,937
Amount to Heirs : $8,625,201 $10,392,095

Additional Value to Heirs : $1,766,895
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Amount to Heirs and Charities
Net Estate Value : $8,625,201 $8,000,608
Bypass Trust : $0 $1,391,487
Other Life Insurance : $0 $0
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Life Insurance in Trust : $0 $1,000,000
Total : $8,625,201 $10,392,095
Cash Needed to Pay Tax and Expenses

Shortfall at First Death : $0 $0
Shortfall at Second Death : $0 $0
Bypass Trust Funding

Funding Shortfall : $0 $0
If you include in your Estate What-If scenario a change in ownership strategy where the insurance death benefit will not revert at death, the
Gross and Taxable Estate will not include the death benefits from life insurance policies that were transferred within three years of death -
this option is for illustrative and comparison purposes only.
12/03/2012 Page 73 of 89
Estate Analysis What If Results Combined Summary
Results for your Goal Plan include the Estate Strategies selected as shown below.
Estimated % of Goal Funded
Goal Existing Estate Estate Scenario 1
Second to Die Policy N/A 100%
Retirement - Living Expense 100% 100%
Buy Long Term Care Policy for John N/A N/A
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College - Jimmy 134% 134%
Travel 100% 100%
Leave Bequest 100% 100%
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Safety Margin (Value at End of Plan)
Current dollars : $7,646,009 $7,607,124
Future dollars : $18,274,368 $18,181,430
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Strategy Description Include Include
Bypass Trust
Wealth Transfer (ILIT) Second to Die Policy

