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Naviplan Select User Manual: Level 1 and Level 2 Plans

1. 2 Click Add Account The New Account or Annuity Details dialog box opens where you can define the account or annuity details Model a change in the state of residence during retirement To model a change in the state of residence for your clients during the retirement period follow these steps Notes Reports 7 Current Plan Recommended Plan Alternative 1 Modify Financial Data Assumptions Zoom 1914 2010 1986 2010 2001 2010 Inflation History Net Worth 25 2012 End of Year 0 15 At Death 0 Hi inflation Cash Flow 5 2012 Surplus Deficit 0 5 Pre retirement v 100 si eo v 100 aswa 19241934 1944 i954 1964 1974 1984 1994 2004 Strategies Year Insurance Coverage Analyze Goals Retirement E 100 ist Year Withdrawal Rate 0 0 Future State of Education Overde Residence Effective Date State Tax Rate College Education B 100 sconsi Ret ist 7 Emergency Fund E 100 Survivor Income Client Calculate Co Client Calculate Both Calculate Disability Income Client Calculate Co Client Calculate Long term Care Client Calculate Co Client Calculate Estate Planning Goal Funding Inflation rate Annualized Inflation tp date General Tax Details Calculate All Figure 31 Scenario Manager dialog box Assumptions link Tax Details tab 1 In the Scenario Manager dialog box under Modify Financial Data click the Assumptions link 2 Click the Tax Details tab 3 Select the Override check box and selec
2. Note Only 529 plans and Coverdell registered accounts created in the current plan that are funding the education goal in whole or in part are available Dependent owned non qualified accounts are also unavailable 4 Enter the date when you want the transfer to occur Adding new education or major purchase accounts to the scenario Level 2 To add new accounts to the scenario follow these steps 1 In the Scenario Manager dialog box under Modify Financial Data click the Net Worth link and then go to the Accounts tab 2 Click Add Account The New Account dialog box opens where you can define the account details and allocate the account to the goal Customizing What if emergency fund scenarios NaviPlan Premium allows you to customize existing emergency fund scenarios to help meet the needs of your clients financial situation and their preferences Once you have an appropriate scenario that you can apply to your clients plan you can recommend it Recommended scenarios apply to client reports where the Recommended plan type is used For information on recommending scenarios see Recommending a scenario on page 18 All What if scenarios are created and customized in the Scenario Manager dialog box To access it go to the Results section Analyze Goals category Scenarios page and then click the Edit Recommended or Alternative Plan button Entering emergency fund scenario objectives To enter scenario objec
3. Re Joint savings 5 000 Lump Sum Y Sep 12011 Joint savings Non Add Savings Strategy gt Qualified Calculate All Figure 20 Scenario Manager dialog box Strategies link Savings tab 2 To edit an existing savings strategy under Non Qualified or Qualified on the Savings tab select the Override check box and then edit the savings strategy details 3 To add anew savings strategy under Non Qualified or Qualified select an account from the Choose Account list and then click Add Savings Strategy Enter the savings strategy details 1 Under Analyze Goals click the Retirement link to return to Retirement details Under Goal Coverage note that the goal coverage for the retirement goal updates Entering retirement transfer strategies Level 2 Note Transfers cannot be entered in the Current Plan scenario To model transferring assets from one account to another follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Retirement link and then go to the Transfers tab Under Transfers existing transfers appear Current Plan Recommended Plan Alternative 1 Alternative Plan Alternative 2 Modify Financial Data Retirement Summary Assumptions Net Worth 80 Goal Coverage David s Retirement Age Susan s Retirement Age Wa 65 65 _ 0 An 64 64 0 2011 End of Year 380 094 Fixed Annual Retirement Expenses Discretionary Annual Retirement Expenses At Death
4. NaviPlan Level 1 and Level 2 Plans Analyzing client goals USER MANUAL USA Version 12 2 Contents Chapter 1 Using this manual NaviPlan Premium user manual series Conventions NaviPlan Premium resources Phone support Updates The About dialog box Chapter 2 Analyzing goals in NaviPlan Select Comparing scenarios Understanding scenario differences in Level 1 and Level 2 Plans Adding Alternative Plan scenarios Achieving goal success and viewing goal coverage Achieving goal success in a scenario Viewing goal coverage for other goals Comparing and recommending scenarios Comparing scenarios for an individual goal Recommending a scenario Determining scenario probability Level 2 Plans Creating goal funding strategies Level 2 Plans Managing scenarios in client reports Adding notes to scenarios Generating scenario reports Chapter 3 Creating goal scenarios Customizing What if retirement scenarios Entering retirement scenario objectives Entering additional retirement savings Level 2 Editing existing or adding new savings strategies Level 2 Entering retirement transfer strategies Level 2 Entering redemptions Level 2 Entering liquidation strategies Level 2 Model a Bucketing Strategy Defining Social Security Entering annuitization strategies Level 2 aooaa Aan R 11 11 12 12 13 17 17 18 19 21 22 23 23 25 25 25 27 27 28 29 30 31 32 32 Adding incomes and expenses Level 2 Add
5. 2011 End of Year 1 080 669 At Death 1 361 688 Cash Flow 2011 Surplus Deficit 47 980 Pre retirement v 100 Retirement X 90 UMbatAeMuOniiansa Strategies Insurance Coverage Analyze Goals Retirement Compare Scenarios E 0 A ump Sum Needs Annual Income Needs Income Available b A Education David Susan College Education 77 Retirement Age for Disability Analysis 65 Major Purchase i a i Li ctancy for Disability Anal afir mw 3 ife Exper i isability Analysis Emergency Fund B 47 Analyze Disability Through Survivor Income ROR on Disability Insurance Proceeds Surpluses amp Liquidations Client Calculate Total Calculate Calculate Pre retirement Retirement Calculate Calculate 4 v Estate Planning Calculate All Daim d Figure 45 Scenario Manager dialog box Disability Income link Assumptions tab 2 To include additional disability insurance in the scenario enter the disability benefit percentage of income or dollar amount and annual premium amount You can adjust the Disability Benefit value using the slider bar Note Use the What Are My Options button to find the optimal death benefit amount 3 To override the client s or co client s default retirement age select the Retirement Age for Disability Analysis check box and then enter the age or date of retirement 4 To override the client s or co client s default life expectancy select the Life Expectancy for Disability Analy
6. NaviPlan calculates and displays in the Payment per 1 000 field the amount that will be paid out of the annuity for every 1 000 of market value that is transferred into the annuity If you do not want to use the calculated Payment per 1 000 value select the Override check box and then in the Payment per 1 000 field enter the value you would rather use 9 10 11 12 13 14 Click OK The Estimate Income Gap in Retirement dialog box closes To make changes to existing annuities click the Apply new strategies to existing annuities link The Strategies for Existing Annuities dialog box opens Apply the following strategies to existing annuities in the plan Withdrawal As Needed Income Option Change Withdrawal As Needed Annuities to Life Income Annuities As Required Use Annuities in the Following Order MN All All Other Income Options Revert Start Dates to Retirement Figure 27 Scenario Manager dialog box Retirement link Annuitization tab Apply new strategies to existing annuities link Strategies for Existing Annuities dialog box To change annuities in the plan with the Withdrawals as Needed annuitization type to Life Income select the Change Withdrawal As Needed Annuities to Life Income Annuities check box This change only affects the selected retirement scenario and does not affect the current plan You can also select to withdrawal the annuities as required or specify an order To change th
7. NaviPlan to convert For example if you do not want to sell more than half of the clients non qualified assets to fund annuities enter 50 for that asset type By default non qualified assets are available for the annuity If you selected more than one asset type under Order of Annuitization select the order in which you want NaviPlan to sell the selected asset types You can select Use assets in the following order for annuitization and then select an annuitization order from the list or you can select Use scenario liquidation order settings for annuitization order and have NaviPlan use the liquidation order set on the Retirement Liquidation Strategies tab of the Scenario Manager dialog box If you want to allocate funds to variable subaccounts under Variable Subaccount Allocation enter the percentage you want to allocate Click Close The Assets for Annuitization dialog box closes Click the Review the results and assumptions link The Annuitize to need Results and Assumptions report opens and displays the results of the strategy and the assumptions used in it Note If you made additional assets available for the annuity the clients may be able to cover a larger income gap To re estimate the income gap repeat the procedure Adding incomes and expenses Level 2 To add annual incomes and expenses to the retirement scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the R
8. To override the default investment profile for the pre retirement or retirement period go to the Objectives tab select the Investment Objective check box next to the profile and then select a different profile The Return Rates fields update automatically The default investment profile for the plan is defined on the Plan Management section Asset Allocation category Profile page 5 To override the return rates for the scenario select the applicable Override check box and then enter new return rates 6 If applicable enter the percentage of fixed and discretionary expenses to cover during the retirement period Entering additional retirement savings Level 2 To enter additional savings for the retirement goal within the scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Retirement link Retirement Goal Coverage David s Retirement Age Susan s Retirement Age l 65 65 0 I 64 64 01 79 I Fixed Annual Retirement Expenses Discretionary Annual Retirement Expenses l 100 l 100 Additional Monthly Savings Details Current Monthly Savings What Are My Options mal 300 E Additional Lump Sum Savings Details Scenario Reports i sol amp Figure 19 Scenario Manager dialog box Retirement link Retirement details showing Savings slider bars and fields 2 Use the slider bars for AdditionalMonthly Savings and Additional Lump Sum Savings to arrive a
9. for each applicable client select the Do not redeem Qualified assets prior to age check box and then enter a new age 3 To override the liquidation order settings for the plan select the Override the default order check box 4 To redeem assets by account type only select one of the existing liquidation options OR To edit the order of specific accounts select the Modify the liquidation order check box A list of existing accounts and the current liquidation order appears By default the accounts are ordered based on the selected liquidation option Note For non qualified accounts NaviPlan only redeems the portion that is linked to the retirement goal 5 To change the liquidation order of individual accounts for each applicable account select the account and then click Move Up or Move Down The liquidations occur when cash flow deficits exist in the plan during the retirement period Model a Bucketing Strategy 1 To model a bucketing strategy go to the Bucketing tab and then complete the following steps a Click the Estimate button this will open the Distribution Bucket Estimator calculator b Enter the number of years over which the bucket investment account will cover needs and click Ok c The amount determined by the calculator will appear in the Target Balance field d Enter the remaining details of the bucketing strategy Liquidation Order Redemptions Distribution Bucket Target Balance Asset Class Re
10. 100 report types stand alone Asset Allocation 98 Capital Accumulation and Redemption 98 Cash Flow 98 Deficit Coverage 98 Estate 98 Fact Finder 98 Favorite Reports 97 Goals 98 Income Tax 98 Insurance 98 Monte Carlo 98 Needs vs Abilities 98 Net Worth 97 Summary 97 reports assigning settings 99 duplicating 100 generating 97 100 generating for scenarios 23 personalizing with user defined text 103 Planning Assistant 102 Progress reports 104 refreshing the view 100 reports client Asset Allocation 104 Financial Needs Analysis 105 Financial Needs Assessment 104 Financial Needs Summary 105 Retirement Distribution Summary 105 Retirement Distribution Summary client report 105 retirement scenarios S adding accounts 37 adding annuitities 37 adding expenses 37 adding incomes 37 annuitization strategies 32 entering 25 entering savings 27 liquidation strategies 30 redemption strategies 29 Social Security 32 transfer strategies 28 savings strategies adding for scenarios 27 40 44 editing in scenarios 27 40 44 Scenario Manager 7 10 scenario probability 19 21 scenarios adding alternative plans 11 adding notes 23 comparing 9 17 differences in plan levels 11 education adding accounts 42 entering savings 40 transfer strategies 41 emergency fund adding accounts 45 entering 43 entering savings 44 estate planning 66 asset bequests 80 asset estate details 82 beneficiaries inter vivos trus
11. Detailed Comparison The Assign Settings dialog box opens Assign Settings Life Expectancy Simultaneous Death in 2011 Other Life Expectancies Event Year of Death David Estate Planning Life Expectancy W 2021 0 2021 Susan Estate Planning Life Expectancy W 2026 0 2026 Figure 79 Assign Settings dialog box 5 Select the settings you want to use and then click OK A window opens displaying an analysis of the two scenarios you selected Estate Planning Comparison Summary SEE Help PDF gt W Word Show Settings Refresh Duplicate yh Add as Favorite Reports Window Estate Planning Comparison Summary Lee Financial plan Description Total Taxes Net to Heirs Net to Chari and Chari Current 788 788 2 018 691 0 2 018 691 Alternative 1 490 186 2 670 827 203 563 2 874 389 Proposed Scenario Figure 80 Estate Planning Comparison Summary report Chapter 6 Examining results After you have entered your clients financial information and goals into a plan you can prepare and generate results When you are satisfied with the results you can generate professionally designed client reports that you can distribute to your clients In this chapter Generating stand alone reports and graphs 97 Using the Planning Assistant 101 Preparing user defined text for client reports 103 Generating client and progress reports 104 Using the Client Report Monitor Online 108 Adding notes for your own p
12. GSTT exemption equal to the set funding amount select the Funding Amount check box Otherwise clear the check box and then in the Fixed Amount field enter a dollar value 7 If the clients have beneficiaries go to the Beneficiaries tab and then enter beneficiary information See Entering testamentary trust beneficiaries on page 79 for more information 8 Go to the Return Rates tab and then enter the return rates that apply to the trust Entering generic testamentary trusts To enter a generic testamentary trust follow these steps 1 In the Scenario Manager dialog box click the Estate Planning link and then go to the Estate Distribution tab 2 Under Testamentary Trusts click the Add Trust button and then select Generic Testamentary Trust The Trust Details dialog box opens New Generic Testamentary Trust Description At Death Of Trust Tax Rate Generic Testamentary Trust ist to Die 40 00 Funding Remainder Maximum Exclusion Fixed Amount Allocation for GSTT Exemption vV Funding Amount Fixed Amount Unitrust Unitrust Trust Payment Frequency Annual Payment Amount Beneficiaries AssetTransfers Return Rates Figure 61 Trust Details dialog box showing a generic testamentary trust 3 Under New Generic Testamentary Trust enter the general details of the trust 4 Under Funding select one of the following trust funding methods Ifyou select The trust is funded in this manner Remainder Nav
13. IRC 7520 en the payment If cleared trust assets may Pe be sold to cover trust payments resulting in tax consequences Income Distribution Annual Payment Trust Payment Amount Payment Frequency v 0 5 00 Monthly Figure 74 Trust Details dialog box showing new GRT details New Rolling GRAT details inter vivos Setup GRAT Series Funded Rolling GRAT Created On Description Grantor End of Year Rolling GRAT Wayne ix 2011 IRC 7520 GRATsin GRAT Termin TotalYears Payment Rate _ Series Years Remaining Frequency 1 00 2 2 3 Annual Final Payment Transfer In Kind To Account P Beneficiaries Return Rates Instructions Click the Add Beneficiary button to create a new row Add Beneficiary 7 Pro ata Add Trust_v f lt Previous Entry Next Entry gt eea New CRT details inter vivos New CRT Description Transfer To Trust Charitable Remainder Trust v Dec 312011 IRC 7520 Rate 4 00 I Distributi Annual Payment Optimize Trust Trust Payment Amount Payment Payment Frequency Annuity v 0 7 Monthly Type Payment Period Term in Years Term Certain lv 10 Figure 75 Trust Details dialog box showing new CRT details New CLT details inter vivos New CLT Trust Tax Description Grantor Non Grantor Rate Payment Distribution Transfer To Trust Charitable Lead Trust Joint v v 40 00 Annuity eA Dec 31 2011 Zero Out Trust Annual Payment IRC 7520 CLAT Payment Amount Payment Fre
14. Non 15 000 Joint v v Julia Real Estate Joint 500 000 Joint v 520 Thomas St J 300 000 Joint v Qualified and Annuities Business Assets Figure 65 Scenario Manager dialog box Estate Planning link Asset Estate Details tab 3 To prevent probate from being assessed against all assets in the client s and co client s gross estate select the Living Trust check box 4 To override the clients current plan asset estate details strategy for this scenario select the Override check box 5 To retitle a non qualified or lifestyle asset under Non Qualified and Lifestyle from the New Owner list select a new owner for example change a separately owned asset to joint ownership 6 To control the application of probate and administration fees for particular assets select or clear the appropriate check boxes Note By default the Probate and Admin Fees check boxes are selected for all assets However probate and administration fees do not apply to joint assets on the first death nor for any qualified assets listed even though these check boxes are selected by default By default probate and administration fees are applied to annuity assets on the second death where the surviving co client is listed as the beneficiary 10 To prevent assets from being liquidated to cover estate settlement costs select the appropriate Not Available For Estate Needs check boxes To specify a beneficiary for a qualified or
15. Ongoing Expenses Additional Annual Income Lump Sum Needs gt Pay Off Outstanding Liabilities Current Plan Pay off all liabilities Override liability pay off strategies Pay off all liabilities Maintain all liability balances Major Purchase Goals Additional Lump Sum Needs Figure 49 Scenario Manager dialog box Disability Income link Lump Sum Needs tab 2 To override the manner in which liabilities are to be paid off for this scenario under Pay Off Outstanding Liabilities select the Override liability pay off strategies check box and then select an option Note Payoff Outstanding Liabilities is only available if liabilities exist in the plan and if in the Enter Financial Data section Net Worth category Assets Liabilities page Liability Details dialog box the Payoff Options at Death is set to Transfer to survivor or Payoff at first death from estate 3 If major purchase goals are included in the plan and you want to override the to Cover field under Major Purchase Goals select the check box for each applicable major purchase and then enter a new percentage 4 To add lump sum needs to the scenario under Additional Lump Sum Needs click Add Lump Sum Need and then enter the details of the need in the fields that appear Entering annual income needs during disability Level 2 This procedure only applies if the Income Coverage Analysis method is selected on the Set Goals section Disability Inco
