Personal Case Study

Date:

FIN-215-1M        PERSONAL FINANCE      

COMPREHENSIVE FINANCIAL QUESTIONNAIRE

As you know, establishing and maintaining a proper financial plan is always prudent. By gathering the following detailed information regarding your assets and liabilities, you will be able to create a “road map” as you plan your future. The resulting review will assist you in analyzing the financial path you are currently on and hopefully, confirm that you are “on the right track” or, if not, identify ways that you can potentially improve your financial future.

P.S. The following information is vital in constructing a proper financial plan. It will be most helpful for you to gather this data before you prepare your plan.

· Recent statements on all currently held investments (i.e. mutual funds, brokerage accounts, bank accounts, certificates of deposit, IRAs, insurance policies, annuities, etc.).

· Recent statements from your current and any past employers showing retirement account balances and/or pension projections.

· Recent statements and/or booklets for all employee benefits from current employer(s).

· Most recent pay stub(s).

· All life insurance, disability and long-term care policies you own, plus any current statements.

· Most recent Social Security statements.

· Other matters that may affect the planning process, such as an anticipated inheritance, pre/post nuptial agreements, health concerns, etc.

· If you have your financial affairs organized on a personal computer, please print all pertinent data and provide that to us. It is not necessary that you conform to our format.

12

PERSONAL DATA Today’s Date: / /

Person A _ Nickname: First, Middle, Last

Date of Birth: / / Place of Birth:

Address:

How is your health? Excellent / Good / Fair / Poor

(Please elaborate in comment section below)

Person B Nickname: First, Middle, Last

Date of Birth: / / Place of Birth:

How is your health? Excellent / Good / Fair / Poor

(Please elaborate in comment section below)

Please list names and dates of birth of your children and grandchildren on the next page.

Is there anyone else financially dependent on you or any dependents with special needs? If yes, please list below and indicate the amount per year you provide.

Additional Comments:

Your Child:

FAMILY INFORMATION

Name: Spouse Name:

Your Grandchildren:

Name: Name: Name: Name:

Your Child:

Name: Spouse Name:

Your Grandchildren:

Name: Name: Name: Name:

Your Child:

Name: Spouse Name:

Your Grandchildren:

Name: Name: Name: Name:

D.O.B. Married / Single

D.O.B.

D.O.B.

D.O.B.

D.O.B.

D.O.B.

D.O.B. Married / Single

D.O.B.

D.O.B.

D.O.B.

D.O.B.

D.O.B.

D.O.B. Married / Single

D.O.B.

D.O.B.

D.O.B.

D.O.B.

D.O.B.

EDUCATION

If applicable, is there any college education yet to be funded? Yes / No

On a scale of 1-10 (10 being highest) how important is it for you to save for your children/grandchildren’s education?

Do you wish to provide for private elementary or high school education? How many years of college would you plan for? (5 years is average) What type of school is desired: State(In-State) / State(Out-of-State) / Private / Ivy League

Would you want to also fund graduate school? Yes / No If yes, how many years or percentage of costs do you wish to cover?

PERSONAL ADVISORS

Attorney_ Accountant Stockbroker Insurance Banker

Years associated with Years associated with Years associated with Years associated with Years associated with

Does anyone else play an advisory role for you when you are making a financial decision?

LIABILITY

Do you have an umbrella policy? Yes / No If so, how much? $

WILLS AND TRUSTS

Does Client A have a will? Yes / No Does Client B have a will? Yes / No

Date/Place executed Date Updated:

Date of Last Review:

Date/Place executed Date Updated:

Date of Last Review:

Does Client A have a living trust? Yes / No Does Client B have a living trust? Yes / No

Are you satisfied with your current estate planning documents? Yes / No

Does your estate plan include any charitable bequests? Yes / No

Do you anticipate receiving an inheritance in the near future? Yes / No

If yes, approximate amount: $ From whom?

DISCUSSION NOTES

Are there any investments you feel committed to?

Are there accounts that you are concerned with?

