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NaviPlan User Manual

1. Annuity Details e Description 3 Account Type Owner Annuitant Beneficiary Income Option New annuity IRA David David a6 Susan lig Amount Certain vi General Account Subaccounts Market Qualified Valuation Market Pre Annuitization Value Basis Date Value Cost Basis Annual M amp E Fee Goal Funding 0 0 Jul 22 2013 0 0 0 00 Retirement Subaccounts Payout Options Savings Strategy Redemptions Return Rates Qualified Account Setup General Subaccounts Direct Savingsto 50 50 Savings Strategy ADD SAVINGS STRATEGY Amount s or of Salary Pre tax Post tax Frequency Start Date End Date i Infl Add l Actions 0 00 0 00 Monthly Jan 12013 m Ret as m 0 00 3 ADD DEFERRED ANNUITY v Next Entry gt CANCEL Annuity Details dialog box Savings Strategy tab showing an IRA 6 Enter either the dollar amount or percentage of income to be contributed along with the Frequency of the contribution m Ensure dollar values under 25 are entered with a dollar sign or they are assumed to be percentages m Forcertain qualified annuities to have the employee contribute the maximum amount as the federal limit increases enter max in the appropriate Salary field 6 Enter the Start Date and the End Date of the strategy 7 Toindex the strategy for inflation select the Infl option To index by an amount greater or less than the default inflation rate enter a
2. Start End Tfrto Fixed Description EJ Member Type Amount Frequency Infl Add l Age Date Age Date Survivor Exp Actions Retirement Expen Joint v Lifestyle v 0 Momh w z 0 00 59 Ret is 83 Death 2nd wy x Lifestyle Expense Joint v Lifestyle v 0 Month v 0 00 43 Jan 12014 83 Death 2nd wx Retirement Incomes ADD RETIREMENT INCOME If Social Security or defined benefit pensions are entered on the Enter Financial Data section Cash Flowcategory Cash Flow page do not enter them in this section Only enter additional retirement incomes in this section Start End Description EJ Member _ Income Type Amount Frequency Infl Add Age Date Age Date Actions Other Taxable David v OtherTaxable x 0 Monthly v 0 00 59 Ret Owner m 85 Death Owner m x AssetAllocation Goal Funding Liquidation Strategies Transfer Strategies Retirement Accounts Linked Asset Class Description Account Type Owner Market Value Basis Linked Amount Weightings ROR Savings New account 401 k David 50 000 0 100 50 000 Unclassified 0 00 1 Set Goals section Retirement category Retirement page Level 2 Plan 2 Under Objectives enter your clients retirement ages or the years at which your clients want to retire and then enter your clients life expectancies 3 Tochange the clients investor profile for ret
3. 022 0022 c cece cece cee cece eeeeeceee 75 Entering Social Security benefit amounts using the Estimate Benefit method 22 22 2 76 Entering current Social Security benefits 000000 00000 oe cece cece eee eee cee cece cece ceeceeeeeee 77 Ente ring pensiolIhcOllle stiano eo Rer EE oat ng dhe crore ev ba eb a dee behets dads eee MENDA Mer TREE 78 Entering an estimated benefit pension 0 2 2 o occ cece cece cece cece cece ceeceeecceeseeceeeeeeees 78 Page iii of 7 NaviPlan User Manual Entering Client Data Entering a benefit formulaipension esise naekna starena a a ch theese ac sees ROI ER fei eiii 79 Entering expenses pti edens Lp ht sur eta A sheet espe tes be Neidio ko Ms aia lenges te 82 Entering s rpl s expehses nt cee fe 8 Bn E OM T hte tuc EE RE BT 84 Generating the Cash Flow report ssusuusussssssssssssss s cece eee ec ce ceeseeseeeeceseeseeeeseseees 85 Chapter 5 Entering strategies Level 2 iiiuuiuuuuuuuuuuusslssllsllsl II ceeeceeeceeseeeeeeesees 86 Entering a regular savings strategy 2 2 oo eL Le Iur RE El ti eco Rm IR ny felgen 87 IMOGITVING aloan src ces ahs netu Ras e eL Lc I E A eA rear EE 88 Entering redemptiofls z estet rettet EM EMO ES REM aa us voci nci 89 Entering a substantially equal periodic payments SEPP strategy LLuuuuuuuueueeeelsnnssseee 90 Setting the deficit coverage order Detailed Tax method 02 22 02 e
4. Planning Assistant dialog box Reports tab 2 Select one of the following reports m Introduction A summary of each of the reports available to you in the Planning Assistant m 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 m 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 Reports menu m 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 3 To print the Planning Assistant report displayed on the current tab click PDF or Word The report generates in its own window and can be printed from your desktop Page 178 of 209 NaviPlan User Manual Entering Client Data Using reporting options in NaviPlan NaviPlan offers three primary report types Standalone Reports allow you to verify the numbers after you have entered your clients fin
5. 2 22 22 2 eee cece cece s LIGEL ss da aaia aG 151 Entering funded trusts sosesc oe ae ase sae nate ee ee ee te bee tee ose U MI EN ea 154 Funded trusts details 5 oie DARII hada accede Meee Geet es ake IGI DIDI ne URDU sees andes 155 F nded credit sheltertrust details ceo eet Mp ETEUI a Beech one sae aweneeehs 156 Funded irrevocable trust details _ 2 222 022 22 eee eee ee 157 Funded irrevocable life insurance trust details o 22220222 eee eee eee eee 158 Funded qualified terminable interest property trust details 2 220020222 e cece cece cece ee eeeeee 159 Page v of 7 NaviPlan User Manual Entering Client Data Funded marital trust details 2d0ce 205 sv echecessreeger eres seeescecegrecuedentcass chase ace IO are aa yoke 160 Funded generic testamentary trust details 2 2 22 22 cece cece cece ccc e cee ceceeceeeeeseeeee 161 Advanced estate funded trusts details 2 lliiiiiiiiiiiiuiiiiuuusiusllsillllsllsslslss esses ren 161 Funded qualified personal residence trust details 000000000000000000000000000 0000000022002202 162 Funded family limited partnership trust details liiiiiiiiiiiississsesssssssss Ill 163 Funded grantor retained trust details 0000000000000000000000 0000000000000002 oaoa 22o 222a nanan 164 Funded rolling grantor retained annuity trust details 2 2202 2 c cece ccc eee e eee eeceecees 165 Funded charitable remainder trust details _ _ 22 2022
6. Notes e Status gt Status 5 X dadA dA B z U E m Ble E a 1 Jui 24 13 10 57 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 Use your browser s spellcheck or copy and paste plain text from Microsoft Word 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 Quick Actions menu Notes and then select View All Notes Notes Summary e Below is a list of notes associated with this client file To print a copy ofthe notes click the Print button Status Status User defined Note Actions Jul 24 13 10 58 5x Client requests more information about q PRINT Page 192 of 209 NaviPlan User Manual Entering Client Data Index 5 529 plans entering 48 A accessing Help 4 account fees setting 48 accounts allocating to goals 117 beneficiaries 46 entering 41 entering savings strategies 43 overriding calculated return rates 45 regular savings strategies 87 setting account fees 48 setting up qualified 47 setting up redemptions 44 55 setting up SEPP strategies 45 accumulation goals entering 102 AMT capital loss carryovers 13 AMT carryforward credits 14 analysis methods Goal and Expense 125 136 141 Income Coverage 128 137 144 annu
7. select Mirror Wills Either The estate details entered will apply regardless of the order of death Dies First Specify b a iy d You can enter separate data to illustrate either the client or co client dying first You rder o Death can also copy the estate distribution details from one client to the other client a 6 Under State Death Taxes select the applicable state for state death taxes The state selected on the Client Management section Client Information category Personal Information page is selected here by default 7 To change the default calculation of taxes select Override and then select the method of tax calculation If you T NaviPlan calculates state death taxes in this manner select Current NaviPlan calculates the state death tax using the maximum federal credit tables Maximum However the credit is only available for years prior to 2005 In tax years 2013 and Federal beyond Tax Options As Legislated selected the state death tax is calculated once Amount again based on the maximum federal credit tables 2001 Credit NaviPlan uses the maximum federal credit tables regardless of the year of death Amount NaviPlan allows for manual entry of taxes Dollar amounts between 1 and 100 must be entered with a dollar sign otherwise they are assumed to be percentages When a Sor dollar value is entered the Infl Add l field appears which allows the option of increasing state death taxes eac
8. 0 0009 1 580 4 300 5 100 10 980 24 650 x Aggregate Bonds 4910 0 000 0 000 2 000 6 910 7 110 x es 3 130 0 000 0 000 0 000 3 130 3 010 3X cae Asset Allocation Settings dialog box Asset Classes tab 3 Under Asset Classes click Add Asset Class for each asset class you want to add to the plan 4 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 5 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 works in the following manner Correlation value Historical relationship of the two asset classes 1 0 The two assets move in exactly the same direction PD uM deswossesmveiexdyfecmedediedem 00 ThetWocsehgenateecoihisy oi Page 24 of 209 NaviPlan User Manual Entering Client Data Asset Allocation Settings 2 Asset Classes 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 B is 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 m
9. 12 13 Go to the Enter Financial Data section Net Worth Assets Liabilities Click Add Liability and then select Variable Mortgage from the menu Click amp next to the new variable mortgage Enter a Description for the mortgage Select the name of the Owner who has taken out the mortgage Select Mortgage from the Liability Type menu and Variable from the Mortgage Type menu Select the Compound Frequency Payment Type and Payment Frequency as well as the asset to which the mortgage is linked If applicable select the Interest is Tax Deductible option Enter the Balance As of Date Loan Date and the Original Principal amount If applicable select the Cover any pre retirement deficits created by these liability payments option Determine the Remaining Amortization for the mortgage by entering the Years and Months remaining until full repayment Click Add Interest Rate Period to enter the different interest rates and the number of months during which they apply When you are satisfied with these options click OK Liability Details 7 Liability Mortgage Interest Compound Description EJ Owner Type Type Rate Frequency Variable Mortgage Joint xj Mortgage v Variable Mal Variable Monthly v Payment Interest is Payment Type Frequency Link to Asset Tax Deductible 7 Principal and Interest v Monthly k Residence ivi Balance Original As of Date Loan Date Renegotiate Principal
10. 22 22 22 o eee cece cece ence cece cece cence eee eee cee eeseeseceeeseeeeseeseees 41 GE ALIS ACC OUI exo E ce cere Demum LLL A E E ETEA le Sees puit e cress 41 Entering holdings _ 2222 02 2 cece eee cece cence cece cece eee e cece eee ec ee ec eeeeececeeceeseeceesesseseeees 42 Entering a hold on a holding within an account 2 00 0 02 2 eee cee cee cee cee cece cee eee cece 43 Entering savings strategies for accounts _ 22 2 2 e cee eee cee cece cee cece cece ces eeceeceeseceeceeeees 43 Setting up a redemption strategy for an account Level 2 Detailed Tax 222 22 0222 e eee eee ee eee eee 44 Setting up a SEPP strategy for an account Level 2 Detailed Tax 222 20222 2 eee cece ee eee eee cece eens 45 Overriding calculated return rates for accounts 2 2 2 2 222 c cece eee cee eee cee cece ss cece eee ee eeeee 45 Setting up beneficiaries for a non qualified account 2 2222 c cece eee eee eee eee eee sss ee eeee 46 Setting up a qualified account _ 2 2 22 cece cence ence cece cece cece ceeseeseeeeseeseees 47 Setting the account fee for an account 22 22 eee cece cee cece cece ccc eecceeceeeteeceereceeseeeees 48 Setting up a 529 plan or Coverdell account 2 22 22 cece cee cece eee cece cee ceeeeceeceeseee 48 Entering an UTMA or UGMA account 2 22 222 eee ee cece eect cee cece cece cece eeeeeeeeeeee 49 Entering annuities 2 22 22 2 222 ce cece cec
11. Payments do not start automatically when the plan reaches the annuitization date Instead NaviPlan redeems funds from the annuity as needed to cover cash flow deficits occurring after this date Payments are annual withdrawals that are guaranteed for the life of the owner If Joint is selected as the owner payments are guaranteed until the first owner dies Payments are guaranteed even if the value of the annuity s accounts are depleted the Valuation Date the Pre Annuitization Return Rate and the Assumed Interest Rate AIR after the annuity begins paying out For a variable annuity enter the general account Market Value Cost Basis and Valuation Date For an annuitized annuity enter the balance of the Cost Basis or Qualified Basis If you are entering a variable annuity follow these steps 1 On the Subaccounts tab enter annuity subaccounts The total of the market values entered for the variable subaccounts appears in the Subaccounts Market Value field under Variable Annuity If you are using asset class weightings define the asset class weightings of the subaccounts as explained in Setting asset allocation assumptions on page 16 In the Annuity Details dialog box you can m Create a new annuity by clicking Add Deferred Annuity and then selecting either an annuity type or Copy of Current m View or edit another annuity by clicking Next Entry or Previous Entry Entering annuity subaccounts Variable annuities a
