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NaviPlan User Manual: Calculators and Assessments

1. Total are self supporting are self supporting During Retirement Number of Years 0 0 0 0 Annual Living Expenses of Survivor current dollars 0 0 0 Less Estimated Social Security Benefits 0 0 0 Survivor s Earned Income 0 0 0 Other Guaranteed Income 0 0 0 Plus Taxes Payable 0 0 0 Annual Income Needs Deficiency Surplus 0 0 0 Capital Needs Choose one of the following methods to calculate the required capital amount Method Capital Depletion ul OK CANCEL Quick Actions menu Calculators Life Insurance Life Insurance Calculator dialog box Future Income Needs tab On the Future Income Needs tab you can determine the annual income that will be required by the survivor throughout his or her life cycle For example you can enter different expense amounts for the following m Before the children are self supporting m When the children are self supporting m During the survivor s retirement On this tab you will also choose one of the following methods to calculate the family s required capital after the insured dies m Capital Retention NaviPlan leaves the bulk of the client s estate untouched Only the growth of the life insurance proceeds and realizable net worth are used to cover expenses Additional insurance coverage is required m Capital Depletion The growth of the client s life insurance proceeds and
2. Page 54 of 65 NaviPlan User Manual Calculators and Assessments Generating a client report To generate the Financial Needs Assessment or Asset Allocation client report follow these steps 1 Goto the Client Report page 2 Click Select Document Sections Select Document Sections Default Template e Select the sections to be included in the report and then click Generate Report to continue The order in which document sections appear in the report can be changed To change where a section appears drag it to the preferred location in the list Client Information Overview Risk Tolerance Analysis Asset Class Details Account Details Current Asset Mix Current Portfolio Breakdown Summary Details Conclusion Appendix Important Terminology Disclaimer Asset Allocation Rate Approval Delivery Acknowledgement tal SelectAll Select None Meliyiz uidiid40 uf Select Document Sections dialog box iv v v iv v iv iv v v v v Note The sections shown in the dialog box vary depending on the client report 3 Toview the subsections for a section click the plus sign beside that section The list expands and subsections appear Select or clear the options for the appropriate subsections Select all sections you want included in the client report To reorganize the sections in the client report click and drag the applicable section to a new location Click OK BU OY yt G To gener
3. accounts Lifestyle assets such as homes are not sold to fund retirement needs To assess retirement needs follow these steps 1 Goto the Retirement page Retirement Information Desired annual retirement income in todays after tax Retirement Age Life Expectancy Social Security Eligibility Estimated Annual Pension Income in today s Investment Accounts for Retirement Non Qualified Accounts Current Value Current Monthly Savings Qualified Accounts Current Value Jim 65 90 lvi 0 Index at Maria 65 90 lv 3 00 Jim 0 Maria Joint 0 0 0 0 0 0 0 Current Monthly Savings 0 0 Monthly Savings Employer 0 0 Assumed Return Rate 6 00 Bl WHAT ARE MY OPTIONS 6 00 Financial Assessment section Financial Assessment category Retirement page 0 100 6 00 2 Under Retirement Information enter the clients combined desired after tax income upon retirement in today s dollars Note This amount should be large enough to include all lifestyle expenses that are expected during retirement Page 27 of 65 7 NaviPlan User Manual Calculators and Assessments To index the retirement income to inflation enter the rate of inflation in the Index at field Enter the retirement age and life expectancy for each client and then select the Social Sec
4. graph select Optimize Page 39 of 65 NaviPlan User Manual Calculators and Assessments Customizing the asset mix using the Weightings feature To use the Weightings feature follow these steps 1 On the Profile page click Customize Asset Mix and then select Weightings Asset Class Weightings Asset Class Weightings C Override default asset class weightings Class Class Name Percentage Class Name Large Cap Growth Equity 8 00 Large Cap Value Equity Mid Cap Equity 5 00 Small Cap Equity US REITs 2 00 International Equity Emerging Markets Equity 0 00 Long Term Bonds Intermediate Term Bonds 17 00 Short Term Bonds High Yield Bonds 6 00 International Bonds Cash 6 00 Asset Class Weightings dialog box 2 Select Override default asset class weightings and then enter the desired weightings The total must equal 100 Note Asset classes with a zero percent weighting do not appear 3 Click OK To revert to the original asset class weightings on the Profile page click Customize Asset Mix and then select Revert to Defaults Page 40 of 65 NaviPlan User Manual Calculators and Assessments Customizing the asset mix using the Optimize feature To restrict the suggested asset classes but still generate an optimal suggested asset mix follow these steps 1 On the Profile page click the Customize Asset Mix button and then select Optimize For more information about this graph see the Help Optimize
5. Previous Enty NextEnty Account Details dialog box showing details for a 529 plan onc 4 Selectthe owner the person who owns the asset the donor the person who contributes to the plan and the distributions beneficiary of the plan the applicable dependent 5 Enter all other applicable information Page 49 of 65 NaviPlan User Manual Calculators and Assessments Entering an UTMA or UGMA account UTMA Uniform Transfers to Minors Act and UGMA Uniform Gifts to Minors Act accounts are considered non qualified assets and they allow your clients to gift money to their dependent s These non qualified accounts can help fund future education costs You must assign a dependent as the owner of the account and then you can designate a client as the custodian of the account To set up an UTMA or UGMA account follow these steps 1 Goto the Accounts page 2 Click Add Account to add a new non qualified account and then select a dependent as the owner of the account 3 Forthe appropriate account click the Details button 4 Gotothe UTMA tab Note The UTMA tab only appears if the account is non qualified and the owner is a dependent 5 Select the UTMA Account option and then enter the details of the account Page 50 of 65 NaviPlan User Manual Calculators and Assessments Entering annuity information You can enter deferred variable annuities in the Asset Allocation Assessment You cannot combine qua
6. 4 Entering Asset Allocation Assessments The Asset Allocation Assessment in NaviPlan allows you to enter the clients accounts and create a suggested asset mix You can also create a suggested asset mix in minutes by having your clients complete the asset allocation questionnaire Note This manual assumes that you have already used NaviPlan to create and open a client file and an Asset Allocation Assessment For information about creating and managing client files and Asset Allocation Assessments see the NaviPlan User Manual Introduction In this chapter Using predefined asset allocation 22 0022 c cece eee eee cence eee cece cece cece eceeeee 39 Overriding the investor profile ice Ie c otha sae dee isa P let Sandee r EEEa A dapi oe 39 Using user defined asset allocation 2 022 0 2022 c cece eee eee eee eee eee ce eee eect eee cece eeeeeeee 43 Entering account information 2 22 22 22 e eee eee ec cee cece cece cece eee ceecceecseecceeteeesseeeees 46 Searching for asset class weightings 2 220 e cence eee cece cece cece cece eceeceececsereeseeees 47 Entering holdings atts cese Se eee ee teen Ae LL Ae an ee et Snes Oe sek LR 47 Entering fetunintates 2 222 to es re et ates d a a eed ete ce 48 Setting up a 529 plan 49 Entering an UTMA or UGMA account 2 22 22 o ee eee eee ce eee eee e eee c cece cece eeeeeeeceeees 50 Entering annuity information __ 222 022 22e eee cee cee cee cece cece ce
7. 9 1696 Efficient Frontier Current Rebalanced 14 Suggested Asset Mix Similar Risk to Current 12 Similar Return to Current Conservative A Moderate Conservative 10 H Y Moderate i E wk Moderate Aggressive i E Aggressive 6 m 4 2 0 0 496 8 12 16 20 24 28 32 Sterderd Deviation Risk Portfolio Statistics Suggested Asset Mix C Override Standard Deviation Class Class Similar Similar Class Name Percentage Class Name Percentage Return Risk x Current toCurrent toCurrent Sugg daas Large Cap Value Equity 12 8196 Emerging Markets Equity 11 0096 Return 4 3196 4 3196 6 6996 6 6996 Long Term Bonds 21 5796 High Yield Bonds 33 3396 Risk 8 7296 4 8096 8 72 8 49 8 49 International Bonds 8 52 Cash 12 77 INDIVIDUAL CONSTRAINTS onc Optimize dialog box 2 To manually enter a new standard deviation select Override Standard Deviation and then enter the standard deviation in the Suggested Risk field The graph will show the entered standard deviation Note Clicking anywhere on the Efficient Frontier line shows the standard deviation and return rate at that point Double clicking on the line selects the point as the new suggested asset mix Use this process as an alternative to overriding the standard deviation manually 3 To exclude asset classes and set minimum and maximum inclusion values for the suggested asset mix click Individual Constraints Page 41 of 65 Ind
8. Actions menu Calculators Major Purchase Required Savings Major Purchase Required Savings Calculator dialog box Details tab Page 15 of 65 NaviPlan User Manual Calculators and Assessments Major Purchase Available Savings calculator The Major Purchase Available Savings calculator determines the after tax value of funds that will be available for your clients for use toward a major purchase based on a monthly savings amount and time frame You can view the results as today s value discounted by inflation or as a future value Major Purchase Available Savings Calculator Details Reports Use this calculator to determine how much money you will have for a major purchase goal based on a monthly savings plan Major Purchase Information Assumptions Description Major Purchase Initial Investment 0 Monthly Savings a Index at ME Average Tax Rate 2595 Starting Year 2013 Interest 696 Purchase Year 2018 Capital Gains 0 5 Stop Savings Year 2018 Tax Free 0 Major Purchase Index At 3 Dividends 0 C Report Results in Today s Dollars DeferredGrowthf O Analysis Results You will accumulate 0 in 2018 dollars towards your major purchase goal in 2018 CANCEL Quick Actions menu Calculators Major Purchase Available Savings Major Purchase Available Savings Calculator dialog box Details tab Page 16 of 65 NaviPlan User Manual Calculators and Assessments Education S