In the next year I / we would like to:

In the next three to five years, I / we would like to:

In the long term I / we would like to:

The single most important financial issue for me at this time is:

EMPLOYMENT

Person A Person B

Company Name: Company Name:

Job Title/Duties : Job Title/Duties :

Years with Company: Years with Company:

What are your career plans? What are your career plans?

FOR ALL EMPLOYER BENEFITS LISTED BELOW, PLEASE DESCRIBE OR PROVIDE BENEFIT BOOKLET, ALONG WITH COPIES OF ALL STATEMENTS.

Are you eligible for a bonus, profit sharing and/or Are you eligible for a bonus, profit sharing and/or Stock option plan: Yes / No Stock option plan: Yes / No

Do you have a 401(k), TSA, or other salary savings Do you have a 401(k), TSA, or other salary savings Plan? Yes / No Plan? Yes / No

Percent of salary you are contributing: % Percent of salary you are contributing: % Company Match, if available: % Company Match, if available: %

What (if any) contribution is after-tax? _% What (if any) contribution is after-tax? % What % of company contributions is vested? % What % of company contributions is vested? %

What amount, if any, is available to you now What amount, if any, is available to you now

as an in-service withdrawal which can be rolled to an as an in-service withdrawal which can be rolled to an IRA in your ownership and control? Your employer IRA in your ownership and control? Your employer

can provide this value. $ can provide this value. $

Disability Income Yes / No Disability Income Yes / No

Percentage of Salary % Percentage of Salary % Waiting Period Days Waiting Period Days Benefit Period Years Benefit Period Years Premium is: PRE-TAX / AFTER-TAX Premium is: PRE-TAX / AFTER-TAX

Health Insurance Yes / No Health Insurance Yes / No

Group Life Insurance Yes / No Group Life Insurance Yes / No

Face Amount: $ Spousal Group Life: $

Face Amount: $ Spousal Group Life: $

Additional Comments:

RETIREMENT

Describe your ideal retirement lifestyle (i.e., how would you like to spend your leisure time)

Is Person A retired? Yes / No If so, what year did you retire? Is Person B retired? Yes / No If so, what year did you retire?

If you are not retired, how much SPENDABLE ( AFTER TAX ) MONTHLY INCOME will you need to support the lifestyle you desire (80% of today’s income is average)? $

I prefer to obtain an after tax figure from you. However, if you feel confident of a pre-tax figure, please provide it here. $ (Pre-Tax)

What was the tax amount you paid last year?

SOCIAL SECURITY

Is Person A receiving Social Security? Yes / No

If so, what is the pre-tax monthly amount? After tax amount? Is Person B receiving Social Security? Yes / No

If so, what is the pre-tax monthly amount? After tax amount?

If you are not receiving Social Security what is the age and projected pre-tax amount?

Person A: Age Pre-taxed amount/monthly $

Person B: Age Pre-taxed amount/monthly $

PENSION

FOR ALL PENSION BENEFITS LISTED BELOW, PLEASE DESCRIBE OR PROVIDE BENEFIT BOOKLET, ALONG WITH COPIES OF LATEST STATEMENTS AND/OR PROJECTIONS.

Person A: Will you qualify for a monthly or lump sum pension amount? Yes / No

If yes, Age: Projected monthly benefit $ and/or Lump Sum $

Does your pension provide a cost of living adjustment during retirement? Yes / No

What is the payout option? Lump Sum / Single Life / Joint & Survivor / Other

Person B: Will you qualify for a monthly or lump sum pension amount? Yes / No

If yes, Age: Projected monthly benefit $ and/or Lump Sum $

Does your pension provide a cost of living adjustment during retirement? Yes / No

What is the payout option? Lump Sum / Single Life / Joint & Survivor / Other

Does either Client have a vested pension with a prior company? Yes / No

If yes, please briefly describe and provide any statements you may have. _

If yes, is the balance available to be distributed as a lump sum? Yes / No

PERSONAL DISABILITY INSURANCE

Only include insurance NOT provided by your employer.