12. m Expanded Ibbotson model o o o Utilize between 15 and 18 asset classes to generate a suggested portfolio based on the completed asset allocation questionnaire Additional asset classes include Municipal Bonds Commodities Diversified Alternatives and additional International Equities Tax Type Preferences Exclusion Preferences Automatic quarterly database updates to ensure investment accuracy m User defined asset allocation o o Enter your own user defined asset classes and weightings Data must be manually updated to reflect market fluctuations Important The methods available to you are based on the license agreement arranged by your organization Overview of predefined Asset Allocation Switching between Expanded Ibbotson and Standard Ibbotson models To switch between Expanded Ibbotson and Standard Ibbotson asset allocations at the plan level do the following m Click Convert to Standard Expanded Ibbotson Asset Allocation Model from one of the following places o o Settings menu Plan Settings Asset Allocation tab OR Plan Management Asset Allocation Profile page OR Plan Management Modules page Note Portfolio compositions and settings created in Expanded Ibbotson mode will not be saved if switched to Standard Ibbotson Any asset classes not included in Standard Ibbotson will be removed from the portfolio The following descriptions and steps are applicable regardl
13. 2 2 2222 02 cece eee cece eee eee eeceeeceeeees 106 Overriding the proposed investor profile for a goal Level 2 Plans 22 22 22 e cece eee ee eee eee eee 109 Defining education goals __ 2 22 2 o eee eee ce cee cee cece cece cece cece eee DDEL DLLD ALD LL aoaaa 111 Defining major purchase goals _ 22 22 22 22 ee eee eee cee cee cece cece cece ceeeceecceesceteeesseeceeees 114 Defining an emergency fund goal _ 2 2 2 eee eee cee cee ec eee cece eee cececeecceecceeseecseeceeees 115 Allocating accounts to goals _ 22 2 2 2 2 occ e eee eee e cece cence eee ce eeeeceeeeseeseeceeees 117 Page 102 of 209 NaviPlan User Manual Entering Client Data Retirement goal assumptions In NaviPlan retirement is treated as a goal rather than just a period of time You can identify a specific need allocate accounts to fund it and then see the resulting shortfalls and savings NaviPlan makes recommendations to achieve the retirement goal without taking cash flow into consideration for example NaviPlan may recommend that the clients save 1 000 per month even when the clients do not have that amount available in their cash flow Retirement date assumptions NaviPlan assumes that the retirement period begins and ends on December 31 of the year in which the last client in the plan dies Retirement dates can be changed for specific goals such as survivor income and disability income Retirement goal report
14. In the Description field enter a unique name for the pension From the Member menu select the pension owner Enter either the Benefits Start Age or the Benefits Start Date 21 049 SS Enter the percentage of pension benefits to be paid to the surviving spouse when the pension owner becomes deceased NaviPlan does not calculate any discounts if this election is chosen 8 Ifthe pension is based on an income under Linked Incomes select the option s for the appropriate income s These options only appear if incomes are entered in the plan 9 Enter either a percentage of the pension owner s final salary in the 96 of Final Salary field or the estimated pension amount in today s dollars in the Est Benefit Amount field 10 Click the Benefit Payout Options link Additional fields appear 11 From the Method of Payout menu select Life Income or Lump Sum m If you select Lump Sum you must also select a Transfer Payout to destination To transfer the lump sum payment to an IRA select an IRA from the menu or select New IRA The default name for the new IRA asset is Transfer From description of pension The newly created asset can be further defined by clicking Account Details To transfer the lump sum payment into the clients cash flow on the pension owner s benefit start date select Cash Flow 12 Enter the remaining details of the pension 13 Go to the Future Benefits tab 14 To override the displayed items select Mod
15. 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 Guide Series _ 222 0202 2 2 eee e ec ec e cen eee eee cece eee e cece eee eececeeceeceeceeeeseeeeees 2 Conventions crece Eo ecg SEE rM AL eles he ene 3 NaviPlan Resources _ 2 2 2 0 e cece cece cece cece cence LLDD LLDD LLLA LLALL LLDD LLLA aaa LaaLa 4 Page 1 of 209 NaviPlan User Manual Entering Client Data NaviPlan User Guide Series NaviPlan user guides are organized by the tasks you can accomplish in each level If you are a new NaviPlan user start with the ntroduction user guide 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 Calculators m Using calculators to model specific aspects of your clients finances m Quickly assessing your clients current financial situation Forecaster Assessment m m Entering account and annuity information Asset Allocation Assessment 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 En
16. You require 0 to meet your calculated ongoing need Available Assets to Offset Needs C Available Asset Override fm Copy Available Assets from Susan s Assessment Realizable Assets 0 Existing Life Insurance Policies 0 Total Available Assets 0 Set Goals section Survivor Income category Survivor Income page Level 1 Plan Page 119 of 209 NaviPlan User Manual Entering Client Data 2 Use the 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 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
17. Suggested Asset Mix Similar Risk to Current Similar Return to Current dk Conservative A Moderate Conservative V Moderate h Moderate Aggressive Bi Aggressive 20 24 28 32 Suggested Asset Mix Class Percentage 12 81 Class Class Name Class Name Large Cap Value Equity Emerging Markets Equity 11 Long Term Bonds 21 57 High Yield Bonds International Bonds 8 52 Cash INDIVIDUAL CONSTRAINTS OK Percentage 33 33 12 7796 00 CANCEL Optimize dialog box m The Optimize dialog box displays the Efficient Frontier graph also known as the Mean Variance Optimization graph Mean variance optimization is the process of identifying portfolios with the maximum expected return for a given level of risk m The vertical axis plots overall return rates and the horizontal axis plots standard deviation The solid line in the graph represents the efficient frontier which is the set of portfolios that provides the highest expected returns for their respective risk levels m The inputs for mean variance optimization are return rates standard deviation and the correlation coefficients of returns for each pair of asset classes The graph also accounts for any constraints applied in the Individual Constraints dialog box 3 Tooverride the standard deviation follow these steps a Under Portfolio Statistics select the Override Standard Deviation option to manually enter a new standard de
18. To enter lifestyle assets follow these steps 1 Go to the Enter Financial Data section Net Worth category Assets Liabilities page Assets Liabilities Accounts Annuities Equity Compensation Asset Class Weightings Enter details about lifestyle assets liabilities income producing real estate assets and business entities Lifestyle Assets EFOIGAIZCiEM Liabilities ADD LIABILITY v Market Description 3 Balance Interest Payment Linkto Actions Description il m Mortgage so 7 00 0 00 mo None vir a x Residence 0 X z Morgage2 so 7 005 0 00 mo None vie B 2nd Residence so x Car Loans 0 8 00 0 00 mo None vireo BA x Personal Use Property s0 x f E l Personal Loans 0 8 0096 0 00 mo None v B X Other Personal Assets s0 2 x f OtherDebt sO 12 00 0 00 mo None vie B Real Estate ADD REAL ESTATE Market Rental Description EJ Value Income Actions Real Estate s0 SOlmo X Business Entities ADD BUSINESS ENTITY v Click the Add Business Entity button to create a new row B Assets Liabilities Report Enter Financial Data section Net Worth category Assets Liabilities page Level 2 Plan Detailed Tax method 2 To add a lifestyle asset click Add Lifestyle Asset and then select an asset type from the menu If applicable enter the market value of the listed
19. not have to specifically enter them anywhere m NaviPlan adds all the clients expenses for the year including the following o Expenses entered on the Enter Financial Data Cash Flow page o Expenses associated with goals entered in the Set Goals section o Loan payments calculated by NaviPlan based on information entered in the Enter Financial Data Net Worth category o nvestment expenses entered under Annual Account Fees on the Plan Management Assumptions General page o Savings strategies entered on the Account Details dialog box Savings Strategy tab and the Annuities Details dialog box Savings Strategy tab o Life disability and long term care insurance premiums calculated by NaviPlan based on information entered in the Enter Financial Data Insurance Coverage category Note Expenses associated with goals are funded by dedicated assets while all other expenses are paid from cash flow If non qualified assets owned by the client or co client that are linked to an education or major purchase goal provide more funds than are required by that goal the excess is used to fund the retirement goal Non qualified assets owned by dependents are excluded from funding the retirement goal NaviPlan adds the clients other scheduled cash outflows from strategies entered in the Enter Financial Data Strategies category and reinvestment of income from assets Clients current year cash flow surplus or d
20. 4 Enter the Start Date of the SEPP Select the payment Frequency 5 6 From the Distribution Method menu select the method of payment 7 If applicable select Pro Rate First Last Payments 8 To specify the life expectancy table to use for calculating payments and an interest rate click a SEPP Strategy Details o Annual Account Distribution Description Amount Start Date Frequency Distribution Method New account NJA MEFENE Annual v Required Minimum Distribut v Pro Rate First Last Beneficiary 72 t Interest Payments Life Expectancy Table Date of Birth Rate Single Life Expectancy v NAQ N A OK CANCEL SEPP Strategy Details dialog box Overriding calculated return rates for accounts NaviPlan calculates an overall return rate for an account based on the return rates and dollar value of the holdings in the account You can override the return rates for any account To override calculated return rates for an account follow these steps Page 45 of 209 NaviPlan User Manual Entering Client Data 1 Go to the Enter Financial Data Net Worth Accounts page 2 Under Qualified and Non Qualified Accounts click for the appropriate account 3 Go to the Return Rates tab Holdings Savings Strategy Redemptions Return Rates Qualified Account Setup Account Fee Setup C Override Pre Retirement Retirement Interest 0 00 Dividends 0 00 Capital Gains 0 00 0 00 Tax Free 0
21. 4 sere see e e See Bete Soh Ae oe cn ns se det sk 183 Che AtINS a NEWTEDON secre pct Pouce selene ened Race oa gees Rn dee ao pak bab BREE ODE EEE 184 Adding custom content to a report 2 2 2 o cece cece cece cece eee eee eececeeceeeeceeseeseeeees 184 Converting reports to Microsoft Word output 222 22 2 ee ee cece cece cee cecceceeceeseeeeees 185 Creating a new report template 2 22 2 2 22 sss s e cece ec ceceeceeceseeseesees 185 Using a template to create areport 2 0 cece cece ene aoip addis ir aeii narid 185 Traditional client and progress reports 2 2 22 2 2 cece cece eee c cece ccc ee ceceeceeceeceeeeseeseeseeees 186 Page vi of 7 NaviPlan User Manual Entering Client Data Preparing custom text TOF reports 2s lt ccqnnscnneseinssnoenescdiideducetins i hoste dicere ee tonto a 189 Managing quick picks for user defined text l 22 2 oo cece cece cece cece eee eeceeseeeeseeseeeees 190 Adding user defined text to Next Gen reports _ 2 22 22 o cece cece cece ccc cee ceceeceeseeseeeees 190 Using the Client Report Monitor 002 2 co cece cece ce cece cence nec e ec ec ee ceeseeeeseeseeseeserees 191 Adding notes for your own personal use _ 2 22 2 e cece cece eee e cece cece ceeceesecseceeseeseeseeeees 192 Indexi coo CRA Ree Re tfe ooa tuat pa CC SPOR EOC ESAT ERE RECUR uomo ECCE EA t eet 193 Page vii of 7 NaviPlan User Manual Entering Client Data Chapter 1 Using this manual
22. Choose Trust E ADD TRUST STRATEGY To create a new strategy select a trust from the Choose Trust list and then click Add Trust Strategy ona Liquidation Strategies dialog box Redemptions tab Level 2 Plan Redemptions section 6 Select an account and then click Add Redemption Strategy 7 Toredeem the entire account select the Redeem All option 8 To exclude penalties for early withdrawals select the Waive Early Withdrawal Penalties option 9 Enter the remaining details of the redemption strategy To model a bucketing strategy go to the Bucketing tab and then complete the following steps Liquidation Strategies Q Liquidation Order Redemptions Bucketing Distribution Bucket Target Balance Asset Class Return future Infl Add l Weightings Rates Estimate so 0 00 v o00 g Liquidation Strategies dialog box Bucketing tab Level 2 Plan Page 107 of 209 iz we mm og NaviPlan User Manual Entering Client Data Click Estimate to open the Distribution Bucket Estimator calculator Enter the number of years over which the bucket investment account will cover needs and click Ok The amount determined by the calculator will appear in the Target Balance field Enter the remaining details of the bucketing strategy To set up a substantially equal periodic payment SEPP go to the Redemptions tab and then complete the following steps 1 Liquidation Strategies
23. Editing asset class weightings Level 2 0 2 2 o coe e cee cee cee cece ccc cc eecceeceeeeceeteceeceeeeees 64 Generating the Asset Liabilities report 2 0 02 oo cece cece eee eee cece cece eeeccceeecceeeeeseeeseseeees 65 Fundine 24 9 yee Nee ng le an OP AS NO Pe Eee AO ne e T dt ERA 66 Overriding previously accrued investment income 022 222 cece cee cee cee cee cece cee cee eeeeeeee 67 Chapter 4 Entering cash flow information _ 00 00 022 c cece cece cee cee eee cece e rsen ele 68 Cashflow caletlations 220 ss 22 002 a IA WR RR CENE Laois Meee ee Et an el 69 Clients cash inflows for the year 2222 oaks ck Gace nese og se RD ed once oA ei esta eee ean ld 69 Clients scheduled cash outflows for the year 2 2 2 22 eee c eee cee ee cece cece cece eeeceeeseeeseesseeees 69 Clients current year cash flow surplus or deficit 2 22 02 2 22 cece cece cece ccc e cee ceceeceeceeeees 70 Manages cash flow surpluses and deficits 0 00000 o cece ce cece cee cee cee cee cece eee essen 71 Entering regular or lump sum incomes 2222 22 22 cee cece eee e cee ceceeceececeeceeseeseeceeeeseeeeees 72 Entering Social Security benefits Level 1 L 2 02 22 l oll ce cece cece cece cece ceeceeeseeeseeceeceeeeees 74 Entering Social Security benefits Level 2 22 22 ooo c ccc ccc nce cece cece cee cceecececeeceeesceeseeees 75 Calculating benefits using the Benefit Formula method