9. modules to assess The Select Modules page displays the assessment s modules and available options Assessment Name Financial Assessment Enabled modules are checked Click Select Modules to change the available modules in this assessment Modules v Retirement v Education v Major Purchase v Insurance SELECT MODULES CONVERT TO DETAILED INCOME TAX Financial Assessment section Financial Assessment category Select Modules page Average Tax method selected To change the selected modules go to the Select Modules page and then click Select Modules A dialog box opens where you can clear or select modules Select Modules e Modules Select one or more of the following modules Assess your risk tolerance and review the corresponding investment profile ivi Retirement Compare your current financial situation with your retirement goal v Education Assess the cost of funding a post secondary education goal such as college v Major Purchase Assess the cost of funding a major purchase goal such as a vehicle v Insurance Assess your life and disability insurance needs in the event of premature death or disability SELECT ALL SELECT NONE Select Modules dialog box Two types of tax methods are available in Financial Assessments Average Tax and Detailed Tax Page 24 of 65 NaviPlan User Manual Calculators and Assessments When using the Average Tax method average taxes including th
10. of 65 NaviPlan User Manual Calculators and Assessments Opening a calculator To save the calculator details for later use you must open the client file first and then open the calculator This means that the calculator must be opened from within a client file in order to be saved To open a calculator follow these steps 1 From any page in the application once you have opened a client file go to the Quick Actions menu in the upper right corner of the window select Calculators and then choose a calculator OR Go to the Plan Management section Plan List category Plans page and click New Select the Calculator option and then select a calculator from the menu QUICK ACTIONS v Switch to Presentation Module 4 Reports Retirement Required Savings 4 Calculators Retirement Available Savings 4 Notes Retirement IRA vs Roth IRA Planning Assistant Q H RAD Education Savings Major Purchase Required Savings Major Purchase Available Savings Loan Comparison Mortgage Comparison Life Insurance Calculator Management Quick Actions menu displaying the Calculators sub menu 2 Toopen a previously saved calculator select it from the menu on the Plans page Page 8 of 65 NaviPlan User Manual Calculators and Assessments Managing calculators NaviPlan allows you to manage multiple calculators in a client file You can create open duplicate and delete calculator
11. of all possible investor profiles in the assessment Asset Allocation Settings e AssetClasses Correlations Investor Profiles Portfolios Use this page to display the asset class weightings for any investor profile Portfolio Criteria Select Your Default Profile Conservative V Investor Profiles Conservative iv Portfolios Class Name Weightings 26 Class Name Weightings 56 Large Cap Equity E 50 00 Small Cap Equity 1 50 00 International Equity 0 00 Aggregate Bonds 0 00 Cash 0 00 Total 100 0096 CANCEL Asset Allocation Settings dialog box Portfolios tab 9 Under Portfolio Criteria select the Investor Profile you want to change and then under Portfolios enter the asset class percentages for this profile 10 To revert to the default asset mix values entered in the User Preferences menu click Reset Asset Allocation This button only appears when the default asset mix is overridden m If no default values exist clicking this button deletes what you have entered without replacing it Page 45 of 65 NaviPlan User Manual Calculators and Assessments Entering account information You can enter one account for each of your clients investments or you can group similar holdings together within one account You cannot combine qualified and non qualified holdings within the same account Also you cannot combine holdings owned by different people within the same account To enter an in
12. realizable net worth are used to cover required expenses Insurance coverage can be lower however the client s net worth may be significantly reduced On the Current Assets amp Insurance tab you can enter the total amount of the family s realizable assets the amount of the insured s existing life insurance coverage and the amount of the Social Security death benefit payment expected if any The Reports tab shows you the results based on the life insurance information entered and recommends additional life insurance that may be required Page 19 of 65 Debt management calculators Two types of debt management calculators are available m Loan Comparison m Mortgage Comparison NaviPlan User Manual Calculators and Assessments This guide provides a general description of all the calculators For detailed instructions and field descriptions see Help Page 20 of 65 NaviPlan User Manual Calculators and Assessments Loan Comparison calculator The Loan Comparison calculator allows you to compare various loan alternatives such as payment frequency compound frequency interest rate amortization period or payment amount You can compare up to three different scenarios You can also include an amortization schedule for one of the three scenarios in the report Loan Comparison Calculator Details Reports Use this calculator to compare loan payment alternatives by payment frequency compound frequency intere
13. the time horizon and investor profile that NaviPlan has calculated 5 To view the predefined asset classes investor profiles and portfolios defined by Ibbotson click Settings Overriding the investor profile If you do not feel that the investor profile accurately reflects your clients risk tolerance and you have appropriate permissions you can override the investor profile in the following ways m Select a different investor profile m Adjustthe weightings manually for the investor profile using the Weightings feature m Use the Optimize feature to determine an optimal asset mix using Ibbotson s Mean Variance Optimizer To override the clients investor profile follow these steps 1 Go to the Profile page to view the asset mix suggested for the clients with the calculated investor profile Override Investor Profile Select an investor profile Moderate Asset Allocation section Asset Allocation category Profile page 2 Select Override Investor Profile and then choose another investor profile Note If you have NaviPlan with user defined asset allocation you can override the investor profile without selecting a option You can modify the suggested asset mix by clicking Customize Asset Mix and then selecting either Weightings or Optimize m Tomanually adjust the asset class weightings select Weightings m To use the Ibbotson Mean Variance Optimizer to generate a new portfolio based on an efficient frontier
14. 5 Client Reports ou once II RESIDUO IGITUR I X bee oases o ose eiae 54 Generating a clientreport 2 2 2222 barmunerE eL tdnltnco Ad OUMUNN AOI RADEON dete EISE 55 Creating reporttemplates oor c rne coepere EU AL Ec 56 Using the ClientReport MORItor ucc essitc Ie pe a lI c RO ER bhi ddd gos ses TUER RUNPIBODDAUS 57 Index 59 Page 2 of 65 NaviPlan User Manual Calculators and Assessments Chapter 1 Using this manual The NaviPlan user manual series includes all the instructions you need to use NaviPlan effectively This chapter will help you use all the manuals in this series More manuals are available on the Learning Center In this chapter NaviPlan User Manual Series sss RII cee ceceeceececeeeseceeseeseees 4 Conventions EEEE E t eee SESE Lr A LL e RP 5 NaviPlan Resources 22222222 22 2222222 6 Page 3 of 65 NaviPlan User Manual Calculators and Assessments NaviPlan User Manual Series NaviPlan user manuals are organized by the tasks you can accomplish in each level If you are a new NaviPlan user start with the Introduction user manual User manual Tasks covered m Setting up user preferences m Creating and managing client engagements Introduction m Determining which assessment or plan level to select m Using NaviPlan workflow m Using calculators to model specific aspects of your clients finances m Assessing your clients current financial situation Calculators and Assessments un m Enteri
15. Age 865 To Age 90 Interest e Savings Information ere I Tax Free 096 Index Required Monthly Savings at 3 R 4 From Age 35 ToAge 65 ne mr Analysis Results You need to save 991 per month indexed at 396 annually to a Non Qualified Plan from age 35 to 65 OK CANCEL Quick Actions menu Calculators Retirement Required Savings Retirement Required Savings Calculator dialog box Details tab To view a detailed report go to the Reports tab in the calculator dialog box To generate a printer friendly version of the report click either the PDF or the Word button Page 10 of 65 NaviPlan User Manual Calculators and Assessments Goals calculators Planning calculators are available for retirement planning major purchase education and life insurance goals This guide provides a general description of all the goals calculators For detailed instructions and field descriptions see Help Retirement calculators m Retirement Required Savings m Retirement Available Savings m IRA vs Roth IRA Major purchase calculators m Major Purchase Required Savings m Major Purchase Available Savings Education calculators m Education Savings Insurance calculators m Life Insurance Page 11 of 65 NaviPlan User Manual Calculators and Assessments Retirement Required Savings calculator The Retirement Required Savings calculator calculates the amount the client needs to save monthly to mee