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Second to Die - $1,000,000
$500 premium per year
** State Estate Taxes are not included. In some states, the tax may be substantial.
Notes
• Prior gifts are not included in the amount to heirs. • The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
systems for the $5 million exclusion amount. In addition, the portability of the deceased
advisors.
12/03/2012 Page 74 of 89
Estate Analysis What If Results Flowchart
Existing Estate without Bypass Trust using Model 6 - Target - Both Die at life expectancy - John Predeceases Jane
John's
Gross Estate
$10,046,436
1st Death
Taxes and Expenses
$32,867
E
PL
$10,013,568 Transfer : $0 $0
To Heirs : $0
Jane's
Gross Estate
$18,844,350
M ILIT
$0
SA
2nd Death
Taxes and Expenses
$10,219,150
$8,625,201 + $0 + $0 + $0
= $8,625,201
12/03/2012 Page 75 of 89
Notes
advisors.
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PL
M
SA
12/03/2012 Page 76 of 89
Estate Scenario 1 using Model 6 - Target - Both Die at life expectancy - John Predeceases Jane
John's
Gross Estate
$10,005,123
1st Death
Taxes and Expenses
$32,447
E
PL
$8,972,676 Transfer : $1,000,000 $0
To Heirs : $1,391,487
Jane's
Gross Estate
$17,360,510
M ILIT
$1,000,000
SA
2nd Death
Taxes and Expenses
$9,359,902
$8,000,608 + $1,391,487 + $0 + $1,000,000
= $10,392,095
12/03/2012 Page 77 of 89
Notes
advisors.
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PL
M
SA
12/03/2012 Page 78 of 89
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Appendix
Risk Assessment
Updated : 11/29/2012
1. What is your primary purpose for investing in this account? 4. Once you begin to withdraw funds for your primary investment objective, over how
long a period do you anticipate the withdrawals to continue?
Investment Account
Retirement Lump Sum
Major Purchase 1 - 5 years
Educational Planning 6 - 10 years
Current Income 11 - 20 years
Other Over 20 years
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2. Do you need current income (that is, will you take regular withdrawals from this 5. Which of the following statements best describes your attitude towards the trade-off
account)? between risk and return?
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Yes I am most concerned with limiting risk. I am willing to accept lower expected
returns in order to limit my chance of loss.
No
I am willing to accept moderate risk and chance of loss in order to achieve moderate
returns. Limiting risk and maximizing return are of equal importance to me.
If yes, approximately what percentage of the accounts current value do you need
annually? I am primarily concerned with maximizing the returns of my investments. I am
willing to accept high risk and high chance of loss to maximize my investment return
Less than 2% potential.
Greater than 2%, but less than 4%
Greater than 4%, but less than 6%
Greater than 6%
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3. In approximately how many years will you begin withdrawing funds for your
investment objective?
Immediately
1 - 5 years
6 - 10 years
11 - 20 years
Over 20 years
12/03/2012 Page 79 of 89
Risk Assessment
Updated : 11/29/2012
6. The following graphs show the historical year by year returns for three hypothetical
portfolios over a 20 year period. The average annual return over the 20-year period is
also indicated. Again, please note that these are examples only, actual results may vary.
Given your investment goals for this account, which portfolio would you choose?
Portfolio X
Portfolio Y
Portfolio Z
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Portfolio X Portfolio Y Portfolio Z
Average Annual Return=6% Average Annual Return=9% Average Annual Return=11%
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7. The risk of a portfolio suffering a decrease in value (having a negative return) is often a
primary concern for investors. To achieve potentially higher returns, however, an Portfolio Expected value of $100,000 after 1 Chance of losing money
investor must be willing to accept greater risk. The following table portrays four year after 1 year
different hypothetical $100,000 portfolios. For each portfolio, the expected value at
Portfolio A $107,000 19%
the end of 1 year is shown along with the probabilities of suffering a decline that year,
rather than a gain. Given your investment objective, in which of the 4 hypothetical Portfolio B $108,000 23%
portfolios would you be most comfortable investing? Portfolio C $109,000 26%
Portfolio A Portfolio D $110,000 28%
Portfolio B
Portfolio C
Portfolio D
12/03/2012 Page 80 of 89
Risk Assessment
Updated : 11/29/2012
8. Each bar below shows a range of possible one-year ending values for a $100,000 initial 9. Inflation can greatly erode the return on your investments, especially over time. For
investment in one of four hypothetical portfolios. The assumed value of the average example, in a typical year with a 3.5% inflation rate, a 6% return before inflation
return for that portfolio is shown in the center of the bar. For example, at the end of a would have a real return of only 2.5% (6% - 3.5% = 2.5%). Please specify which of
given year, Portfolio A could have an ending value anywhere between $115,000 (a the following best summarizes your attitudes regarding investing and inflation.
return of 15%) and $93,000 (-7% return). The average ending value is approximately
$107,000 (7% return). It is important to remember that the hypothetical portfolios are I prefer portfolio returns that are expected to return substantially more than
more likely to achieve the average return over long-term holding periods. The four bars inflation over the long run and I am willing to accept large short-term fluctuations in
represent the four hypothetical portfolios. (Please note that these are only examples -- value (and a greater potential for loss) to achieve this goal.
actual results will vary). Given the possible average, best, and worst outcomes for each I prefer a portfolio that is expected to moderately exceed inflation over the long run
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portfolio, please indicate which of the four options would be most suitable for this and I am willing to accept moderate short-term fluctuations in value (and a
account: moderate potential for loss) to achieve this goal.
Portfolio A I prefer to minimize short-term fluctuations in portfolio value (and the potential for
loss) as much as possible, even if it means that my portfolio is expected to only keep
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Portfolio B
pace with or slightly exceed inflation.
Portfolio C
Portfolio D 10. Sometimes investment losses are permanent, sometimes they are prolonged, and
sometimes they are short-lived. How might you respond when you experience
investment losses?
I would sell my investments immediately if they suffered substantial declines.
M Although declines in investment value make me uncomfortable, I would wait one to

two quarters before adjusting my portfolio.
I can endure significant declines in the value of my investments and would wait at
least one year before adjusting my portfolio.
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Even if my investments suffered a significant decline over several years, I would
continue to follow my long-term investment strategy and not adjust my portfolio.
11. What is your current level of investable assets?