24. Entering stock options Level 2 In NaviPlan the term stock options refers to compensatory stock options and not the trading of stock options A stock option gives an individual the right to purchase a set number of shares at a fixed price at some point in the future Clients can own stock options individually or jointly but dependents cannot You can enter all your clients compensatory stock options on the Financial Picture section Net Worth category Equity Compensation page To enter a new compensatory stock option follow these steps 1 Go to the Enter Financial Data section Net Worth category Equity Compensation page 2 Toenter a new stock option click Add Stock Option and then select Non Qualified Stock Option or Incentive Stock Option Return Rates Vesting and Expiry Exercise Schedule Asset Class Annual Dividend Growth Standard Weightings Override per Unit Rate Deviation Large Cap Value Equity wj o 0 0000 7 09 17 35 Stock Option Details dialog box Return Rates tab 3 Inthe Description field enter a unique name for the stock and then complete all the required fields 4 From the Asset Class Weightings menu on the Return Rates tab select an asset class if the account is fully weighted in one asset class OR If the account is weighted in multiple asset classes select Manual Classification from the Asset Class Weightings menu The Asset Class Weightings Details dialog box opens Assign p
25. NaviPlan automatically populates a default entry under Surplus Expenses Surplus Expenses ADD SURPLUS EXPENSE of Start Description Surplus Year End Year Actions Surplus Expense 0 0096 2013 o Death 2 m 5 XR Enter Financial Data section Cash Flow category Cash Flow page Level 2 Plan 2 To add a surplus expense click Add Surplus Expense 3 For each expense enter a Description the of Surplus designated to the expense and the Start and End Years m By default surplus expense strategies end in the year before death Death 1 since there may be surpluses in that year due to estate settlement m Surplus expenses entered here also appear on the Enter Financial Data Strategies Surplus page See Entering surplus strategies on page 92 for more information Page 84 of 209 NaviPlan User Manual Entering Client Data Generating the Cash Flow report The Cash Flow report provides a summary of all the incomes and expenses entered in the plan To generate the Cash Flow report follow these steps 1 2 Go to the Enter Financial Data Cash Flow page Click the Cash Flow Report button You can use the options at the top right of the report as follows To generate a printer friendly report click the PDF or the Word button NaviPlan generates and opens the report using the selected format To update the open report after changes are made to the plan data click Refresh To see two copi
26. Not Available at Death w Estate Needs Not Available at Death w Estate Needs Not Available at Death w Set Goals section Survivor Income category Client Co client Objectives page Asset Availability tab Level 2 Plan Goal and Expense Analysis method selected 2 Under Investment Accounts Survivor Needs select one of the following options for each account of the client retirement Not Available if the account is not available for survivor needs Available Immediately if the account is available for survivor needs immediately following the death Available Starting At Retirement if the account is available for survivor needs upon the survivor s Note If you select Available Immediately or Available Starting At Retirement the clients accounts are redeemed as required to cover the survivor s income needs Page 131 of 209 NaviPlan User Manual Entering Client Data 3 If an account should not be used to settle the deceased s estate under Investment Accounts Estate Needs select the Not Available at lt client s co client s gt Death option 4 Under Lifestyle Assets Real Estate Assets and Business Entity Assets select one of the following options for each lifestyle asset m Liquidate Immediately if the asset will be made available to the survivor when the client or co client dies m Liquidate At Retirement if the asset will be sold when the surviving client reaches retireme
27. 1 Go to the Set Goals section Estate Planning category Assumptions page Assumptions Funded Trusts Gifting Growth amp History Estate Expenses Estate Strategy Enter estate planning assumptions for the clients including life expectancies estate distribution state death taxes additional fees and will details Life Expectancy Scenario Estate Distribution Selection Mirror Wills Either Dies First David Susan Details entered apply regardless of order of death illustrated Age Year Age Year Reports O Specify by Order of Death Life Expectancy 53 2023 56 2028 z Separate data entry allowed to illustrate client or co client dying first Alternate Life Expectancy 58 2028 51 2023 m Year Assumed first death Reports Will Details Simultaneous Death 2014 David iv LJ Yes No Last update David has a will o e Susan has a will o State Death Taxes State Death Taxes are calculated as a percentage of the Federal Taxable Estate David Susan O Override O Override Sor Infl Add l Sor Infl Add l 0 00 1 0 0096 0 0096 3 0 0096 M Percentages are applied to the Federal Taxable Estate Additional Fees David Susan Sor Infl Add l Sor Infl Add Probate Fee 1 00 0006 1 00 j 0 009 Administration Fee 1 0096 0 00 1 00 0 00 If you wish to gather estate planning details click the optional Estate Questionnaire button ESTA
28. 2 oo eee ee cece eee eee cece cece cece ceeteeceeecseesseeseeees 8 Entering income tax rate assumptions Average Tax method 22 002 22 eee eee ee eee cecceeeeeees 9 Overriding tax filing statuses Detailed Tax method 2 22 o cece eee eee eee cece ceeeeeeeeeees 10 Changing the Dependent of status Detailed Tax method 022 2 2222 c cece cece eee cece cceee ee 10 Entering tax credits and deductions Level 2 Detailed Tax method 2 22 2 22222 e ee eee eee ee eee 11 Selecting a portfolio balancing method uuuuusuuuususssslsslssss ss I eececceeeeceeseees 12 Entering capital loss carryovers Level 2 22 2 2 cece cece cee cece cece cece s ceeeceeetetecersseceeeeees 13 Entering AMT carryforward credits Level 2 2 2 02 2 ooo e cece ee cece cece cece cece cee eeeeceeeeeeeeeeee 14 Entering unused charitable donations Level 2 2 22 2 22 eo ee eee cee cece cece cece ceeceeeceeeeeecees 15 Setting asset allocation assumptions 2 02022 cee eee eee eee eee rrr llli 16 Overview of predefined Asset Allocation 2 22 2 c cece nce c eee eee cece cece raroa aaao onnaa 16 Switching between Expanded Ibbotson and Standard Ibbotson models 2222 16 Viewing predefined asset allocation assumptions 2 0 00 002 o eee cece eee eee eee cence ee eee 17 Determining the clients investor profile 2 2 2222 oo cece cece cece ence ee
29. Annual Expenses Percentage of lifestyle expenses to cover 8596 Education Goals Number Annual to Description Name Start Age of Years Amount Cover University Education Jeremy 18 4 1 100 Surplus Strategy Percent surplus spent 0 Percent surplus saved 100 Analysis Surplus v Assume surplus is spent Additional Expenses ADD ADDITIONAL EXPENSE v Click the Add Additional Expense button to create a new row Set Goals section Survivor Income category Client Co client Objectives page Ongoing Expenses tab Level 2 Plan Goal and Expense Analysis method selected 4 If education expenses exist in the plan under Education Expenses enter the percentage of education expenses to be covered in the event of death Page 125 of 209 NaviPlan User Manual Entering Client Data 5 Under Surplus Strategy enter the applicable amounts in the Percent surplus spent and Percent surplus saved fields The surplus strategy applies throughout the life insurance analysis m The Percent surplus spent and Percent surplus saved fields control what NaviPlan does with any cash flow surplus during survivorship For example when one client dies you expect the survivor to incur a cash flow surplus of 10 000 You also expect the survivor to spend 2596 of this surplus on miscellaneous costs and invest the remaining amount For this example you would enter 25 in the Percent surplus spent field NaviPlan automatically saves the rem
30. Asset Until C Retirement End of Plan Goal Funding Unassigned Accounts 50 000 Unassigned Asset Class Description Account Type Owner Market Value Basis 96 Unassigned Amount Weightings ROR Savings New account Non Qualified Joint 50 000 50 000 10096 50 000 Unclassified 0 0096 1 Set Goals section Emergency Fund category Emergency Fund page Level 2 Plan 2 Tocalculate the funds required to cover expenses that occur over a specific period select Calculate target amount and then in the Multiple field enter the number of months to cover The required amount appears in the Target Amount field NaviPlan assumes that m Regular liability payments insurance premiums and fixed expenses are covered m Income taxes Social Security and Medicare taxes are not covered m Extra lump sum payments discretionary expenses savings strategies estate planning gifts gift taxes GSTT and 10 early redemption from qualified plan taxes are not covered Page 115 of 209 NaviPlan User Manual Entering Client Data 3 Tocreate an emergency fund goal set at a fixed amount select Specify target amount and then enter the amount 4 If you want to index the emergency fund to inflation select the Infl option and then enter the percentage above or below inflation The inflation rate applies to both emergency fund calculation methods 5 Under Reserve asset for Emergency Fund until indicate how long the emergency fund assets
31. CA o 6 276 San Diego Mesa College San Diego CA 7 a Oo San Diego Miramar College San Diego CA inse Tunton Enom San Diego State University San Diego CA o 17 684 San Diego State University Imperial Valley Campus Calexico CA Out of State Tuition San Francisco Art Institute San Francisco CA San Francisco Conservatory of Music San Francisco CA o SALA San Francisco State University San Francisco CA Out of State Tuition Room San Joaquin Delta College Stockton CA o 28 844 San Joaquin Valley College Visalia CA San Joaquin Valley College Bakersfield CA San Joaquin Valley College Hesperia CA San Joaquin Valley College Temecula CA San Joaquin Valley College Hanford CA San Joaquin Valley College Fresno CA San Inanuin Vallev College Salida CAY zl M Amounts include required fees Data Source Peterson s Databases copyright 2012 Peterson s a division of Thomson Learning All rights reserved Search Education Costs dialog box showing search results 5 Tuition or Tuition Room Click OK The value is populated in the Annual Cost field To change the clients investor profile for a specific education goal do the following select another investment profile u Overriding the proposed investor profile for a goal Level 2 Plans on page 109 8 To add additional expenses to the education goal click s Under Search Results select the schoo
32. Click a tab to view detailed information Page 177 of 209 NaviPlan User Manual Entering Client Data 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 e um PDF ci WORD Settings Current MA Overview Problems Questions Opportunities Reports Select a report Introduction jv 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 current year CLOSE as
33. Complete one of the following procedures m Goaland Expense Analysis method if one client dies on the next page m Income Coverage Analysis method if one client dies on page 128 m Survivor Income Objectives Quick Assessment on page 1 m Using the Human Life Value calculation on page 1 Page 124 of 209 NaviPlan User Manual Entering Client Data Goal and Expense Analysis method if one client dies The Goal and Expense Analysis method must be selected on the Set Goals Survivor Income Client Co client Objectives page See Entering insurance goals for Level 2 Plans on page 123 To use the Goal and Expense Analysis method follow these steps 1 Goto the Ongoing Expenses tab 2 Under Annual Expenses enter the percentage of lifestyle expenses to be covered by life insurance proceeds The percentage entered becomes the default for the expenses listed under Expense Note Pre retirement or retirement expenses must be entered in the plan for the Expense fields to appear on this tab 3 Toselect a different percentage for an individual expense clear the corresponding Use Defaults option and then enter the percentage in the to Cover field Assumptions OngoingExpenses Additional Annual Income Lump Sum Needs Asset Availability Enter the overall percentage for pre retirement and retirement expenses for the survivor analysis Enter Additional Expensesto account for incremental expenses that may be incurred after the partner s death
34. Defined Benefit Pensions Amount Description Member Type S or Actions Defined Benefit Pei David v Estimate Benefit E 0 yr 5x pee ai Som x Enter Financial Data section Cash Flow category Cash Flow page Level 2 Plan showing Defined Benefit Pensions 2 Under Defined Benefit Pensions enter each client s annual pension amount in the Amount or 96 fields 3 To add a new pension click the Add Benefit Pension button and then select Add Estimate Benefit Defined Benefit Pension Details e Estimate or calculate the client s defined benefit pension Ifthe client is already retired and the pension amount is known enter the defined benefit income under Jncomes on the Cash Flowpage Details Future Benefits Pension Details Estimate Benefit Payable s Description Member Start Age Start Date to Survivor Linked Incomes Emm Doia v i6s Ret client x 0 of Final Salary 0 Est Benefit Amount in today s 50 Infi Add l Total 0 00 3 00 Benefit Payout Options Benefits Vested Earliest Retirement Age Method of Payout Survivor Disabity Analyst Survivor Analysis Lfelnome x a Account Transfer Payout to Details Cash Flow E ADD BENEFIT fo Previous Entry mu CANCEL Defined Benefit Pension Details dialog box Details tab Level 2 Plan Estimate Benefit method Page 78 of 209 NaviPlan User Manual Entering Client Data