16. Regular Cash Gifts enter the start and end dates for the annual gifts Lump sum cash Under Lump Sum Cash Gifts enter the date gift when the gift is expected to occur Asset gift Under Asset Gifts select the frequency of the gift and enter the start and end dates for annual quarterly and monthly gifts If the gift is a lump sum gift enter the date when the gift is expected to occur Note Click the Event Calendar to use event dates Offsets can also be used e g retirement 5 9 To index a regular or lump sum cash gift to inflation select the applicable Infl check box and then enter the rate of additional savings above or below the inflation rate Note If the Max Annual Gift Exclusion check box is selected you cannot set the inflation rate Entering inter vivos trust strategies On the Estate Planning Trusts tab in the Scenario Manager dialog box you can enter edit and delete your clients planned inter vivos trusts Existing trusts those that are already active and funded should be entered on the Set Goals section Estate Planning category Funded Trusts page Only trusts that will be established during the clients lifetimes inter vivos are entered on the Trusts tab Testamentary trusts are entered on the Estate Distribution tab See Defining the clients estate distribution on page 69 You can enter the following types of inter vivos trusts e Irrevocable trust e Irrevocable life insur
17. To add anew savings strategy under Non Qualified or Qualified select an account from the Choose Account list and then click Add Savings Strategy Enter the savings strategy details 4 Under Analyze Goals click the lt education gt or lt major purchase gt goal link to return to Retirement details Under Goal Coverage note that the goal coverage for the education or major purchase goal updates Entering education transfer strategies Level 2 Note Transfers cannot be entered in the Current Plan scenario To model transferring assets from one account to another follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the applicable lt education goal gt link and then go to the Transfers tab Under Transfers existing transfers appear Objectives Transfers Transfers Transfer Source Destination Account Amount Transfer Pre Tax Account Account Dewils Sor Date Contrib Pay Taxes From Delete Joint savings 529 plan David 52 v Br 0 Sep 1 2011 x Choose Source Account V Add Transfer Strategy Figure 34 Scenario Manager dialog box Education link Transfers tab 2 Under Transfers select the source account you want to transfer funds from and then click Add Transfer Strategy A new data entry row appears 3 From the Destination Account list select the account you want to transfer funds to and then enter the dollar amount or percentage of the source account you want to transfer
18. Trust 40 00 Funding Value Autofund Maximum Exdusion GSTT Exemption Allocation Funding Amount Fixed Amount Beneficiaries Return Rates Capital Deferred Total Interest Dividends Gains Tax Free Growth 0 00 0 00 0 00 0 00 0 00 0 00 Add Trust i Previous Entry Next Entry gt Figure 58 Trust Details dialog box showing a credit shelter trust Under New CST enter the general details of the trust If you want non qualified assets owned 100 by the client to be automatically transferred to the trust under Funding select the Autofund check box 5 Select one of the following trust funding methods If you select The trust is funded in this manner Maximum NaviPlan transfers to the trust an amount Exclusion equal to the client s maximum remaining applicable exclusion amount Value NaviPlan transfers to the trust an amount equal to the value entered in the Value field 6 Under GSTT Exemption Allocation if you want NaviPlan to make the GSTT exemption equal to the set funding amount select the Funding Amount check box Otherwise clear the check box and then in the Fixed Amount field enter a dollar value 7 On the Beneficiaries tab enter beneficiary information See Entering testamentary trust beneficiaries on page 79 for more information 8 Go to the Return Rates tab enter the return rates that apply to the trust By default the investment income is reinvested into
19. amount 4 Enter the premium amount 5 To override the percentage of lifestyle and medical expenses to cover for the insurance scenario on the Objectives tab select the Percentage of lifestyle and medical expenses to cover check box and then enter a new percentage This is the percentage of current expenses that continue in the event of the insurance scenario For example in a survivor income scenario some expenses utility payments and property taxes normally continue for a surviving client and dependents while other expenses food and clothing decline The default is 85 but the percentage can be changed 6 Survivor income scenario only To override the rate of return used for life insurance proceeds under ROR on Life Insurance Proceeds select the check box and then enter a new return rate 7 Survivor and disability income scenarios only To change how outstanding major purchase goals are covered select the Cover Major Purchase Goals check box and then make the appropriate selections for the client and co client When major purchase goals are not covered less insurance is required 8 Survivor and disability income scenarios only To change how outstanding liabilities are covered select the Pay Off Outstanding Liabilities check box and then make the appropriate selections for the client and co client 9 Long term care insurance scenario only Select the Additional Daily LTC Expenses check box and then enter the
20. are not included in the gross estate for estate tax purposes Non qualified qualified and lifestyle assets can be held in trust Life insurance policies are not included ILIT Existing A trust similar to other irrevocable trusts Insurance which holds an existing life insurance policy that was entered on the Enter Financial Data section Insurance Coverage category Insurance Coverage page ILIT New A trust similar to ILIT Existing Insurance Insurance except that it holds a new life insurance policy that has not been entered on the Enter Financial Data section Insurance Coverage category Insurance Coverage page When the ILIT is created the life insurance policy is created at the same time A family limited partnership trust PRT A qualified personal residence trust 4 Detailed Trusts Description Grantor New Irrevocable Joint End Date Never years 0 0 R t Date D Beneficiaries Asset Transfers Return Rates gt Instructions Trust type Description CRT A charitable remainder trust CLT A charitable lead trust The Trust Details dialog box opens The fields to be completed will vary depending on the type of trust being added To see the varying trust details in the Trust Details dialog box for each of the trusts see Figure 69 to Figure 76 immediately after this procedure Transfer to Trust Trust Tax Rate Crummey Trust Dec 312011 40 00 v Income Beneficiaries Click the A
21. check box next to an existing expense and then edit the information or click Details 6 To add a new ongoing expense click Add Support for Dependent 7 Enter the details of the dependent expense s 8 For each applicable education goal select the check box next to the goal and then enter a new percentage in the to Cover field 9 Goto the Lump Sum Needs tab Assumptions Ongoing Expenses Lump Sum Needs Additional Lump Sum Needs Override Description Amount Infl Add l Delete Lump Sum Need Y x Add Lump Sum Need Figure 44 Scenario Manager dialog box Survivor Income link Level 2 Plan Lump Sum Needs tab 10 Select the check box next to an existing expense that you expect will apply 11 If any other lump sum needs are expected click Add Lump Sum Need and then enter the details of the need in the fields that appear Customizing What if disability income scenarios Level 2 The analysis method chosen in the Set Goals section Disability Income category determines the available tabs in the Analyze Goals section of the Scenario Manager dialog box e Goal and Expense Analysis method Uses the clients existing lifestyle expenses and goal information to define their insurance needs e Income Coverage Analysis method Uses the clients income to estimate the anticipated expenses during the disability period NaviPlan allows you to customize a recommended disability income scenario to
22. disability income Level 2 55 additional annual expenses 59 annual income needs 61 assumptions 56 goal and expense analysis 56 income available 62 income coverage analysis 56 lump sum needs 60 ongoing expenses 58 long term care Level 1 46 long term care Level 2 62 assumptions 63 LTC incomes and expenses 64 survivor income Level 1 46 survivor income Level 2 48 additional annual income 52 dependent needs when both clients die 53 goal and expense analysis 48 income coverage analysis 49 lump sum needs 52 ongoing expenses 51 inter vivos trust strategies 87 L liquidation strategies 30 living trust 82 long term care scenarios Level 1 46 long term care scenarios Level 2 62 assumptions 63 LTC incomes and expenses 64 major purchase scenarios adding accounts 42 entering savings 40 transfer strategies 41 marital trusts entering 69 74 Monte Carlo 19 Monte Carlo reports 98 N NaviPlan Select phone support 5 resources 5 updates 6 user manual series 2 version 6 Needs vs Abilities report 98 net worth reports 97 notes adding personal 109 adding to scenarios 23 P phone support 5 Planning Assistant opening 101 reports 102 using 101 Q QDOTs entering 69 74 qualified domestic trusts entering 69 74 qualified terminable interest property trusts entering 72 R recommended plan 9 refresh report 100 report settings assigning 99 duplicating 100 hiding 100 redisplaying 100 refresh
23. help meet the needs of your clients financial situation and preferences Recommended scenarios apply to client reports where the Recommended plan type is used To customize the disability income scenarios complete the following procedures based on the method used Note The procedures vary depending on which analysis method is selected on the Set Goals section Disability Income category Client Co client Objectives page Goal and Expense Analysis method e Entering disability income assumptions Level 2 on page 56 e Entering ongoing expenses during disability Level 2 on page 58 e Entering lump sum needs during disability Level 2 on page 60 Income Coverage Analysis method e Entering disability income assumptions Level 2 on page 56 e Entering lump sum needs during disability Level 2 on page 60 e Entering income available during disability Level 2 on page 62 Entering disability income assumptions Level 2 To enter disability income assumptions for the client and co client in the Recommended Plan scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Disability Insurance Client Co Client link Current Plan Recommended Plan Alternative 1 Alternative Plan Alternative 2 Modify Financial Data Disability Income Client Summary Goal Coverage of Income Assumptions 98 Disability Benefit or Amount Premium Net Worth da Dims v 0 mo
24. liabilities and taxes have been settled solely owned non qualified assets and cash remaining in the estate form the remainder Lifestyle assets real estate assets business assets joint assets and qualified assets do not form part of the remainder Autofund NaviPlan transfers to the trust an amount equal to the value entered in the Value field Asset Transfer The Asset Transfers tab appears allowing you to select the client s assets to be transferred to the trust If you selected Asset Transfer in the previous step go to the Asset Transfers tab and then see Entering asset transfers for a testamentary trust on page 78 Under GSTT Exemption Allocation if you want NaviPlan to make the GSTT exemption equal to the set funding amount select the Funding Amount check box Otherwise clear the check box and then in the Fixed Amount field enter a dollar value Go to the Beneficiaries tab and then enter beneficiary information See Entering testamentary trust beneficiaries on page 79 for more information Go to the Return Rates tab and then enter the return rates that apply to the trust By default the investment income is reinvested into the trust Entering marital testamentary trusts To enter a marital testamentary trust including a QDOT follow these steps 1 2 In the Scenario Manager dialog box click the Estate Planning link and then go to the Estate Distribution tab Under Testament
25. link Ongoing Expenses tab 2 To override the percentage of lifestyle and medical expenses covered during disability under Annual Expenses select the Percentage of lifestyle and medical expenses to cover check box and then enter a new percentage Note If the percentage of expenses to cover varies among expenses Blended appears in the field 3 To change the percentage of education expenses to cover during disability click Education Expenses The Education Expense dialog box opens gt Instructions Education Expenses Number Annual to Override Description Name Start Age of Years Amount Cover College Education Julia 18 4 10 000 Figure 47 Scenario Manager dialog box Disability Income link Education Expenses button Education Expenses dialog box 4 For each applicable education goal select the check box next to the goal and then enter a new percentage in the to Cover field 5 Click OK to close the Education Expenses dialog box 6 To edit an existing annual expense previously entered in the Set Goals category under Additional Annual Expenses select the check box next to it and then edit the expense OR To create a new annual expense under Additional Expenses click Add Additional Expense 7 Enter the expense description and annual amount of the expense 8 Repeat steps 2 8 until you ve finished entering all additional disability expenses Entering additional annual income during disa
26. method is selected on the Set Goals section Survivor Income category Client Co client Objectives page To enter the survivor s annual expenses at death in the Recommended Plan scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the appropriate Survivor Income link and then go to the Ongoing Expenses tab Assumptions Additional Annual Income Lump Sum Needs Annual Expenses Percentage of lifestyle and medical expenses to cover Education Expenses Additional Expenses Click the Add Additional Expense button to create a new row Add Additional Expense Figure 39 Scenario Manager dialog box Survivor Income link Level 2 Plan Ongoing Expenses tab 2 To change the default percentage of expenses to cover at death under Annual Expenses select the Percentage of lifestyle and medical expenses to cover check box and then enter a new percentage 3 To change the percentage of education expenses to cover at death click Education Expenses gt Instructions Education Expenses Number Annual to Overide Description Name Start Age of Years Amount Cover College Education Julia 18 4 10 000 Figure 40 Scenario Manager dialog box Survivor Income link Level 2 Plan Education Expenses button Education Expenses dialog box 4 For each applicable education goal select the check box next to the goal and then enter a new percentage in the to Cover field 5 Cl
27. one of the following List all reports Clear the Show only reports for this plan check box for which you The dialog box updates and expands the list of have access reports View a Click the link for a report with the Completed status complete report The report opens using the format specified on the User Preferences menu User Preferences System Settings dialog box Report Format tab Delete a report Click the Delete button for the applicable report or click the Delete All button to delete all listed reports and then click OK for the message that appears 3 Click Close The Client Report Monitor dialog box closes Any reports that have not yet generated will continue to process while you work in other areas of NaviPlan If needed you can generate additional reports while other reports are being processed NaviPlan generates each report independently Adding notes for your own personal use In NaviPlan Premium you can add notes for yourself that are not seen by the clients To enter personalized text for reports follow these steps 1 On any page within an open plan go to the Notes menu and then select Add Note The Notes dialog box opens e amp BS Figure 92 Notes menu Add Note Notes dialog box 2 Enter the text into the dialog box and then use the formatting buttons where applicable Note A spelling checker is not available You can copy and paste plain text from Microsoft Wo
28. or lower than average Probability analysis projects the scenario multiple times and randomizes account return rates according to their standard deviation for each trial The goal success of each trial may change due to asset performance The goal success of each trial is plotted on probability graphs To determine the likelihood that your clients will meet a particular goal follow these steps 1 Go to the Results section Analyze Goals category Scenarios page and then click the Edit Recommended or Alternative Plan button 2 Under Analyze Goals select the applicable goal link 3 Under lt goal gt click the Scenario Reports button and then select Scenario Probability The Scenario Probability Details dialog box opens Instructions Total Probability Trials 150 Figure 11 Scenario Probability Details dialog box 4 Enter the number of probability trials you want NaviPlan to perform and then click OK After NaviPlan calculates the scenario probabilities the Scenario Probability dialog box Probability tab opens showing a goal coverage graph for the scenario The Portfolio Variability Projection and Investment Capital tabs also appear To view more details about a graph in this dialog box click the Graph Information link above the graph Portfolio Variability Projection Investment Capital gt Graph Information v a 2 5 gt 5 3 5 5 e 75 Trials 90 or more 65 or more but le
29. tab 401 k selected 2 Enter the amount or percentage of the asset your client wants to transfer 3 If applicable go to the Beneficiaries tab Entering testamentary trust beneficiaries In addition to entering income and remainder beneficiaries you can specify the percentage of income or remainder to be allocated to each beneficiary This procedure assumes you are already on the Trust Details dialog box Beneficiaries tab for a testamentary trust The fields on the Beneficiaries tab may vary slightly depending on the trust type Asset Transfers Return Rates Instructions Remainder Beneficiaries Income Beneficiaries Beneficiary Percent Delete Julia 100 X Total Surviving Client Income Beneficiaries Add Beneficiary Pro tata Beneficiary Other Total Add Beneficiary Pro ata Figure 64 Trust Details dialog box Beneficiaries tab To enter beneficiary details for a testamentary trust follow these steps 1 To add a beneficiary under Remainder Beneficiaries or Income Beneficiaries click the Add Beneficiary button and then select the beneficiary you are adding 2 To delete a beneficiary from the trust click the Delete button next to the beneficiary you are removing 3 To assign equal distribution of income or remainder trust proceeds click the Pro rata button Each beneficiary receives an equal share 4 To assign a different distribution percentage for each beneficiary enter the percent
30. the income Customizing What if long term care scenarios Level 2 NaviPlan allows you to customize a recommended long term care scenario to help meet the needs of your clients financial situation and preferences Recommended scenarios apply to client reports where the Recommended plan type is used To customize the long term care see the following sections e Entering long term care assumptions Level 2 on page 63 e Entering long term care incomes and expenses on page 64 Entering long term care assumptions Level 2 To enter long term care assumptions in a What if scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Long term Care Client Co Client link and then go to the Assumptions tab Long term Care Client Goal Coverage Daily Benefit Amount Premium 100 i E 0 imo What Are My Options E Compare Scenarios LTC Incomes amp Expenses Age at Start of LTC in the year LTC period years fi 1 Assumption is that David dies at the end of the LTC period ROR on Surpluses amp Liquidations Total Applies to proceeds from liquidated assets Figure 53 Scenario Manager dialog box Long term Care link Assumptions tab 2 To override the age at which the client or co client will enter long term care select the check box next to the Age at Start of LTC field and then enter new values 3 To override the duration of the lo
31. the end date of the redemption strategy Note If Lump Sum is selected from the Frequency list you cannot enter an end date or index the amount 7 To exclude penalties for early withdrawals or to index the redemptions to inflation click the Details button and then edit the details as required Entering liquidation strategies Level 2 To define the liquidation order of assets to cover cash flow deficits and to define additional automatic redemptions in the retirement goal scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Retirement link and then go to the Liquidation Order tab Transfers Liquidation Order Redemptions Bucketing Social Security Annuitization Incomes Expenses Do not redeem Qualified assets prior to age Liquidation Order David Modify the liquidation order Susan H Description Account Type Owner Override the default order 8 Joint savings Non Qualified Joint Choose the order in which assets are redeemed during retirement Non Qualified Roth Qualified Non Qualified Qualified Roth David s 40 1 k 401k David Roth Qualified Non Qualified Move Up Move Down Blended Withdrawal 8 Susan s saving Non Qualified Susan 8 Account is not used entirely to fund the retirement goal Figure 23 Scenario Manager dialog box Retirement link Liquidation Order tab 2 To override the minimum age when qualified assets can be redeemed