Less than $1,000,000
$1,000,000 to $19,999,999
Greater than $20,000,000
12/03/2012 Page 81 of 89
Tax and Inflation Assumptions
Base Inflation Rate Tax Penalty
Inflation rate : 2.00% Include penalties in Plan? : Yes
Social Security Inflation rate : 2.00% Tax Relief Acts of 2001/2010 - Options
Tax Assumption Inflation rate : 2.00%
Use the new Tax Rates for the entire Plan.
Marginal Tax Rates Before Retirement
Tax Free Earnings - Options
Federal State Local
Use Tax-Free returns by Asset Class,
Tax Rates : 35.00% 7.85% 0.00% Marginal Tax Rate to use during Retirement is 40.00%
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Untaxed Gain on Taxable Earnings - Before Retirement
What portion of your Annual Taxable Investment 0.00%
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Earnings will not be taxed until withdrawn?
Long Term Capital Gains (LTCG) - Before Retirement

What portion of your Taxable Investment Earnings 20.00%
will be taxed as Long Term Capital Gains?
Long Term Capital Gains rate : Use Program estimate
Tax Rates During Retirement

Let the Program calculate taxes each year
M
SA
Local rate : 0.00%
Deduction estimate : Use standard deductions
Untaxed Gain on Taxable Earnings - During Retirement

What portion of your Annual Taxable Investment 0.00%
Earnings will not be taxed until withdrawn?
Long Term Capital Gains (LTCG) - During Retirement

What portion of your Taxable Investment Earnings 20.00%
will be taxed as Long Term Capital Gains?
Long Term Capital Gains rate : Use Program estimate
Taxation of Social Security