16. Education Objectives enter m the estimated annual education costs in today s dollars m apercentage to index costs by m the dependent s age when the education goal begins m the duration of the education goal NaviPlan calculates the Total Projected Cost value by indexing each annual cost individually by the rate entered in the Index Costs by field from January 1 of the plan year to December 31 of the year before the year the expense occurs Page 29 of 65 NaviPlan User Manual Calculators and Assessments 3 Under Savings Information enter the current amount saved the current monthly savings and the assumed rate of return m All amounts saved earn the rate of return specified in the Assumed Return Rate field until the account is depleted m Non qualified savings are assumed to be deposited into a joint non qualified account m The amounts in the Current Amount Saved fields are assumed to be saved on January 1 of the plan year whereas monthly savings begin in the current month The monthly savings end on December 31 of the year before the last year of the goal Note The graphs on this page update as you enter different values NaviPlan calculates the percentage of each education goal that is expected to be covered based on the information you entered 4 Click What are my options Under Options alternative strategies are shown that would if implemented enable your clients to meet their education goal s Page 30 of 65 Asse
17. Insurance Calculator e Enter applicable expenses income needs and existing assets on the tabs below to determine life insurance needs General Expenses at Death Future Income Needs Current Assets amp Insurance Reports Life Insurance Information Assumptions Description Life Insurance Inflation Rate 3 Insured Insured Assumed Return Rate 6 Survivor Survivor Less Tax Rate 25 1 5 After Tax Yield on Capital 4 5 Less Inflation Rate on Income and Expenses Real Return on Capital after tax and inflation 1 5 OK CANCEL Quick Actions menu Calculators Life Insurance Life Insurance Calculator dialog box General tab On the General tab under Assumptions you can edit the inflation rate assumed return rate and tax rate that NaviPlan will use to calculate the real rate of return after taxes and inflation earned on life insurance proceeds that have been invested On the Expenses at Death tab you can enter all the lump sum expenses that the surviving client will incur following the client s or co client s death Page 18 of 65 NaviPlan User Manual Calculators and Assessments Life Insurance Calculator e Enter applicable expenses income needs and existing assets on the tabs below to determine life insurance needs General Expenses at Death Future Income Needs Current Assets amp Insurance Reports Future Income Needs Until Children After Children
18. RA 50 Monthly v 2013 Amount Frequency Starting Year Starting Age Return Rate 35 6 Payout Information Starting Age 8 Number of Years 26 Average Tax Rate 2596 Frequency Time of Year Index at Monthly v 3 Analysis Results Starting at age 65 the Roth IRA will payout 0 more income for the year than the Traditional IRA Quick Actions menu Calculators Retirement IRA vs Roth IRA IRA vs Roth IRA Calculator dialog box Details tab Page 14 of 65 NaviPlan User Manual Calculators and Assessments Major Purchase Required Savings calculator The Major Purchase Required Savings calculator determines how much money your clients need to save each month to meet a desired major purchase goal Major Purchase Required Savings Calculator e Details Reports Enter information in the fields below to determine the amount of savings required to meet a major purchase goal Major Purchase Information Assumptions Description Major Purchase Initial Investment 0 Major Purchase Goal 0 Average Tax Rate 25 C 2013 Dollars Index at 3 Interest 6 Starting Year 2013 Capital Gains 0 Purchase Year 2018 Tax Free 0 Stop Savings Year 2018 Dividends 0 Index Required Monthly Savings at 3 Deferred Growth 0 Analysis Results You need to save 0 per month indexed at 3 00 annually from 2013 to 2018 OK CANCEL Quick
19. TANI VAL SNR NaviPlan User Manual Calculators amp Assessments Volume II of IV NaviPlan User s Guide USA Version 14 2 Copyright and Trademark Copyright 2013 2014 Advicent LP and its affiliated companies Advicent All rights reserved Advicent and NaviPlan are trademarks of Advicent No part of this publication may be reproduced or transmitted in any form by any means electronic photocopying recording or otherwise without the written permission of Advicent Microsoft Word is a registered trademark of Microsoft Corporation Adobe and Acrobat are trademarks of Adobe Systems Inc All other product names are the sole properties of their respective owners Software License This publication is intended for use by authorized licensees of Advicent s proprietary NaviPlan software described herein This publication does not grant any license or right to use of the software and use of the software or this publication is prohibited by anyone who is not an authorized licensee All licenses rights and restrictions on use of the software are governed by a separate license agreement Disclaimer The software described in this publication is designed to allow a financial planner to demonstrate and evaluate various strategies in order to achieve a client s financial goals It is licensed to authorized licensees on the understanding that Advicent is not engaged in rendering legal accounting or other professional advice and if
20. al You can compare up to three different scenarios You can also include an amortization schedule for one of the three scenarios in the report Mortgage Comparison Calculator o Details Reports Use this loan calculator to compare mortgage payment alternatives by payment frequency interest rate amortization period or payment amount Calculator Name Mortgage Comparison Loan Information Start Date jan12013 Original Principal 100 000 Mortgage Comparison Field to Calculate Payment Amount v Original Alternative 1 v Alternative 2 Payment Frequency Monthly v Monthly v Monthly v Mortgage Type Fixed Rate v Fixed Rate v Fixed Rate v Term years Interest Rate 10 000 10 000 10 000 Amortization yrs periods 10 00 120 15 00 180 30 00 360 Accelerated to 10 00 120 15 00 180 30 00 360 Payment Amount 1 298 1 048 346 Total Payments in Year 15 573 12 581 10 151 Total Interest Cost for Amortization Period 55 731 88 710 204 521 Include Amortization Schedule for None MA Compare Payment Frequencies v OK CANCEL Quick Actions menu Calculators Mortgage Comparison Mortgage Comparison Calculator dialog box Details tab Select the Field to Calculate from the menu the results are displayed in the corresponding fields below The mortgage alternative columns allow you to show different mortgage parameters to your clients such
21. any such advice is required the services of a competent professional person should be obtained Advicent has engaged Ibbotson Associates Inc a wholly owned subsidiary of Morningstar Inc to develop proprietary asset allocation tools for educational purposes Ibbotson has granted to Advicent a license for use thereof USA version 11 07 2014 NaviPlan User Manual Calculators and Assessments Contents Contents lIlIIIlllllrrllmIIll2 233333222122 3333322221222 1 Chapter 1 Using this manual _ ss RR rIRlrllllmlemLmLmeTLmlrlllll 3 NaviPlan User Manual Series sss ln Il rrr rrr 4 esp ARCEM E OEO 2 NaviPlaniR SOUnGeS RN RENE RD PCI 6 Parmer SUPPO RERO RE 6 Chapter 2 Using the calculators sls I eee cee eeceeceececeeeseseeseees 7 Opening a calculator a eee cece R Ra RR aR RRR ET 8 Managing calculators sss ss lrllemrlmlmmxLmeLrmLmTmmLm TrmLllLll 9 Reviewing and printing calculator results sss cece eceeceececeeeeeees 10 GGalS Cal T RN RE ERR KT 11 Retirement calculators 032 005 a ac oc rniii 2 er a n sm eee dip ecc a uti R aaa KERES ese ceci ie 11 Major purchase calculators ss cence eee e cee ceeeeceeceeseesereeseees 11 Education calculators a eee outed fo IL Six e eS Soa daa Dee d 11 Insurance cale lators 2 cA eL I ster eee ll Ld cr eL Le 11 Retirement Required Savings calculator _ 2 s cee ceececeeceeceesees 12 Retirement Available Savings calculato
22. appropriate account Account Details dialog box Return Rates tab Return Rates Beneficiaries Pre Retirement Retirement Reinvestment Strategy Reinvest lv Reinvest v after tax income C Override Pre Retirement Retirement Interest 0 00 0 00 Dividends 2 55 2 55 Capital Gains 5 13 5 13 Tax Free 0 00 0 00 Deferred Growth 1 71 1 71 Total 9 39 Standard Deviation 18 61 8 61 3 To manually set the return rates for the account select Override and then enter the appropriate pre retirement and retirement return rates and standard deviations Page 48 of 65 NaviPlan User Manual Calculators and Assessments Setting up a 529 plan To set up a 529 plan follow these steps 1 Go to the Accounts page 2 Click Add Account and then select 529 Plan from the Account Type menu 3 Click the Details button Account Details Description Account Type Owner Donor E Distributions Beneficiary Sophie s 529 Plan 529 Plan v im v hm v Sophie v Asset Class Market Weightings Value Qualified Hold Basis Valuation Date x s85000 0 005 0 Jul 18 2013 ADD HOLDINGS Return Rates C Override Pre Retirement Retirement Interest 0096 0 0096 Dividends 0096 0 0096 Capital Gains 0096 0 0096 Tax Free 0096 0 0096 Deferred Growth 0096 0 0096 Total 0096 0 0096 Standard Deviation 009 0 0096 ADD ACCOUNT v
23. as how increasing their payment frequency can shorten their amortization Page 22 of 65 NaviPlan User Manual Calculators and Assessments Chapter 3 Entering Financial Assessments To quickly obtain a picture of your clients current financial situation and to assess if your clients financial goals will be met create a Financial Assessment and then generate a Financial Needs Assessment report to analyze the results Note This manual assumes that you have already used NaviPlan to create and open a client file engagement and a Financial Assessment For information about creating and managing client files and Financial Assessments see the NaviPlan User Manual Introduction In this chapter Selecting modules to assess _ ssl DADDA Daaa aaa 24 Modeling the current financial picture __ sls s DLLD La aona 26 Assessing retirement needs sss lr eee eececeecceceeeeeeeceeseeees 27 Determining whether the retirement goal is achievable see ssene 28 Assessing education needs s sees Rss Ier cece ceeeeteeeeees 29 Assessing major purchase needs _ es Rs I le rrr eeeeeeees 31 Assessing insurance needs ss ss slrlIrRrlmlTmlmlvLmlmmImeLreIllll 33 Analyzing Life Insurance needs with the Life Insurance Quick Assessment 35 Viewing results coc coe oe Sec dee m dcr ir teries lise geidurLibder ssermesd bl etis Dfstrain 37 Page 23 of 65 NaviPlan User Manual Calculators and Assessments Selecting