Person Issuing Benefits Benefits Monthly Annual Insured Company Start After Pay Until Benefit Cost

$

$

DISABILITY INCOME NEEDS

$ _

$

In the event of a long-term disability, what is the minimum after-tax cash flow your family would need to continue your current lifestyle? $ per month

Where would this money come from if you were disabled today?

LONG TERM CARE INSURANCE

1. Do you currently have Long Term Care Coverage? Person A / Person B / Both / Neither

Company: Issue Date:

2. If so, please list the provisions of your plan:

a) Facility Benefit per day

b) Waiting Period Days

c) Benefit Period Years or Lifetime

d) Automatic Increases (Inflation protection) %

Circle one: simple, compound

e) Current Premium $

f) In-Home Care Included Yes / No (If yes, % or $ of facility benefit)

SUPPLEMENTAL INSURANCE

If you are receiving Social Security, do you have a Medicare supplement plan?

Person A: Yes / No Person B: Yes / No

EMERGENCY RESERVES

What level of liquid reserves do you feel you need for emergencies?

How much of this should be in the bank? Additional Comments:

FINANCIAL REQUIREMENTS AT DEATH

In the event of a premature death, what would the TOTAL SPENDABLE ( AFTER TAX ) MONTHLY cash flow need be for your family to maintain the same standard of living? Statistically in the U.S., upon death, the family needs 75% of the deceased’s lost income.

Person A’s DEATH

TOTAL Spendable Monthly cash flow need: $ After Tax (while children are still at home)

TOTAL Monthly Spendable Monthly cash flow need: $ After Tax (children no longer living at home)

If applicable, would you want to provide for college funding for your children or grandchildren? Yes / No Do you want to assure that the surviving spouse could immediately pay off all non-mortgage debt? Yes / No Do you want to assure the surviving spouse could immediately pay off the mortgage? Yes / No

Are there any charitable intentions you would like to make certain are covered at your death? Yes / No

Amount: $

Would the surviving spouse continue to work? Yes / No

How many years? Income Level: $

Would the surviving spouse continue to save to his/her qualified retirement plans? Yes / No

Person B’s DEATH

TOTAL Spendable Monthly cash flow need: $ After Tax (while children are still at home)

TOTAL Monthly Spendable Monthly cash flow need: $ After Tax (children no longer living at home)

If applicable, would you want to provide for college funding for your children or grandchildren? Yes / No Do you want to assure that the surviving spouse could immediately pay off all non-mortgage debt? Yes / No Do you want to assure the surviving spouse could immediately pay off the mortgage? Yes / No Are there any charitable intentions you would like to make certain are covered at your death? Yes / No

Amount: $

Would the surviving spouse continue to work? Yes / No

How many years? Income Level: $

Would the surviving spouse continue to save to his/her qualified retirement plans? Yes / No

LIFE INSURANCE

(Please list all life insurance, including group coverage)

Loan Amount Insured Face Amount Policy Type Company Premium Cash Value (if any)

ASSETS

If you have your financial affairs organized on a personal computer, please print all pertinent data and provide that to us. It is not necessary that you conform to our format.

(BE SURE TO PROVIDE STATEMENTS FOR ALL ACCOUNTS)

$

$

$

$

Bonds (EE, Municipal, Corporate) Monthly Current

Education Funds (Coverdell, UGTMA’s or 529 plans)

Monthly Current Owner* For Benefit of Fund Name Investment Value

Mutual Funds

Owner* Fund Name

Monthly Investment

Current Value

$

$

$

$

$

$

$

$

$

$

$ $

$ $

$ $

$ $

*PA = Person A PB = Person B J = Joint PAT = Person A trust PBT = Person B trust JT = Joint trust

ASSETS (continued)

(BE SURE TO PROVIDE STATEMENTS FOR ALL ACCOUNTS)

Personal Assets

LIABILITIES

Additional Comments:

*PA = Person A PB = Person B J = Joint PAT = Person A trust PBT = Person B trust JT = Joint trust

** T = Traditional IRA R = Roth IRA N = Non-qualified Annuity I = Inherited IRA

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PERSONAL CASH FLOW

If you have your financial affairs organized on a personal computer, please print all pertinent data and provide that to us. It is not necessary that you conform to our format.