What portion of Social Security will be taxed? 85.00%
12/03/2012 Page 82 of 89
Return Methodology
Morgan Stanley Wealth Management Global Investment Committee Strategic Investors should carefully consider several important factors when making asset allocation
Return Estimates Methodology decisions using projected investment performance data based on assumed rates of return of
indices:
This tool incorporates a methodology for making hypothetical financial projections approved
by the Morgan Stanley Wealth Management Global Investment Committee. Opinions
Indices illustrate the investment performance of instruments that have certain similar
expressed in this presentation may differ materially from those expressed by other
characteristics and are intended to reflect broad segments of an asset class. Indices do not
departments or divisions or affiliates of Morgan Stanley.
represent the actual or hypothetical performance of any specific investment, including any
About Strategic Return Estimates, Rate of Return, Standard Deviation, and Asset individual security within an index. Although some indices can be replicated, it is not
Class Indices possible to directly invest in an index. It is important to remember the investment
performance of an index does not reflect deductions for investment charges, expenses, or
Strategic Return Estimates (SREs) fees that may apply when investing in securities and financial instruments such as
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commissions, sales loads, or other applicable fees. Also, the stated investment performance
What are SREs? assumes the reinvestment of interest and dividends at net asset value without taxes, and
These Strategic Return Estimates (SREs) represent one set of assumptions regarding rates of also assumes that the portfolio is consistently “rebalanced” to the initial target weightings.
1
return for specific asset classes approved by the Morgan Stanley Wealth Management Asset allocations which deviate significantly from the initial weightings can significantly
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Global Investment Committee. However, this tool allows you to modify the SREs in what-if affect the likelihood of achieving the projected investment performance.
scenarios and/or stress testing to include your own assumptions about the rates of return
you may expect to receive on various asset classes. Changing these assumptions can change Another important factor to keep in mind when considering the historical and projected
the program results. returns of indices is that the risk of loss in value of a specific asset, such as a stock, a bond
or a share of a mutual fund, is not the same as, and does not match, the risk of loss in a
How are SREs derived? broad asset class index. As a result, the investment performance of an index will not be the
same as the investment performance of a specific instrument, including one that is
M
These assumptions are made using a proprietary methodology using a building block contained in the index. Such a possible lack of “investment performance correlation” may
approach. Our SREs reflect expectations for a number of long-term economic and also apply to the future of a specific instrument relative to an index.
market-related factors we expect to influence capital market returns, such as population
growth, productivity, earnings expectations, etc. For these reasons, the ultimate decision to invest in specific instruments should not be
premised on expectations that the historical or projected returns of indices will be the same
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Index returns are used for calculation of volatility and correlations. For most indices we use as those for specific investments made.
data since 1990. Regarding several types of alternative investments such as hedge funds,
private equity and real estate, we apply significant statistical adjustments to historical Rates of Return, Standard Deviation, and Asset Class Indices
returns in order to correct for distortions such as survivorship biases, selection biases and
price staleness. Standard deviation is a common risk measurement that estimates how much an
investment’s return will vary from its predicted average. Generally, the higher an
What else is important to know? investment’s standard deviation, the more widely its returns will fluctuate, implying greater
volatility. In the past, asset classes that have typically provided the highest returns have also
It is important to remember that future rates of return can't be predicted with certainty and
carried greater risk. For purposes of this report, the standard deviation for the asset classes
that investments that may provide higher rates of return are generally subject to higher risk
shown below are calculated using data going back to 1990.
and volatility. The actual rate of return on investments can vary widely over time. This
includes the potential loss of principal on your investment.
1 “Rebalancing” describes the discipline of selling assets and buying others to match the target weightings of an asset allocation model.
Because assets increase and decrease in value over time, the percentage amounts of assets invested in each class will tend to vary from their
original target weightings.
12/03/2012 Page 83 of 89
Return Methodology
Morgan Stanley Wealth Management Global Investment Committee Strategic While Morgan Stanley Wealth Management has not designed its forecasting methodologies
Return Estimates Methodology (continued) to match or address its inventory as a broker-dealer of financial products, an appearance of
a conflict of interest could exist in which the Morgan Stanley Wealth Management
It is important to note that the rates of return of the listed indices may be significantly forecasts, if followed, guide investors in directions that support Morgan Stanley Wealth
different than the SRE or your own assumptions about the rates of return used in the Management's inventory. To the extent this is a concern to customers, they should request