35. Disability if the account is available for disability needs immediately when the client becomes disabled m Available Starting At Retirement if the account is not available for disability needs until retirement m Not Available if the account is not available for disability needs 3 Under Lifestyle Assets Real Estate Assets and Business Entity Assets select one of the following options for each asset m Liquidate Immediately to sell the asset immediately if disability occurs m Liquidate At Retirement to sell the asset at retirement if disability occurs m Not Available to hold the asset during disability The Education Specific Accounts section is for information purposes only and cannot be modified The list includes 529 plans Coverdell accounts and UTMAs UGMAs Page 146 of 209 NaviPlan User Manual Entering Client Data Long term care insurance goals Level 2 Long term care refers to services provided to people who can no longer take care of themselves Long term care insurance policies are available to cover anticipated expenses should long term care be required To enter data and assess needs for the client or co client follow these steps 1 Go to the Set Goals Long term Care Client Co client Objectives page 2 Under Objectives select If lt client co client gt is in Long term Care Client Objectives Co client Objectives Select the checkbox to activate long term care analysis for David The plan will
36. Enter Financial Data section Strategies category Redemptions page Level 2 Plan Detailed Tax method showing a SEPP strategy 3 Enter the Start Date field Frequency and Distribution Method 4 If applicable select Pro Rate First Last Payments 5 To specify the life expectancy table to use for calculating payments as well as an interest rate click s SEPP Strategy Details Lo Annual Account Distribution Description Amount Start Date Frequency Distribution Method i New account N A Jul 22 2013 Annual v Required Minimum Distribut v Pro Rate First Last Beneficiary 72 t Interest Payments Life Expectancy Table Date of Birth Rate Single Life Expectangy v NA N A 4 Previous Entry J Next Enty gt CANCEL SEPP Strategy Details dialog box Page 90 of 209 NaviPlan User Manual Entering Client Data Setting the deficit coverage order Detailed Tax method You can select the order in which accounts and account types are redeemed to cover pre retirement deficits To specify the pre retirement deficit coverage order follow these steps 1 Go to the Enter Financial Data Strategies Deficit Coverage page 2 Under Pre Retirement Deficit Coverage Order select Redeem from accounts to cover deficits in the pre retirement period 3 To specify the order in which account types will be redeemed select an option from the menu OR To specify the order in which specific accounts will be re
37. Gifts Credit Used Already Paid Exemption Used Already Paid Spousal Exclusion David 0 0 0 0 0 0 Susan 0 0 0 0 0 0 Set Goals section Estate Planning category Gifting Growth amp History page 2 Under Prior Gifts enter the total original value of any gifts that will not grow going forward that each client has given to each beneficiary 3 Under Prior Gifts with Growth enter the total current value of any gifts that will grow going forward at the after tax rate that each client has given to each beneficiary 4 Under Growth Rate enter the rate of growth the gift is expected to earn Under Income Tax Rate enter the rate of taxation applied to the growth rate 5 Under Historical Data in the Taxable Lifetime Gifts field enter the amount of the taxable gifts made up to December 31 of the previous year Only the gift amount should be entered here and not the gift or generation skipping transfer taxes paid 6 Under Applicable Credit Used enter a credit amount used against gift taxes 7 Under Gift Taxes Already Paid enter the amount of gift taxes already paid up to December 31 of the previous year 8 If applicable under Lifetime GSTT Exemption Used enter the total amount of the lifetime generation skipping transfer tax exemption that has been used up to December 31 of the previous year 9 If applicable under GSTT Already Paid enter the amount of GSTT that has already been paid on prior gifts Gene
38. IRA spousal IRA Roth IRA Roth 401 k and Roth 403 b accounts 9 For Other Salary Deferral Generic Employer Paid Plan or Generic Self Employed Plan select the Treat As Deferred Compensation Plan i e no RMDs option These account types do not require minimum distributions Holdings Savings Strategy Redemptions Return Rates Qualified Account Setup Account Fee Setup Primary Beneficiary Susan v Contingent Beneficiary Estate P Multi Generational Waive early withdrawal penalties LJ Delay RMDs RMD Payment Frequency Monthly v Make Annual Payments In January End of Year Market Value as of 2012 GJ 0 Page 47 of 209 NaviPlan User Manual Entering Client Data Account Details dialog box Qualified Account Setup tab Level 2 Plan Detailed Tax method Other Salary Deferral account type selected 10 To apply state taxes to the taxable portion of distributions from this account select the State taxable option Note The State taxable option does not appear for 457 and Roth accounts 11 Select the RMD Payment Frequency If Annual is selected select the month in which the annual payment will be made 12 To change the market value used to calculate the minimum payout select the End of Year Market Value option and then enter a new value in the field to the right Setting the account fee for an account NaviPlan allows you to set a default account fee for the client from the Settings menu Plan Settings G
39. Income Coverage Analysis assesses the life insurance needed to replace income lost from the death of the client or co client This method is independent of the rest of the plan 4 Onthe Assumptions tab under ROR on Cash Flow Surpluses amp Liquidations enter return rates 5 Under Tax Rates view the tax rates to be used for any dependent owned assets Edit if necessary 6 Complete one of the following procedures m Goaland Expense Analysis method if both clients die on the next page m income Coverage Analysis method if both clients die on page 137 Page 135 of 209 NaviPlan User Manual Entering Client Data Goal and Expense Analysis method if both clients die The Goal and Expense Analysis method must be selected on the Set Goals Survivor Income Both Objectives page Survivor income goals if both clients die Level 2 on the previous page for more information To use the Goal and Expense Analysis method follow these steps 1 Go to the Ongoing Expenses tab Assumptions OngoingExpenses Lump Sum Needs Asset Availability Support for Dependent Click the Add Support for Dependent button to create a new row Education Goals Number Annual 96 to Description Name Start Age of Years Amount Cover College Education Julia 18 4 0 100 Set Goals section Survivor Income category Both Objectives page Ongoing Expenses tab Level 2 Plan Goal and Expense Analysis method selected 2 Under Support for Depende
40. International Equity Emerging Markets Equity Long Term Bonds Intermediate Term Bonds Short Term Bonds High Yield Bonds International Bonds Cash Portfolios Description Interest 0 00096 0 00096 0 00096 0 000 0 000 0 000 3 820 Asset Allocation Settings dialog box Asset Classes tab Dividends 1 96096 3 04096 2 04096 1 71096 3 89096 3 93096 0 0 000 0 000 0 000 0 000 0 000 Capital Gains 4 630 5 530 6 430 5 800 0 000 0 000 0 000 0 000 0 000 0 000 Deferred Growth 1 890 1 560 3 710 1 140 2 670 2 160 0 000 0 000 0 000 0 000 0 000 0 000 Tax Free 0 000 0 000 0 000 0 000 0 000 0 000 0 000 0 000 0 000 0 000 0 000 Total 8 480 10 130 11 090 11 220 8 440 9 73096 14 540 3 820 2 630 1 720 7 580 3 270 1 260 These are the asset classes and their return rates and standard deviation defined in the application They are not Standard Deviation 20 870 31 680 12 810 2 690 11 450 11 280 1 820 Page 17 of 209 NaviPlan User Manual Entering Client Data Determining the clients investor profile When using NaviPlan with predefined asset allocation a questionnaire is used to determine your clients investor profile NaviPlan suggests an asset mix appropriate for clients with that profile This sug
41. Jun 26 2014 Dec 31 2013 Refinanced 20 222 T When converting a plan from Average income tax to Detailed income tax if you do not have an asset linked to the liability the Interest is Tax Deductible check box will be inaccessible To create a link use the Link to Assetlist Calculation Options Remaining Amortization Variable Payment Balance Payment Years Months End Date Yes v 20 222 Varies 25 4 Oct 25 2039 Variable Interest Rate Schedule ADD INTEREST RATE PERIOD This section allows you to model changing interest rates on your mortgage The schedule begins on the date entered in the Balance As of Date field for this mortgage Payment Amount The interest rate will be 3 000 for the next 24 months 94 84 x The interest rate will be 8 000 for the remaining months 150 83 Liability Details dialog box for a Variable Mortgage Level 2 Plan Page 35 of 209 NaviPlan User Manual Entering Client Data Entering real estate assets Level 2 You can enter real estate assets that are purchased for investment purposes NaviPlan includes fields for rental income and expenses Real estate assets that are purchased for the clients personal use and enjoyment should be entered as lifestyle assets To enter real estate assets follow these steps 1 Go to the Enter Financial Data Net Worth Assets Liabilities page 2 To add anew real estate asset click Add Real Estate 3 If applicable enter the mark
42. Misc Tax Credits Description 3 Owner Type Amount Start Date m End Date mu Actions Refundable Tax Credit David Refundable Tax Credit v 0 Jan 12013 m Death Ownei m X Enter Financial Data section Tax Details category Tax Details page Level 2 Plan 2 Toenter a deduction click Add Deduction and then select either Above the Line Deduction or Below the Line Deduction 3 Toenter additional details click s To enter a tax credit follow these steps 1 Go to the Enter Financial Data section Tax Details category Tax Details page 2 Click Add Credit and then select either Refundable Credit or Non Refundable Credit 3 Enter the details for the credit To enter additional details click P Page 11 of 209 NaviPlan User Manual Entering Client Data Selecting a portfolio balancing method In NaviPlan you can specify how your clients assets are to be rebalanced using one of two methods Current Rebalanced or Current Not Rebalanced m When Current Rebalanced is selected NaviPlan assumes accounts are regularly rebalanced to maintain allocation and applies the weighted average return rate to accounts that are linked to goals m When Current Not Rebalanced is selected NaviPlan assumes the portfolio is never rebalanced and the weighted average return fluctuates according to market conditions as the allocation adjusts By default NaviPlan uses the setting defined on the User Preferenc
43. O Less than 1 year 1 to 2 years 3to4 years 5to07 years O 8to 10 years 11 years or more 2 Once you begin withdrawing money from your investment account how long do you expect the withdrawals to last Iplan to take a lump sum distribution O 1to4 years 5t07 years 8to 10 years 11 years or more 3 Inflation the rise in prices over time can erode your investment return Long term investors should be aware that if portfolio returns are less than the inflation rate their ability to purchase goods and services in the future might actually decline However portfolios with long term returns that significantly exceed inflation are associated with a higher degree of risk Which of the following portfolios is most consistent with your investment philosophy Portfolio 1 will most likely exceed long term inflation by a significant margin and has a high degree of risk O Portfolio 2 will most likely exceed long term inflation by a moderate margin and has a high to moderate degree of risk C Portfolio 3 will most likely exceed long term inflation by a small margin and has a moderate degree of risk on Ng r key marh longy Jn low FN Np ON i a LU PI GUEST Plan Management section Asset Allocation category Questionnaire page 3 To view the asset allocation risk scores for the investor profile click Scoring NaviPlan shows the time horizon and investor profile that it has calculated 4 Go to the Profile pag
44. Term Bonds 0 00 100 00 Intermediate Term Bonds 0 0096 100 00 K v Short Term Bonds 0 00 100 00 v High Yield Bonds 0 00 100 0096 v International Bonds 0 00 100 00 v Cash 0 00 100 0096 REVERT TO DEFAULTS Please indicate a reason for the exclusion Individual Constraints dialog box b Enter the minimum and maximum holding constraints for each asset class c To exclude an asset class clear the associated option d To return all overridden asset class weightings to the initial recommended asset class weightings click Revert to Defaults e If necessary enter any additional comments or details f Click OK to close the Individual Constraints dialog box NaviPlan applies the constraints to the plan and the Efficient Frontier graph updates 5 Click OK to close the Optimize dialog box The Suggested Asset Mix graph on the Profile page updates to display the optimization Page 22 of 209 NaviPlan User Manual Entering Client Data Upgrading asset allocation When you open a plan for editing if the Modules category includes the Asset Allocation Upgrade page you can upgrade the asset allocation settings or view details about the changes made to the settings since this plan was last updated NaviPlan presents the option to upgrade each time you open the plan until you upgrade the asset allocation To continue using existing settings go to the Modules pa