32. 1 397 855 Mi 100 T 100 Cash Flow i 2011 Surplus Deficit 10 824 Additional Monthly Savings Details Current Monthly Savings Pre retirement v 100 a 7 sca x 0 What Are My Options me 300 oF 250 as of Sep 1 2011 Strategies _ Additional Lump Sum Savings Details Insurance Coverage Sc nario Reports 2 Ti so e mma Gerster Ligation Order Redemptions Bucketing Social Security Annuitization Incomes Expenses 80 Tato Transfers College Education Transfer Major Purchase Source Destination Account Amount Transfer Pre Tax Vehicle Account Account Deis Sor Date Contrib Pay Taxes From Delete Emergency Fund Joint savings Susan s IRA yx g 0 Sep 12011 ash F x Survivor Income dlient Calculate Co Client Calaulate Both Calculate Goal Funding Objectives Add Transfer Strategy Choose Source Account Joint savings Non Qualified Susan s IRA David s 40 1 k Figure 21 Scenario Manager dialog box Retirement link Transfers tab Note Only accounts created in the current plan that are funding the retirement goal in whole or in part are available Annuities created in the current plan and dependent owned accounts are unavailable 2 Under Choose Source Account select the source account you want to transfer funds from and then click Add Transfer Strategy A new data entry row appears 3 From the Destination Account list select the account you want to transfer funds to and then enter the doll
33. 100 00 type of life insurance policy that will be used to fund the trust The fields under m Beneft Details and Premiums vary Policy Beneficiaries Return based on the policy type selected Details Policy Type 7 Effective Date Whole Life v Jan 12011 Benefit Details Death Enter the details of the Benefit life insurance benefits 0 and premiums Premiums Cease Premiums Waived Payer Amount Frequency At Age On Date at Disability David v 0 Annual v Never is 3 v Figure 71 Trust Details dialog box showing new ILIT with new insurance details New FLP details inter vivos Marketability Minority Interest Discount Rate Discount Rate Transfer To Trust Family Limited Partnership 0 00 0 00 Dec 31 2011 Income Distributions Asset Transfers Gifting Return Rates Click the Add Partner button to create a new row Add Partner Figure 72 Trust Details dialog box showing new FLP trust details Partners tab New QPRT details inter vivos Grantor Transfer To Trust Qualified Personal Residence Trust Joint v Dec 312011 Rate used to calculate the value Family member of the transfer whose assets fund the trust Figure 73 Trust Details dialog box showing new QPRT details New GRT details inter vivos New GRT Description TransferToTrust If selected and the income earned is not Grantor Retained Trust i w Dec 312011 enough to cover the intrust payments an in kind transfer makes up the balance of
34. 12 995 Pension Inflows so 1 720 1 720 Total Cash Inflows 88 498 68 218 156 716 Cash Outflows Lifestyle Expenses 35 400 35 400 70 800 Taxes 20 990 15 999 36 988 Miscellaneous Expenses 4 900 3 700 8 600 Non Qualified Contributions and Reinvestments 1 365 1 365 2 730 Qualified Contributions 1 200 2 000 3 200 Total Cash Outflows 63 855 58 464 122 319 Current Surplus Deficit 34 397 Ending Surplus Deficit 34 397 V Summary View Show Family column only Show rows with zero values Hide dependents Figure 83 Cash Flow Details report 4 To redisplay the report settings click Report Settings at the bottom of the report window To hide the settings again click Report Settings 5 To generate a report or graph that you can print or distribute beside the PDF or Word button click the z button and then select Automatic Portrait or Landscape The report or graph generates as a PDF or Word file Note Selecting Automatic generates a report or graph using NaviPlan s default printer orientation 6 If you made changes to the plan and the report window is still open click the Refresh button to update the report 7 To duplicate the report or graph click the Duplicate button NaviPlan creates a duplicate and displays it next to the original in the same window 8 To generate a report or graph from within an open stand alone report or graph window click the Reports button The Reports menu o
35. 71 generic 75 QTIPs 72 transfer strategies 28 41 trusts testamentary asset transfers 78 beneficiaries 79 charitable lead 77 credit shelter 71 generic 75 marital 74 QDOTs 74 QTIPs 72 U updates to NaviPlan Select 6 user defined text customizing 103 user manual conventions 4 series 2 V version of NaviPlan Select 6 Ww What Are My Options 12
36. Level 1 and Level 2 Plans Analyzing client goals Analyzing your clients goals using side by side comparisons of the Current Plan scenario and Recommended Plan scenario Conducting detailed cash flow and net worth analyses Generating Monte Carlo simulations Creating goal scenarios Creating estate planning scenarios Generating client reports Conventions This user manual uses the following conventions The names of items on the screen are italicized For example the Clients page opens The names of items that you must select click or enter appear in bold For example select Recommended and then click OK To help you navigate through the application locations are separated by en dashes For example Enter Financial Data section Net Worth category Accounts page Figure 1 Enter Financial Data section Net Worth category Accounts page To help you use this manual please note the following abbreviations and graphics AA Refers to the Asset Allocation Assessment FA Refers to the Financial Assessment Indicates that the step or paragraph applies to Level 1 Plans only Indicates that the step or paragraph applies to Level 2 Plans only Indicates that the step or paragraph only applies when you are using the Average Tax method Indicates that the step or paragraph only applies when you are using the Detailed Tax method NaviPlan Premium resources Phone support A
37. Plan v Client Action List F Scenario Probability Assumptions Tax Considerations E Important Terminology Disclaimer Asset Allocation Rate Approval Delivery Acknowledgement OK Cancel Figure 90 Select Document Sections dialog box 5 Select the sections you want included in the report 6 To view the subsections for a section click the beside that section The list expands and subsections appear Select or clear the check boxes for the appropriate subsections 7 To reorder report sections click an applicable section and then drag it to another location 8 10 To save your selections as a template for this type of client report click the Save as Template button The Save Template dialog box opens Enter a name for the template and then click OK The Save Template dialog box closes The templates you create can be managed on the User Preferences System Settings dialog box Templates tab User Preferences menu System Settings Click OK NaviPlan Premium saves your selections and the Select Document Sections dialog box closes To generate the report click the Generate button If you generated this report before this button appears as Regenerate If you are using NaviPlan Premium Online the Status column updates To view the report or view the status of other reports see Using the Client Report Monitor Online on page 108 Note In NaviPlan Premium Offline you may have to click Refresh to
38. Retirement All Years Cash Flow Surplus Deficit Assumptions Net Worth 2011 End of Year 880 094 peal At Death 1 397 855 Cash Flow SISK 2011 Surplus Deficit 10 824 10k Pre retirement v 100 5K 80 0 30K Si Ci verage Analyze Goals Retirement Education College Education 12 Direct Amount Major Purchase Overde Savings To or of Salary Frequency StartDate End Date Infl Add l Delete Vehicle E 34 Joint savings Monthly Jan 12011 Re av x S ia Retirement Fu 300 Monthly Sep 12011 m Ret ist m 0 00 x Survivor Income dient Calculate Joint savings 5 000 Lump Sum Y Sep 12011 F x Co Client Calculate Both Calculate Goal Funding Joint savings Non Add Savings Strategy gt Qualified Calculate All Figure 36 Scenario Manager dialog box Strategies link Savings tab 2 To edit an existing savings strategy under Non Qualified or Qualified on the Savings tab select the Override check box and then edit the savings strategy details 3 To add anew savings strategy under Non Qualified or Qualified select an account from the Choose Account list and then click Add Savings Strategy Enter the savings strategy details 4 Under Analyze Goals click the lt emergency fund goal gt link to return to the goal details Under Goal Coverage note that the goal coverage for the emergency fund goal updates Adding new emergency fund accounts to the scenario Leve
39. To enter a testamentary charitable lead trust follow these steps 1 In the Scenario Manager dialog box click the Estate Planning link and then go to the Estate Distribution tab 2 Under Testamentary Trusts click the Add Trust button and then select Testamentary Charitable Lead Trust The Trust Details dialog box opens New TCLT Trust Tax Description At Death Of Rate Payment Distribution Testamentary Charitable Lead Trust ist to Die vy 40 00 Annuity v Zero Out Trust Annual Payment IRC 7520 TCLAT Payment Amount Payment Frequency Payment Period Term in Years Rate 5 00 Monthly AA Term Certain NA 10 4 00 Funding Remainder Fixed Amount Beneficiaries Asset Transfers Return Rates Figure 62 Trust Details dialog box showing a testamentary charitable lead trust 3 Under New TCLT enter the general details of the trust 4 If you want to set the trust payment so the taxes are zeroed out select the Zero Out TCLAT check box NaviPlan calculates the Trust Payment value Note The Zero Out TCLAT check box is not available if the Payment Distribution is Unitrust 5 Under Funding select one of the following trust funding methods Ifyou select The trust is funded in this manner Remainder NaviPlan transfers to the trust an amount equal to the client s estate remainder Once estate fees liabilities and taxes have been settled solely owned non qualified assets and cash remaining in the estat
40. age in the applicable Percent field 5 If applicable enter the percentage of trust income that will go to the surviving client The remaining income amount is divided among the remaining income beneficiaries Entering general bequests To enter general bequests follow these steps 1 To override the client s current plan estate distribution strategies for this scenario select the Override check box 2 Click General Bequests click the Add General Bequest button and then select Cash or Remainder If you select The bequest is funded in this manner Cash Surpluses or cash accounts fund the bequest If no cash or surpluses exist an asset must be liquidated to satisfy the bequest Cash distributions must be specified using a dollar amount Remainder Residual assets are distributed intact at their residual values to satisfy the distribution Once estate fees liabilities and taxes have been settled solely owned non qualified assets and cash remaining in the estate form the remainder Remainder distributions can be specified as a percentage or a dollar amount Dollar amounts are distributed first followed by percentages to their respective beneficiaries 3 To bequeath cash or residual assets up to the client s remaining applicable exclusion amount at death select the Max Excl check box 4 Enter the dollar amount or percentage of the bequest 5 From the At Death Of list select the client who is making t
41. ails To override the clients current plan gifting strategies select the Override check box Click Regular Cash Gifts Lump Sum Cash Gifts and Asset Gifts for each applicable gift and then click the Add lt Regular Cash Gift Lump Sum Cash Gift Asset Gift gt button to create a new data entry row For regular or lump sum cash gifts select the individual giving the gift and the recipient of the gift For asset gifts select the asset being gifted and the recipient To split the gift tax consequences between the client and co client for each applicable gift select the Split Gift check box The Split Gift check box is selected by default for joint assets For community property assets the check box is inaccessible since the gift is provided equally by the client and co client The check box does not appear for single or unmarried clients To provide an amount that is equal to the maximum annual gift exclusion for each applicable gift select the Max Annual Gift Exclusion check box The Annual Amount or the Value or field is not accessible By law Max Annual Gift Exclusion gifts the maximum annual exclusion amount allowed gift tax free This amount does not apply to charitable beneficiaries For each applicable gift enter the dollar amount of the gift or if you are gifting a percentage of an asset enter a percentage instead 8 For each gift entered do one of the following Regular cash gift Under
42. ails Both Details Disability Income Client Details Co Client Details Long term Care Client Details Co Client Details Estate Planning Details Goal Funding Details Calculate All Include Alternatives In Reports Figure 2 Results section Analyze Goals category Scenarios page NaviPlan automatically creates the Recommended Plan scenario based on the current plan with suggested asset allocation The column on the far left of the Scenarios page is split into two categories Modify Financial Data and Analyze Goals similar to the left navigation bar in NaviPlan To view the plan details click the Edit Recommended Plan button or any of the links The Scenario Manager dialog box opens and displays the Recommended Plan scenario in detail Current Plan Recommended Plan Alternative 1 Alternative Plan Alternative 3 Summary Scenario Name Alternative 1 s Goals with Shortfall 2 uth You have 7 insurance goals that need to be calculated Calculate All 2011 End of Year e 2 goal s with shortfall At Death e 1 goal s with surplus Goal College Education Cash Flow e 7 insurance goal s that need to be calculated Calculate All Coverage Goal Coverage 12 2011 Surplus Deficit Analyze Goal Pre retirement Retirement Cash How Gosl Emergency Fund Siategies 2011 Surplus Deficit Goal Coverage 35 Insurance Coverage X Pre etirement fo Analyze Goal Analyze Goals vV Retirement Retirement E 100 Analyze Cash Fl
43. als section Estate Planning category Assumptions page If you ve selected Specify by Order of Death NaviPlan displays separate Estate Distribution tabs for the client and co client See Entering estate planning assumption in chapter 9 of the Level 1 and Level 2 Plans Entering client data and goals user guide To allow full control of estate distribution testamentary trusts general bequests and asset bequests on the Estate Distribution tab select the Override check box and then select either Convert to Detailed or Convert and Create Marital QDOT CST e If you select Convert to Detailed you can create testamentary trusts general bequests and asset bequests e If you select Convert and Create Marital QDOT CST NaviPlan automatically creates a marital trust a qualified domestic trust QDOT and a credit shelter trust CST and allows you to create other trusts and bequests Note Marital trust only appears if one or both the clients are U S citizens QDOT only appears if one or both of the clients are resident aliens NaviPlan allows you to define the distribution of the clients estate in terms of a dollar or percentage amount asset bequests and testamentary trusts To define the clients estate distribution follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Estate Planning link 2 Go to the Estate Distribution tab Based on your selection under Estate Distributio
44. ance trust existing insurance ILIT e Irrevocable life insurance trust new insurance ILIT e Family limited partnership FLP e Qualified personal residence trust QPRT e Rolling Grantor retained annuity trust GRAT e Grantor retained trust GRT e Charitable remainder trust CRT e Charitable lead trust CLT These trusts are available only if the Detailed Tax method is used and the optional Detailed Cash Flow and Advanced Estate modules are included in the plan To enter inter vivos trust strategies into an estate planning scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Estate Planning link and then go to the Trusts tab Estate Distribution Asset Estate Details afina trusts v Override Inter Vivos Trusts Lifetime Click the Add Trust button to create a new row Irrevocable Trust ILIT Existing Insurance ILIT New Insurance FLP T Click Add Trust to CRT open the trust list CLT Rolling GRAT Add Trust Figure 67 Scenario Manager dialog box Estate Planning link Trusts tab To override the clients current plan strategy for trusts in this scenario select the Override check box Click the Add Trust button and then select one of the following options Trust type Description Irrevocable Trust A trust that cannot be amended once the trust has been established The assets in the trust including any future appreciation
45. ancial Needs Assessment 2 Current Template Select Document Sections Generate Asset Allocation 2 Default Template Y Select Document Sections Generate Financial Needs Summary 2 Default Template Y Select Document Sections Generate Retirement Distribution Summary Default Template Select Document Sections Generate Financial Needs Analysis 2 Default Template Y Select Document Sections Generate Figure 88 Results section Client Reports category Client Report page 2 To include alternative plans in the client reports click Include Alternatives In Reports and then select the alternative plans to include Note The current and recommended plans are always included Include Alternatives In Reports gt Instructions Scenario Scenario Name Current Current Plan Recommended Proposed Alternative 1 Alternative A Alternative B Figure 89 Include Alternatives In Reports dialog box 3 If applicable select a template to use for the report 4 Click the Select Document Sections button for the report you want to generate The Select Document Sections dialog box opens Select Document Sections Current Template gt Instructions v Overview Current Financial Position v Asset Allocation v Retirement v Attainable Retirement v Education vV Major Purchase vV Emergency Fund v Disability Insurance Life Insurance Long Term Care Goal Attainability v Condusion Appendix Bv Action
46. and capital loss carryovers If you are using the Detailed Tax method additional income tax reports are available View details of goals and goal savings Compare goal needs with current and projected goal funding View summaries for each goal Compare current and suggested asset mixes asset class weightings and the efficient frontier If you are using Ibbotson asset allocation examine risk score and questionnaire results Analyze the effects of death disability long term care and insurance on cash flow Analyze the effects of asset redemptions at death during disability and for long term care Compare estate planning scenarios View a synopsis report of estate data entered in the plan Monitor gift and trust activity Analyze the effects of taxes on the estate planning scenario View asset distribution details View an input summary and prepopulated Fact Finder Compare goal type needs with abilities to meet those goals all goals of the same type are grouped together in the same graph Analyze the accumulation and redemption of capital used to fund a goal type or all goals Compare deficit coverage assets to deficit coverage sells Detailed Tax method only Analyze the probability of plan success given random asset returns based on the standard deviation assigned to each account and holding To generate a stand alone report or graph follow these steps 1 Go to the Reports menu select a report categor
47. annuity asset on the death of the owner click Qualified and Annuities and then select beneficiaries for each asset If the contingent beneficiary of the qualified asset is someone other than the co client and IRD taxes should not apply under Qualified and Annuities select the Multi Generational check box To control the application of probate and administration fees for business assets click Business Assets and then select or clear the appropriate check boxes Note The Business Planning module must be selected on the Plan Management section Modules category Modules page Entering gifting strategies The clients current plan gifting strategies should be entered on the Set Goals section Estate Planning category Estate Strategy page Gifting tab to ensure that they appear in the Estate Planning report If gifts are entered in the Enter Financial Data section Cash Flow category they do not appear in the Estate Planning report Gifting strategies can be used as a means of distributing the clients estate and effectively reducing estate taxes upon death In many cases gifting has the dual advantage of not only removing the asset itself from the taxable estate but also removing the appreciation on that asset In general a lifetime transfer of property can be subject to gift taxes depending on the type of gift and its value Under the annual gift tax exclusion an individual can give up to 14 000 in 2013 th