24. assets available to cover needs in the selected survivorship situation These assets are divided into two categories m Realizable Assets This field represents the value of assets that are easily converted to cash in the event of a death m Existing Life Insurance Policies This field represents the value of existing life insurance policies already entered in the assessment The value of these assets is calculated by NaviPlan to modify these values select Available Asset Override and enter new data 6 Review the information NaviPlan is using for this analysis in the Assumptions container and make any changes you wish 7 NaviPlan now calculates your clients need for additional life insurance and displays its recommendations in the Results container Page 36 of 65 NaviPlan User Manual Calculators and Assessments Viewing results To view the results of the Financial Assessment go to the Summary page An overview of the Financial Assessment is generated for each of the modules selected The results on the Summary page are updated automatically whenever you make changes on any of the previous pages and can be used throughout the planning process to show the clients goal achievement and alternative strategies This page can be shared with your clients since the information here is presented in the same format as the Financial Needs Assessment client report Page 37 of 65 NaviPlan User Manual Calculators and Assessments Chapter
25. ate the report click Generate If you generated this report before this button appears as Regenerate You can use the Client Report Monitor to monitor your recent report request and the requests for other client reports For more information see Using the Client Report Monitor on page 57 Page 55 of 65 NaviPlan User Manual Calculators and Assessments Creating report templates To create a template a group of selections that you can reuse for the client report type follow these steps Go to the Client Report page Click Select Document Sections Modify the report sections as explained in Generating a client report on the previous page Click Save as Template Ur Ge gr oq o Enter a name for the template and then click OK Note You can delete templates on the Settings menu System Settings Templates tab Page 56 of 65 NaviPlan User Manual Calculators and Assessments Using the Client Report Monitor The Client Report Monitor allows you to continue using NaviPlan when generating time intensive reports Each time you click Generate for a client report NaviPlan creates a request in the Client Report Monitor and generates the report Generating a client report 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 client reports You can only open reports with a Completed status The Client Report Monitor is available from the followin
26. ators in NaviPlan To develop a general needs analysis or for more detailed planning use the assessment or plan types In this chapter Opening a calculator sls cece cence eee e eee ceeseeeeceeseeceeseeeees Managing calculators __ 222 2222 oe cece cece cence ec eee cece cece cee ee cece eeceeeeeceseeseeseeeees Reviewing and printing calculator results _ _ 2 2 222 222 ee cece cence eee e cece cece eceeceeseeeee Goals calculators __ 2 2 22 eee ee eee eee eee ERES E DEESIE EEEE Major purchase calculators 20 sav 2 hese Dee Sees Soc uc ooo Bees h ceeeee daly S dele 22 2orfedeg Bex Education calculators Insurance calculators Retirement Required Savings calculator 222 0222 2 cece eee eee cece e eee ee cee cee ceceeceeseeseeeeees Retirement Available Savings calculator 22 2 2 occ o cece e cence cece cece ececeeceeseeeeeseees IRA vs Roth IRA Major Purchase Required Savings calculator Major Purchase Available Savings Calculator 00002 o eee cece cece ee cee cee s sse esee lle Education Savings calculator Life Insurance calculator Debt management calculators 2 22 22 2 cece cece cece cece cece eee e cece ee ceceeececeeseeeeeeees Loan Comparison calculator _ 2 2 2 0 2 2 2 eee cece cece cece ec e cee cee cece eee e eee c ee ceeceececeeeeeseeees Mortgage Comparisoni calculator cessus sade ods rmt dena sock decals deceesisies s Pee delice Soule nels Page 7
27. avings calculator The Education Savings calculator determines how much money your clients need to save each month to plan for a child s education Note This calculator does not calculate the benefits of using a 529 plan or Coverdell account Education Savings Calculator Details Reports Enter information in the fields below to determine the amount of savings required to meet an education goal Education Information Description Education Savings Education for Student Age at End of Year 0 Education Start Age 18 Annual Education Cost in today s 10 000 Number of Years 4 Cost Indexed at 5 Analysis Results You need to save 234 per month indexed at 3 annually from 2013 to 2031 9 Assumptions Initial Investment 50 Required Monthly Savings 395 Starting Year 2013 Average Tax Rate 25 Interest 6 Capital Gains 0 Tax Free 0 Dividends 0 Deferred Growth 0 cnn Quick Actions menu Calculators Education Savings Education Savings Calculator dialog box Details tab Page 17 of 65 NaviPlan User Manual Calculators and Assessments Life Insurance calculator The Life Insurance calculator estimates how much life insurance your clients may require to protect the income and assets of surviving beneficiaries The tabs on which you enter information are General Expenses at Death Future Income Needs and Current Assets amp Insurance E Life
28. bbies 0 Mortgage 0 7 0096 0 L Other e g child care travel 0 Car Loans 0 8009 0 l Mortgage 0 Personal Loans 0 8 00 0 Car Loans 0 Other 0 12 005 0 Personal Loans 0 0 0 Total Other 0 Total 0 Note Income and expenses entered on this page apply to the pre retirement period only Financial Assessment section Financial Assessment category Financial Picture page 2 Enter all applicable lifestyle assets liabilities incomes and expenses Page 26 of 65 Assessing retirement needs NaviPlan User Manual Calculators and Assessments In NaviPlan retirement begins on January 1 of the year in which the first client to retire turns the specified retirement ageon the date specified for the first client and ends December 31 of the year when the last client dies NaviPlan assesses needs in each year of the retirement period and compares them to the resources available for retirement funding If either a shortfall or overfunding is expected NaviPlan presents recommendations Retirement needs include desired annual retirement income and liability payments that extend into the retirement period Do not include taxes or life insurance premiums NaviPlan calculates taxes automatically and life insurance premiums if applicable are entered elsewhere in the application Retirement resources include estimated annual pension income Social Security and all qualified and non qualified
29. ce cece ceeeceescecsceeseeceeeeees 51 Entering ann ity subacco nts q 2cic22ss0ace uus o dat vedwutissaee re ncadececaessoecedmabssecedenseessacs 51 Comparing the current portfolio and suggested asset mi sess ssl 52 Viewing results oe cece cece cece eee e cece eee c eee ee cee ee cee ceceeeeeceeeeeeeeeereesees 53 Page 38 of 65 NaviPlan User Manual Calculators and Assessments Using predefined asset allocation With predefined asset allocation begin by using the questionnaire to determine your clients investor profile or suggested asset mix which is used as an asset allocation target throughout the Asset Allocation Assessment While the questionnaire must be filled out to proceed you can override the results or modify the suggested asset mix Note The Questionnaire page is only available if you are using NaviPlan with the predefined asset allocation option If you do not have this option you need to determine the investor profile yourself To generate a proposed portfolio follow these steps 1 Go to the Questionnaire page A list of questions appears to help you identify your clients investor profile 2 Select your clients responses to all the questions NaviPlan calculates risk scores based on the answers you provided and then recommends an investor profile 3 Go to the Profile page 4 To view the asset allocation risk scores for the investor profile click Scoring The Scoring Summary dialog box displays
30. ce needs are determined by simulating the death of either the client co client or both on December 31 of the plan year When death is simulated NaviPlan assesses needs and compares them to existing resources and life insurance coverage If available resources are not sufficient to meet needs NaviPlan recommends additional coverage NaviPlan assumes a capital depletion method for the life insurance analysis which depletes available assets and existing life insurance policies as needed Disability insurance needs are determined by simulating either the client or co client being disabled on January 1 of the year after the plan year The annual income of the disabled client is discontinued during the disability period Cash flow throughout disability is projected and if deficits result a need for further disability income coverage is reported The disability period ends at retirement at which time the retirement goal assumes the fulfillment of needs until death To assess insurance needs follow these steps 1 Go to the Insurance page Life Insurance Information Jim Maria 300 175 000 Existing Coverage Monthly Premium 100 90 Disability Insurance Information v Include in Analysis Percent of Expenses to Cover 100 0096 Jim Maria Short Term Coverage Monthly Benefits 4 500 1 000 Duration months 3 EC Monthly Premium 100 100 Long Term Coverage Mo