report. As always, keep in mind that past performance is no guarantee of future results. that a forecast be prepared using a different third party methodology, either alone or in
SREs are for illustrative purposes only and are not indicative of the future performance of conjunction with a Morgan Stanley Wealth Management model for comparison purposes.
any specific investment. A Morgan Stanley Financial Advisor is available to explain the different methodologies and
Performance of an asset class within a portfolio is dependent upon the allocation of can compare and contrast different models upon request.
securities within the asset class and the weighting or the percentage of the asset class
within that portfolio. Potential for a portfolio’s loss is exacerbated in a downward trending
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market. A well-diversified portfolio is less vulnerable in a falling market. Asset allocation and
diversification, however, do not assure a profit or protect against loss in a declining market.
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Asset class returns and standard deviations of returns projections are based on reasoned
estimates of drivers of capital market returns and historical relationships. As with any
forecasting discipline, the assumptions and inputs underlying Morgan Stanley Wealth
Management’s forecasting process may or may not reconcile with, or reflect, each investor’s
individual investment horizon, risk tolerance, capital markets outlook, and world view. For
these reasons, and because forecasting methods are complicated, investors are encouraged
to discuss forecasting with a Morgan Stanley Financial Advisor.
M
As described, financial forecasting involves developing a methodology for extracting
expected returns and standard deviations of returns from historical data. Each forecasting
methodology is developed by selecting objective and subjective factors that vary among
those developing the forecast model. Morgan Stanley Wealth Management has formulated
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several different methodologies and makes its forecasts available to Morgan Stanley
customers. Customers may choose one of Morgan Stanley Wealth Management's
forecasting models or, instead, if using a different financial planning tool, a forecasting
methodology developed by a third party. Differences exist between the various
methodologies because different objective and subjective factors are incorporated into each
methodology. These differences can include: the indices used as proxies for various asset
categories and classes, the length of time historical index data is input into the calculations,
and the resulting expected returns and volatility for each asset class. Each model may cover
a greater or lesser number of asset classes than other models, the indices used as asset class
representations may be different for certain classes of assets in the models, and Morgan
Stanley Wealth Management has more asset classes in the Alternative Investments asset
category than are available in other models. Additionally, other differences may develop in
the future as these methodologies are dynamic in nature and are likely to change over time.
12/03/2012 Page 84 of 89
Return Methodology
Asset Class Return Index
Cash - USD (90-day Tbills) Bloomberg US Generic Government 3 Month Yield
Global Govt/Govt-Related Bonds (hedged to USD) Barclays Capital Global Aggregate: Govt/Govt-Related (hedged to USD)
Global Corporate/Securitized Bonds (hedged to Barclays Capital Global Aggregate: Corporate/Securitized (hedged to USD)
USD)
Global Short-Term Government Bonds (hedged to Barclays Capital Global Treasury (1-3 Year) (hedged to USD)
USD)
Global High Yield Bonds (hedged to USD) Barclays Capital Global High Yield (hedged to USD)
Global Emerging Markets Local Debt (unhedged) JPM GBI-EM Global Diversified Composite (unhedged USD)
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US Large-Cap Value Stocks Russell 1000 Value
US Large-Cap Growth Stocks Russell 1000 Growth
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US Mid-Cap Value Stocks Russell Mid Cap Value
US Mid-Cap Growth Stocks Russell Mid Cap Growth
US Small-Cap Value Stocks Russell 2000 Value
US Small-Cap Growth Stocks Russell 2000 Growth
Developed-Market ex US Stocks (unhedged) MSCI World ex US IMI
Global Emerging Market Stocks (unhedged)
Global REITs (unhedged)
Commodities
MSCI EMF IMI
M
FTSE EPRA NAREIT Global Total Return
DJ/UBS Commodity Total Return
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Global Inflation-Linked Securities (unhedged) Barclays Capital Universal Govt Inflation-Linked All Maturities (unhedged)
Broad Fund of Hedge Funds MS AIP, HFRI Fund of Funds Composite
Managed Futures Barclay BTop50
US Private Equity Venture Economics
US Private Real Estate Funds NCREIF Townsend
Source: Morgan Stanley Wealth Management Global Investment Committee
12/03/2012 Page 85 of 89
Glossary of Terms
Adjusted Real Return Stocks
Adjusted Real Return is the Real Return minus the Total Return Adjustment. Stocks are equity securities of domestic and foreign corporations. (See "Stocks" in the
"Key Asset Class Risk Considerations" section of this report for a summary of the risks
Alternative Portfolio associated with investing in stocks.)
Your Alternative Portfolio is a modification of the Risk Based Portfolio. In order for the
Alternative Portfolio to be selected as the Target Portfolio, it must fall within the defined Domestic stocks are equity securities of U.S. corporations. Domestic stocks are often
constraints. sub-divided based upon the market capitalization of the company (the market value of the
company's stock). "Large cap" stocks are from larger companies, "mid cap" from the
middle range of companies, and "small cap" from smaller, perhaps newer, companies.
Asset Allocation
Generally, small cap stocks experience greater market volatility than stocks of companies