48. ar amount or percentage of the source account you want to transfer 4 Enter the date when you want the transfer to occur 5 If the transfer is a pre tax contribution select the Pre Tax Contrib check box Entering redemptions Level 2 To enter automatic retirement redemptions that will occur outside deficit coverage follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Retirement link and then go to the Redemptions tab Transfers Liquidation Order Redemptions Bucketing Social Security Annuitization Incomes Expenses Account Redeem Amount Overde Description All Sor Frequency StartDate End Date Details Delete Susan s IRA j w x Joint savings 0 00 Monthly wv Ret ist GR Death ly zm Er xX Joint savings v Add Redemption Strategy Choose Account swe briodic Pay ts SEPP Joint savings Susan s IRA David s 40 1 k Figure 22 Scenario Manager dialog box Retirement link Redemptions tab 2 Select an account from which funds will be redeemed and then click Add Redemption Strategy 3 If you expect the entire account to be redeemed select the Redeem All check box and then enter or select the date when the redemption should occur Redemptions can only occur on or after the retirement date 4 Enter the dollar amount of each redemption 5 From the Frequency list select the frequency of the redemption 6 Enter Retirement or a start date during retirement and then enter
49. ary Trusts click the Add Trust button and then select Marital Trust The Trust Details dialog box appears New Marital Trust Name Trust Tax Rate At Death of Marital Trust 40 00 1st to Die Funding Value Remainder Autofund Asset Transfer GSTT Exemption Allocation Funding Amount Fixed Amount Beneficiaries Asset Transfers Return Rates Figure 60 Trust Details dialog box showing a marital trust Under New Marital Trust enter the general details of the trust 4 Under Funding select one of the following trust funding methods If you select The trust is funded in this manner Remainder NaviPlan transfers to the trust an amount equal to the client s estate remainder Once estate fees liabilities and taxes have been settled solely owned non qualified assets and cash remaining in the estate form the remainder Lifestyle assets real estate assets business assets joint assets and qualified assets do not form part of the remainder Autofund NaviPlan transfers to the trust an amount equal to the value entered in the Value field Asset Transfer The Asset Transfers tab appears allowing you to select the client s assets to be transferred to the trust If you selected Asset Transfer in the previous step go to the Asset Transfers tab and then see Entering asset transfers for a testamentary trust on page 78 6 Under GSTT Exemption Allocation if you want NaviPlan to make the
50. b and then enter the rate of return information 10 To generate a report that describes the trust click the Report button on the Trusts tab for the appropriate trust 11 To delete a trust you have entered click the Delete button on the Trusts tab next to the appropriate trust New irrevocable trust details inter vivos Detailed Trusts Description Grantor Transfer to Trust Trust Tax Rate Crummey Trust New Irrevocable Joint Dec 312011 40 00 v End Date Never years 0 0 Select this check box to permit the transfer of funds to the trust whie using the annual gift exclusion Figure 69 Trust Details dialog box showing new irrevocable trust details New ILIT with existing insurance details inter vivos New ILTT Existing Insurance Transfer to Trust Description Trust Tax Rate Crummey Trust End of Year Transfer Policy ILIT 40 00 v 2011 David s Life Insurance Y Death Benefit Payable to Trust 100 00 In the Transfer to Trust End of From the Transfer Policy list Year field enter the year when the grantor will be transferring the insurance policy to the trust select the existing life insurance policy that you want transferred into the trust Figure 70 Trust Details dialog box showing new ILIT with existing insurance details New ILIT with new insurance details inter vivos New ILIT New Insurance Trust Tax Rate Crummey Trust 40 00 v rea From the Policy Type lst select the
51. bility To enter the clients additional annual income during disability in a What if scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Disability Income Client Co Client link and then go to the Additional Annual Income tab Assumptions Ongoing Expenses Additional Annual Income Lump Sum Needs Additional Annual Income Annual Overide Description Income Type Amount Start Date End Date Infl Add l Delete v Salary Salary v 10 000 Jan 12012 amp Ret Client vV 0 00 X Add Additional Annual Income Figure 48 Scenario Manager dialog box Disability Income link Additional Annual Income tab 2 To edit an existing annual income previously entered in the Set Goals category under Additional Annual Income select the Override check box next to it and then edit the income 3 To create a new annual income under Additional Annual Income click Add Additional Annual Income 4 Enter the income description and annual income amount for the new income 5 Repeat steps 3 4 until you ve finished entering all additional disability income Entering lump sum needs during disability Level 2 To enter the client s lump sum needs during disability in the Recommended Plan scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Disability Income Client Co Client link and then go to the Lump Sum Needs tab Assumptions
52. cable education goal select the Override check box next to the goal and then enter a new percentage in the to Cover field When you are done click OK Entering income available during disability Level 2 This procedure only applies if the Income Coverage Analysis method is selected on the Set Goals section Disability Income category Client Co client Objectives page To enter the clients income available during disability in the Recommended Plan scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Disability Income Client Co Client link and then go to the Income Available tab Assumptions Lump Sum Needs Annual Income Needs Income Available Specify Income Available During Disability Overde Description Amount Infl Add l Detsils Delete Susan s income 60 000 4r vV 0 00 Er xX Other Taxable Imo v yr x Add Disability Income Figure 52 Scenario Manager dialog box Disability Income link Income Available tab 2 To override an existing income select the check box next to the income 3 To add a new income for the scenario click Add Disability Income and then enter the income details 4 To enter additional details for the income click Details The Income Details dialog box opens The fields will vary based on your selection from the Income Type list 5 Enter detailed information 6 Repeat steps 2 5 until you are finished entering details for
53. ce you have added a note to a scenario an asterisk appears on the Notes button indicating that there is a note in the scenario To add a note to a scenario follow these steps 1 In the Scenario Manager dialog box click the Notes button The Notes dialog box opens 2 In the Notes dialog box enter the note Generating scenario reports After you have defined a scenario in NaviPlan Premium you can examine the effect the scenario will have on the plan To generate a scenario report follow these steps 1 Go to the Reports menu and then select the report you want to view The Assign Settings dialog box opens Assign Settings Kurren Current Alternative 1 Recommended Alternative 2 Alternative 3 Figure 17 Reports menu lt report gt Assign Settings dialog box 2 Select the applicable scenario Chapter 3 Creating goal scenarios This chapter describes how to customize scenarios for retirement education major purchase and emergency fund goals and assumes you already know how to use the common features of the pages in the Results section Analyze Goals category For more information about analyzing goals using scenarios see Analyzing goals in NaviPlan Select on page 7 In this chapter Customizing What if retirement scenarios 25 Customizing What if education and major purchase scenarios 38 Customizing What if emergency fund scenarios 42 Customizing What if
54. cenario Manager dialog box Goal Funding Override Current Plan settings Existing Accounts College Account Name Owner Account Type Total Retirement Education Vehicle Joint savings Non Qualified 15 000 Susan s IRA 75 000 529 plan David 529 Plan for Julia 10 000 David s 401 k 75 000 Susan s saving Non Qualified 5 000 180 000 153 750 5 000 8 750 3 750 8 750 Figure 15 Scenario Manager dialog box Goal Funding link Goal Funding details 3 Select the Override Current Plan settings check box 4 Under Goal Funding for each non qualified account in the available fields enter a fixed dollar value a percentage or the keyword balance as explained in the following table Enter To fund goals in this manner A fixed dollar The account funds for this goal are used before those assigned a percentage or a balance If fixed amounts are assigned to multiple goals and the combined fixed amounts exceed the value of the account then funds are automatically distributed according to the dollar amount entered A percentage The account funds for this goal are used before those assigned a balance Only goals with fixed amounts take precedence The word All remaining unallocated funds in the account balance are directed to the goal The account funds for this goal will be used after those assigned a percentage or a fixed amount If balance is entered for more than one goal then the remaining balance is di
55. cenarios page and the Scenario Manager dialog box In a Level 2 Plan more complex What if scenarios can be analyzed For example the Scenario Manager dialog box Retirement section for a Level 2 Plan has six additional tabs Transfers Redemptions Liquidation Order Annuitization Incomes and Expenses that allow you to modify the What if scenarios Scenario Manager Current Plan Recommended Plan Alternative 1 Modify Financial Data Retirement Summary Goal Coverage David s Retirement Age Susan s Retirement Age Assumptions 100 iR 65 65 0 at 64 64 0 Net Worth 2011 End of Year 823 576 Fixed Annual Retirement Expenses Discretionary Annual Retirement Expenses At Death 2 387 836 7 o aa a Cash Flow f 2011 Surplus Deficit 13 386 Additional Monthly Savings Detsis Current Monthly Savings Pre retirement X 88 T S 250 as of aa Additional tabs are available in Retirement V 100 WhatAre My Options y aiai Level 2 Plans Strategies Additional Lump Sum Savings i m Analyze Goals Transfers liquidation Order __ Redemptions _Bucketing Social Security Education Investment Objective Insurance Coverage Scenario Reports College Education E 12 Pee Pre Emergency Fund E 35 Return Rates retirement Retirement Survivor Income Pre retirement Override Client Calculate Retirement derate Interest Co Client Calculate Dividends Both Calculate Disability Income Ctl Gere Client Calculate Tax Free Co Cli
56. centage of trust income to be received Any income that is not distributed is reinvested into the trust Generating comparison reports NaviPlan Premium allows you to compare multiple estate planning scenarios for your clients estate planning goals without having to create duplicate plans Once you have an appropriate scenario that you can apply to your clients plan you can recommend it Recommended scenarios apply to reports where the Recommended plan type is used For information on recommending scenarios see Recommending a scenario on page 18 To generate comparison reports for the estate planning scenario follow these steps 1 2 Go to the Results section Analyze Goals category Scenarios page Click Include Alternatives In Reports The Include Alternatives In Reports dialog box opens By default the Current Plan scenario and Recommended Plan scenario are included See Adding Alternative Plan scenarios on page 11 for more information gt Instructions Scenario Scenario Name Current Current Plan Recommended Proposed Alternative 1 Alternative A Alternative B Figure 78 Include Alternatives In Reports dialog box Select any additional alternative scenarios you want to compare You can compare up to four scenarios Go to the Reports menu and then select Estate Planning General Summary Estate Planning Comparison Summary OR Estate Planning General Detailed Estate Planning
57. ction Analyze Goals category Scenarios page and then click the Edit Recommended or Alternative Plan button To edit the clients life expectancies for a What if estate planning scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Estate Planning link Current Plan Recommended Plan Alternative 1 Modify Financial Data Estate Planning Summary Assumptions E Total Taxes Net Worth E Net to Heirs 2011 End of Year E Net to Charity At Death Net to Heirs and Charity Cash Flow 2011 Surplus Deficit Life Expectancy pav posean 0 Gates Pl ose Retirement vid 2021 Estate Planning Life ctancy 0 Edit Life Strategies Susan 2026 Estate Planning Life Expectancy 0 Insurance Coverage The life expectancy settings selected here apply to all estate planning scenarios and are used for comparison purposes only These settings do not affect life expectancy options in other reports Analyze Goals Retirement E 100 Major Purchase Expense E 0 Override Emergency Fund E100 Simple will Survivor Income dient Calculate By default NaviPlan creates a simple will estate distribution scenario In a simple will scenario upon first death all assets flow through to the Co Client Calculate surviving spouse under the unlimited marital deduction Both Calculate To allow full control of estate distribution testamentary trusts general bequests and asset bequests click one of the following but
58. daily expense amount that is to be covered 10 Under Goal Coverage note how your changes affect the Goal Coverage graph Customizing What if survivor income scenarios Level 2 The analysis method chosen in the Set Goals section Survivor Income category determines the available tabs under Survivor Income lt client gt details in the Scenario Manager dialog box e Goal and Expense Analysis method Uses the clients existing lifestyle expenses and goal information to define their insurance needs e Income Coverage Analysis method Uses the clients income to estimate the anticipated expenses during the survivorship period NaviPlan Premium allows you to customize a recommended survivor income scenario to help meet the needs of your clients financial situation and preferences Recommended scenarios apply to client reports where the Recommended plan type is used To customize a survivor income scenario complete the following procedures based on the method used or special circumstance Note The procedures available depend on which analysis method is selected on the Set Goals section Survivor Income category Survivor Income page Goal and Expense Analysis method e Entering survivor income assumptions Level 2 on page 49 e Entering ongoing expenses Level 2 on page 51 e Enter the survivor s annual income needs Level 2 on page 1 e Entering the survivor s lump sum needs at death L
59. day s dollars Estimate the additional income gap to cover 0 yr in future dollars Apply the following annuity settings General Account Payment per Override 1 000 AIR 4 8 3 00 Variable Subaccounts Variable Payment per Post Annuitization Payments Override 1 000 AIR Annual M amp E Fee Other annuity assumptions are reported in step 4 Calculate Lowest Fixed Expenses Average Fixed Expenses Highest Fixed Expenses Gap in Retirement yr Gap throughout Retirement Gap in Retirement yr 0 2035 163 997 5238 506 2060 gt Annual Retirement Income Expense Summary Graph Annual Retirement Income Expense Summary Recommended Graph Information Non Qualified Distributions Additional Qualified Distributions other Inflows Previous Year Surplus Used 2035 2038 2041 2044 2047 2050 2053 2056 2059 Yes Figure 26 Scenario Manager dialog box Retirement link Annuitization tab Estimate Income Gap button Estimate Income Gap in Retirement dialog box Specify whether the income gap should be expressed in future dollars or in today s dollars Use the graph in the open dialog box as well as the Retirement Annuitization tab of the Scenario Manager dialog box to determine the size of the income gap that should be covered by annuity income and then enter that amount in the Estimate the additional income gap to cover field In the AIR field enter the expected rate of return for the new annuity Click Calculate
60. dd Beneficiary button to create a new row Add Beneficiary Pro rata Surviving Client Income Beneficiaries Click the Add Beneficiary button to create a new row Add Beneficiary Pro rata Add Trust lt 4 Previous Entry NextEntry Figure 68 Trust Details dialog box showing new irrevocable trust details Some of the following steps may not be applicable to all inter vivos trusts For example the FLP trust has a few unique tabs and it does not have a Beneficiaries tab If applicable go to the Beneficiaries tab Under Remainder Beneficiaries click Add Beneficiary select a beneficiary from the list and then enter the percentage of the remainder income attributable to the beneficiary Alternatively select Add all to add all beneficiaries in the plan to the trust To split the remainder equally among all beneficiaries click Pro rata If the trust has income beneficiaries and if any trust income is to go to the surviving client under Income Beneficiaries enter the percentage that will go to the surviving client If any trust income is to go to other beneficiaries click Add Beneficiary select the beneficiaries from the list and then enter the percentage of the trust income attributable to the beneficiary To split the remainder equally among all beneficiaries click Pro rata 8 If applicable go to the Asset Transfers tab and then enter the transfer information 9 If applicable go to the Return Rates ta
61. disability Level 2 Entering income available during disability Level 2 Customizing What if long term care scenarios Level 2 Entering long term care assumptions Level 2 Entering long term care incomes and expenses Chapter 5 Entering estate planning scenarios Editing life expectancy Defining the clients estate distribution Entering testamentary trusts 37 37 37 38 39 40 40 41 42 42 e m S 46 46 48 49 51 52 52 53 55 56 58 59 60 61 62 62 63 64 66 67 69 71 Entering general bequests Entering asset bequests Entering asset estate details Entering gifting strategies Entering inter vivos trust strategies Entering beneficiaries for an inter vivos trust Generating comparison reports Chapter 6 Examining results Generating stand alone reports and graphs Using the Planning Assistant Opening the Planning Assistant Viewing and or printing the Planning Assistant reports Preparing user defined text for client reports Generating client and progress reports Using the Client Report Monitor Online Adding notes for your own personal use Index 80 80 82 84 87 94 95 97 97 101 101 102 103 104 108 109 111 Chapter 1 Using this manual The NaviPlan Premium user manual series includes all the instructions you need to use NaviPlan Premium effectively This chapter will help you use all the manuals in this series More manuals are available in the Knowledge Base http knowledge ei
62. ds to the scenario under Additional Lump Sum Needs if any other lump sum needs are expected click Add Lump Sum Need and then enter the details of the need in the fields that appear Entering dependent needs when both clients die Level 2 To enter the dependents needs when both clients die in the Recommended Plan scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Survivor Income Both link and then go to the Assumptions tab 2 To override the return rates used for the survivor income scenario under ROR on Cash Flow Surpluses amp Liquidations select the check box and then enter the pre retirement and retirement return rates 3 Under Survivor Income Both details to include additional life insurance in the scenario enter the death benefit and annual premium amount You can use the slider bar or the What Are My Options button to find the optimal death benefit amount 4 Go to the Ongoing Expenses tab Assumptions Ongoing Expenses ump Sum Needs Support for Dependents Overde Description Owner Ongoing Expenses Julia Add Support for Dependent Education Expenses Number Annual to Override Description Name Start Age of Years Amount Cover College Education Julia 18 4 10 000 Figure 43 Scenario Manager dialog box Survivor Income link Level 2 Plan Ongoing Expenses tab 5 To override an existing ongoing expense under Support for Dependents select the
63. dvicent Solutions provides several resources to help you use NaviPlan Premium In addition to telephone support you can access resources from within NaviPlan and Online The following table shows some of the resources available and where to find them Advicent resource Help Functional documents Knowledge Base Description and location The quickest way to get information about any command dialog box or item within NaviPlan Premium is to use the application Help To access Help click the Help button at the top of the NaviPlan Premium window Help includes a glossary of terms Functional documents explain NaviPlan Premium functionality underlying assumptions and results calculations You can access functional documents by searching the Knowledge Base at http knowledge eisi com The Knowledge Base is a database comprised of the following resources Support issues Functional documents Learning guides Help videos Frequently asked questions FAQs You can access the Knowledge Base fromwithin NaviPlan or online at http knowledge eisi com To access resources from within NaviPlan follow these steps 1 Click 7 beside the Help button and then select Support The Support dialog box opens 2 Click the appropriate link The applicable page opens in your Web browser You can contact us by telephone at 888 692 3474 Monday Thursday 7 30 a m 6 p m central time Friday 7 30 a m 5 00p m centra