45. box Page 38 of 209 NaviPlan User Manual Entering Client Data Entering business activity Business activity such as income expenses and distributions can be entered for all business entities except for C corporations To enter the activity for a business entity follow these steps 1 In the Business Entity Details dialog box go to the Activity tab Activity Sale Information Return Rates Activity ADD INCOME EXPENSE AMT Income Expenses NetIncome Distributions Adjustments Frequency __ Start Date End Date Infl Add l Actions 0 0 0 0 0 Annual v lan12013 Death 2na m 000 2 Enter the dollar value of the Income generated by the business entity asset This amount will not affect the clients personal cash flow 3 Enter the dollar value of the Expenses incurred by the business entity This amount will not affect the clients personal cash flow 4 Enter the Distributions amount that will flow into this year s cash flow to fund the current year tax liability 5 If applicable enter an amount in the AMT Adjustments field This amount is a tax item only It can be positive or negative and does not affect the clients personal cash flow The amount entered in AMT Adjustments will be reported as passive activities in the AMT section of the ncome Tax Details report 6 From the Frequency menu select the frequency of the income 7 If the activity is to be indexed to inflation sele
46. by 5 enter 2 in the Add l field To view or edit how surplus funds are directed click Surplus Cash Usage In the Surplus Cash Usage dialog box select a method and then use the Move Up and Move Down buttons to reorder the list Page 87 of 209 NaviPlan User Manual Entering Client Data Modifying a loan NaviPlan calculates the regular loan payments required for liabilities You can modify the principal of an existing loan either by making additional principal payments over and above the calculated regular loan payments or if the loan is either an interest only or last period payment type by adding to the principal Debt modification strategies can be entered in the following locations m Enter Financial Data Strategies Debt Modification page m Liability Details dialog box Debt Modification tab for an individual liability To modify the principal of a loan follow these steps 1 Go to the Enter Financial Data Strategies Debt Modification page OR Go to the Enter Financial Data Net Worth Assets Liabilities page click fora liability and then go to the Debt Modification tab Debt Modification Mortgage Y ADD DEBT MODIFICATION Direct Outstanding Increase Funds To Amount Amount Frequency Start Date End Date Principal Infl Add l Actions Mortgage 0 0 Monthly w Jan12013 aa Ret 1st m O oo0 sx Enter Financial Data section Strategies category Debt Modification pag
47. client or co client may already be listed under Income Beneficiaries If the beneficiary is not listed and you want to add this beneficiary click Add Beneficiary select the beneficiary and then enter the income percentage to be distributed to the beneficiary Any income that is not distributed to income beneficiaries is reinvested into the trust Note To add all available beneficiaries under Remainder Beneficiaries or Income Beneficiaries click Add Beneficiary and then select Add All 3 To delete a beneficiary from the trust click the X button next to the beneficiary you are removing 4 Toassign equal distribution of income or remainder trust proceeds click Pro rata Each beneficiary shown receives an equal share 5 Toassign a different distribution percentage for each beneficiary enter the percentage in the applicable Percent field Page 168 of 209 NaviPlan User Manual Entering Client Data Generate trust re ports The Single Trust report defines the trust type provides details of the values you have entered and lists a cash flow projection of the trust To generate a Single Trust report follow these steps 1 Go to the Set Goals Estate Planning Funded Trusts page All existing funded trusts in the plan appear under Funded Trusts Click Report for the applicable trust Assign Settings o Life Expectancy C Simultaneous Death in 2013 Other Life Expectancies Event Year of Death David Estate P
48. created row This comprises the second period and immediately follows the previous period 4 Repeat step 3 until you are satisfied 5 Enter all 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 120 of 209 NaviPlan User Manual Entering Client Data Disability insurance Level 1 1 Go to the Set Goals Disability Income page Disability Income Select the appropriate check boxes below to activate the insurance analysis Enter details for the applicable insurance objectives Disability Insurance Analysis to Include v If David becomes Disabled v If Susan becomes Disabled Objectives Percentage of lifestyle and medical expenses to cover 10096 David Susan Cover Major Purchase Goals v v Pay Off Outs
49. different percentage in the Add l field Note The nfl option is not accessible when a percentage of salary is entered Page 54 of 209 NaviPlan User Manual Entering Client Data Setting up redemption strategies for annuities Level 2 Detailed Tax You can enter a redemption strategy for any deferred annuity type to redeem an annuity over a period of time or you can redeem an annuity in full as alump sum To set up aredemption strategy follow these steps 1 Go to the Enter Financial Data Net Worth Annuities page 2 Under Deferred Annuities click for the appropriate annuity 3 Go to the Redemptions tab Subaccounts Payout Options Savings Strategy Redemptions Return Rates Qualified Account Setup Redemptions ADD REDEMPTION STRATEGY Waive Early Redeem Amount Withdrawal Redeem From All Sor Frequency Penalties Start Date u End Date Infl Add l Actions New annuity Retirement C 000 Monthy v 22201 Rer client m 0 00 x Substantially Equal Periodic Payments SEPP Click the Add SEPP Strategy button to create a new row Annuity Details dialog box Redemptions tab Redemptions details Level 2 Plan Detailed Tax method 4 To redeem a portion of the annuity or all of the annuity over time in the Amount or field enter either the percentage of the annuity to redeem or an amount to redeem periodically based on the selection from the Frequency menu OR To redeem the entire an
50. economic factors such as the inflation rate follow these steps 1 Go to the Plan Management Assumptions General page General Milestones Current Portfolio Setting Income Tax Capital Loss Carryovers Economic Factors Base Inflation Rate 3 00 Bir i2 wa a avis ae Plan Management section Assumptions category General page Level 2 Plan Detailed Tax method 2 Under Economic Factors enter the base inflation rate 3 Toview a graph of historical inflation rates from 1914 to 201 click Inflation Rate Graph 4 To focus on more recent data under Select A Graph To View click the 1914 2013 and 2003 2013 links To return to the General page click Close Page 6 of 209 NaviPlan User Manual Entering Client Data Setting annual account fees To change the annual account fee and frequency follow these steps 1 Go to the Plan Management Assumptions General page Annual Account Fees Annual Account Fee 0 0096 Frequency Quarterly v Tax Deductible v RESET TO DEFAULTS Plan Management section Assumptions category General page 2 Under Annual Account Fees in the Annual Account Fee field enter the annual account fee as a percentage of the account s market value 3 From the Frequency menu select how often the account fee will be calculated 4 To claim annual account fees as a tax deductible expense select the Tax Deductible option Note To clear any changes and
51. eligible for a credit for a portion of that AMT against their regular tax liability for the current year and for subsequent years Use the AMT Carryforward page to calculate your clients AMT carryforward credits Note The 8801 form 6251 form and Schedule D Schedule D Worksheet 1040 of the clients tax returns from last year are needed to use this page To enter AMT carryforward credits follow these steps 1 Go to the Plan Management Assumptions AMT Carryforward page AMT Carryforward Credit for David Form 8801 from last year s taxes 2012 AMT Minimum Tax Credit Carryforward last line of Part II 0 Form 6251 from last year s taxes 2012 ME Sum of lines 1 and 10 0 Sum of lines 2 through 5 7 8 9 12 13 0 Line 34 0 Alternative Minimum Tax Payable line 35 0 Schedule D 1040 from last year s taxes 2012 mE Line 14 0 Line 15 0 Line 16 0 Line 19 0 Plan Management section Assumptions category AMT Carryforward page Level 2 Plan Detailed Tax method 2 In each field enter the dollar value from the specified line on your clients tax returns from last year Page 14 of 209 NaviPlan User Manual Entering Client Data Entering unused charitable donations Level 2 Note This procedure only applies if you are using the Detailed Tax method To enter unused charitable donations follow these steps 1 Go to the Plan Management Assumptions Unused Charitable Donations page U
52. future Social Security benefits based on the Social Security formula or enter their benefit amounts directly from their Social Security Statements Calculating benefits using the Benefit Formula method To calculate Social Security benefits using the Benefit Formula method follow these steps 1 Go to the Enter Financial Data Cash Flow page 2 Under Social Security click the Social Security Details link 3 Go to the Client or Co Client tab and then select Benefit Formula Social Security Details e Use this dialog box to define Social Security assumptions for the plan Note Retirement survivor and disability benefits can be defined independently in each ofthe applicable sections below Client Co Client Benefit Method Select a Social Security method Use this method to automatically calculate Social Security benefits based on the annual income entered on the Cash Flowpage Estimate Benefit Use this method to enter benefit amounts directly from a Social Security Statement Currently Receiving Benefits Use this method to enter benefit amounts that the client is currently receiving Details Eligible Dependents Earnings History Monthly Retirement Benefits Eligible for Start Date a Est Benefit Benefits of monthly benefit today s S Event Age Date Infl Add Total if applicable v David e ox 0 Oo 0 Retiremei v O 65 May2035 0 00 3 00 z Monthly Survivor Benefits Bene
53. 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 vy Johny 25 000 Tax Details ee Goal Funding Retirement Enter Financial Data section Net Worth category Accounts page To help you use this guide please note the following abbreviations and graphics m AA Refersto the Asset Allocation Assessment m FA Refers to the Forecaster 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 3 of 209 NaviPlan User Manual Entering Client Data NaviPlan Resources Advicent provides several resources to help you use NaviPlan The following table shows some of the resources available and where to find them Advicent ee 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 t
54. l Monthly 2 052 Jan 12014 m Death 2na m 0 00 Deductible Transfer to Survivor v Fixed Expense C Cover any pre retirement deficits created by this expense ADD EXPENSE v 4 Previous Entry Next Enty gt CANCEL Expense Details dialog box Page 82 of 209 NaviPlan User Manual Entering Client Data m If the expense is a semi regular expense such as a car purchase occurring every few years select Every X Years from the Frequency menu then enter the term as a number of years into the Every X Years field m If you are entering an expense owned by one client and you expect the expense to continue for the survivor after the client dies select the Transfer to Survivor option m f entering a fixed expense select the Fixed Expense option Fixed expenses are included in the calculation of emergency fund goals and in determining scenario goal coverage If you clear the option the expense is considered to be discretionary and is not included in the calculation Defining an emergency fund goal on page 115 for more information Note Fixed expenses are expenses that cannot be readily changed or eliminated by the clients such as utility bills and rent payments D Tax if applicable select the Cover any pre retirement deficits created by this expense option to have NaviPlan cover deficits by automatic redemptions from clients accounts You do not have to manually enter a redemption to cover the deficit o To control
55. lifestyle asset To enter additional details for the asset click the corresponding button Page 31 of 209 NaviPlan User Manual Entering Client Data Lifestyle Asset Details e Purchase Community Description E3 Type Owner Date Property Residence Residence v em v Dec31 2012 J Purchase Current Current Amount Market Value Value As Of Cost Basis 0 0 Jul 222013 0 Property Taxes Tax Amount Frequency Infl Add l Deductible 0 Annual v mi 000 a Sale Information Sell Direct After Tax account Exclusion Asset Sale Date Proceeds To Dess Amount o ina x E 500 000 Projected Value Projected as of Sale Dates Buying Power BeforeTax After Tax BeforeTax After Tax 0 0 0 0 Return Rates O Override Deferred Standard Growth Deviation Pre Retirement 00 0 00 Retirement Lifestyle Asset Details dialog box Level 2 Plan Note If you are entering details for a residence under Property Taxes enter the property tax information for the asset The expense will end at death or when the asset is sold Level 2 Plans only By default NaviPlan assumes that property taxes are tax deductible If property taxes are not deductible clear the Tax Deductible option NaviPlan estimates the before and after tax values of the asset on the sale date as well as the buying power of those values in today s dollars To enter details regarding asset return rates click the Return Rates link m If y
