Instructions:
1. Enter your present age

2. Enter an age in the future (e.g, 65)

3. Enter your Total Liquid Resources. Include cash, stocks, bonds, and other resources that can be readily converted to cash. (Do not include Real Estate, the value of your home, autos.)

4. Enter your Total Annual Inflow. Include salary, commissions, and disability benefits if any. (Do not include interest or dividends from investments.)

5. Enter a Tax rate to be applied to annual inflow

6. Enter your Total Annual Outflow. This would be all you spend to live. Disregard taxes. Inflow will be adjusted for taxes.

Hint
If you feel as if you're just breaking even, or close to it, every year, make sure your Annual Outflow entry is equal to the Annual Inflow. Once the analysis is complete, you can always go back and decrease the outflow information to see what you would have if you could save a little each year.

7. Enter a Rate of Inflation: (Currently many analysts use 3%.)

8, 9 . Enter Allocation percentages for bonds, stocks.
Allocation refers to how your portfolio (total investments) is divided.

Guidelines for selecting Allocation percentages
 BondsStocks
Under 55 years old; need growth to maximize size of Portfolio30%70%
55 to 65 years old; need balance50%50%
Over 65 years old; more interested in safety than growth70%30%

Bonds tend to be more stable, fluctuate less in value but do not increase in value as quickly as Stocks. Stocks however provide growth needed in earlier years to build a portfolio.

Suggested Allocations can be developed by using the Risk Tolerance Worksheet in the Advanced Financial Planning Program

10. For the year 2007 Taxes on Deferred Type Tax investments (401k's) would be zero until withdrawals are made. Withdrawals are then taxed at your normal tax rate.

Check with your tax advisor for the most current tax information

To adjust your total tax rate to reflect the division of your portfolio between Deferred and Nondefered type investment enter the percentage of Deferred Type investments and Non deferred. The program will calculate and enter an adjusted Tax Rate taking into consideration the tax rate you have entered for tax on ordinary income

11 & 12. Enter a return percentage for bonds and stocks. This is what you hope to make on an annual basis on your investments. You can enter the suggested amounts or others you feel appropriate. The program will adjust for taxes based on the tax rate you enter.

Guidelines for Selecting Returns
 BondsStocks
Conservative approach to investing3.0%6.0%
Neutral approach to investing4.0%8.0%
Aggressive approach to investing5.0%10.0%

Investments with high returns tend to be more risky i.e. chance of decreasing in value is greater. Lower returns provide greater safety but less growth

Remember returns are subject to taxes,unless invested in nontaxable issues (e.g. Municipal Bonds or deferred plans) so that returns will be reduced by taxes.Returns on Municipal Bonds tend to be lower to begin with and move toward taxable returns adjusted for tax rates

A Stockbroker or Financial Advisor would offer advice on this topic. You could test the combination used in the example and make changes to view different combinations.

Based on the information you entered the program will calculate what your Total Resources will be at the age you initially chose.

Save this information and reenter data you want to change. The program will recalculate the results based on the new input.

Instructions:
1. Enter your present age.

2. Enter the age you intend to retire.

3. Enter how much you think you will have when you retire (Total Liquid Resources; things like Cash, Stocks, Bonds, all those things that can be readily turned into cash). Do not include Real Estate the value of your home, autos. Treat this number as a broad estimate. Use round figures. You can test different numbers until you get the desired results.

4. Enter a Total Annual Inflow as if you were to retire now; Salary, Commissions, Disability Benefits if any. Do not include interest or dividends from investments. For example: enter your Social Security Benefits as if you were retiring now.

5. Enter a Tax rate to be applied to annual inflow. This can be your current tax rate or the tax rate you think you will have at retirement. In some cases the retirement tax rate could be lower that the current rate.

6. Enter a Total Annual Outflow. Again pretend you are retiring now and estimate how much you will be spending. Disregard taxes.Inflow will be adjusted for taxes.

The program will adjust the Inflow, Outflow information entered for inflation by considering your present age, the inflation rate you chose, the planned retirement age and will continue to adjust for inflation through the retirement years

7. Enter a Rate of Inflation. Many people are using 3%.

8.&9. Enter an allocation % for Bonds and Stocks.

Guidelines for selecting Allocation percentages

Bonds tend to be more stable, fluctuate less in value but do not increase in value as quickly as Stocks. Stocks however provide growth needed to keep up with inflation. In retirement Stock Brokers and Financial Advisors usually recommend a combination slanted torwards Bonds. Suggested Allocations can be developed by using the Risk Tolerance worksheet in the Advanced Retirement Planning Program. You could test the combination used in the example and make changes to view different combinations.

10.&11. For the year 2007 Taxes on Deferred Type Tax investments would be zero until withdrawals are made. Withdrawals are then taxed at your normal tax rate.

Check with your tax advisor for the most current tax information

To adjust your total tax rate to reflect the division of your portfolio between Deferred and Nondefered type investment enter the percentage of Deferred Type investments and Non deferred. The program will calculate and enter an adjusted Tax Rate taking into consideration the tax rate you have entered for tax on ordinary income.

12.&13. Enter a return percentage for bonds and stocks. This is what you hope to make on an annual basis on your investments. You can enter the suggested amounts or others you feel appropriate. The program will adjust for taxes based on the tax rate you enter.

Guidelines for Selecting Returns
 BondsStocks
Conservative approach to investing3.0%6.0%
Neutral approach to investing4.0%8.0%
Aggressive approach to investing5.0%10.0%

Investments with high returns tend to be more risky i.e. chance of decreasing in value is greater. Lower returns provide greater safety but less growth. People tend to take fewer risks in retirement. A Stockbroker or Financial Advisor would offer advice on this topic. You could test the combination used in the example and make changes to view different combinations
Remember returns are subject to taxes,unless invested in nontaxable issues (e.g. Municipal Bonds or deferred plans) so that returns will be reduced by taxes. Returns on Municipal Bonds tend to be lower to begin with and move toward taxable returns adjusted for tax rates

Based on the information you entered the program will calculate how long the combination of starting resources, inflow will cover outflow and at what age the combination begins to become deficient.

Save this information and enter information you want to change. The program will recalculate the results based on the new input.