64. e annuitization start date of existing annuities to the retirement start date as defined in the plan select the Revert Start Dates to Retirement check box Annuities are affected for this scenario only Click Close The Strategies for Existing Annuities dialog box closes To convert asset types into an annuity click the Select the assets to annuitize link The Assets for Annuitization dialog box opens 15 16 17 18 19 Assets for Annuitization Select the asset types to be made available to provide additional fixed annuity income Use non qualified assets to a maximum of 100 00 Use qualified assets to a maximum of Use Roth assets to a maximum of Order of Annuitization Choose to either maintain the existing liquidation order for the scenario or apply a different order in which available assets will be used to provide annuity income Use scenario liquidation order settings for annuitization order using only assets that have been made available above Use assets in the following order for annuitization Variable Subaccount Allocation Enter the percentage that will be allocated to the variable subaccounts portions of annuitized assets 0 00 Figure 28 Scenario Manager dialog box Retirement link Annuitization tab Select the assets to annuitize link Assets for Annuitization dialog box Select the asset types you want NaviPlan to convert into an annuity and then enter the maximum percentages you want
65. e form the remainder Lifestyle assets real estate assets business assets joint assets and qualified assets do not form part of the remainder Fixed Amount NaviPlan transfers to the trust the amount entered in the adjacent field At death this is the value that the surviving client will receive 6 If you selected Fixed Amount in the previous step see Entering asset transfers for a testamentary trust on page 78 7 If the clients have beneficiaries go to the Beneficiaries tab and then enter beneficiary information See Entering testamentary trust beneficiaries on page 79 for more information 8 Go to the Return Rates tab and then enter the return rates that apply to the trust Entering asset transfers for a testamentary trust This procedure assumes you are already on the Trust Details dialog box Asset Transfers tab for a testamentary trust To enter an asset transfer follow these steps 1 Under Existing Transfers click the Add Asset Transfer button and then select an asset from which you want to transfer funds Additional data entry fields appear Beneficiaries Asset Transfers Return Rates Existing Transfers Asset or of Market Value Delete David s 40 1 k 100 00 75 000 X Add Asset Transfer 7 Note Joint assets are not available for transfer to testamentary trusts CSTs QTIPs TCLTs marital trusts or generic testamentary trusts Figure 63 Trust Details dialog box Asset Transfers
66. e problems of which you should be aware Questions 10 questionable strategies or data values Opportunities 2 possible opportunities on which you may capitalize Reports 3 select one of the options to review the reports listed The Qualified Contribution Limits report contains information specific to retirement savings plans Here you wil find useful analysis regarding the client s qualified contributions and contribution limits The Cash Flow report contains information related to Pre Retirement surpluses and deficits This information is useful in determining the impact that the client s goals and associated savings plans will have on their cash flow You should be aware that the system is not designed to perform detailed cash flow analysis Please refer to the Cash Flow report for more details The Net Worth report contains information on the accumulation and or depletion of assets over time It displays both assets and liabilities and the net value or difference at the end of the current year Figure 84 Planning Assistant dialog box 2 From the Settings menu select the plan type you want to analyze The Current option is based on the plan in which you are working The Recommended option represents the Recommended Plan scenario which takes into account additional assumptions and strategies including those selected in the What Are My Options dialog boxes found throughout NaviPlan 3 Detailed information is available on th
67. e tabs Click the appropriate one Problems Questions or Opportunities 4 To close the Planning Assistant dialog box click Close Viewing and or printing the Planning Assistant reports The Reports tab and the Overview tab provide a synopsis of the other Planning Assistant reports To view or print the Planning Assistant reports follow these steps 1 Open the Planning Assistant select either Current or Recommended and then go to the Reports tab Planning Assistant Financial plan Settings Current v PDF Word Overview Problems Questions Opportunities Reports Select a report Introduction v To review the reports listed select an option from the list above The Qualified Contribution Limits report contains information specific to retirement savings plans Here you will find useful analysis regarding the client s qualified contributions and contribution limits The Cash Flow report contains information related to pre retirement surpluses and deficits This information is useful in determining the impact that the client s goals and associated savings plans wil have on their cash flow You should be aware that the system is not designed to perform detailed cash flow analysis Please refer to the Cash Flow report for more details The Net Worth report contains information on the accumulation and or depletion of assets over time It displays both assets and liabilities and the net value or difference at the end of the curren
68. egies By default a Current Plan scenario is included which assumes that a will exists and all assets pass to the surviving client If the client has an existing estate plan the details should be entered in the Set Goals section Estate Planning category since the Current Plan scenario cannot be edited By default a Recommended Plan scenario which includes all data from the current plan is included in the plan If you create additional What if estate planning scenarios you can recommend one of the additional scenarios instead This chapter assumes you already know how to use the common features of the pages in the Results section Analyze Goals category For more information about analyzing goals using scenarios see Analyzing goals in NaviPlan Select on page 7 In this chapter Editing life expectancy 67 Defining the clients estate distribution 69 Entering asset estate details 82 Entering gifting strategies 84 Entering inter vivos trust strategies 87 Generating comparison reports 95 Editing life expectancy The life expectancy settings entered on the Set Goals section Estate Planning category Assumptions page apply to all scenarios in the plan and are used for comparison purposes only Changing the settings on this page does not affect life expectancy options used in other areas of the plan All What if scenarios are created and customized in the Scenario Manager dialog box To access it go to the Results se
69. enarios apply to client reports where the Recommended plan type is used To customize the survivor disability or long term care income scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the appropriate lt insurance goal gt link In this example we will look at survivor income Current Plan Recommended Plan Alternative 1 Modify Financial Data Survivor Income Summary Goal Coverage Select analysis If David dies Assumptions Net Worth 88 Death Benefit 2011 End of Year 94 935 L At Death 2 547 527 Cash Flow 2011 Surplus Deficit 26 344 Pre retirement v 100 Retirement v 100 hat Are My Options Insurance Coverage Compare Scenarios a ee Retirement E 100 E 0 Percentage of lifestyle and medical expenses to cover David Susan Cover Major Purchase Goals v v Pay Off Outstanding Liabilities v v o 88 Co Client O 77 Both E 100 Disability Income ROR on Life Insurance Proceeds Client Calculate Total Co Client Calculate Long term Care Client Calculate Co Client Calculate Goal Funding Calculate All Figure 37 Scenario Manager dialog box Survivor Income link Level 1 Plan Objectives tab 2 From the Select analysis list select the insurance scenario 3 Use the slider bar for Death Benefit survivor income Disability Benefit disability income or Daily Benefit Amount long term care to arrive at an optimal insurance amount or enter the
70. ent Age Ls 64 64 0 Discretionary Annual Retirement Expenses T 100 Detais Current Monthly Savings 250 as of Sep 1 2011 Objectives Transfers Liquidation Order Redemptions Bucketing Social Security Annuitization Incomes Expenses Investment Objective College Education E 12 shud Major Purchase Investment Objective Investment Profile v Current Rebalanced aj 2 Vehicle E 30 Pre retirement Emergency Fund E 57 Retirement Current Rebalanced 2 Survivor Income Client Calculate 2 The Investment Profile for this scenario has been overridden Therefore the Co Client Calculate Suggested Asset Mix for this goal does not apply Return Rates Return Rates Override Interest Dividends Capital Gains Both Calculate Tax Free Goal Funding Deferred Growth Total Standard Deviation Calculate All Figure 18 Scenario Manager dialog box Retirement link Objectives tab 2 To change the retirement age of the client or co client enter a positive or negative number in the Age field or move the slider bars The retirement age will be adjusted by that number For example to change the retirement age from 65 to 55 enter 10 in the Age field Note To override other assumptions such as life expectancy and the inflation rate for this scenario under Modify Financial Data click Assumptions select the applicable override check box and then edit the data 3
71. ent Calculate Deferred Growth Long term Care Total Client Calculate Co Client Calculate Estate Planning Standard Deviation Goal Funding Figure 4 Results section Analyze Goals category Scenarios page Retirement link clicked Scenario Manager dialog box Recommended Plan lt scenario name gt Objectives tab In a Level 2 retirement scenario you can consider scenario probability and estate planning and you also have the ability to sell an asset Adding Alternative Plan scenarios Clicking the Create Alternative button on the Scenarios page allows you to create alternative scenarios in addition to the Recommended Plan Alternative 1 scenario NaviPlan has some predefined scenarios that can be added to education retirement and major purchase goals However you can also create unique scenarios that closely reflect your clients financial situation and preferences To add an Alternative Plan scenario follow these steps 1 Go to the Results section Analyze Goals category Scenarios page 2 Click Create Alternative Step 1 Enter a description that identifies the A temative scenario you are creating Alternative Name Alternative 6 Step 2 Select the scenario from which you would like to copy Copy Existing Scenario Current with Suggested Asset Allocai v Step 3 Select which predefined scenario s you would like to apply Retirement Maintain Current Plan Settings College Education Maintain Current P
72. ering 69 71 D deficit coverage reports 98 Detailed Cash Flow module 2 Detailed Tax method 2 4 disability income scenarios Level 1 46 disability income scenarios Level 2 55 additional annual income 59 annual income needs 61 assumptions 56 goal and expense analysis 56 income available 62 income coverage analysis 56 lump sum needs 60 ongoing expenses 58 duplicating reports 100 E education scenarios adding accounts 42 entering savings 40 transfer strategies 41 emergency fund scenario adding accounts 45 entering 43 entering savings 44 estate planning scenarios 66 asset bequests 80 asset estate details 82 beneficiaries inter vivos trust 94 comparison reports 95 estate distribution 69 general bequests 80 gifting 84 inter vivos trust strategies 87 life expectancy editing 67 testamentary trusts 69 estate reports 98 F Fact Finder 98 favorite reports 97 Financial Needs Analysis client report 105 Financial Needs Assessment client report 104 Financial Needs Summary client report 105 G general bequests entering 80 generic testamentary trusts entering 75 gifting strategies entering 84 goal and expense analysis 48 goal coverage color codes 14 viewing 13 What Are My Options 12 goal funding strategies 21 goals reports 98 graphs generating 97 100 H Help accessing 5 income coverage analysis 49 income tax reports 98 insurance reports 98 insurance scenarios disability income Level 1 46
73. ersonal use 109 Generating stand alone reports and graphs After you have entered your clients financial information and goals you can verify the results by generating stand alone reports and graphs NaviPlan Premium provides a large selection of reports and graphs from the Reports menu Level 2 Plans have access to a larger number of reports than Level 1 Plans Stand alone report categories Examples of the tasks you can perform Keep reports that you use frequently readily available Summary View an action plan for the clients investments redemptions insurance and debt View a synopsis of the data entered into the plan View the results of the Planning Assistant report Compare differences between the current plan and the recommended plan Net Worth View account and holding details Compare summary or detailed changes in net worth over time View composition and activity details for the clients assets and liabilities Stand alone report categories Cash Flow Income Tax Asset Allocation Insurance Estate Planning Fact Finder Needs vs Abilities Capital Accumulation and Redemption Deficit Coverage Monte Carlo Examples of the tasks you can perform Monitor changes in cash flow activity Examine current and projected cash flow on a single or multi year basis View the effects of taxes and capital loss carryovers Monitor changes in projected surpluses and deficits Monitor income tax changes
74. etirement link and then go to the Incomes tab Transfers Liquidation Order Redemptions Bucketing Social Security Annuitization Gacomes Expenses To add or modify an income record in the plan go to Incomes on the Cash Flow page Figure 29 Scenario Manager dialog box Retirement link Incomes tab 2 Clicking the Incomes link takes you to the Incomes tab in the Cash Flow details section of the Scenario Manager dialog box where you can add incomes 3 Go to the Expenses tab Transfers Liquidation Order Redemptions Bucketing Social Security Annuitization Incomes To modify an existing expense record in the plan go to Existing Expenses on the Cash Flow page Or to add a new expense go to New Expenses on the Cast Flow page Figure 30 Scenario Manager dialog box Retirement link Expenses tab 4 Clicking the Existing Expenses link takes you to the Existing Expenses tab in the Cash Flow details section of the Scenario Manager dialog box where you can edit existing expenses 5 Clicking the New Expenses link takes you to the New Expenses tab in the Cash Flow details section where you can add new pre retirement and retirement expenses Adding new retirement accounts and annuities to the scenario Level 2 To add new accounts and annuities to the scenario follow these steps 1 In the Scenario Manager dialog box under Modify Financial Data click the Net Worth link and then go to the Accounts or the Annuities tab
75. evel 2 on page 52 Income Coverage Analysis method e Entering survivor income assumptions Level 2 on page 49 e Entering additional annual income at death Level 2 on page 52 e Entering the survivor s lump sum needs at death Level 2 on page 52 e Enter the survivor s income at death Level 2 on page 1 When both the client and co client die together e Entering dependent needs when both clients die Level 2 on page 53 Entering survivor income assumptions Level 2 To enter survivor income assumptions for the client and co client in the Recommended Plan scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the appropriate lt insurance goal gt link Scenario Manager Current Plan Recommended Plan Alternative 1 _ Alternative Plan Alternative 2 Modify Financial Data Survivor Income Co Client Summary Assumptions Net Worth 2011 End of Year 869 476 65 AtDeath 1 047 897 Cash Flow 2011 Surplus Deficit 5 665 Pre retirement X 99 Retirement X 81 What Are My Options Strategies Insurance Coverage Analyze Goals Retirement Goal Coverage Death Benefit Aa E Compare Scenarios Ongoing Expenses Additional Annual Income Lump Sum Needs Education David College Education Survivor Retirement Age Major Purchase Vehicle Emergency Fund ROR on Cash Flow Surpluses amp Liquidations Survivor Income Total The values for these fields 9 Pre retireme
76. f 60 5 To override the current asset class on the Objectives tab select the Asset Class check box and then select a new asset class for the emergency fund NaviPlan assumes savings to an emergency fund are invested The Return Rates fields update automatically Entering additional emergency fund savings To enter additional savings for the emergency fund goal scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Emergency Fund link 2 Use the slider bars for Additional Monthly Savings and Additional Lump Sum Savings to arrive at an optimal savings amount or enter the amount NaviPlan assumes that the savings are directed to a non qualified account which is created when the savings are entered The return rate is based on the suggested asset mix 3 To specify additional savings strategy details such as inflation rates and start and end dates click the Details button and then enter the additional details in the dialog box that opens Editing existing or adding new savings strategies Level 2 To edit existing savings strategies or to add new savings strategies for the emergency fund goal into the scenario follow these steps 1 In the Scenario Manager dialog box under Modify Financial Data click the Strategies link Current Plan Recommended Plan Alternative 1 Alternative Plan Alternative 2 Modify Financial Data Strategies Summary Zoom Next 5 Years Pre retirement
77. goal only To override the purchase date select the Purchase Date check box and then enter a new date 7 To override the default investment profile for the goal on the Objectives tab select the Investment Objective check box next to the profile and then select a different profile The Return Rates fields update automatically The default investment profile for the plan is defined on the Plan Management section Asset Allocation category Profile page 8 To override the return rates for the scenario select the applicable Override check box and then enter new return rates Entering additional savings for the education or major purchase goal scenario To enter additional savings for the education or major purchase goal scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the applicable lt education goal gt or lt major purchase goal gt link 2 Use the slider bars for Additional Monthly Savings and Additional Lump Sum Savings to arrive at an optimal savings amount or enter the amount NaviPlan assumes that the savings are directed to a non qualified account which is created when the savings are entered The return rate is based on the suggested asset mix 3 To specify additional savings strategy details such as inflation rates and start and end dates click the Details button and then enter the additional details in the dialog box that opens Editing existing or adding new sa
78. he bequest Entering asset bequests To enter general bequests follow these steps 1 To override the client s current plan estate distribution strategies for this scenario select the Override check box 2 Click Asset Bequests and then click the Add Asset Bequest button for each bequest you are creating 3 From the Source Asset list select an asset All non qualified and lifestyle assets owned by the clients are available Jointly owned assets are not available until the second death 4 Enter the dollar value or percentage of the asset the clients are bequeathing 5 If applicable from the At Death Of list select when the asset will be bequeathed Entering asset estate details NaviPlan Premium allows you to determine how all the assets owned in the plan will be dispersed upon the clients deaths You can control who owns the asset whether or not probate and administration fees are applicable for specific assets the asset beneficiary and income in respect of a decedent IRD taxes To enter asset estate details into an estate planning scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Estate Planning link 2 Go to the Asset Estate Details tab Estate Distribution Asset Estate Detais ing Trusts vV Living Trust vV Override Not Available Market Probate Admin For Estate Primary Contingent Asset Name Value New Owner Fi Is Beneficiary Beneficia Joint savings