Monthly Income (Gross)

Monthly Living Expenses

Person A Salary

$

Mortgage or Rent

$

Person A Bonus

$

Property Taxes/Insurance

$

Person B Salary

$

Utilities

$

Person B Bonus

$

House Maint. & Furnishings

$

Interest & Dividends

$

Child Care

$

Child Support / Alimony

$

Car Payment(s)

$

Other (i.e. Pension, etc.)

$

Car Insurance

$

Social Security Client A

$

Gas/Maintenance/ Car Phone

$

Social Security Client B

$

Food/Beverages

$

Total Monthly Income

$

Clothing

$

Person A Withholdings

Personal Care/Cash

$

Federal Income Tax

$

Health & Disability Ins.*

$

State & Local Income Tax

$

Medical/Dental/Drugs

$

Self Employment

$

Education/Self-Improvement

$

F.I.C.A. (Social Security)

$

Installment Payments

$

Medicare

$

Entertainment

$

Health/Disability Insurance

$

Vacations/Holidays

$

401(k) or other employer retirement plans

$

Charitable Contributions

Gifts

$

$

Person B Withholdings

Federal Income Tax

$

Pets

$

State & Local Income Tax

$

Miscellaneous

$

Self Employment

F.I.C.A. (Social Security)

$

$

Total Living Expenses

$

* (Not withheld from paychecks)

16

Medicare $

Health/Disability Insurance $

401(k) or other employer $ retirement plans

(The above “Monthly Living Expenses” list is for your benefit. However, please be sure to enter a value for “Total Living Expenses”)

INVESTMENTS & SAVINGS

In addition to your employer plans(s), how much are you currently saving on a monthly basis? $

Is there an additional amount that you desire to save? Yes / No If so, how much? $

(NOTE: This excess cash flow could be a result of salary increases, bonuses, account liquidations, loans paid off, etc.)

What is your short-term and long term savings strategy?

INCOME CHANGES

TAXES

When filing your most recent federal income tax return, what was the result? Owe / Refund

Approximately how much? $

Is that a “typical” result for the last two or three returns? Yes / No

If not, please explain

Additional Comments:

HELPFUL CHECKLIST

In most cases, if you are married, assets such as your home and cars will be titled in joint ownership. But this is not always the case. In addition, certain assets that you may think are titled as joint, such as a checking/savings account, are actually listed under just one name. Please verify each asset and list them accordingly in the “ASSETS” section beginning on page 9 and 10.

Please note that retirement assets such as IRAs, employer savings plans and other employer retirement plans, by law, are titled in only the name of the employee, with your spouse or another individual as the beneficiary.

ASSETS: Did you remember to report all of the following?

$ Residence (current market value)

$ Furnishings (normally 10-20% of the value of your home)

$ Auto(s)

$ Boat

$ Rental property

$ Checking accounts(s)

$ Savings account(s)

$ CD(s)

$ Mutual funds(s)

$ Stocks(s)

$ Bond(s)

$ U.S. Savings Bonds

$ IRA(s) (traditional)

$ IRA(s) (Roth)

$ Prior retirement plan(s)

$ Stock Option statement

$ ESOP

$ Trusts

$ Precious metals and coin collections

$ Jewelry

$ Art

$ Collectibles

$ Business property, assets

$ Personal loan you expect to be repaid

$ Anticipated inheritance in the near future

LIABILITIES: Did you remember to report all of the following?