Asset Allocation is the process of determining what portions of your portfolio holdings are with larger capitalization. Small cap stocks are generally those from companies whose
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to be invested in the various asset classes. capitalization is less than $500 million, mid cap stocks those between $500 million and $5
billion, and large cap over $5 billion.
Asset Class
Large cap, mid cap and small cap may be further sub-divided into "growth" and "value"
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Asset Class is a standard term that broadly defines a category of investments. The three
basic asset classes are Cash, Bonds, and Stocks. Bonds and Stocks are often further categories. Growth companies are those with an orientation towards growth, often
subdivided into more narrowly defined classes. Some of the most common asset classes are characterized by commonly used metrics such as higher price-to-book and
defined below. price-to-earnings ratios. Analogously, value companies are those with an orientation
towards value, often characterized by commonly used metrics such as lower price-to-book
Cash and price-to-earnings ratios.
Cash and Cash Alternatives are investments of high liquidity and safety with a known
International stocks are equity securities from foreign corporations. International stocks are
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market value and a very short-term maturity. Examples are treasury bills and money market
funds. (See "Money Market Funds" in the "Key Asset Class Risk Considerations" section often sub-divided into those from "developed" countries and those from "emerging
of this report for a summary of the risks associated with investing in Money Market markets." The emerging markets are in less developed countries with emerging economies
Funds.) that may be characterized by lower income per capita, less developed infrastructure and
nascent capital markets. These "emerging markets" usually are less economically and
politically stable than the "developed markets." Investing in international stocks involves
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Bonds
special risks, among which include foreign exchange volatility and risks of investing under
Bonds are either domestic (U.S.) or global debt securities issued by either private different tax, regulatory and accounting standards.
corporations or governments. (See “Fixed Income" in the "Key Asset Class Risk
Considerations" section of this report for a summary of the risks associated with investing Asset Mix
in bonds. Bonds are also called “fixed income securities.”)
Asset Mix is the combination of asset classes within a portfolio, and is usually expressed as a
Domestic government bonds are backed by the full faith and credit of the U.S. percentage for each asset class.
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 offer Bear Market Loss
additional yield. Domestic government and corporate bonds can be sub-divided based The Bear Market Loss shows how a portfolio would have been impacted during the Great
upon their term to maturity. Short-term bonds have an approximate term to maturity of 1 Recession (November 2007 through February 2009) or the Bond Bear Market (July 1979
to 5 years; intermediate-term bonds have an approximate term to maturity of 5 to 10 through February 1980). The Bear Market Loss shows: 1) either the Great Recession Return
years; and, long-term bonds have an approximate term to maturity greater than 10 years. or the Bond Bear Market Return, whichever is lower, and 2) the potential loss, if you had
been invested in this cash-bond-stock portfolio during the period with the lower return. See
Bear Market Test, Great Recession Return, and Bond Bear Market Return.
12/03/2012 Page 86 of 89
Glossary of Terms
Bear Market Test Fund All Goals
The Bear Market Test, included in the Stress Tests, examines the impact on your Plan results Fund All Goals is one of two ways for your assets and retirement income to be used to fund
if a Bear Market Loss occurred this year. The Bear Market Test shows the likelihood that you your goals. The other is Earmark, which means that an asset or retirement income is
could fund your Needs, Wants and Wishes after experiencing such an event. See Bear assigned to one or more goals, and will be used only for those goals. Fund All Goals means
Market Loss. that the asset or income is not earmarked to fund specific goals, and can be used to fund
any goal, as needed in the calculations. The {0} default is Fund All Goals, except for 529
Bond Bear Market Return Plans and Coverdell IRAs, which are generally used only for college goals. Fund All Goals is
The Bond Bear Market Return is the rate of return for a cash-bond-stock portfolio during implemented as either Importance Order or Time Order funding. Importance Order means
the Bond Bear Market (July 1979 through February 1980), the worst bear market for bonds that all assets are used first for the most important goal, then the next most important goal,
since the Great Depression. LifeView Advisor shows a Bond Bear Market Return for your and so on. Time Order means that all assets are used first for the goal that occurs earliest,
then the next chronological goal, and so on.
E
Current, Risk-based, and Target Portfolios, calculated using historical returns of three
broad-based asset class indices. See Great Recession Return.
Future Dollars
Cash Receipt Schedule Future Dollars are inflated dollars. The Results of LifeView Advisor calculations are in Future
PL
Dollars. To help you compare dollar amounts in different years, we discount the Future
A Cash Receipt Schedule consists of one or more years of future after-tax amounts received
Dollar amounts by the inflation rates used in the calculations and display the Results in the
from the anticipated sale of an Other Asset, exercising of Stock Options grants, or proceeds
equivalent Current Dollars.
from Restricted Stock grants.
Concentrated Position Great Recession Return