79. iPlan transfers to the trust an amount equal to the client s estate remainder Once estate fees liabilities and taxes have been settled solely owned non qualified assets and cash remaining in the estate form the remainder Lifestyle assets real estate assets business assets joint assets and qualified assets do not form part of the remainder Maximum NaviPlan transfers to the trust an amount equal Exclusion to the client s maximum remaining applicable exclusion amount Fixed Amount NaviPlan transfers to the trust the amount entered in the adjacent field At death this is the value that the surviving client will receive 5 If you selected either Maximum Exclusion or Fixed Amount in the previous step see Entering asset transfers for a testamentary trust on page 78 6 Under Allocation for GSTT Exemption if you want NaviPlan to make the GSTT exemption equal to the set funding amount select the Funding Amount check box Otherwise clear the check box and then in the Fixed Amount field enter a dollar value 7 If a percentage of the trust s market value is to be distributed as income under Unitrust select the Unitrust check box and then enter the income distribution details 8 Go to the Beneficiaries tab and then see Entering testamentary trust beneficiaries on page 79 9 Goto the Return Rates tab and then enter the return rates that apply to the trust Entering a testamentary charitable lead trust
80. ick OK to close the Education Expenses dialog box 6 To add additional expenses to the scenario under Additional Expenses click Add Additional Expense 7 Enter a description and the annual amount of the expense Entering additional annual income at death Level 2 This procedure only applies if the Goal and Expense Analysis method is selected on the Set Goals section Survivor Income category Client Co client Objectives page To enter the survivor s additional annual income at death in the Recommended Plan scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the appropriate Survivor Income link and then go to the Additional Annual Income tab Assumptions Ongoing Expenses Additional Annual Income Lump Sum Needs Additional Annual Income Annual Overide Description Income Type Amount Start Date End Date Infl Add l Delete Salary J mov x Additional Annual Income Salary v 0 Jan 12012 amp Ret Client V 0 00 X Add Additional Annual Income Figure 41 Scenario Manager dialog box Survivor Income link Level 2 Plan Additional Annual Income tab 2 To edit an existing income under Additional Annual Income select the check box next to the applicable income OR To create a new income under Additional Annual Income click Add Additional Annual Income 3 Enter the income description select the income type and then enter an annual income amount Ente
81. ing new retirement accounts and annuities to the scenario Level 2 Model a change in the state of residence during retirement Customizing What if education and major purchase scenarios Entering education or major purchase scenario objectives Entering additional savings for the education or major purchase goal scenario Editing existing or adding new savings strategies Level 2 Entering education transfer strategies Level 2 Adding new education or major purchase accounts to the scenario Level 2 Customizing What if emergency fund scenarios Entering emergency fund scenario objectives Entering additional emergency fund savings Editing existing or adding new savings strategies Level 2 Adding new emergency fund accounts to the scenario Level 2 Chapter 4 Insurance goal scenarios Customizing What if insurance goal scenarios Level 1 Customizing What if survivor income scenarios Level 2 Entering survivor income assumptions Level 2 Entering ongoing expenses Level 2 Entering additional annual income at death Level 2 Entering the survivor s lump sum needs at death Level 2 Entering dependent needs when both clients die Level 2 Customizing What if disability income scenarios Level 2 Entering disability income assumptions Level 2 Entering ongoing expenses during disability Level 2 Entering additional annual income during disability Entering lump sum needs during disability Level 2 Entering annual income needs during
82. ion goal select the Duration check box and then enter the number of years you expect the education goal to last 4 Major purchase goal only To override the amount of the major purchase use the Purchase Amount slider bar or select the check box and then enter a rate at which to adjust annual savings Notes Reports Current Plan Recommended Plan Alternative 1 Alternative Plan Alternative 2 Modify Financial Data College Education Summary Goal Coverage Expense Coverage Duration Infl Add l Assumptions 18 100 Vi Net Worth 2011 End of Year 879 359 pond Additional Monthly Savings Detsis Current Monthly Savings At Death 1 080 230 T so e 150 as of Sep 1 2011 Cash Flow 2011 Surplus Deficit 9 620 Additional Lump Sum Savings Details Pre retirement v 100 Ti so E Retirement X 82 What Are My Options Strategies Insurance Coverage ime conls Objectives Transfers Retirement fo Ed Investment Objective Return Rates Scenario Reports Override Interest porera Vehide Emergency Fund Survivor Income Dividends Client Calculate Capital Gains Co Client Calculate Both Calculate Goal Funding Tax Free Deferred Growth Total Standard Deviation Calculate All Figure 32 Scenario Manager dialog box lt education goal gt link Objectives tab 5 To override the inflation rate for this scenario select the Infl check box and then if applicable enter a new rate 6 Major purchase
83. irement needs will be covered select Fixed Needs Covered by Total Resources Probability Portfolio Variability Projection Investment Capital Graph Information Alternative 1 2 000 000 1 800 000 1 600 000 1 400 000 1 200 000 1 000 000 800 000 3B a F o c 5 ca o 2 600 000 400 000 200 000 J 0 TOTTI 2011 2016 2021 2026 2031 2036 2041 2046 2051 2056 Years Net Wor th of Assets Linked to Goal 50th Percentile 90th Percentile 10th Percentile Total Probability Trials 150 Calculate Figure 14 Scenario Probability dialog box Investment Capital tab 9 Enter the number of trials you want NaviPlan to perform and then click the Calculate button The graph updates Note A higher number of trials will provide a more accurate probability distribution However NaviPlan will require more time to calculate the results of the probability analysis Creating goal funding strategies Level 2 Plans In addition to entering goal funding assumptions NaviPlan Premium allows you to analyze various goal funding strategies and then apply an appropriate strategy to the clients recommended plan To create a goal funding strategy follow these steps 1 Go to the Results section Analyze Goals category Scenarios page and then click the Edit Recommended or Alternative Plan button 2 Under Analyze Goals click the Goal Funding link The Goal Funding details appear in the S
84. is amount is subject to change over time to each of any number of recipients without incurring a gift tax or any gift tax effect This 14 4000 amount is adjusted for inflation in 1 000 increments for gifts made after 1998 A gift of this type can be made to as many individules each year as long as the 43 000 per recipient limit is not exceeded Gifts in excess of this amount will first reduce the lifetime applicable exclusion before being subject to tax An effective gifting strategy can allow for a significant reduction in overall estate taxes that may be due on death For example a married couple can each gift 14 000 a year to each child for a total of 28 000 per year If the couple has two children the taxable estate could be reduced by up to 56 000 per year To enter gifting strategies into a What if estate planning scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Estate Planning link and then go to the Gifting tab Estate Distribution Asset Estate Details Trusts vl Override Y Regular Cash Gifts Split Max Annual Annual Description Gifted By GiftedTo Gift Gift Exclusion Amount Start Date End Date Infl Add l Delete Regular Cash Gift David v Julia v 1 000 Jan 12011 amp Death Owner 0 00 x Add Regular Cash Gift Lump Sum Cash Gifts Asset Gifts Figure 66 Scenario Manager dialog box Estate Planning link Gifting tab showing Regular Cash Gifts det
85. l 2 To add new accounts to the scenario follow these steps 1 In the Scenario Manager dialog box under Modify Financial Data click the Net Worth link and then go to the Accounts tab 2 Click Add Account The New Account dialog box opens where you can define the account details and allocate the account to the emergency fund goal Chapter 4 Insurance goal scenarios This chapter describes how to customize scenarios for insurance goals and assumes you already know how to use the common features of the pages in the Results section Analyze Goals category For more information about using the common features see Chapter 9 Analyzing goals in NaviPlan Select All What if scenarios are created and customized in the Scenario Manager dialog box To access it go to the Results section Analyze Goals category Scenarios page and then click the Edit Recommended or Alternative Plan button For more detailed insurance goal analysis use a Level 2 Plan In this chapter Customizing What if insurance goal scenarios Level 1 46 Customizing What if survivor income scenarios Level 2 48 Customizing What if disability income scenarios Level 2 55 Customizing What if long term care scenarios Level 2 62 Customizing What if insurance goal scenarios Level 1 NaviPlan Premium allows you to customize a recommended survivor income scenario to help meet the needs of your clients financial situation and preferences Recommended sc
86. l time Updates Using NaviPlan s Check for Updates feature you can update to the current release within the same version for example to update from v12 1 to v12 2 If the update is a major change that is it involves a change in the version number such as an upgrade from v12 0 to v14 0 the upgrade may not be available through Check for Updates You will have to install the new version To check for updates follow these steps 1 Click the Save button at the top of the window to save your work 2 Click beside the Help button and then select Updates The Updates dialog box opens 3 Click the Check for Updates button NaviPlan checks for current updates available online After a few seconds the NaviPlan Update dialog box opens 4 Follow the instructions in the dialog box If updates are available NaviPlan shuts down installs the updates and then restarts The About dialog box Clicking 7 beside the Help button and then selecting About opens the About dialog box Using the tabs in this dialog box you can determine what version of NaviPlan Premium you are using and which options are installed Chapter 2 Analyzing goals in NaviPlan Select This chapter introduces the Scenario Manager feature accessible from the Results section Analyze Goals category in NaviPlan Premium In most plans the clients current resources and strategies do not meet their goals With NaviPlan you can crea
87. lan Settings Figure 5 Create Alternative dialog box 3 Enter a name for the scenario 4 Select the scenario you would like to use as the basis for the new scenario 5 If you selected Current with Suggested Asset Allocation as the scenario you want to copy select which predefined scenarios you would like to apply to each of the goals in your scenario To delete an alternative scenario click the Delete button at the top of the listed scenario on the Scenarios page Note The Current Plan and Recommended Plan scenarios cannot be deleted Achieving goal success and viewing goal coverage For each goal except for estate planning in Level 2 Plans NaviPlan recommends options to achieve the goal The recommended options can be viewed by clicking the What Are My Options button for the scenario The recommended options may differ among goals Achieving goal success in a scenario To achieve 100 goal coverage in a scenario follow these steps 1 Go to the Results section Analyze Goals category Scenarios page Edit Recommended or Alternative Plan Scenario Manager dialog box lt goal gt link The goal details appear on the right side of the Scenario Manager dialog box Retirement Goal Coverage David s Retirement Age Susan s Retirement Age is 65 65 0 14 64 644 0 65 Fixed Annual Retirement Expenses Discretionary Annual Retirement Expenses Gi 100 I 100 Additional Monthly Savings Dei Cur
88. me category Client Co client Objectives page To enter the clients annual income needs during disability in the Recommended Plan scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Disability Income Client Co Client link and then go to the Annual Income Needs tab Assumptions Lump Sum Needs Annual Income Needs Income Available Additional Annual Income Needs Income Need Override Description Member pre tax Frequency Start Date End Date Infl Add l Delete Lifestyle Expenses Ar al mvt x Additional Annual Ince David 0 yr Annual Y Jan 12012 Ret Owner HY 0 00 X Add Additional Annual Income Need Education Expenses Figure 50 Scenario Manager dialog box Disability Income link Annual Income Needs tab 2 To override an existing income need select the check box next to the income need 3 To add an income need click Add Additional Annual Income Need and then enter the additional details of the income need s 4 To change the percentage of education expenses to cover at death click Education Expenses The Education Expenses dialog box opens gt Instructions Education Expenses Number Annual to Overde Description Name Start Age of Years Amount Cover College Education Julia 18 4 10 000 Figure 51 Scenario Manager dialog box Disability Income link Education Expenses button Education Expenses dialog box 5 For each appli
89. mpare Scenarios dialog box Detailed Comparison tab 5 To view additional assumptions go to the Assumptions Comparison tab Assumptions for both scenarios appear Note The Assumptions Comparison tab does not appear for the emergency fund goal Recommending a scenario NaviPlan allows you to recommend the scenario you want to apply to your clients plan Recommended scenarios apply to stand alone and client reports where the Recommended plan type is used To recommend a scenario for a goal go to the Scenarios page and then click the Recommend Plan button for the scenario Current Plan Recommended Plan Alternative Plans Create Review Current Plan Edit Recommended Plan Edit Alternative Plan f Alternative 1 Alternative v 3 Modify Financial Data Delete 2 Assumptions Details Details aa aa RR Ne a EN fpr fe i T TN Figure 10 Results section Analyze Goals category Scenarios page showing top of the Scenarios section only A goal can only have one recommended scenario You cannot recommend the Current Plan scenario Determining scenario probability Level 2 Plans The Monte Carlo module must be included in the plan to perform scenario probability analyses The traditional planning process analyzes one possible outcome of the clients plan which assumes that the accounts will always earn their stated return rates While return rates usually average out in the long run in the short run they may be higher
90. mplemented in the proposed plan It also shows a review of the fixed and total incomes as well as expenses during retirement Financial Needs This report provides a comprehensive view of the entire plan including a Analysis summary of the clients needs and objectives the financial assumptions used in preparing the financial analysis as well as additional strategies that could be implemented to achieve the objectives The report includes summaries of the various analyses performed and recommendations and strategies that could be used to meet the clients objectives A synopsis of the analysis data is included In an update plan an approved financial plan in Update Plan status you can generate a Progress report which compares the updated plan information with the approved plan This report compares the clients current and previous net worth cash flow and asset allocation mixes and also tracks the success of each goal The Progress report will help you determine whether your clients are staying on track towards attaining their financial goals To generate a client or progress report follow these steps 1 Go to the Results section Client Reports category Client Report page OR If you are generating a progress report go to the Results section Progress Report category Progress Report page i Client Report gt Instructions Indude Alternatives In Reports Reports Report Name Template Action Fin
91. mptions page under Estate Distribution Selection to copy the estate distribution details from one spouse to the other spouse click the Copy information from lt client or co client gt button OR To clear the estate distribution details for the client or co client click the Clear all button and then click OK to the message that appears 6 See the following procedures e Entering testamentary trusts on page 71 e Entering general bequests on page 80 e Entering asset bequests on page 80 Entering testamentary trusts To add testamentary trusts to the clients estate planning scenario see the following procedures Entering credit shelter testamentary trusts on page 71 Entering a QTIP testamentary trust on page 72 Entering marital testamentary trusts on page 74 Entering generic testamentary trusts on page 75 Entering a testamentary charitable lead trust on page 77 Entering asset transfers for a testamentary trust on page 78 Entering testamentary trust beneficiaries on page 79 Entering credit shelter testamentary trusts To enter a credit shelter testamentary trust follow these steps 1 2 In the Scenario Manager dialog box click the Estate Planning link and then go to the Estate Distribution tab Under Testamentary Trusts click the Add Trust button and then select Credit Shelter Trust The Trust Details dialog box opens New CST Description At Death of Trust Tax Rate Credit Shelter
92. n Selection on the Set Goals section Estate Planning category Assumptions page the fields and tabs will vary Estate Planning E Total Taxes 796 621 m E Net to Heirs 2 005 075 1 6M E Net to Charity 0 Net to Heirs and Charity 2 005 075 1 2M 0 8M Life Expectancy a David 2021 Estate Planning Life Expectancy 0 Edit Life Expectancy 0 4M Susan 2026 Estate Planning Life Expectancy 0 0 0M The life expectancy settings selected here apply to all estate planning scenarios and are used for comparison purposes only These settings do not affect life expectancy options in other reports Estate Distribution Asset Estate Details Gifting Trusts v Override Testamentary Trusts Click the Add Trust button to create a new row AddTrust Create Marital QDOT CST General Bequests Asset Bequests Figure 57 Scenario Manager dialog box Estate Planning link Estate Distribution tab 3 To override the client s current plan estate distribution strategies for this scenario select the Override check box 4 To automatically establish trusts for the client and co client providing the selected tax filing status is Married filing jointly or Married filing separately click the Create Marital QDOT CST button Selecting the Override check box allows you to enter asset bequests and testamentary trusts 5 If you selected Specify by Order of Death on the Set Goals section Estate Planning category Assu
93. narios 23 Generating scenario reports 23 Comparing scenarios On the Scenarios page you can compare the Current Plan scenario the clients current financial situation with the Recommended Plan scenario the proposed option or best case scenario As well you can create numerous alternative scenarios Two alternative scenarios can be shown on the Scenarios page for comparison purposes The Scenarios page allows you to see at a glance how the modifications you make to the plan may affect goal coverage as well as overall net worth and cash flow Scormmios Current Plan data is read How to use this page 2 only It is provided for comparison purposes Scenarios Current Plan Recommended Plan Create Alternative Review Current Plan Edit Recommended Plan Alternative 1 Modify Financial Data Assumptions Details Net warih Recommended Pan data is 2011 End of Year 825 103 823 576 editable Clicking this button or At Death 2 631 920 2 387 836 the links in this column opens Cash Flow the Scenario Manager dialog 2011 Surplus Deficit 13 563 z i box where you view the plan Pre retirement X 88 7 details and make changes Retirement vV 100 Strategies Insurance Coverage Analyze Goals Retirement Education College Education You can view and compare Emergency Fund z four plan scenarios on the Scenarios page Current Recommended and up to two Akternative Plan scenarios Survivor Income Client Details Co Client Det