56. or bequest you want to create and then click Add Trust Add General Bequest or Add Asset Bequest m Selectthe appropriate type from the menu and then enter the details of the trust or bequest 4 To change assumptions about how assets will be disposed of after death go to the Asset Estate Details tab and then enter the asset estate details Estate Distribution Asset Estate Details Gifting Trusts Living Trust Non Qualified and Lifestyle Probate Admin Not Available Primary Contingent Asset Name Market Value New Owner Fees Fees For Estate Needs Beneficiary Beneficiary Residence Joint Li 220 000 Joint v v v Estate Qualified and Annuities This plan does not contain any qualified assets or annuities Set Goals section Estate Planning category Estate Strategy page Asset Estate Details tab m To prevent probate from being assessed against all assets in the client s and co client s gross estate select the Living Trust option m To prevent an asset from being liquidated to cover estate costs select the Not Available For Estate Needs option m To specify the Contingent Beneficiary of a non qualified account at the death of the owner under Non Qualified and Lifestyle select a beneficiary from the menu m To specify a beneficiary for a qualified or annuity asset at the death of the owner under Qualified and Annuities select a beneficiary from the menu m To model a stretch multi generational qual
57. other goals accounts partially funding f retirement and unlinked accounts 1 Liquidation Strategies dialog box Liquidation Order tab Level 2 Plan 2 For the client and co client click the Event Calendars to enter the minimum age when qualified assets can be redeemed Ret Client Co client is entered by default 3 Toredeem assets by account type only select one of the existing liquidation options OR To view and edit the order of specific accounts select View Modify the liquidation order For each applicable account select the account and then click Move Up or Move Down 4 Tospecify redemptions of specific dollar values or percentages of certain accounts go to the Redemptions tab and then complete the following steps 5 Click the Redemptions link Page 106 of 209 NaviPlan User Manual Entering Client Data Liquidation Strategies Liquidation Order Redemptions Bucketing Redemptions New account hdi ADD REDEMPTION STRATEGY Waive Early Account Redeem Amount Withdrawal Description All Sors Frequency Penalties Start Date End Date Infl Add l Actions New account Cj 0 00 Monthly Ly E Ret Client Death 1y ci m 0 00 3 Substantially Equal Periodic Payments SEPP Choose Account To create a new strategy select an account from the Choose Account list and then click Add SEPP Strategy Principal Distributions from Trusts
58. page automatically appear on the other page Page 105 of 209 NaviPlan User Manual Entering Client Data 4 To indicate the retirement expense is fixed cannot be eliminated select the Fixed Exp option If the option is not selected NaviPlan assumes the expense is discretionary 5 If applicable under Retirement Incomes modify retirement incomes that have been entered on the Enter Financial Data Cash Flow page OR Click Add Retirement Income to enter additional income that will be earned during retirement Note Incomes entered on the Retirement page also appear on the Enter Financial Data Cash Flow page under Incomes Defining liquidation order in retirement Level 2 Plans NaviPlan automatically redeems accounts to cover the retirement goal either using deficit coverage automatic account redemption method or a specific liquidation order 1 Tochange the manner in which accounts are redeemed during retirement click Liquidation Strategies on the Retirement page Liquidation Strategies o Liquidation Order Redemptions Bucketing Liquidation Order Do not redeem Qualified assets prior to age David a Susan Ret Co client m Choose the order in which assets are redeemed during retirement Non Qualified Roth Qualified Equity Compens v IEW Weta LIQUIDATION ORDER 1 See the Help for information on liquidation order and the use of residuals from accounts funding
59. period of time or you can redeem an account in full as alump sum To set up aredemption strategy follow these steps 1 Go to the Enter Financial Data Net Worth Accounts page 2 Under Qualified and Non Qualified Accounts click for the appropriate account 3 Go to the Redemptions tab Holdings Savings Strategy Redemptions Return Rates Beneficiaries Account Fee Setup Redemptions ADD REDEMPTION STRATEGY Waive Early Redeem Amount Withdrawal Redeem From All S or Frequency Penalties Start Date End Date Infl Add l Actions New account Unlinked v J 0 00 Monthly v u222013 g Ret 1st 000 3 Account Details dialog box Redemptions tab Redemptions section Level 2 Plan Detailed Tax method 4 To redeem a portion of the account or all of the account over time in the Amount or field enter either the percentage of the account to redeem or an amount to redeem periodically based on the selection from the Frequency menu OR To redeem the entire account as a lump sum select the Redeem All option 5 Select the Frequency of redemptions 6 Ifapplicable for qualified accounts select the Waive Early Withdrawal Penalties option to exclude penalties due if the asset is withdrawn early 7 Enter the Start Date and End Dates of the redemption strategy Note The End Date field is not accessible if Redeem All or Lump Sum is selected 8 To index the strategy for inflation select
60. qualified personal residence trust 162 qualified terminable interest property trust 159 generic testamentary trust 161 NaviPlan User Manual Entering Client Data Page 199 of 209 gifting growth and history 170 Goal and Expense Analysis method 124 135 disability income 141 survivor income 125 136 goal funding 117 goals defining education 111 defining emergency fund 115 116 defining major purchase 114 disability income Level 2 140 disability insurance Level 1 121 disability insurance Level 2 141 funding 117 long term care insurance 122 long term care needs 147 reports 181 retirement 103 survivor income Level 2 123 135 survivor income analysis Level 1 119 grantor retained trust 164 165 graphs generating 179 H Help accessing 4 hold entering on a holding 43 holdings entering 42 l Income Coverage Analysis method 124 128 135 137 144 income tax rate assumptions Average Tax method 6 9 NaviPlan User Manual Entering Client Data Page 200 of 209 NaviPlan User Manual Entering Client Data income tax reports 181 incomes pensions 78 regular or lump sum entering 72 retirement 106 Social Security benefits Level 1 74 Social Security benefits Level 2 75 inflation rate base 6 base rate changing 6 Historical Rate graph 6 insurance coverage 94 96 insurance goals disability Level 1 121 disability Level 2 141 disability income Level 2 140 Level 1 Plan 119 Level 2 Plan 123 long ter
61. remaining surplus from cash flow 8 Toview or edit how surplus funds are directed click Surplus Cash Usage In the Surplus Cash Usage dialog box select a method and then use the Move Up and Move Down buttons to reorder the list Order of Surplus Cash Usage 9 Description iei Surplus Saving Surplus Expense MoveUp Move Down onm Surplus Cash Usage dialog box Page 93 of 209 NaviPlan User Manual Entering Client Data Chapter 6 Entering insurance coverage and tax details In the Insurance Coverage category you can enter your clients planned and existing life disability and long term care insurance If using the Detailed Tax method NaviPlan automatically calculates many tax credits and deductions You can enter any applicable credits or deductions that are not automatically calculated by NaviPlan in the Tax Details category In this chapter Entering life insurance policies _ _ 2 22 22 e eee eee eee ee ce ec cece cee cece ce ecceeceeeeeeeteceseeseeees 95 Modifying future values and premiums of a life insurance policy Level 2 97 Entering disability insurance policies __ 2 2 0 2 2 cece cece cece eee cece cece eeeeeeeceeseeseees 99 Entering long term care insurance policies _ _ 2 22 22 2 22 e eee cece eee c cece eee ccecceceeseeseeeees 100 Generating the Insurance report 2 2 22 2 222 eee cece cee cece ec s RI cee ceec
62. simulate David entering long term care and analyze the plan over the long term care period Objectives v If David requires long term care services Assumptions LTCExpenses Income Adjustments During LTC Asset Availability David will enter LTC at age 75 in the year 2045 LTC period years 4 Assumption is that David dies at the end of the LTC period ROR on Surpluses amp Liquidations Capital Deferred Total Interest Dividends Gains Tax Free Growth 6 00 6 00 0 00 0 00 0 00 0 009 For lifestyle assets that are available immediately you can specify the rate of return on the proceeds from the sale of the asset by entering values in the rate of return fields Set Goals section Long term Care category Client Co client Objectives page Assumptions tab Level 2 Plan Average Tax method selected 3 On the Assumptions tab define the age at which the client or co client will enter long term care and the duration of the long term care period NaviPlan assumes that the client will die at the end of the long term care period 4 Under ROR on Surpluses amp Liquidations enter the expected return rates 5 To override tax rates select Override Tax Rates and then enter the tax rates you wish to use Changing the tax rates here only affects the tax rates for long term care insurance calculations It does not affect rates used in the rest of the plan The default values on this page originate from the Plan M
63. the Infl option To index by an amount greater or less than the default inflation rate enter a different percentage in the Add l field Note The nfl option is not accessible when Redeem All or Lump Sum is selected or a percentage of the account is entered 9 Click OK to save the redemption strategy Page 44 of 209 NaviPlan User Manual Entering Client Data Setting up a SEPP strategy for an account Level 2 Detailed Tax You can enter a substantially equal periodic payments SEPP strategy for certain qualified accounts If an account does not qualify for SEPP redemptions the Substantially Equal Periodic Payments SEPP section of the Account Details dialog box does not appear Note Only one SEPP strategy can be added to an account To set up a SEPP strategy follow these steps 1 Go to the Enter Financial Data Net Worth Accounts page 2 Under Qualified and Non Qualified Accounts click for the appropriate account 3 Go to the Redemptions tab click the Substantially Equal Periodic Payments SEPP link and then click Add SEPP Strategy Substantially Equal Periodic Payments SEPP ADD SEPP STRATEGY Pro Rate Account First Last Description Start Date Frequency Distribution Method Payments Actions New account Jul 22 2013 Annual Required Minimum Distribution v 5x Account Details dialog box Redemptions tab Substantially Equal Period Payments SEPP section Level 2 Plan Detailed Tax method
64. uses the Life Income income option enter the guaranteed number of years the annuity will pay out For variable annuities if payouts from the General Account are indexed select the Index Payment option and then enter a value in the Index Rate field If the annuity uses the Life Income income option and you want to change the Payment per 1000 amount select Override and then enter anew amount For variable annuities enter an assumed interest rate AIR for the General Account If the entire value of the annuity will not be redeemed enter the percentage of value that will be used for payouts in the Partial Settlement field For variable annuities if payouts made from the subaccounts are to be calculated separately from the general account select Variable Payments and then enter the applicable details under Variable Subaccounts Page 53 of 209 NaviPlan User Manual Entering Client Data Entering savings strategies for annuities Savings strategies can be set up either when entering an annuity or at a later time To define regular savings or contributions to an annuity follow these steps 1 Go to the Enter Financial Data Net Worth Annuities page 2 Under Deferred Annuities click for the appropriate annuity 3 Go to the Savings Strategy tab If you are entering savings for a variable annuity enter the percentages to be directed toward the general account and the subaccounts 5 Click Add Savings Strategy
65. which accounts are used for deficit coverage and their order select View Modify Deficit Coverage Order Enter Financial Data Strategies Deficit Coverage page Expenses that flow into retirement years appear on the Set Goals Retirement page These retirement expenses also appear on the Cash Flow page under Expenses m From the Expense Details dialog box you can add another expense by clicking Add Expense and then selecting New Expense or Copy of Current If you select Copy of Current NaviPlan creates a copy of the existing expense You can view or edit other expenses by clicking Previous Entry or Next Entry Page 83 of 209 NaviPlan User Manual Entering Client Data Entering surplus expenses While the clients plan may be projected to have an end of year cash surplus this surplus often does not materialize because the clients have underestimated their regular expenses or incurred unexpected expenses such as car repairs that use up this projected cash surplus If you think the plan s projected surplus is unrealistic NaviPlan allows you to use up the projected cash surplus by entering a surplus expense strategy The expense appears as a line item in reports Any cash flow surplus not allocated to a surplus savings or surplus expense strategy is eliminated automatically at the end of the year To enter surplus expenses follow these steps 1 Go to the Enter Financial Data Cash Flow page When you create a new plan
66. 00 Account Details dialog box Holdings tab Level 2 Plan 3 Ifyou 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 100 and then click OK 4 To manually set the return rates for the holding click the Return Rates link to open the lt holding gt Return Rates dialog box Select Override and then change the appropriate return rates and standard deviations Page 42 of 209 NaviPlan User Manual Entering Client Data Entering a hold on a holding within an account To stop a specific portion of a holding within an account from being included in asset reallocation follow these steps 1 Go to the Enter Financial Data Net Worth Accounts page 2 Click 9 3 On the Holdings tab in the Hold S field enter either the percentage or the dollar value of the specific holding that should be excluded from asset reallocation Entering savings strategies for accounts Savings strategies can be set up either when entering an account or at a later time To define regular savings or contributions to an account follow these steps Go to th