31. d plans are found under Plan Settings Asset Allocation Settings Asset Allocation Settings You can override these defaults for an individual Asset Allocation Assessment if you need to 1 Go to the Asset Allocation Asset Allocation Profile page 2 Click Settings 3 Click Add Asset Class to enter additional asset classes For each asset class enter a unique description such as Cash or Bonds and then define the return rates and standard deviation values that apply Asset Allocation Settings 7 Asset Classes Correlations Investor Profiles Portfolios Use this page to enter new asset classes their return rates and standard deviation as well as to edit existing asset classes Asset class data entered on this page will only affect asset class defaults for future plans Existing plans will not be affected but may be edited upon opening a plan Asset Classes ADD ASSET CLASS Capital Deferred Standard Description Interest Dividends Gains Growth Total Deviation Actions Large Cap Equity 0 000 2 4009 3 010 5 250 10 660 19 610 Small Cap Equity 0 000 1 470 5 060 7 840 14 370 28 900 N International Equity T 0 000 1 580 4 300 5 100 10 980 24 650 x Aggregate Bonds 4 910 0 000 0 000 0 000 4 910 7 110 N Cash 3 130 0 000 0 000 0 000 3 130 3 010 N OK CANCEL Asset Allocation Settings dialog box Asset Classe
32. e date entered must be June 1 2014 or later m NaviPlan calculates the Total Projected Cost value by indexing the value of each major purchase goal by the rate entered in the Index Costs by field from January 1 of the plan year to December 31 of the year before the year the expense occurs Page 31 of 65 NaviPlan User Manual Calculators and Assessments 3 Under Savings Information enter the current amount saved the current monthly savings for the major purchase s and the assumed rate of return m All amounts saved earn the rate of return specified in the Assumed Return Rate field until the account is depleted m Accounts used to save toward major purchase goals are assumed to be joint non qualified accounts m The amounts in the Current Amount Saved fields are assumed to be saved on January 1 of the plan year whereas monthly savings start at the beginning of the month following the plan date The monthly savings end on the month before the purchase date Note The graphs on this page update as you enter different values NaviPlan calculates the percentage of each major purchase goal that is expected to be covered based on the information you entered 4 Click What are my options Under Options alternative strategies are shown that would if implemented enable your clients to meet their major purchase goal s Page 32 of 65 NaviPlan User Manual Calculators and Assessments Assessing insurance needs Life insuran
33. e eee eee 35 Mie WINGIRESUITS u mem nei setti tnter testes soho deutet hae Ee meer s dee sens A EA mee erm te eid 37 Chapter 4 Entering Asset Allocation Assessments s ss sns e ei 38 Using predefined asserallocatiori croi RED RR RUE I Re EI 39 Overriding the investor profile 00K eich we ance cose die IUUD D bose oo EDD DRM OUO MEO IV 39 Customizing the asset mix using the Weightings feature sese 40 Customizing the asset mix using the Optimize feature sss ll 41 Using user defined asset allocation ss ee ceceeceeseeeesceceeseeseeeee 43 Entering account Information L cece cece cee cece cence nce eceececseececeeseeceeceseeseeseeees 46 Searching for asset class weightings 2 22 22 o cece cece eee cece cece cee ceceeseeceeseeseceeseeees 47 Entering MOINS lt lt eet ts Ore ett ee te EP ROO Beek itis Se ENS Ont toL te eS EE Mee Ei 47 Entering returni nates 2c 2222250520052 ont chen eae deed die coer abe aes Siac E IO 22 see Bae chen 48 Setting upa 529 Pla Mew 2 etate ices eee disent Dee hie Aste lia ere eek etie Lui Ar e f 49 Entering an UTMA or UGMA account sl ssl lmRmlLlLlm2LllmmeLxLeLllll 50 Entering annulty hnfotimidlok y horrea 942 94 rr PRAE A Ni get Le Ee 9 EA Aen ref 51 Entering annuity subaccounts sss ssl cee seeeeceeseeseececeeseeeeesecees 51 Comparing the current portfolio and suggested asset my sse lll 52 Viewing RESUITS aont sme hene crece rade es te POR OP a oa nla LI Due M d Ra tA 53 Chapter
34. e state tax rate specified on the Settings menu Plan Settings General tab apply When using the Detailed Tax method NaviPlan applies the bracketed federal and state rates including tax deductions credits and AMT to taxable income on a year by year basis These tax rates are not editable If you selected the Average Tax method during assessment creation you can convert to the Detailed Tax method by clicking Convert to Detailed Income Tax on the Select Modules page Once you have converted to the Detailed Tax method you cannot revert to the Average Tax method Page 25 of 65 NaviPlan User Manual Calculators and Assessments Modeling the current financial picture On the Financial Picture page you can model the clients current financial situation NaviPlan uses this information to calculate the clients net worth To enter your clients financial picture using the Financial Assessment follow these steps 1 Goto the Financial Picture page Lifestyle Assets Annual Income Asset Amount Jim Maria Residence 0 Annual Income 0 0 2nd Residence 0 Personal Use Property 0 Monthly Expense Other Personal Assets 0 Expense Amount Housing e g utilities repairs 0 Total 30 ges 9 Food 0 Liabilities Transportation e g gas insurance 0 Outstanding Interest Monthly Entertainment e g restaurants movies 0 Liability Amount Rate Paymans Personal e g clothing ho
35. er the search criteria and then click Search If you are unsure of all the letters in a symbol or name insert an asterisk for wildcard searches For example to search for assets that begin with br enter br in the Ticker Symbol field Under Results select the appropriate asset and then click OK Entering holdings To add holdings to an account follow these steps T 2 Go to the Accounts page Under Holdings click Add or the numbered link or for the appropriate account If holdings already exist and you are adding new holdings to the account click Add Holding for each new holding you want to add or click beside Add Holding and then select an option If you are using predefined asset allocation enter the holding s Symbol and then click Classify NaviPlan enters the symbol s description and asset class weighting OR If the holding is fully weighted in one asset class select the class from the Asset Class Weightings menu OR If the holding is weighted in multiple asset classes select Manual Classification from the Asset Class Weightings menu Assign percentages to various asset classes to equal 10096 and then click OK Enter the remaining details for each holding you added Page 47 of 65 Entering return rates To enter return rates for an account follow these steps 1 Go to the Accounts page NaviPlan User Manual Calculators and Assessments 2 Under Return Rates click the link for the
36. esources to help you use NaviPlan The following table shows some of the resources available and where to find them Advicent ogi Description and location resource The quickest way to get information about any item within NaviPlan is to use the Help application Help To access Help select NaviPlan Help from the Help amp Resources menu Help includes a glossary of terms Functional documents explain NaviPlan functionality underlying assumptions and unctiona results calculations You can access functional documents from the NaviPlan Learning documents Center Quick Reference Quick Reference Guides are designed to get you started with a particular workflow in Guides NaviPlan You can access QRGs from the NaviPlan Learning Center QRGs User You can also access other user manuals in this series You can access manuals from Manuals the NaviPlan Learning Center Help Help videos are designed to give you an overview of each section in NaviPlan You Videos can access help videos from the NaviPlan Learning Center Partner Support 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 central time Contact us by email at support advicentsolutions com Page 6 of 65 NaviPlan User Manual Calculators and Assessments Chapter 2 Using the calculators For a quick snapshot of your clients current financial situation future goals and objectives use the calcul
37. for each subaccount you added Page 51 of 65 NaviPlan User Manual Calculators and Assessments Comparing the current portfolio and suggested asset mix Before you generate the Asset Allocation client report you can compare the breakdown of the clients current asset mix with NaviPlan s suggested asset mix in the Asset Allocation Assessment Go to the Summary page Two graphs appear on the page as follows Graph Details Current Asset Mix The current asset mix reflects the weighted asset mix of all accounts in the clients current portfolio The text includes the expected rate of return and the expected standard deviation The graph displays a proportional breakdown of the assets in Suggested Asset Mix the suggested asset mix m With predefined asset allocation the suggested asset mix reflects the clients responses to the asset allocation questionnaire m With user defined asset allocation the asset mix is based on your selection on the Profile page The Summary includes the expected rate of return the expected standard deviation the proposed investor profile and the proposed time horizon Page 52 of 65 NaviPlan User Manual Calculators and Assessments Viewing results To view the results of the Asset Allocation Assessment go to the Summary page An overview of the Asset Allocation Assessment is generated for each of the modules selected Current Asset Mix Suggested Asset Mix i Large Cap Growth Equi
38. g areas Reports menu m Financial Assessment category Client Report page Asset Allocation category Client Report page Workflow section Status page Client Report Monitor 9 To continue working while the report is generating click Close The Client Report Monitorwill continue to function whether this dialog box is open or closed If you close the Client Report Monitor to access a client report go to the Results section Client Reports category Client Reports page in the plan the report was generated from or go the Reports menu at the top of the NaviPlan window and then select Client Report Monitor Alternatively go to the Workflow section Status category Workflow Status page to view the status of or print generated reports for a particular plan v Show only reports for this plan Client Report Monitor Client Name Client ID Description Plan Name Submission Time Status Actions Dixon Jim amp Maria 2144 Financial Needs Assessment Financial Assessment Jul 18 2013 12 19 Processing DELETE ALL CLOSE Client Report Monitor dialog box Page 57 of 65 NaviPlan User Manual Calculators and Assessments To use the Client Report Monitor follow these steps 1 Generate a client report or from the Quick Actions menu access Reports and then select Client Report Monitor 2 Perform one of the following steps To Do this List all client reports for which you have Clear the Sho