94. ng term care period select the check box next to the LTC period years field and then enter the number of years NaviPlan assumes that the client will die at the end of the long term care period 4 To override the ROR on Surpluses amp Liquidations select the check box and enter a new return rate 5 To include additional long term care insurance in the scenario under Long term Care Client CoClient details enter the Daily Benefit Amount and Premium Entering long term care incomes and expenses To enter long term care incomes and expenses for the Recommended Plan scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Long term Care Client Co Client link and then go to the LTC Incomes amp Expenses tab Assumptions LTC Incomes amp Expenses Existing Annual Expenses Long term Care Survivorship Percentage of lifestyle and medical expenses to cover Existing Incomes Percentage of income David expects to receive during LTC Additional Long term Care Expenses Daily Number Override Description Expense Type Amount Start Date of Years End Date Infl Add l Delete LTC Expense J H v x Add Additional LTC Expense Figure 54 Scenario Manager dialog box Long term Care link LTC Incomes amp Expenses tab 2 To override the percentage of lifestyle and medical expenses to cover during the long term care and survivorship periods under Existing Annual Expenses selec
95. nt were entered on the Pan Retirement 00 Management section Assumptions category Miestones page Survivor Life Expectancy Disability Income Client Calculate Co Client Calculate Long term Care Client Calculate Co Client Calculate Goal Funding Calculate All Figure 38 Scenario Manager dialog box Survivor Income link Level 2 Plan Assumptions tab 2 Under Survivor Income lt client gt details to include additional life insurance enter the death benefit and annual premium amount You can use the slider bar and the What Are My Options button to find the optimal life insurance amount 3 To override the return rates used for the additional life insurance select the override check box and then enter the pre retirement and retirement return rates 4 To change the survivor s retirement age for the scenario select the Survivor Retirement Age check box and then enter the retirement age or date 5 To change the survivor s life expectancy for the scenario select the Survivor Life Expectancy check box and then enter the life expectancy age or year 6 To override the return rates used for cash flow surpluses and liquidations under ROR on Cash Flow Surpluses amp Liquidations select the override check box and then enter the pre retirement and retirement return rates 7 Note the goal coverage graph results Entering ongoing expenses Level 2 This procedure only applies if the Goal and Expense Analysis
96. ow Education College Education 12 Net Worth Emergency Fund 35 2011 End of Year 823 576 Sapar aa ara At Death 2 387 836 Client Calculate Co Client Calaulate Analyze Net Worth Both Calculate Disability Income Client Calaulate Co Client Calculate Long term Care Client Calculate Co Client Caloulate Estate Planning Goal Funding Goals with Surplus 1 Calculate All Goals that are Covered 0 Figure 3 Results section Analyze Goals category Scenarios page Edit Recommended Plan button Scenario Manager dialog box Summary details The left side of the Scenario Manager dialog box has the same two categories Modify Financial Data and Analyze Goals Clicking any of the links under these headings changes the information displayed on the right side of the dialog box For example to see retirement goal details under Analyze Goals click the Retirement link The Scenario Manager dialog box has tabs for each plan shown on the Scenarios page You can quickly compare the current recommended and alternative plan details by clicking the other tabs Only the recommended and alternative plan details are editable On the Recommended Plan and Alternative Plan tabs you can implement various planning strategies into the plan to solve goal shortfalls manage cash flow etc Understanding scenario differences in Level 1 and Level 2 Plans In a Level 1 Plan you can analyze fairly simple What if scenarios using the S
97. pens Using the Planning Assistant The Planning Assistant displays a broad overview of the potential success of the plan It summarizes potential problems opportunities and questions You can use the Planning Assistant reports to analyze the financial data in your clients current or recommended plan These reports identify the strengths and weaknesses of the plan In some cases the reports identify something discretionary that does not apply to the current plan and can be ignored In other cases the reports identify an improvement that could be made with a simple data change Sometimes following the recommendations requires using one or more financial planning strategies Opening the Planning Assistant To open the Planning Assistant follow these steps 1 Click the Planning Assistant button near the upper right corner of the NaviPlan window The Planning Assistant dialog box opens and displays the Overview report for the current plan Planning Assistant Financial plan Settings Current v A PoF Word Overview Problems Questions Opportunities Reports The Planning Assistant is designed to assist you in analyzing the client s plan It contains information the system has generated by projecting the plan into the future and extracting the relevant details This information is dynamically generated by the system and may vary from plan to plan This facility is organized into the following categories Problems 2 possibl
98. quency Payment Period Termin Years Rate 5 00 Monthly v Term Certain NA 10 4 00 Figure 76 Trust Details dialog box showing new CLT details Entering beneficiaries for an inter vivos trust You can enter trust income and remainder beneficiaries and allocate a percentage of the trust to each beneficiary This procedure assumes you are already on the Trust Details dialog box Beneficiaries tab for an inter vivos trust Asset Transfers Return Rates Instructions Beneficiary ry Surviving Client Julia Total Income Beneficiaries Add Beneficiary Pro rata Beneficiary Other Total Add Beneficiary Pro ata Figure 77 Trust Details dialog box Beneficiaries tab To enter beneficiary details for an inter vivos trust follow these steps 1 To add a beneficiary under Remainder Beneficiaries or Income Beneficiaries click the Add Beneficiary button and then select the beneficiary you are adding 2 To assign equal distribution of income or remainder trust proceeds click the Pro rata button Each beneficiary receives an equal share OR To assign a different distribution percentage for each beneficiary enter the percentage in the applicable Percent field 3 If applicable under Income Beneficiaries enter the percentage of trust income that will go to the surviving client 4 Ifa portion of the trust income will go to other beneficiaries click Add Beneficiary select the beneficiary and then enter the per
99. r financial planning reports for reports related to goals and for estate planning reports To enter personalized text for reports follow these steps 1 2 Go to the Results section User Defined Text category User Defined Text page Under User Defined Text Summary select the goal or category for the user defined text To add an objective recommendation or action plan click the appropriate Add button The User Defined Text Entry dialog box opens OK Figure 86 User Defined Text Entry dialog box 4 Enter the text in the dialog box and then use the formatting buttons where applicable 5 To close the dialog box click OK Under Objectives Recommendations or Action Plan a new row appears Note A spelling checker is not available You can copy and paste plain text from Microsoft Word into the User Defined Text Entry dialog box Graphics are not supported Ra User defined Text User Defined Text Summary Asset Allocation v Enter client specific goals to personalize the client reports t Move Up Move Down Enter client specific recommendations to personalize the dient reports Add t Move Up Move Down Enter the steps involved in implementing the plan Action Plan Desc t Move Up Move Down Figure 87 Results section User defined Text category User defined Text page 6 To edit an existing entry click the appropriate Details button to reopen the User Defined Text Ent
100. rate the benefits of covering some expenses with a guaranteed annuity income stream instead of relying on market performance to provide enough capital growth to cover basic retirement needs This strategy can be of particular interest to clients who are nearing retirement or are already retired To enter annuitize to need scenarios follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Retirement link and then go to the Annuitization tab Transfers Liquidation Order Redemptions Bucketing Social Security Incomes Expenses v Override current annuitization settings Review how applying an annuitize to need strategy can affect the scenario Estimate the additional income gap to cover 0 yr in future dollars Estimate Income Gap Apply new strategies to existing annuities Select the assets to annuitize Available assets Non qualified to 100 Review the results and assumptions Figure 25 Scenario Manager dialog box Retirement link Annuitization tab 2 Select the Override current annuitization settings check box The annuitize to need scenario settings are now editable 3 To estimate the gap between the clients expenses and fixed incomes during retirement click Estimate Income Gap The Estimate Income Gap in Retirement dialog box opens Estimate Income Gap in Retirement Instructions Estimate Income Gap Estimate the income gap using future dollars to
101. rd into the Notes dialog box Graphics are not supported To view and print all notes that were entered for this plan follow these steps 1 On any page within an open plan go to the Notes menu and then select View All Notes The Notes Summary dialog box opens Notes Summary The following is a list of all notes that were entered Assumptions gt General User defined Note Nov 15 2011 Client requests more information about Figure 93 Notes menu View All Notes Notes Summary dialog box To edit the notes click Details The Notes dialog box opens where you can edit the information To print the notes click Print Index A accessing Help 5 support 5 alternative plan scenarios 11 annual gift exclusion 84 annuitization strategies 32 Asset Allocation client report 104 asset bequests entering 80 asset estate details entering 82 asset transfers entering 78 Average Tax method 4 beneficiaries entering 79 beneficiaries inter vivos trust 94 c Capital Accumulation and Redemption report 98 cash flow reports 98 Client Report Monitor Online using 108 client reports Asset Allocation 104 customizing 103 Financial Needs Analysis 105 Financial Needs Assessment 104 Financial Needs Summary 105 generating 104 107 including scenarios 22 Retirement Distribution Summary 105 user defined text 103 comparison reports 95 conventions user manual 4 credit shelter trusts entering 69 71 CSTs ent
102. re Scenarios button The Compare Scenarios dialog box opens OR If you ve selected the Monte Carlo module click the Scenario Reports button and then select Compare Scenarios 4 Select the scenarios you want to compare NaviPlan displays an analysis of the two scenarios including assumptions and a graph for each scenario Compare Scenarios seg Cong The scenarios illustrated below are based on the assumptions entered for each scenario Alternative 1 Current Investment Objectives Pre retirement Moderate Current Rebalanced Retirement Moderate Current Rebalanced Return Rates Pre retirement 8 23 9 14 Retirement 8 23 8 95 Annual Inflation Rate 3 00 3 00 Fixed Needs Goal Net Worth Net Worth Year Capital Covered by Scenario Name Coverage 1 AtRetirement AtDeath Exhausted Age Total Resources Alternative 1 65 2 265 474 393 226 2046 76 75 66 Current 69 2 452 696 1 150 125 2050 80 79 69 1 This value indicates the percentage of total retirement needs that can be covered by total retirement resources during the retirement period Alternative 1 Current 2045 2067 2063 2051 2053 2055 2057 2059 2035 2037 2039 2041 2063 265 2097 2009 2051 2053 2055 2057 2059 Bro E Previous Year Surplus Used E Nor Qualified Distributions W shortfall Bl Additions Qualified Distributions Fixed Needs E other inflows Total Needs Total Probability Trials 150 Scenario Probability Figure 9 Co
103. rent Monthly Savings What Are My Options I so B 250 as of Sep 1 2011 Additional Li Sum Savi Details Scenario Reports R samo ae oll amp Figure 6 Scenario Manager dialog box Retirement details 2 Use the sliders to easily adjust values to solve goals 3 To achieve 100 success under Goal Coverage click the What Are My Options button The following options will achieve a 100 goal success Select an option to implement as part of the scenario Select Continue Planning if you do not want to implement any of the scenarios Cover of Expenses 63 35 515 OR Save Monthly 1 217 OR Save a Lump Sum 191 644 OR Retire in May 2048 Jun 2048 78 77 OR Continue Planning EE Cancel Figure 7 What Are My Options dialog box showing retirement options 4 Select one option that would achieve 100 goal coverage 5 If you don t want to use any of the 100 options select Continue Planning To use a combination of options such as saving a smaller monthly amount and retiring a few years later define the options yourself by using the slider bars or entering plan modifications in the Scenario Manager dialog box Viewing goal coverage for other goals Under Analyze Goals you can view the status of all other goals in the scenario Analyze Goals Retirement Education College Education Major Purchase Vehicle Emergency Fund Survivor Income Client Co Client Both Goal Funding Calcula
104. retirement scenarios NaviPlan Premium allows you to customize existing retirement scenarios to help meet the needs of your clients financial situation and their preferences Once you have an appropriate scenario that you can apply to your clients plan you can recommend it Recommended scenarios apply to client reports where the Recommended plan type is used For information on recommending scenarios see Recommending a scenario on page 18 All What if scenarios are created and customized in the Scenario Manager dialog box To access it go to the Results section Analyze Goals category Scenarios page and then click the Edit Recommended or Alternative Plan button Entering retirement scenario objectives To enter scenario objectives for the retirement goal follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Retirement link Current Plan Recommended Plan Alternative 1 Alternative Plan Alternative 2 Modify Financial Data Summary Assumptions Net Worth 2011 End of Year 879 992 At Death 716 353 Cash Flow 2011 Surplus Deficit 17 023 Additional Monthly Savings Pre retirement vV 100 1 sll amp Retirement X 71 Lihat Are My Options Strategies Additional Lump Sum Savings Details Insurance Coverage Scenario Reports 7 TT so E Retirement Goal Coverage David s Retirement Age i 65 65 _0 71 Fixed Annual Retirement Expenses T 100 Susan s Retirem
105. ring the survivor s lump sum needs at death Level 2 To enter the survivor s lump sum needs at death in the Recommended Plan scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the appropriate Survivor Income link and then go to the Lump Sum Needs tab Assumptions Annual Income Needs Lump Sum Needs Survivor s Income gt Pay Off Outstanding Liabilities Current Plan Pay off all liabilities Override liability pay off strategies Pay off all liabilities Maintain all liability balances Major Purchase Goals gt Additional Lump Sum Needs Figure 42 Scenario Manager dialog box Survivor Income link Level 2 Plan Lump Sum Needs tab 2 To override the manner in which liabilities are to be paid off for this scenario under Pay Off Outstanding Liabilities select the Override liability pay off strategies check box and then select an option Note This option appears if liabilities exist in the plan and if in the Enter Financial Data section Net Worth category Assets Liabilities page Liability Details dialog box the Payoff Options at Death is set to either Transfer to survivor or Payoff at first death from estate 3 If major purchase goals are included in the plan and you want to override the to Cover field under Major Purchase Goals select the Override check box for each applicable major purchase and then enter a new percentage 4 To add lump sum nee
106. ry dialog box for that entry 7 To reorder entries within a category click the Move Up or Move Down buttons 8 Repeat steps 2 7 until all your entries are complete Generating client and progress reports The following client reports are available in NaviPlan Select for Level 1 and Level 2 Plans and are accessible from the Results section Client Reports category Client Report page Description This report provides an overview of the clients current financial situation and indicates whether the clients goals are attainable Asset Allocation This report demonstrates the effects that the clients time horizon risk tolerance and asset allocation have on their portfolio returns The clients portfolio is calculated based on their existing accounts and related holdings Client report Description Financial Needs This report provides an overview of your clients current financial situation with Summary special emphasis on their retirement goal Typically this report is used when the recommended plan has been finalized as the final presentation to the clients Retirement This report is useful to clients who are nearing or at retirement and provides an in Distribution depth review of the plan retirement period and the distribution of income the Summary clients may expect in retirement The report focuses on the apparent risks in the clients current plan and how those risks have been reduced by strategies i
107. si com In this chapter NaviPlan Premium user manual series 2 Conventions NaviPlan Premium resources 5 NaviPlan Premium user manual series The NaviPlan Premium user manuals are organized based on the tasks you can accomplish in each level If you are a new NaviPlan Premium user start with the Introduction user manual Introduction Setting up user preferences Creating and managing client engagements Determining which assessment or plan level to select to enter financial information Using NaviPlan Premium workflow Calculators and Assessments Using calculators to model specific aspects of your clients finances such as retirement savings and debt management Assessing your clients current financial situation Entering account and annuity information Determining your clients investor profile Level 1 and Level 2 Plans Entering financial planning assumptions Entering client data and goals Entering detailed net worth cash flow and insurance information Adding holdings to accounts and annuities Entering business entities Entering real estate assets Entering equity compensation Entering detailed estate planning information Entering advanced estate planning information Using the Detailed Tax method and the Detailed Cash Flow module Entering saving and redemption strategies Entering client goals Generating simple estate planning reports Generating client reports rman en
108. sis check box and then enter the age or year of death 5 To override the last year used in the client s or co client s disability analysis reporting select the Analyze Disability Through check box and then enter the last age or year you want the reports to display The adjacent field updates automatically 6 To override the return rates used for the disability income scenario select the check box under ROR on Disability Insurance Proceeds Surpluses amp Liquidations and then enter the pre retirement and retirement return rates Entering ongoing expenses during disability Level 2 This procedure only applies if the Goal and Expense Analysis method is selected on the Set Goals section Disability Income category Client Co client Objectives page To enter the survivor s annual expenses during disability in the Recommended Plan scenario follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Disability Income Client Co Client link and then go to the Ongoing Expenses tab Assumptions Ongoing Expenses Additional Annual Income Lump Sum Needs Annual Expenses Percentage of lifestyle and medical expenses to cover 85 Education Expenses Additional Expenses Description Amount Frequency Start Date End Date Infl Delete Additional Expense 0 Monthly V Jani2012 Ret Cien BY X Add Additional Expense Figure 46 Scenario Manager dialog box Disability Income
109. ss than 90 Less than 65 Total Needs Covered by Total Resources Fixed Needs Covered by Total Resources Total Probability Trials 150 Calculate Figure 12 Scenario Probability dialog box Probability tab To view details of the return rates for the probability analysis go to the Portfolio Variability Projection tab By default the Portfolio Variability Projection graph shows the compounded rate of return for the scenario Scenario Probability Probability Portfolio Variability Projection Investment Capital Graph Information Compound ROR Annual ROR Isolate ROR Percentiles Show All v Alternative 1 22 000 20 000 18 000 16 000 14 000 12 000 Rate of Return 10 000 8 000 6 000 g 4 000 rrr rrr rrr 2011 2016 2021 2026 2031 2036 2041 2046 2051 2056 Years 90th Percentile 10th Percentile 50th Percentile Assumed Rate of Return Total Probability Trials 150 Calculate Figure 13 Scenario Probability dialog box Portfolio Variability Projection tab To view the annual rate of return instead select Annual ROR To view the projected capital accumulation go to the Investment Capital tab If you are viewing results for a retirement goal and you want to determine the probability that all needs will be covered go to the Probability tab and then select Total Needs Covered by Total Resources OR To determine the probability that all fixed ret