A Concentrated Position is when your portfolio contains a significant amount (as a The Great Recession Return is the rate of return for a cash-bond-stock portfolio during the
Great Recession (November 2007 through February 2009), the worst bear market for stocks
M
percentage of the total portfolio value) in individual stock or bonds. Concentrated Positions
have the potential to increase the risk of your portfolio. since the Great Depression. LifeView Advisor shows a Great Recession Return for your
Current, Risk-based, and Target Portfolios, calculated using historical returns of three
Confidence Zone broad-based asset class indices. See Bond Bear Market Return.
See Monte Carlo Confidence Zone.

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Inflation Rate
Current Dollars The Inflation Rate is the percentage increase in the cost of goods and services for a specified
time period. A historical measure of inflation is the Consumer Price Index (CPI).
The Results of LifeView Advisor calculations are in Future Dollars. To help you compare
dollar amounts in different years, we also express the Results in Current Dollars, calculated
Liquidity
by discounting the Future Dollars by the sequence of inflation rates used in the Plan.
Liquidity is the ease with which an investment can be converted into cash.
Current Portfolio
Model Portfolio
Your Current Portfolio is comprised of all the investment assets you currently own (or a
These five portfolios (Conservative, Moderate Conservative, Moderate, Moderate
subset of your assets, based on the information you provided for this Plan), categorized by
Aggressive, Aggressive) are the available models as a result of the risk questions answered in
Asset Class and Asset Mix.
the Risk Tolerance Questionnaire.
12/03/2012 Page 87 of 89
Glossary of Terms
Monte Carlo Confidence Zone Probability of Success / Probability of Failure
The Monte Carlo Confidence Zone is the range of probabilities that you (and/or your See Monte Carlo Probability of Success / Probability of Failure.
financial advisor) have selected as your target range for the Monte Carlo Probability of
Success in your Plan. The Confidence Zone reflects the Monte Carlo Probabilities of Success Real Return
with which you would be comfortable, based upon your Plan, your specific time horizon, The Real Return is the Total Return of your portfolio minus the Inflation Rate.
risk profile, and other factors unique to you.
Risk
Monte Carlo Probability of Success / Probability of Failure
Risk is the chance that the actual return of an investment, asset class, or portfolio will be
The Monte Carlo Probability of Success is the percentage of trials of your Plan that were different from its expected or average return.
successful. If a Monte Carlo simulation runs your Plan 10,000 times, and if 6,000 of those
E
runs are successful (i.e., all your goals are funded and you have at least $1 of Safety Risk Based Portfolio
Margin), then the Probability of Success for that Plan, with all its underlying assumptions,
Your Risk Based Portfolio is based on the results of your Risk Tolerance Questionnaire. You
would be 60%, and the Probability of Failure would be 40%.
are scored into one of the Model Portfolios.
PL
Monte Carlo Simulations
Standard Deviation
Monte Carlo simulations are used to show how variations in rates of return each year can
affect your results. A Monte Carlo simulation calculates the results of your Plan by running Standard Deviation is a statistical measure of the volatility of an investment, an asset class,
it many times, each time using a different sequence of returns. Some sequences of returns or a portfolio. It measures the degree by which an actual return might vary from the
will give you better results, and some will give you worse results. These multiple trials average return, or mean. Typically, the higher the standard deviation, the higher the
provide a range of possible results, some successful (you would have met all your goals) and potential risk of the investment, asset class, or portfolio.
some unsuccessful (you would not have met all your goals).
M
Target Portfolio
Needs Your Target Portfolio is the portfolio you have selected based upon your investment
objectives and your risk tolerance. The Target Portfolio will be the same as the Risk Based
In LifeView Advisor, you choose an importance level from 10 to 1 (where 10 is the highest)
Portfolio unless you choose an Alternative Portfolio or a Model Portfolio.
for each of your financial goals. Each importance level is defined to be a Need, Want, or
SA
Wish. Needs are the goals that you consider necessary for your lifestyle, and are the goals
that you must fulfill. Wants are the goals that you would really like to fulfill, but could live Time Horizon
without. Wishes are the “dream goals” that you would like to fund, although you won’t be Time Horizon is the period from now until the time the assets in this portfolio will begin to
too dissatisfied if you can’t fund them. In LifeView Advisor, Needs are your most important be used.
goals, then Wants, then Wishes.
Total Return
Portfolio Set Total Return is the assumed growth rate of your portfolio for a specified time period. The
A Portfolio Set is a group of portfolios that provides a range of risk and return strategies for Total Return is either (1) determined by weighting the return assumption for each Asset
different investors. Class according to the Asset Mix or (2) is entered by you or your financial advisor (on the
What If Worksheet). Also see “Real Return.”
Portfolio Total Return
Total Return Adjustment
A Portfolio Total Return is determined by weighting the return assumption for each Asset
Class according to the Asset Mix. Also see “Expense Adjustments.” Total Return Adjustment allows you and your Financial Advisor to model hypothetical
What-If scenarios by decreasing the Total Return without adjusting the Target Portfolio or
the Standard Deviation. This may be a useful part of the analysis to help you understand
the impact of a lower Total Return.
12/03/2012 Page 88 of 89
Glossary of Terms
Unclassified Securities
Unclassified Securities are not included in any of the pre-defined asset class categories that
serve as proxies for modeling asset allocation.
Wants
See "Needs".
Willingness
In LifeView Advisor, in addition to specifying Target Goal Amounts, a Target Savings
Amount, and Target Retirement Ages, you also specify a Willingness to adjust these Target
E
values. The Willingness choices are Very Willing, Somewhat Willing, Slightly Willing, and
Not at All.
Wishes
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See "Needs".
M
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12/03/2012 Page 89 of 89