39. g box 40 asset classes correlating 43 entering 43 Average Tax method 5 25 C calculator types debt management 20 major purchase 15 retirement planning 12 calculators Education Savings 17 IRA vs Roth IRA 14 Life Insurance 18 Loan Comparison 21 Major Purchase Available Savings 16 Major Purchase Required Savings 15 managing 9 Mortgage Comparison 22 NaviPlan User Manual Calculators and Assessments Page 60 of 65 opening 8 Retirement Available Savings 13 Retirement Required Savings 12 reviewing and printing results 10 Client Report Monitor dialog box 57 Client Report page 55 client reports Client Report Monitor 57 generating 55 templates 56 conventions user manual 5 correlations entering 43 current asset mix graph 52 D Detailed Cash Flow module 4 Detailed Tax method 4 5 25 education needs assessing 29 Education page 29 What are my options button 30 Education Savings calculator 17 Financial Assessment assessing education needs 29 assessing insurance needs 33 assessing major purchase needs 31 assessing retirement needs 27 NaviPlan User Manual Calculators and Assessments Page 61 of 65 modeling current financial picture 26 selecting modules 24 viewing results 37 Financial Picture page 26 G goal coverage graph 28 H Help accessing 6 holdings entering 47 Individual Contraints dialog box 41 insurance needs assessing 33 Insurance page 33 life insurance analysis 34 What are my op
40. ickly using NaviPlan On the nsurance Analysis page these needs are determined using the following method m First NaviPlan totals the data in the Lump Sum Needs and Ongoing Needs sections m Next the total from the Available Assets to Offset Needs section is deducted m Finally the total recommended additional insurance is displayed along with a summary of the calculation in the Results section This method makes the calculation easy to understand increasing your clients confidence To analyze your clients need for additional insurance follow these steps 1 Gotothe nsurance Analysis page Ifjim dies If Maria dies If Both Die v Include in Analysis Lump Sum Needs Lump Sum Needs Override Assumptions R Copy Lump Sum Needs from Sarah s Assessment Inflation Rate 3 00 Mortgage Principal 0 Assumed Return Rate 5 00 All Other Loans 0 Survivor s Tax Rate 30 0096 Education Goals Emergency Fund 0 Results Final Expenses burial probate etc 0 Total Lump Sum Needs 23 032 Any Additional Needs 0 plus Total Ongoing Needs 0 Total Lump Sum Needs 23 032 less Total Available Assets 311 800 Additional Life Insurance Needed 0 Ongoing Needs ADD ONGOING NEED Annual Ongoing Needs are 0 for 0 years You require 0 to meet your calculated ongoing need Available Assets to Offset Needs 1 Available Asset Override IB Copy Available Assets from Sarah s Assessment Real
41. ividual Constraints dialog box Individual Constraints Asset Class Exclusion Class Name Large Cap Growth Equity Large Cap Value Equity Mid Cap Equity Small Cap Equity US REITs International Equity Emerging Markets Equity Long Term Bonds Intermediate Term Bonds Short Term Bonds High Yield Bonds International Bonds v Cash REVERT TO DEFAULTS Please indicate a reason for the exclusion 0 0096 0 0096 0 0096 0 0096 0 0096 0 0096 0 0096 0 0096 0 0096 0 0096 0 0096 0 0096 0 0096 Minimum Maximum Holding Holding 100 0096 100 0096 100 0096 100 0096 100 0096 100 0096 100 0096 100 0036 100 00 100 0056 100 00 100 00 100 00 NaviPlan User Manual Calculators and Assessments 4 If applicable clear the options for asset classes that you want excluded from the suggested asset mix or modify the minimum and maximum holding percentage for the included asset classes 5 Optional In the text field at the bottom of the dialog box enter the reason s for the exclusion s To revert to the original asset class weightings on the Profile page click the Customize Asset Mix button and then select Revert to Defaults Page 42 of 65 NaviPlan User Manual Calculators and Assessments Using user defined asset allocation If you are using user defined asset allocation not predefined in NaviPlan asset allocation defaults for all new assessments an
42. izable Assets 11 800 Existing Life Insurance Policies 300 000 Total Available Assets 311 800 Financial Assessment section Financial Assessment category Insurance Analysis page Page 35 of 65 NaviPlan User Manual Calculators and Assessments 2 Usethe tabs along the top of the page to select a survivorship situation 3 Enter all lump sum needs in the Lump Sum Needs container Note Mortgage Principal All Other Loans and Education Goals are calculated by based on data collected from elsewhere in the assessment To manually enter data for these fields select the Lump Sum Needs Override option 4 Enter all Ongoing Needs your client will need to pay in the selected survivorship situation The default entry is based on data entered elsewhere in the plan and is meant to show the amount of annual income necessary to replace the decedent s income m To modify these assumptions select and modify any of the assumptions in the Ongoing Needs dialog box m You can also specify how much of the decedent s income is necessary to replace for different time periods 1 From the Ongoing Needs section enter an ongoing need and a number of years for the first row This comprises the first period 2 Click Add Ongoing Need 3 Enter an annual ongoing need and a number of years for the newly created row This comprises the second period and immediately follows the previous period 4 Repeat step 3 until you are satisfied 5 Enter all
43. lified and non qualified holdings or annuity subaccounts owned by different people within the same annuity Entering annuity subaccounts To enter annuity subaccounts for variable annuities follow these steps 1 Go to the Annuities page 2 Under Deferred Annuities click for the appropriate variable annuity 3 Go to the Subaccounts tab Subaccounts PayoutOptions Return Rates Holdings Classi Reset Symbols App SURACCOUNT lt Marker Cost Valuation Asset Class Description Symbol Value Hold 96 5 Basis Date Weightings Actions New Subaccount 0 096 0 Jul 18 2013 a Annuity Details dialog box Subaccounts tab 4 From the Asset Class Weightings menu select the asset class for the subaccount m If you are using predefined asset allocation enter the subaccount s Symbol and then click Classify NaviPlan enters the description and asset class weighting m If the subaccount is fully weighted in one asset class select the class under Asset Class Weightings m lf the subaccount is weighted in multiple asset classes select Manual Classification under Asset Class Weightings Assign percentages to various asset classes to equal 10096 and then click OK 5 Enter the remaining subaccount details 6 If you are adding new subaccounts to the variable annuity click Add Subaccount for each new subaccount row you want to add or click D beside Add Subaccount and then select an option 7 Enter the remaining details
44. ng account and annuity information m Determining your clients investor profile m Entering financial planning assumptions m Entering detailed net worth cash flow and insurance information m Adding holdings to accounts and annuities m Entering business entities m Entering real estate assets m Entering equity compensation Level 1 and Level 2 Plans m Entering detailed estate planning information Entering client data and goals e j S m Entering advanced estate planning information m Using the Detailed Tax method and Detailed Cash Flow m Entering saving and redemption strategies m Entering client goals m Generating simple estate planning reports m Generating client reports m Analyzing your clients goals using Scenario Manager m Conducting detailed cash flow and net worth analyses Level 1 and Level 2 Plans m Generating Monte Carlo simulations Analyzing client goals m Creating goal scenarios m Creating estate planning scenarios m Generating client reports Page 4 of 65 NaviPlan User Manual Calculators and Assessments Conventions This user manual uses the following conventions m The names of items on the screen are bolded and italicized For example the Clients page opens m The names of items that you must select click or enter appear in bold For example select Recommended and then click OK m Tohelp you navigate through the application locations are separated by en dashes Fo
45. nthly Benefits 4 500 1 000 Benefits End at Age 65 65 Monthly Premium 100 100 B WHAT ARE MY OPTIONS Financial Assessment section Financial Assessment category Insurance page Page 33 of 65 NaviPlan User Manual Calculators and Assessments 2 Under Life Insurance Information enter the Existing Coverage and Monthly Premium m Life insurance policies in the Financial Assessment are assumed to be 10 year term policies that do not lapse where the insured owns the policy and pays the premium while the beneficiary is the non insured client Disability policies in the Financial Assessment are assumed to provide non taxable flat dollar amounts that are not indexed for inflation The owner of the policy is expected to pay for the premiums and be the recipient of disability benefits The policies have the following payout terms Policy type Waiting period Benefits end Short term Two weeks In three months Long term Three months At age 65 These are default values in NaviPlan but can be modified as required 3 Click What are my options Under Options NaviPlan displays the percentage and dollar value of the goal that can be met and the amount by which coverage would have to be increased to meet the goal Page 34 of 65 NaviPlan User Manual Calculators and Assessments Analyzing Life Insurance needs with the Life Insurance Quick Assessment The need for additional life insurance can be determined qu
46. ptions A graph displays the percentage of the goal that is achievable using current strategies Some suggestions for other possible strategies appear at the bottom of the dialog box Page 28 of 65 NaviPlan User Manual Calculators and Assessments Assessing education needs In general NaviPlan assesses all needs associated with the education goal for each dependent and compares those to the resources available for education funding If a shortfall or overfunding is expected NaviPlan presents recommendations for each dependent s education goal In the Financial Assessment each dependent can only have one education goal In the Financial Assessment education assessments can only be done for dependents they cannot be done for the client or co client If no dependent was added when the client file was created go to the Client Management Client Information Personal Information page and then add the family member To assess education needs for a dependent follow these steps 1 Goto the Education page Education Objectives Sophie Annual Education Costs in today s 10 000 Index Costs by 5 00 Education Start Age 18 2016 Number of Years Total Projected Cost Savings Information Non Qualified Accounts Current Amount Saved 13 985 Current Monthly Savings Assumed Return Rate Bl WHAT ARE MY OPTIONS Financial Assessment section Financial Assessment category Education page 2 Under