110. stributed equally among those goals For more information about funding goals see Allocating accounts to goals in Level 1 and Level 2 Plans Entering client data and goals Note 529 plans and Coverdell accounts can only be allocated to the clients education goal s Qualified accounts can only be allocated to the retirement goal Managing scenarios in client reports NaviPlan allows you to manage multiple plan scenarios without having to concentrate on individual scenario details You can determine which scenarios should be included in client reports To include alternative scenarios in reports follow these steps 1 Go to the Results section Analyze Goals category Scenarios page 2 Click the Include Alternatives In Reports button The Include Alternatives In Reports dialog box opens gt Instructions Scenario Scenario Name Current Current Plan Recommended Proposed Alternative 1 Alternative A Alternative B Figure 16 Results section Analyze Goals category Scenarios page Include Alternatives In Reports button Include Alternatives In Reports dialog box The Current Plan scenario and Recommended Plan Proposed scenarios are included by default 3 Select an alternative scenario from the lists for Alternative A and Alternative B Adding notes to scenarios You can add your own notes to almost every page in NaviPlan including the Scenarios page and Scenario Manager dialog box On
111. t 94 comparison reports 95 estate distribution 69 general bequests 80 gifting 84 inter vivos trust strategies 87 life expectancy editing 67 testamentary trusts 69 generating stand alone reports 23 goal coverage 12 including scenarios in client reports 22 major purchase adding accounts 42 entering savings 40 transfer strategies 41 recommended plan 9 recommending 18 retirement 25 adding accounts 37 adding annuities 37 adding expenses 37 adding incomes 37 annuitization strategies 32 entering objectives 25 entering savings 27 liquidation strategies 30 redemption strategies 29 Social Security 32 transfer strategies 28 savings strategies adding 27 40 44 editing 44 editing existing 27 40 Social Security retirement scenarios 32 stand alone reports 97 100 strategies goal funding 21 summary reports 97 support accessing 5 survivor income scenarios Level 1 46 survivor income scenarios Level 2 48 additional annual income 52 assumptions 49 dependent needs when both clients die 53 goal and expense analysis 48 income coverage analysis 49 lump sum needs 52 ongoing expenses 51 T TCLTs entering 77 testamentary charitable lead trusts entering 77 testamentary trusts asset transfers 78 beneficiaries 79 charitable lead 77 credit shelter trusts 71 generic trusts 75 marital trusts 74 QDOTs 74 QTIPs 72 transfer strategies 28 41 trusts testamentary asset transfers 78 beneficiaries 79 charitable lead 77 credit shelter
112. t an optimal savings amount or enter the amount NaviPlan assumes that the savings are directed to a non qualified account which is created when the savings are entered The return rate is based on the suggested asset mix 3 To specify additional savings strategy details such as inflation rates and start and end dates click the Details button and then enter the additional details in the dialog box that opens Editing existing or adding new savings strategies Level 2 To edit existing savings strategies or to add new savings strategies for the retirement goal into the scenario follow these steps 1 In the Scenario Manager dialog box under Modify Financial Data click the Strategies link Current Plan Recommended Plan Alternative 1 Alternative Plan Alternative 2 Modify Financial Data Strategies Summary Zoom Next 5 Years Pre retirement Retirement All Years Cash Flow Surplus Deficit Assumptions Net Worth 2011 End of Year 880 094 FEN At Death 1 397 855 qan Cash Flow s15 2011 Surplus Deficit 10 824 10k Pre retirement v 100 5K 30K Si Ci verage Analyze Goals Retirement Education O College Education 12 Direct nt Major Purchase Overde Savings To or of Salary Frequency Start Date End Date Vehicle E 34 Joint savings Emergency Fund 68 Survivor Income Client Calculate Co Client Calculate Both Calculate Goal Funding Monthly Jan 12011 Retirement Fu 300 Monthly Sep 12011
113. t the Percentage of lifestyle and medical expenses to cover check box and then revise the percentages NaviPlan assumes that the client will die at the end of the long term care period 3 To override the percentage of income the client or co client will receive during the long term care period under Existing Incomes select the Percentage of income lt client co client gt expects to receive during LTC check box and then enter a new percentage Note If the percentage of expenses to cover or expected income varies among expenses and income Blended appears in the field 4 To edit an existing additional long term care expense in the Recommended Plan scenario under Additional Long term Care Expenses select the check box next to the expense OR To add a new long term care expense for the scenario click Add Additional LTC Expense and then enter the expense details Chapter 5 Entering estate planning scenarios In NaviPlan Premium you can use the Estate Planning module to enter detailed information about the clients existing estate plan and then examine various estate planning scenarios that might meet the clients estate needs In the Scenario Manager dialog box accessible from the Results section Analyze Goals category Scenarios page you can use manage and compare What if estate planning scenarios Different estate planning scenarios can be created to see the effect of different estate planning strat
114. t the state to which you clients intend to move from the Future State of Residence menu 4 Additionally if the state to which your clients intend to move has a different rate of taxation you can enter the new rate into the State Tax Rate field Customizing What if education and major purchase scenarios NaviPlan Premium allows you to customize existing education or major purchase goals within scenarios to help meet the needs of your clients financial situation and their preferences Once you have an appropriate scenario that you can apply to your clients plan you can recommend it Recommended scenarios apply to client reports where the Recommended plan type is used For information on recommending scenarios see Recommending a scenario on page 18 All What if scenarios are created and customized in the Scenario Manager dialog box To access it go to the Results section Analyze Goals category Scenarios page and then click the Edit Recommended or Alternative Plan button Entering education or major purchase scenario objectives To enter scenario objectives for the education goal follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the applicable lt education goal gt or lt major purchase goal gt link 2 Education goal only If applicable use the slider bars or enter the percentage of the education expenses to cover 3 Education goal only To override the duration of the educat
115. t year Figure 85 Planning Assistant dialog box Reports tab 2 Select one of the following reports e Introduction A summary of each of the reports available to you in the Planning Assistant e Qualified Contribution Limits Analysis and recommendations specific to IRAs 457 401 k 403 b and SARSEP plans including contributions contribution limits and unused room This analysis includes catch up contribution room when available e Cash Flow Summary of pre retirement cash flow surpluses and deficits This information is useful for seeing how the clients cash flow is affected by their goals and associated savings strategies Note The Planning Assistant is not designed to perform a detailed cash flow analysis For a more detailed report you can access the Cash Flow Details report from the 3 Reports menu e Net Worth Summary of all the assets and liabilities entered into the plan for the clients client co client and joint ownership and the net value and accumulated surplus deficit at the end of the plan year To print the Planning Assistant report displayed on the current tab click the PDF or Word button The report generates in its own window and can be printed from your desktop Preparing user defined text for client reports In NaviPlan Premium you can create and customize text that will be included in client reports You can enter personalized objectives recommendations and action plans fo
116. te All Figure 8 Scenario Manager dialog box Analyze Goals details Changes made to one goal can affect other goals The color coded boxes under Analyze Goals indicate the expected goal coverage success for the goal To view another goal in this scenario under Analyze Goals click the link for the goal you want to view The selected goal s details appear on the right side of the Scenario Manager dialog box Note You can calculate insurance goal coverage by clicking the Calculate links or the Calculate All button Comparing and recommending scenarios NaviPlan Premium allows you to compare multiple scenarios for meeting goals without having to create duplicate plans Once you have an appropriate scenario that you can apply to your clients plan you can recommend it NaviPlan incorporates the strategies used in the recommended scenario into the Recommended Plan scenario in reports graphs and client reports The Recommended Plan scenario is a system generated plan that incorporates the current plan and the recommended scenario Note This procedure does not apply to the estate planning goal Comparing scenarios for an individual goal To compare scenario details for a goal follow these steps 1 Go to the Results section Analyze Goals category Scenarios page and then click the Edit Recommended or Alternative Plan button 2 Under Analyze Goals select the goal you want to compare 3 Click the Compa
117. te What if scenarios that contain additional assumptions and strategies to help develop an optimal solution for the clients Even in plans where the goal is adequately funded or overfunded What if scenarios can be used to find an optimal solution The Scenario Manager feature in NaviPlan allows you to create and compare multiple scenarios side by side without having to create duplicate plans Once you have an appropriate scenario that you can apply to your clients plan you can mark it as the Recommended Plan Recommended scenarios are included in client reports By default the Scenarios page displays the Current Plan scenario which cannot be edited in the Scenario Manager dialog box as well as the Recommended Plan scenario current plan with suggested asset allocation The Current Plan scenario represents the plan that is open whereas the Recommended Plan scenario is generated by NaviPlan and uses the suggested asset mix You can create as many alternative scenarios as you like but only one can be marked as the Recommended Plan scenario In this chapter Comparing scenarios 9 Understanding scenario differences in Level 1 and Level 2 Plans 11 Adding Alternative Plan scenarios 11 Achieving goal success and viewing goal coverage 12 Comparing and recommending scenarios 17 Determining scenario probability Level 2 Plans 19 Creating goal funding strategies Level 2 Plans 21 Managing scenarios in client reports 22 Adding notes to sce
118. the trust Entering a QTIP testamentary trust To enter a QTIP testamentary trust follow these steps 1 In the Scenario Manager dialog box click the Estate Planning link and then go to the Estate Distribution tab 2 Under Testamentary Trusts click the Add Trust button and then select Qualified Terminable Interest Property The Trust Details dialog box opens Trust Description At Death of Reverse QTIP Tax Rate Qualified Terminable Interest Property ist to Die v 40 00 Funding Value Remainder Autofund Asset Transfer GSTT Exemption Allocation v Funding Amount Fixed Amount Bereficiaries Asset Transfers Return Rate Figure 59 Trust Details dialog box showing a QTIP trust Under New QTIP enter the general details of the trust 4 If applicable select the Reverse QTIP check box to treat the trust property as if the QTIP election had not been made that is the assets are considered transferred from the donor spouse to the remainder beneficiaries for GSTT purposes Any remaining GSTT exemption of the donor is applied against any GSTT that results from the trust If this check box is not selected GSTT implications on the death of the owner selected will be considered Under Funding select one of the following trust funding methods If you select The trust is funded in this manner Remainder NaviPlan transfers to the trust an amount equal to the client s estate remainder Once estate fees
119. tives for the emergency fund goal follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Emergency Fund link Current Plan Recommended Plan Alternative 1 _ Alternative Plan Alternative 2 Modify Financial Data Emergency Fund Summary Goal Coverage Target Amount Savings Period Infl Add l Assumptions i 12 60 mo Sep 12016 Net Worth 2011 End of Year 884 497 So Additional Monthly Savings Deis Current Monthly Savings At Death 1 080 230 T so e 50 as of Sep 1 2011 Cash Flow 2011 Surplus Deficit 9 620 Additional Lump Sum Savings Details Pre retirement v 100 Ti so E Retirement X 82 What Are My Options Strategies Insurance Coverage Analyze Goals CED Retirement o 82 Education Asset Class College Education 78 Return Rates Major Purchase E Compare Scenarios Override Interest Dividends Calculate Capital Gains Calculate Tax Free Calculate Deferred Growth Total Goal Funding Standard Deviation Calculate All Figure 35 Scenario Manager dialog box Emergency Fund link Objectives tab 2 To override the target amount of the emergency fund use the slider bar to select an amount OR Select the Target Amount check box and then enter a new amount 3 To override the inflation rate for this scenario select the Infl check box and then enter a rate at which to adjust annual savings 4 Enter the savings period in months up to a maximum o
120. tons Disability Income Convert to Detailed Convert and Create Marital QDOT CST Client Calculate Co Client Calculate Long term Care dlient Calculate lieni Calculate Estate Distribution Asset Estate Details Gifting Trusts Goal Funding Figure 55 Scenario Manager dialog box Estate Planning link showing the Edit Life Expectancy button 2 To edit life expectancies click the Edit Life Expectancy button The Estate Planning Report Settings dialog box opens Estate Planning Report Settings Life Expectancy Simultaneous Death 2011 Other Life Expectancies David 2021 Estate Planning Life Expectancy Susan 2026 Estate Planning Life Expectancy Vv Figure 56 Estate Planning Report Settings dialog box To model simultaneous death under Life Expectancy select Simultaneous Death and then enter the year when the client and co client are expected to die OR To model other life expectancies under Life Expectancy select Other Life Expectancies and then either select an option for each client or enter the year in which the client or co client is expected to die Defining the clients estate distribution By default NaviPlan Premium creates a simple will estate distribution scenario which assumes that a will exists and all assets pass to the surviving client under the unlimited marital deduction Note The procedures in this section assume that you have selected MirrorWills Either Dies First on the Set Go
121. turn future Infl Add l Weightings Rates Estimate 88 112 0 00 Cash 1 02 fa Defining Social Security Note If both the client and co client are retired in a joint plan the Social Security tab is unavailable If only one client in a joint plan is retired the Social Security scenario options are only available for the client in pre retirement To analyze the effects of receiving Social Security benefits starting at various ages follow these steps 1 In the Scenario Manager dialog box under Analyze Goals click the Retirement link and then go to the Social Security tab Transfers Liquidation Order Redemptions Bucketing CSocial Security Annuitization Incomes Expenses Social Security Start Date Current Plan David Never Susan Never Override Earliest Age 62 0 62 0 Full Retirement Age 67 0 67 0 Latest Age 70 0 70 0 Never Figure 24 Scenario Manager dialog box Retirement link Social Security tab 3 Under Social Security Start Date select the Override check box for each applicable client The Social Security options for the scenario become accessible 4 For each client select the age when Social Security begins Entering annuitization strategies Level 2 An annuitize to need scenario calculates the amount of redeemable non annuity assets that are required to purchase annuities that provide income for a specified need starting at retirement An annuitization strategy can demonst
122. update the Status column Using the Client Report Monitor Online The Client Report Monitor allows you to continue using NaviPlan Premium when generating time intensive client reports and progress reports Each time you click the Generate button for a report NaviPlan creates a request in the Client Report Monitor and generates the report Generating reports can take between a few seconds to a few minutes The Client Report Monitor allows you to monitor your recent request and the requests for other reports You can only open reports with a Completed status The Client Report Monitor is available from all the following areas in NaviPlan Premium Online e Reports menu e Results section Client Reports category Client Report page e Results section Progress Report category Progress Report page e Workflow section Status category Status page Instructions Vl Show only reports for this plan Client Report Monitor Client Name Client ID Description Plan Name Submission Time Status Lee David amp Susan 5784 Financial Needs Assessment Plan Nov 15 2011 13 22 Completed Lee David amp Susan 5784 Financial Needs Summary Plan Nov 15 2011 14 37 4 Processing Delete All Figure 91 Client Report Monitor dialog box To use the Client Report Monitor follow these steps 1 Generate a client or progress report or from the Reports menu select Client Report Monitor The Client Report Monitor dialog box opens Do
123. vings strategies Level 2 To edit existing savings strategies or to add new savings strategies for the education or major purchase goal into the scenario follow these steps 1 In the Scenario Manager dialog box under Modify Financial Data click the Strategies link Current Plan Recommended Plan Alternative 1 Alternative Plan Alternative 2 Modify Financial Data Strategies Summary Zoom Next 5 Years Pre retirement Retirement All Years Cash Flow Surplus Deficit Assumptions Net Worth 2011 End of Year 880 094 peal At Death 1 397 855 Cash Flow SISK 2011 Surplus Deficit 10 824 10k Pre retirement v 100 5K 80 0 30K Si Ci verage Analyze Goals Retirement Education College Education 12 Direct Amount Major Purchase Overde Savings To or of Salary Frequency StartDate End Date Infl Add l Delete Vehicle E 34 Joint savings Monthly Jan 12011 Re av x S ia Retirement Fu 300 Monthly Sep 12011 m Ret ist m 0 00 x Survivor Income dient Calculate Joint savings 5 000 Lump Sum Y Sep 12011 F x Co Client Calculate Both Calculate Goal Funding Joint savings Non Add Savings Strategy gt Qualified Calculate All Figure 33 Scenario Manager dialog box Strategies link Savings tab 2 To edit an existing savings strategy under Non Qualified or Qualified on the Savings tab select the Override check box and then edit the savings strategy details 3
124. y and if applicable a subcategory and then select the report or graph you want to generate 4 Favorite Reports 3 Summary 4 Net Worth 4 Cash Flow 3 Income Tax 3 Goals 4 Asset Allocation 4 Insurance 4 Estate Planning 4 Fact Finder 43 Needs vs Abilities 4 Capital Accumulation and Redemption 3 Deficit Coverage 43 Monte Carlo Figure 81 Reports menu Level 2 Plan Detailed Tax method Depending on the report or graph type selected the Assign Settings dialog box may open The contents of this dialog box varies depending on the report selected 2 If applicable enter the settings details and then click OK to generate the report or graph See the Help for more information about assigning report settings Assign Settings Assign Settings Scenario Current Figure 82 Assign Settings dialog box 3 Ifa Report Year field appears in the Assign Settings dialog box e g for the Cash Flow Details report and you want to report on a different year after you have generated the report in the report window click the Previous Year or Next Year button NaviPlan redisplays the report based on the applicable year Cash Flow Details DER L Help CZ PoF v W Word Hide Settings _ Refresh Duplicate Crevious Year_ Next Year skh Add as Favorite Reports 7 Window Cash Flow Details Lee Financial plan 2011 ee David SuSa Fami Cash Inflows Employment Inflows 82 000 60 000 142 000 Investment Inflows 6 498 6 498

Naviplan Select User Manual: Level 1 and Level 2 Plans

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