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LifeView® Financial Plan

December 03, 2012

CRC# 475298 Revised 12/12

Employer Stock Plans

LifeView Advisor is powered by MoneyGuidePro™

to differ materially from those shown.

LifeView Advisor is powered by MoneyGuidePro™

Summary of Goals and Resources

10 Retirement - Living Expense

M Base Inflation Rate (2.00%)

John Jimmy 07/07/1998 14 Child

Investment Assets $1,550,000

Net Worth $2,525,000

Description John Jane Joint Total

Net Worth: $2,525,000

Description Owner Current Value Additions Assign to Goal

Total Investment Assets :

Description Owner Current Value Future Value Assign to Goal

Total of Other Assets : $1,350,000

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

Type Description Owner Outstanding Balance Interest Rate Monthly Payment

Total Outstanding Balance : $400,000

Total : $1,550,000 100%

Risk and Portfolio Information

Return vs. Risk Graph

Bear Market Returns

Portfolio Comparison with Allocation Changes

Results Current Scenario Recommended Scenario

Average Return Bad Timing Average Return Bad Timing

Estimated % of Goals Funded 100% 100% 100% 100%

Results Current Scenario Model 6 - Target Change In Value

Results Current Scenario Model 6 - Target Change In Value

Results Current Scenario Model 6 - Target Change In Value

Portfolio Value $1,550,000 $1,550,000

Estimated % of Goal Funded

Safety Margin (Value at End of Plan)

Your Confidence Zone: 70% - 90%

Total Portfolio Value Graph

Year 2026 2027 2028 2029 2030 2031 2032 2033

Year 2026 2027 2028 2029 2030 2031 2032 2033

Estimated Required Minimum Distribution (RMD)

Year 2034 2035 2036 2037 2038 2039 2040 2041

Year 2034 2035 2036 2037 2038 2039 2040 2041

Estimated Required Minimum Distribution (RMD)

Year 2042 2043 2044 2045 2046 2047 2048 2049

Year 2042 2043 2044 2045 2046 2047 2048 2049

Estimated Required Minimum Distribution (RMD)

Year 2050 2051 2052 2053 2054 2055

Year 2050 2051 2052 2053 2054 2055

Estimated Required Minimum Distribution (RMD)

Low Expected High

Real Estate Investment at John's retirement $300,000 $500,000 $700,000

John begins at John Jane

Maximization Based on Overall Plan Result

Employer Stock Plans

Option Equity Schedule

Option Equity Value if Die Today - All Options Vested at Death

Total : $0 $0 $15,000 $30,075 $43,500

Change In Value: -$15,000 -$15,000 $0 $15,075 $28,500