$ Mortgage $ Student loan

$ 2nd mortgage $ Finance company

$ Credit cards $ Loan against employer retirement plan

$ Automobile $ Home equity loan

$ Boat $ Life insurance loan

$ Rental Property $ Personal loan you owe someone

$ Business loan

Additional Comments:

Asset Allocation Questionnaire

Different Investors have different risk tolerances. Much of the difference stems from time horizon. That is, someone with a short investment time horizon is less able to withstand losses. The remainder of the difference is attributable to the individual’s appetite for risk. Volatility can be nerve-wracking for many people and they are more comfortable when they can avoid it. However, there is a definite relationship between risk and return. Investors need to recognize this risk/return trade-off. The following risk tolerance questionnaire has been designed to measure an individual’s ability (time horizon) and willingness (risk tolerance) to accept uncertainties in their investment’s performance. The total score recommends which of the five risk profiles is most appropriate for the investor. Please circle your answers below:

Time Horizon

1. When do you expect to begin withdrawing money from your investment account?

A. Less than 1 year

B. 1 to 2 years

C. 3 to 4 years

D. 5 to 7 years

E. 8 to 10 years

F. 11 years or more

2. Once you begin withdrawing money from your investment account, how long do you expect the withdrawals to last?

A. I plan to take a lump sum distribution

B. 1 to 4 years

C. 5 to 7 years

D. 8 to 10 years

E. 11 years or more

Risk Tolerance

3. Inflation, the rise in prices over time, can erode your investment return. Long-term investors should be aware that, if portfolio returns are less than the inflation rate, their ability to purchase goods and services in the future might actually decline. However, portfolios with long-term returns that significantly exceed inflation are associated with a higher degree of risk.

Which of the following portfolios is most consistent with your investment philosophy?

A. Portfolio 1 will most likely exceed long-term inflation by a significant margin and has a higher or more aggressive degree of risk.

B. Portfolio 2 will most likely exceed long-term inflation by a moderate margin and has a moderately aggressive degree of risk.

C. Portfolio 3 will most likely exceed long-term inflation by a small margin and has a moderate degree of risk.

D. Portfolio 4 will most likely match long-term inflation and has a lower degree of risk.

4. Portfolios with the highest average returns also tend to have the highest chance of short- term losses. The table below provides the average dollar return of four hypothetical investments of $100,000 and the possibility of losing money (ending value of less than

$100,000) over a one-year holding period. Please select the portfolio with which you are most comfortable.

Probabilities After 1 Year

Possible Chances

Average of Losing

Dollar Return Money

5. Investing involves a trade-off between risk and return. Historically, investors who have received high long-term average returns have experienced greater fluctuations in the value of their portfolio and more frequent short-term losses than have investors in more conservative investments. Considering the above, which statement best describes your investment goals?

A. Protect the value of my account. In order to minimize the chance for loss, I am willing to accept the lower long-term returns provided by conservative investments.

B. Keep risks to a minimum while trying to achieve slightly higher returns than the returns provided by investments that are more conservative.

C. Balance moderate levels of risk with moderate levels of returns.

D. Maximize long-term investment returns. I am willing to accept large and sometimes dramatic fluctuations in the value of my investments.

6. Historically, markets have experienced downturns, both short-term and prolonged, followed by market recoveries. Suppose you owned a well-diversified portfolio that fell by 20% (i.e. $1,000 initial investment would now be worth $800) over a short period, consistent with the overall market. Assuming you still have 10 years until you begin withdrawals, how would you react?

A. I would not change my portfolio.

B. I would wait at least one year before changing to options that are more conservative.

C. I would wait at least three months before changing to options that are more conservative.

D. I would immediately change to options that are more conservative.

7. The following graph shows the hypothetical results of four sample portfolios over a one-year holding period. The best potential and worst potential gains and losses are presented. Note that the portfolio with the best potential gain also has the largest potential loss.

______

______

______

______

______

______

______

______

______

______

______

______

______

_______

_______

_______

_______

_______

_______

_______

Return

%

50%

40%

30%

20%

10%

0%

-10%

- 20%

- 30%

-40%

Portfolio A Portfolio B Portfolio C Portfolio D

44%

33%

_

_

26%

19%

_

-9%

-20%

_

-15%

-27%

Which of these portfolios would you prefer to hold?

A. Portfolio A

B. Portfolio B

C. Portfolio C

D. Portfolio

8. I am comfortable with investments experiencing some level of volatility given enough investment time horizon to potentially rebound from that volatility.

A. Agree

B. Disagree