67. 00 0 00 Deferred Growth 0 00 0 00 Total 0 00 0 00 Standard Deviation 0 00 0 00 Account Details dialog box Return Rates tab 4 Selectthe Override option and then revise the return rates and standard deviations Setting up beneficiaries for a non qualified account You can specify primary and contingent beneficiaries for non qualified accounts To set up beneficiaries follow these steps 1 Go to the Enter Financial Data Net Worth Accounts page 2 Under Qualified and Non Qualified Accounts click for the appropriate non qualified account 3 Goto the Beneficiaries tab Holdings Savings Strategy Redemptions Return Rates Beneficiaries Account Fee Setup Primary Beneficiary Surviving Client Contingent Beneficiary Estate v Account Details dialog box Beneficiaries tab joint analysis 4 Select the Primary Beneficiary and the Contingent Beneficiary Note For plans using a joint analysis the Primary Beneficiary is always the surviving client Page 46 of 209 NaviPlan User Manual Entering Client Data Setting up a qualified account This procedure applies to qualified accounts other than 529 plans Note The options available on the Qualified Account Setup tab are dependent on the Account Type selected To set up a qualified account follow these steps e m x Go to the Enter Financial Data Net Worth Accounts page Under Qualified and Non Qualified Accounts click for the approp
68. 220222 e eee eee eee 166 Funded charitable lead trust details _ _ 22 22022202 167 Enter beneficiary details for a funded trust 2 2 2 2 0 2 ee cece cece cee cece ceeceeeeceeceeeees 168 Generate tr stirepOFts occ asl ilL bare see ast et eee ens IRI SUA DAIOISQUENGSE ORE 169 Entering gifting growth and history 2 2 2 22 2 2c cece cece cece cece cee E a a a aE ea A EES En 170 Entering estate expenses cos tess Ahh ee go ed Cie i feo t EL had Ia tio oy 171 Entering estate strategies 0 esae ee peEDocneS rrr NRI ERIYEOAMT ES re NT sb Bee Sees aa Een 172 Chapter 10 Examining results 2 2 2 2 22 22 ccc cece cece ence cence cee cee ceceeceeceeseeeeseeseeees 175 Viewing goal coverage progress 2 2 2 2 cee cece cece cece nec e cence eee e cee ceeeeceeseesecseeeeseeseeeees 176 Tracking net worth and cash flow projections Viewing goal coverage progress 176 simg the Plannihg Assistante eoeonelec Ent aco het ook ALS sree A ERA DEUDA A AA nA ELEC a 177 Opening the Planning Assistant 2 2220 Seaen feo ates Scien a UDUT IIT NEN UU NUS E DLU e dnSU C Uii 177 Viewing and or printing the Planning Assistant reports 022 2 00 eee anana aoaaa aa aoa naana 178 Using reporting options im NaviPlany iiinllsnseneie a a deeds ogee seheshbicdedehels gece sine seniied 179 Standalone reports and graphs 2 22 2 cece eee ec cee cece cece eee ec cee eeeeeceeseeseeeeseeseees 179 Next Gen Client Reports
69. 23 Goal and Expense Analysis method if one client dies 2 02 2200 occ c cece cece ec ecceceeeeees 125 Income Coverage Analysis method if one client dies lsioiieeeeeeeueeeeeeessssssssn sss 128 Assigning asset availability if one client dies 2 02 02 202 occ ec ec e eee III 131 Life dns rance Analysis ecl Inl TR els ee be ee sk Sl oi See eee eff 133 Survivor income goals if both clients die Level 2 2 2 02 2 o cece cee cece cece cece ceeceeeeeeeeees 135 Goal and Expense Analysis method if both clients die 2 2 22 eee eee eee eee ee cece ceecceeeeees 136 Income Coverage Analysis method if both clients die 02 2 c ec cece cece cece ee ceeceees 137 Assigning asset availability if both clients die 0 2 2 2 occ cece cen een ence ec ceceeceeceeees 139 Disability inc me goals Level 2 REED Ru RI Rh DU euh 140 Disability Income Goal and Expense Analysis method 2 2 22 2 02 0e cece ccecceceeceeseees 141 Disability Income Income Coverage Analysis method 2 2 0 200 c cece cee ceececceceeceeees 144 Indicating when accounts are to be made available Lsouoeueeueesleeeeesssnssn sss 145 Long term care insurance goals Level 2 2 2 2 o cece cece eee eee ccc ee cece cececececeesceeseeceeecees 147 Chapter 9 Entering the clients estate plan _ 22 22 2222 ce ec cece cece ceeceeececceeeeeees 150 Entering estate planning assumptions
70. Account NaviPlan creates a simple account without holdings OR Click Add Account and then select an account type from the menu If you select Simple Account NaviPlan creates an account without holdings If you select Investment Portfolio Mutual Fund or Cash Account NaviPlan creates an account with holdings and the Account Details dialog box opens Select the Owner of the account SY T d Jes the Basis field OR Enter a unique Description such as name or account number to identify this account holding From the Account Type menu select the tax category of the account for example Non Qualified or IRA Enter the current Market Value of the account If the account is a non qualified simple account complete If the account is a qualified account with holdings click the link under Basis to open the Account Details dialog box In the Qualified Basis field enter the amount of the after tax contributions 7 Ifthe account is fully weighted in one asset class select the class from the Asset Class Weightings menu OR If the account 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 Page 41 of 209 NaviPlan User Manual Entering Client Data From the Account Details dialog box accessed by clicking P you can m Assign the account to a specific goal or multiple goals by making a selec
71. Click the Add Beneficiary button to create a new row Click the Add Beneficiary button to create a new row ADD TRUST v 4 Previous Enay qum CANCEL Trust Details dialog box showing charitable lead trust details Page 167 of 209 NaviPlan User Manual Entering Client Data Enter beneficiary details for a funded 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 which is accessible from the Set Goals Estate Planning Funded Trusts page The fields on the Beneficiaries tab may vary slightly depending on the trust type Beneficiaries Return Rates Enter the income and remainder beneficiaries ofthe trust and the corresponding percentages Remainder Beneficiaries Pro rata Income Beneficiaries Percent E Click the Add Beneficiary button to create a new row om David Income Beneficiaries Pro rata Click the Add Beneficiary button to create a new row Trust Details dialog box Beneficiaries tab To enter beneficiary details for a funded trust follow these steps 1 To add aremainder beneficiary under Remainder Beneficiaries click the Add Beneficiary button and then select the beneficiary you are adding To add all available beneficiaries select Add All 2 If applicable specify the income beneficiary of the trust Depending on the trust type the
72. D TRUST v Funded CST Funded Irrevocable Funded ILIT Funded QTIP Funded State QTIP Funded QPRT Funded Marital Funded Generic Testamentary Trust Funded FLP Funded GRT Funded CRT Funded CLT Funded Rolling GRAT 3 Enter the details of the trust 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 Indicating when accounts are to be made available on page 145 4 On the Beneficiaries tab under Remainder Beneficiaries select a beneficiary from the Add Beneficiary menu and then enter the percentage of the remainder income attributable to the beneficiary Alternatively to split the remainder equally among all beneficiaries click Pro rata 5 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 or to other beneficiaries 6 If applicable go to the Return Rates tab and then enter the expected return rates By default the investment income is reinvested into the trust Funded trusts details The following funded trusts are available in Level 1 and Level 2 Plans when using the Average Tax method The annotations in the following images show some of the unique requirements for each trust For more information see the NaviPlan Help Page 155 of 209 NaviPlan User Manual Ente
73. ER TEENS Direct Amount Savings To S or of Salary Frequency Start Date End Date Infl Add l Actions Newaccount 0 00 Monthly w Jan12013 mj Ret is m 0O00 3 Qualified New account David Roth IR v JFGT Eternia Amount s or of Salary Direct Savings To Mandatory Owner Pre tax Post tax Employer Frequency Start Date End Date Infl Add l Actions New account 0 00 Monthly v Jan12013 Ret Owner m 0 00 3 To view or edit how surplus funds are directed click Surplus Cash Usage Surplus Cash Usage Enter Financial Data section Strategies category Savings page Level 2 Plan Detailed Tax method Under Non Qualified or Qualified from the Choose Account menu select the account to which you want to add a savings strategy and then click Add Savings Strategy Enter all the details of the clients savings plan including the amount or percentage frequency and the time frame of savings Note If the savings amount was entered as a percentage of salary the Infl option is inaccessible and the savings are indexed by the Infl percentage indicated for the salary If you have entered a savings amount that changes with inflation on an annual basis select the Infl option If the amount is to change with inflation plus or minus a certain percentage select the Infl option and then enter the rate above or below inflation For example if inflation is 396 and the savings should be increased
74. IES DO AINE 104 Defining liquidation order in retirement Level 2 Plans 022 0022 2 ce eee cece cee cece cece cece 106 Overriding the proposed investor profile for a goal Level 2 Plans 22 02 222 e cece eee eee eee 109 Defining education goals o eot 2 2 2 2 oo cece cece cece cece sss lr ec re a e a a E aG 111 Defining major purchase goals preste Done Se EI nore RIDUDOISD desea teenies aide bos ver eds 114 Defining an emergency fund goal 2 2 22 oo eee cece ec cece cece cece cee ceeeceeeceeceeesceeseeeseeseees 115 Page iv of 7 NaviPlan User Manual Entering Client Data Allocating accounts to gOdls scm dn dane rae sah ten hen diner it ah one Mtas ne satan E ers dee 117 Chapter 8 Entering insurance goals _ _ 22 22 2022 2c eee cece eee cece cece e cee ceceeseececeeseeseeeeeees 118 Entering insurance goals for Level 1 Plans 2 22 02 2 cece e cece cee e cence ec ceceeceececeeseeseeeees 119 Survivor income Level 1 iiilupiec ill eue bid ODD eir e ino ld oh pa erd ae e eu b A leen n 119 Disability irisurance Level 1 2 22 serine IAEA eh DR eItiil us 121 Long term care insurance Level 1 20 02 eee cece eee eee cece cece ceecceeceeeteeeceeceeeeeeees 122 Entering insurance goals for Level 2 Plans 2 02 02 2 2c eee cece cece cece ccc ecceceeseeceeseseeseesees 123 Survivor income goals if one client dies Level 2 0 2 0 0 o eee cee cee cece cece cee ceeecceeceeeees 1
75. Income Income Coverage Analysis method on page 144 Disability Income Goal and Expense Analysis method The Goal and Expense Analysis option must be selected on the Set Goals section Disability Income category Client Co client Objectives pages To use the Goal and Expense Analysis option follow these steps 1 Goto the Ongoing Expenses tab Assumptions OngoingExpenses Additional Annual Income Lump Sum Needs Asset Availability Annual Expenses Percentage of lifestyle and medical expenses to cover 10096 Education Goals Number Annual to Description Name Start Age of Years Amount Cover College Education Julia 18 4 0 10096 Surplus Strategy Percent surplus spent 0 Percent surplus saved 10096 Analysis Surplus O Assume surplus is spent Additional Expenses ADD ADDITIONAL EXPENSE v Click the Add Additional Expense button to create a new row Set Goals section Disability Income category Client Co client Objectives page Ongoing Expenses tab Level 2 Plan Goal and Expense Analysis method selected Page 141 of 209 NaviPlan User Manual Entering Client Data 2 Under Annual Expenses enter the percentage of lifestyle and medical expenses the disability insurance will cover The percentage entered becomes the default for the expenses listed under Expense 3 If education expenses exist in the plan under Education Expenses enter the percentage of education expenses to be covered in the
76. Joint v David v Surviving Client Amount Certain v General Account Subaccounts Waive Early Market Cost Valuation Market Pre Annuitization Withdrawal Value Basis Date Value Cost Basis Annual M amp E Fee Goal Funding Penalties 0 0 Jul 22 2013 0 0 0 00 Retirement Oo Subaccounts Payout Options Savings Strategy Redemptions Return Rates Annuitization AtEnd Number Final Start Date Frequency of Period of Years Payment Date Ret 1st m Annual v O 10 000 General Account Index Index Payment Partial Payments Rate AIR Override per 1000 Settlement GJ 0 00 0 00 100 00 100 00 Variable Subaccounts Variable Post Annuitization Payment Partial Payments Annual M amp E Fee AIR Override per 1000 Settlement 96 LJ 0 00 0 00 0 00 100 00 ADD DEFERRED ANNUITY v 40 gt Previous Entry NextEnuy gt OK CANCEL Annuity Details dialog box Payout Options tab showing a variable annuity with Amount Certain income option 4 Select the start date for the annuity and the payment frequency If the payments are to be made at the end of the selected payment period select the At End Of Period option Page 52 of 209 10 NaviPlan User Manual Entering Client Data If the annuity uses the Term Certain income option enter the number of years the annuity will pay out OR If the annuity uses the Amount Certain income option enter an amount in the Payment per 1000 field OR If the annuity
77. LN VA Ole NE NaviPlan User Manual Level 1 amp Level 2 Plans Entering Client Data Volume V of VI NaviPlan User s Guide USA Version 15 0 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 ofthe 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 professi