47. r _ sss eeceeseeeecseseesees 13 IRA WS ROUMRA ETT 14 Major Purchase Required Savings calculator 22 2222 ecco eee cece nec e cece ss Ill rli 15 Major Purchase Available Savings calculator 2020022 o eee cece eee cee eee sse senes 16 Education Savings Calculator 17 ite Insurance calculat ca tee eere eene dede eee eens ad es oot cea ee te dee ea 18 Debt management calculators 2 22 22 occ ce cece cece eee eee ees cece eee ececeeseeceeseseeceesees 20 Loan Comparison calculator 2 22 22 2 cee cece cece ec cece cece cece eee ecceceeceeceecereeseeeerees 21 Mortgage Comparison calculator eee anaana cece ceeeceeee 22 Chapter 3 Entering Financial Assessments _ 2222 22 02 ess seres cece 23 Selecting modules to assess s cece eee e cence eee cee ceeeeceeceeseeseseesees 24 Page 1 of 65 NaviPlan User Manual Calculators and Assessments Modeling the currentfiriancial plct ke settore 9 92 dene hcc ptc TE diete e tont ATA 26 Assessing retirement needs oro upper VID EPOR eek Me LED I pO AA 27 Determining whether the retirement goal is achievable senses 28 Assessing education needs sss ceceeeeeseeceseeseeseeceeeeeeeseee 29 Assessing major purchase needs ipn a r a e e ILII M I EI INDICO ieu cdi ibo eee 31 Assessing insuranceneeds 2222555 va ch A ti Aes cc atit Ta pom cnr LUA hh ph Eun s e to E 33 Analyzing Life Insurance needs with the Life Insurance Quick Assessment ee
48. r example Enter Financial Data section Net Worth category Accounts page v Client Information Net Worth Client List i Assets Liabilities Accounts Annuities Equity Compensation Asset Class Weight Section Section Enter new accounts define how Bnd edit investment incc Plan List To edit investment income earna non qualified accounts Modules Previously Incurred Investment Activity ssumptions Asset Allocatiog Qualified and Non Qualified Accounts v Enter Financial Data Category ccount Cash Flow New account 401 k v John Lvs 50 000 Strategies New account Non Qualified v Joint v 50 000 AOE Nebulous other acc IRA von 25 000 Tax Details iani Goal Funding Retirement Enter Financial Data section Net Worth category Accounts page To help you use this manual please note the following abbreviations and graphics m AA Refersto the Asset Allocation Assessment m 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 m Indicates that the step or paragraph only applies when you are using the Detailed Tax method Page 5 of 65 NaviPlan User Manual Calculators and Assessments NaviPlan Resources Advicent provides several r
49. rket Value and the Base fields will populate as you enter holdings for the account If the account is fully weighted in one asset class select the asset class under Asset Class Weightings OR If the account is weighted in multiple asset classes select Manual Classification under Asset Class Weightings Assign percentages to various asset classes to equal 10096 and then click OK To add holdings to a simple account on the Accounts page click Add under Holdings To enter additional account information click 4 The following topics explain how to use this dialog box m Entering holdings on the next page m Entering return rates on page 48 m Setting up a 529 plan on page 49 m Entering an UTMA or UGMA account on page 50 Page 46 of 65 NaviPlan User Manual Calculators and Assessments Searching for asset class weightings To use the predefined Asset Allocation option to search for asset class weightings for an account you can search the Ibbotson Asset Allocation database as follows From the Asset Class Weightings menu in various NaviPlan locations click Search Search Ticker Symbol CUSIP Type v Asset Class l v Description SEARCH Please use wildcards in your searches Accounts page Asset Class Weightings Search Asset Class Weightings Details dialog box Search container 2 3 Under Asset Class Weightings Options select Use Asset Classifier Search Under Search ent
50. s Reports Use this calculator to determine the amount of attainable retirement income to meet a desired income need based on a possible monthly savings plan Possible Savings Plan Assumptions gt Description Retirement Available Average Tax Rate 25 Initial Investment 50 Qualified Plan C Return Rate for Qualified Plan 696 Monthly Savings 0 ee pa Interest 6 gt Index at 3 n p poa Capital Gains 0 From Age 35 To Age 65 l Tax Free 0 b Retirement Information Dkddends 0X Index Retirement Income at 3 Deferred Growth 0 From Age 65 ToAge 90 C Report Results In Today s Dollars Analysis Results Based on your current savings strategy you may be able to attain a retirement income of 0 OK CANCEL ee _ ey Quick Actions menu Calculators Retirement Available Savings Retirement Available Savings Calculator dialog box Details tab Page 13 of 65 IRA vs Roth IRA The IRA vs Roth IRA calculator compares the benefits of contributing to either a traditional IRA or a Roth IRA IRA vs Roth IRA Calculator NaviPlan User Manual Calculators and Assessments There are two types of Investment Retirement Accounts IRA Traditional IRA and Roth IRA Enter your investment information below to compare the benefit of contributing to either an IRA or Roth IRA Details Reports Contribution Information Description IRA vs Roth I
51. s in the Calculator Management dialog box To manage multiple calculators in an open client file go to the Calculators menu and then select Calculator Management P N Calculator Management 9 Calculators iB MeUuiM IB Duplicate 3 Delete Description Type Modified Date Retirement Retirement Required Savings CLOSE a Calculators menu Calculator Management Calculator Management dialog box To Do this Create a new Click New and then select a calculator Enter the required data and then calculator click OK Open an existing Select a calculator to open and then click Open or click the link for the calculator calculator you want to open Duplicate a calculator Page 9 of 65 NaviPlan User Manual Calculators and Assessments Reviewing and printing calculator results After entering the clients information in most of the calculators the calculator results appear under Analysis Results on the Details tab in the calculator dialog box Retirement Required Savings Calculator e Details Reports Use this calculator to determine the amount of monthly savings required to meet your desired retirement income needs Retirement Information Assumptions 7 Description Retirement Initial Investment 0 Annual Income Needs paid monthly Average Tax Rate 25 Desired Income after tax l 50 000 Qualified Plan E EIn Teday s Dollars Index at 3 Return Rate for Qualified Plan 6 From
52. s tab 4 Once you have made the required changes go to the Correlations tab Correlation measures how much you can expect your clients investments to change in price relative to each other Correlation g Historical relationship of the two asset classes value 1 0 The two assets move in exactly the same direction 1 0 The two assets move in exactly the opposite direction 0 0 The two assets have no relationship Page 43 of 65 NaviPlan User Manual Calculators and Assessments Asset Allocation Settings 7 AssetClasses Correlations Investor Profiles Portfolios Use this page to enter correlation values between all asset classes The correlation value between asset class A and asset class Bis the same as the correlation value between asset class B and asset class A etc Correlation data entered on this page will only affect asset class defaults for future plans Existing plans will not be affected but may be edited upon opening a plan A B c D E A Large Cap Equity 1 0000 0 32001 0 4500 1 00001 1 0000 B Small Cap Equity 1 0000 0 25001 1 0000 1 0000 C International Equity 0 4500 0 2300 1 0000 1 0000 1 0000 D Aggregate Bonds 1 0000 1 0000 1 0000 1 0000 1 0000 E Cash 1 00001 1 0000 1 0000 1 0000 1 0000 OK CANCEL Asset Allocation Settings dialog box Correlations tab 5 To change the correlation between two asset classes enter the new correla
53. ssing major purchase needs In general NaviPlan assesses all needs associated with the major purchase goal and compares those needs to the NaviPlan User Manual Calculators and Assessments clients resources available to fund major purchases Whether a shortfall or overfunding is expected in either event NaviPlan presents recommendations for each major purchase goal In the Financial Assessment you can enter up to three major purchase goals To assess major purchase needs follow these steps 1 Goto the Major Purchase page Major Purchase Objectives Goal One Goal Two Goal Three Description European Vacation Major Purchase 2 Major Purchase 3 Purchase Date Jan 1 2018 Cost in today s 10 000 Index Costs by 3 0096 Total Projected Cost 11 593 Savings Information Goal One Current Amount Saved 2 000 Current Monthly Savings 100 Assumed Return Rate 5 0096 WHAT ARE MY OPTIONS Jan12018 0 3 00 0 Goal Two 0 50 5 00 Financial Assessment section Financial Assessment category Major Purchase page Jan12018 0 3 0096 0 Goal Three 0 50 5 00 2 Under Major Purchase Objectives enter all applicable information for the clients planned purchase s m Major purchase goals cannot occur in the month of the plan date or in the following month For example if the plan date is April 12 2014 th
54. st rate amortization period or by payment amount Calculator Name Loan Comparison Loan Information StartDate Jan12013 Loan Amount 100 000 Payment Type Principal and Interest v Loan Comparison Field to Calculate Payment Amount v Original Alternative 1 v Alternative 2 Payment Frequency Monthly v Monthly v Monthly v Compound Frequency Monthly v l Monthly v Monthly v Interest Rate 10 000 10 000 10 000 Amortization yrs periods 10 00 120 15 00 180 30 00 360 Payment Amount 1 322 1 075 878 Total Payments in Year 15 858 12 895 10 531 Total Remaining Interest 58 581 93 429 215 926 Include Amortization Schedule for None v Compare Payment Frequencies Quick Actions menu Calculators Loan Comparison Loan Comparison Calculator dialog box Details tab Select the Field to Calculate from the menu the results are displayed in the corresponding fields below The loan alternative columns allow you to show your clients different loan parameters such as how reducing their interest rate will allow them to pay the loan off more quickly Page 21 of 65 NaviPlan User Manual Calculators and Assessments Mortgage Comparison calculator The Mortgage Comparison calculator allows you to compare various mortgage alternatives such as interest rate amortization payment amount or princip
55. t his or her desired retirement income based on the initial investment savings time frame average tax rate in retirement and assumed return rates Retirement Required Savings Calculator o Details Reports a H Use this calculator to determine the amount of monthly savings required to meet your desired retirement income needs Retirement Information Assumptions f Description Retirement Initial Investment 50 Annual Income Needs paid monthly ju E Average Tax Rate 25 Desired Income after tax 50 000 Qualified Plan D o J In Today s Dollars Index at 3 Return Rate for Qualified Plan 6 From Age 6 To Age a Interest a Savings Information en Lo Tax Free 096 Index Required Monthly Savings at 3 os oe L sjoe is Deferred Growth Analysis Results You need to save 991 per month indexed at 3 annually to a Non Qualified Plan from age 35 to 65 Quick Actions menu Calculators Retirement Required Savings Retirement Required Savings Calculator dialog box Details tab Page 12 of 65 NaviPlan User Manual Calculators and Assessments Retirement Available Savings calculator The Retirement Available Savings calculator calculates the amount of annual after tax income the client will receive in retirement based on the initial investment monthly savings tax rates savings time frame and assumed return rates Retirement Available Savings Calculator LG Detail
56. tion 43 user manual conventions 5 series 4 UTMA or UGMA entering 50 NaviPlan User Manual Calculators and Assessments Page 64 of 65 NaviPlan User Manual Calculators and Assessments V viewing results 37 W What Are My Options disability insurance 34 education 30 insurance 33 major purchase 32 retirment 28 Page 65 of 65
57. tion value at the intersection of a row and column for the two asset classes The default value is updated For example to change the correlation between Large Cap Equity and Small Cap Equity go to the field that intersects row A and column B and then enter a new correlation value 6 Go to the Investor Profiles tab to view the investor profiles entered in the User Preferences menu 7 Investor profiles should be added from lowest to highest risk tolerance To add a new investor profile to the Asset Allocation Assessment click the Add Investor Profile button enter a name such as Conservative and then click A dialog box opens where you can enter the details of the new profile Asset Allocation Settings e Asset Classes Correlations Investor Profiles Portfolios Enter the description for each investor profile To define an investor profile click Details Investor profile data entered on this page will only affect asset class defaults for future plans Existing plans will not be affected but may be edited upon opening a plan Investor Profiles ADD INVESTOR PROFILE Description 3 Actions Conservative 2 x Moderate Conservative 5x Moderate aR Moderate Aggressive 5x Aggressive EE 5x OK CANCEL Asset Allocation Settings dialog box Investor Profiles tab Page 44 of 65 NaviPlan User Manual Calculators and Assessments 8 Goto the Portfolios tab to edit the composition
58. tions button disability insurance 34 investor profile determining 39 overriding 39 investor profiles entering 44 IRA vs Roth IRA calculator 14 life insurance analysis 34 Life Insurance calculator 18 Loan Comparison calculator 21 NaviPlan User Manual Calculators and Assessments Page 62 of 65 M Major purchase calculators 15 Major Purchase Available Savings 16 Major Purchase Required Savings 15 major purchase needs assessing 31 Major Purchase page 31 What are my options button 32 Mean Variance Optimizer 41 modules selecting 24 Mortgage Comparison calculator 22 N NaviPlan Select phone support 6 resources 6 user manual series 4 0 Optimize dialog box 41 P phone support 6 portfolios entering 43 Profile page 39 Q Questionnaire page 39 R results Asset Allocation Assessment 53 NaviPlan User Manual Calculators and Assessments Page 63 of 65 Financial Assessment 37 retirement goal coverage graph 28 retirement needs assessing 27 Retirement page 27 retirement planning calculators 12 Retirement Available Savings 13 Retirement Required Savings calculator 12 return rates entering 48 S Select Document Sections dialog box 55 Select Modules dialog box 24 Select Modules page 24 suggested asset mix comparing to current portfolio 52 customizing 39 41 suggested asset mix graph 52 Summary page 37 53 1 tax methods Average 25 Detailed 25 U user defined asset alloca
59. ty 23 1396 8 0096 i Large Cap Value Equity 23 1396 11 0096 i Mid Cap Equity 0 0096 5 0096 i Small Cap Equity 0 0096 3 0096 AUS REITs 0 0096 2 0096 p International Equity 0 0096 11 0096 Long Term Bonds 0 0096 7 0096 p Intermediate Term Bonds 0 0096 17 0096 i Short Term Bonds 0 0096 17 0096 p High Yield Bonds 0 0096 6 0096 p International Bonds 0 0096 7 0096 a Cash 0 0096 6 0096 p Unclassified 53 7496 0 0096 Summary Expected rate of return 4 31 5 69 Expected standard deviation 8 72 8 49 Proposed investor profile Moderate Proposed time horizon Intermediate Asset Allocation section Asset Allocation category Summary page The Summary page is easy to access and can be used throughout the planning process to show the clients current and suggested asset mixes This page can be shared with your clients since the information here is presented in the same format as the Asset Allocation Assessment client report Page 53 of 65 NaviPlan User Manual Calculators and Assessments Chapter 5 Client Reports The Client Report page is similar in both Financial Assessments and Asset Allocation Assessments only the name of the client report is different In this chapter Generating a client report _ 222 2222 sels RR lrlImLllLlmImLmxTrlLmellLll1l 55 Creating report templates c oolllellleccfeiegmemecivbe iz uec egcellseieile teil Pere s dtfurtil 56 Using the Client Report Monitor s e IR IRR eect ec eee anaana 57
60. urity Eligibility option for each client who is eligible to receive Social Security benefits at retirement Enter the clients estimated annual pension income in today s dollars This amount should not include estimated amounts from Social Security Under Investment Accounts for Retirement enter the current value of non qualified and qualified accounts and the monthly amount of client and employer contributions Monthly savings start January 1 of the plan year and end December 31 of the year before retirement Enter the rate of return you expect the investment accounts to earn Note The bar graph on this page updates as you enter different values NaviPlan calculates the percentage of the retirement goal that is expected to be covered based on the information you entered 8 Click What are my options Under Options alternative strategies are shown that would if implemented enable your clients to achieve their retirement goal Determining whether the retirement goal is achievable Once you have completed the fields under Retirement Information and Investment Accounts for Retirement on the Retirement page NaviPlan can provide feedback on current strategies Under Goal Coverage in Detailed retirement mode and Investment Accounts for Retirement in Simple retirement mode the graph displays the percentage of the goal that is achievable using current strategies To see suggestions for other possible strategies click What are my o
61. vestment account in an Asset Allocation Assessment follow these steps 1 Go to the Accounts page Qualified and Non Qualified Accounts Account Asset Class Return Description E3 Type Owner Market Value Basis Weightings Rates Holdings Actions Joint Savings Accom Non Qualified v Jim v 50 000 r 0 4596 Large Cap Gro 9 39 Add X Maria s Brokerage A Non Qualified Maria v 55 000 46 000 Large Cap Growth E v 848 Add 6 X Jim s Brokerage Acc Non Qualified v Joint v 50 000 46 000 Large Cap Value Eq v 10 13 Add gt X Jim s 403 b 403 b v Jim Y 45 000 0 w 0 00 Add N Maria s 401 k 401 9 v Maia v 50 000 so v 0 00 Add N Sophie s 529 Plan 529 Plan v tim 85 000 0 v 0 00 Add Asset Allocation section Asset Allocation category Accounts page gs p om o Click Add Account or click beside Add Account and then select the type of account you want to create In the Description field enter a unique name or account number to identify this account From the Account Type menu select the tax category of the account such as non qualified or IRA From the Owner menu select the owner of the account If you are entering a simple account enter the current Market Value and for a non qualified account enter its basis in the Base field If you re entering any other type of account the Ma
62. w only reports for this plan option access Click the link for a client report with the Completed status The client report opens using the format specified on the Settings menu System Settings Report Setup tab View a completed report Click for the applicable report or click the Delete All button to delete listed client reports 3 Click Close 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 Page 58 of 65 Index 5 529 plans entering 49 A accessing Help 6 Account Details dialog box Return Rates tab 48 UTMA tab 50 accounts entering 46 entering holdings 47 entering return rates 48 Accounts page 46 annuities entering subaccounts 51 Annuity Details dialog box Subaccounts tab 51 annuity subaccounts entering 51 Asset Allocation Assessment entering holdings 47 entering return rates 48 setting assumptions 43 viewing results 53 asset allocation assumptions setting overall default values 43 NaviPlan User Manual Calculators and Assessments Page 59 of 65 Asset Allocation Settings dialog box Asset Classes tab 43 Correlations tab 43 Investor Profiles tab 44 45 Asset Class Exclusion 41 asset class weightings entering 46 searching 47 Asset Class Weightings Details dialog box 47 Asset Class Weightings dialo

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