78. Page 164 of 209 NaviPlan User Manual Entering Client Data Funded rolling grantor retained annuity trust details NaviPlan supports the modeling of a series of short term GRATs where the annuity payments of previous GRATs fund future GRATs automatically Trust Details o Setup GRAT Series Funded Rolling GRAT Created On Description Grantor End of Year Rolling GRAT David v 2013 IRC7520 GRATsin GRAT Termin TotalYears Payment Rate Series Years Remaining Frequency 1 00 2 2 3 Annual Final Payment Transfer In Kind To Account LJ Beneficiaries Return Rates Enter the remainder beneficiaries ofthe trust and the corresponding percentages Remainder Beneficiaries Pros WOU TSS A Click the Add Beneficiary button to create a new row 4 Previous Entry Next Enty gt CANCEL Trust Details dialog box showing rolling grantor retained annuity trust details Page 165 of 209 NaviPlan User Manual Entering Client Data Funded charitable remainder trust details Trust Details 7 Funded CRT Description E3 Grantor Created On Charitable Remainder Trust Joint v Dec 31 2013 Start of Year Start of Year Market Value Cost Basis 9 s Income Distribution Transfer Annual Payment Trust Payment Account Type Amount Payment 96 Frequency In Kind To Account Details Annuity v 0 N A Monthly v LJ a Payment Period Term in Years F uen d
79. Portfolios tab accessed from the User Preferences menu Asset Allocation Settings click Reset Asset Allocation If no default values exist clicking this button deletes what you have entered without replacing it Page 27 of 209 NaviPlan User Manual Entering Client Data Determining the clients investor profile with user defined asset allocation The purpose of selecting an investor profile is to identify the model portfolio suggested asset mix that is most appropriate for your clients To select a proposed portfolio follow these steps 1 Go to the Plan Management section Asset Allocation category Profile page Profile SETTINGS Investor Profile Select an investor profie Conservative Mal Suggested Asset Mix p Cash 50 0096 p Bonds 50 00 Summary Expected rate of return 9 75 Expected standard deviation 39 00 Proposed investor profile Conservative Plan Management section Asset Allocation category Profile page 2 A default investor profile may appear To change the displayed investor profile select another profile from the menu If you select Current Rebalanced or Current Not Rebalanced the Suggested Asset Mix graph displays a proportional breakdown of all the clients assets in the current plan based on whether or not the portfolio is regularly rebalanced to maintain their allocation Page 28 of 209 NaviPlan User Manual Entering Client Data Chapter 3 Entering net
80. Survivor Linked Incomes EEE David v e5 Ret Client I 0 of Final Salary 75 0 Est Benefit Amount in today s 0 Infl Add l Total w 0 00 3 00 Benefit Payout Options Benefits Vested Earliest Retirement Age Method of Payout Survver Dasbatty Analysis Survivor Analysis Life Income wal m Transfer Payoutto pews Cash Flow a 4 PeieusEny Nerii EB o Defined Benefit Pension Details dialog box Details tab Level 2 Plan Benefit Formula method Page 80 of 209 oor me 10 11 12 13 NaviPlan User Manual Entering Client Data In the Description field enter a unique name for the pension From the Member menu select the pension owner Enter either the Benefits Start Age or the Benefits Start Date Enter the percentage of pension benefits to be paid to the surviving spouse when the pension owner becomes deceased The Benefit Reduction for Suvivor Coverage field becomes accessible Enter the percentage in this field If the pension is based on an income under Linked Incomes select the option s for the appropriate income s These options only appear if incomes are entered in the plan Enter information from the available pension documents Level 2 gt it a pension is linked to a salary and if under Benefit Payout Options the Method of Payout is set to Life Income the benefits that will be paid in the first year appear under Estimated Annua
81. TE QUESTIONNAIRE Set Goals section Estate Planning category Assumptions page 2 To create alternative life expectancy scenarios for estate planning purposes under Life Expectancy Scenarios change the hypothetical ages or years when the client or co client are expected to die These life expectancies only apply to estate planning and do not affect the life expectancies used in the rest of the plan m All life expectancy scenarios can be overridden by entering a different age or year NaviPlan uses the following default settings o Life Expectancy sets the life expectancy to 10 years after the plan date for the client and 15 years after the plan date for the co client o Alternate Life Expectancy uses the reverse assumptions the life expectancy for the co client is 10 years after the plan date and 15 years after the plan date for the client Page 151 of 209 NaviPlan User Manual Entering Client Data 3 Inthe case of simultaneous death enter a date in the Year field and then select the name of the client that is assumed to die first m The Simultaneous Death fields do not appear in a plan without a co client 4 To designate which life expectancy scenarios will be used for client reports select the Reports option Up to three scenarios can be selected 5 If this analysis is for a joint analysis under Estate Distribution Selection select one of the following options If you y The selection has this effect on the estate
82. a fixed or variable annuity select the Waive early withdrawal penalties option If income in respect of decedent IRD taxes are not applicable select the Multi Generational option When this option is selected the asset will pass to the beneficiary and not to the client or co client Estate taxes may be due but IRD taxes will be avoided If the plan type is 403 b in the Pre 1987 Account Balance field enter the value of the plan on December 31 1986 Required minimum distribution payments on the pre 1987 portion of the account will be delayed until retirement or age 75 whichever is later If the client s retirement date is after age 70 the milestone is defined on the Plan Management Assumptions Milestones page and the client is permitted to delay required minimum distributions beyond this age select the Delay RMDs to Retirement option Note If the client s retirement begins before age 70 this option does not appear This step does not apply to IRA spousal IRA Roth IRA Roth 401 k and Roth 403 b accounts m If the Delay RMDs to Retirement option is not selected NaviPlan ensures that contributions to the plan cease no later than the year in which the client turns 70 and that RMDs will begin in the year in which the client turns 70 even if the client s retirement age has been defined as older than 70 For Other Salary Deferral Generic Employer Paid Plan or Generic Self Employed Plan select the Treat As Deferre
83. ability insurance policy click for that policy Disability Insurance Details e Description EJ Policy Type Insured Policy Owner Effective Date Company Policy Number Group STD Group STD w Davd v Davd v Dec312012 Benefit Details Benefit Amount of Salary Flat Dollar Benefit Frequency Taxable Benefit Infl Add l O 0 00 0 Monthly v e 4 0 009 Maximum Indexed Benefit Dollar Offset by Calculated As Amount Waiting Period Benefits Period Social Sec None Ma O 0 2 Weeks v 3 Months v ie Premiums Cease Premiums Payer Amount Frequency AtAge On Date Infl Add l David y 0 Monthly 65 Ret Owner m 0 00 ADD DISABILITY INSURANCE v 4 Previous Entry NextEntry gt CANCEL Disability Insurance Details dialog box Level 2 Plan m If the disability insurance policy benefits will be offset by Social Security disability benefits select the Offset by Social Sec option This is used for informational purposes only Note Clicking Add Disability Insurance opens a menu where you can select New Disability Insurance or Copy of Current If you select Copy of Current NaviPlan creates a copy of the current policy Use this when you have similar items to add to avoid re entering data You can view or edit other disability insurance policies by clicking Previous Entry or Next Entry Page 99 of 209 NaviPlan User Manual Entering Cli
84. age 195 of 209 NaviPlan User Manual Entering Client Data holdings 42 95 Client Report Monitor Online using 191 client reports adding custom content pages 184 adding custom text 190 Asset Allocation 186 converting to Microsoft Word 185 creating new reports 184 creating new templates 185 custom text 189 customizing 189 display modes 183 Financial Needs Analysis 186 Financial Needs Assessment 186 Financial Needs Summary 186 generating 186 188 overview 183 Retirement Distribution Summary 186 conventions user manual 3 correlations setting up 24 Coverdell accounts entering 48 credit shelter trusts 156 current results goal coverage 176 options to increase goal coverage 176 custom text adding to reports 190 creating 189 Page 196 of 209 managing Quick Picks 190 D debt modification 88 modifiying loan payment 88 modifying loan principal 88 deficit coverage account redemption order 91 automatic pre retirement deficit coverage 83 deficit coverage reports 182 defined benefit pension details 78 79 dependent status changing 10 Detailed Tax method 3 changing dependent of status 10 overriding tax filing status 10 disability income goals Level 2 140 additional annual income 142 annual income needs 144 asset availability 145 assumptions 140 currently disabled 140 Goal and Expense Analysis 141 income available 144 Income Coverage Analysis 144 lump sum needs 142 144 ongoing expenses 141 disability insurance entering p
85. ails dialog box showing marital trust details Page 160 of 209 NaviPlan User Manual Entering Client Data Funded generic testamentary trust details Trust Details 7 Funded Generic Testamentary Trust Start of Year Start of Year Trust Description 3 Market Value Cost Basis Tax Rate Generic Testamentary Trust 0 0 40 0096 If a percentage of the trust s market value is to be distributed as income GSTT select the Unitrust option and enter the percentage to be distributed as Income Inclusion Trus income and the frequency Member Ratio Unitrust Payment Frequency David lx 100 O 5 00 Monthly Beneficiaries Return Rates Enter the income and remainder beneficiaries of the trust and the corresponding percentages Remainder Beneficiaries Pro rata Income Beneficiaries d Percent 3 Click the Add Beneficiary button to create a new row M David 0 Income Beneficiaries Pes EOE Click the Add Beneficiary button to create a new row ADDTRUST f 4 Previous Enay Em CANCEL Trust Details dialog box showing generic testamentary trust details Advanced estate funded trusts details The following funded trusts are available only when the optional Advanced Estate module is included in the plan The annotations in the following images show some of the unique requirements for each trust Page 161 of 209 NaviPlan User Manual Entering Client Data Funded qualified p
86. aining 7596 into a non qualified account when survivorship occurs 6 Under Analysis Surplus select or clear the Assume surplus is spent option as required m When the option is selected NaviPlan projects the cash flow that would have occurred in pre retirement if neither client died Any pre retirement surpluses resulting from that projection become additional pre retirement survivor expenses in the years they are projected to occur The Percentage of lifestyle and medical expenses to cover value applies to this expense just like any other regular expense 7 Under Additional Expenses click Add Additional Expense to enter any new expenses that will apply during survivorship 8 Once all ongoing expenses are entered go to the Additional Annual Income tab 9 Toadd an annual income that may apply during survivorship under Additional Annual Income click Add Annual Income and then enter the income details Assumptions Ongoing x enses Additional Annual Income Lump Sum Needs Asset Availability Use this page to enter additional annual income that applies in survivorship Additional Annual Income ADD ANNUAL INCOME Annual Description 3 Income Type Amount Start Date End Date Infl Add l Actions Salary Salary v 0 Jan 1 2015 m Ret Co client m j 0 00 3X Set Goals section Survivor Income category Client Co client Objectives page Additional Annual Income tab Level 2 Plan Goal and Expense Analy
87. al Expenses burial probate etc 0 Any Additional Needs 0 Total Lump Sum Needs 23 032 Ongoing Needs oj years You require 0 to meet your calculated ongoing need Annual Ongoing Needs are 0 for Available Assets to Offset Needs J Available Asset Override ia Copy Available Assets from Sarah s Assessment 11 800 Realizable Assets Existing Life Insurance Policies Total Available Assets Financial Assessment section Financial Assessment category Insurance page Assumptions Inflation Rate 3 0096 Assumed Return Rate 5 0096 Survivor s Tax Rate 30 00 Results Total Lump Sum Needs 23 032 plus Total Ongoing Needs 0 less Total Available Assets 311 800 Additional Life Insurance Needed so Page 133 of 209 NaviPlan User Manual Entering Client Data 2 Use the 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 se
88. ample some student loans select Insured for life from the Payoff Options at Death menu This excludes the loan balance from the insurance analysis as well as from estate planning cash flow calculations To view the liability amortization schedule report for a liability on the Assets Liabilities page click Report beside the specific liability To generate the Assets Liabilities report click Assets Liabilities Report on the Assets Liabilities page Page 33 of 209 Entering fixed rate mortgages NaviPlan User Manual Entering Client Data Mortgages can be entered in NaviPlan with either fixed interest rates or variable interest rate periods To enter a fixed rate mortgage follow these steps 1 Go to the Enter Financial Data section Net Worth Assets Liabilities 2 Click Add Liability and then select Fixed Mortgage from the menu 3 Click next to the new fixed mortgage 4 Enter a Description for the mortgage 5 Select the name of the Owner who has taken out the mortgage 6 Enter the Interest Rate and the Compound Frequency 7 Select the Payment Type and Payment Frequency as well as the asset to which the mortgage is linked 8 If applicable select the Interest is Tax Deductible option 9 Enter the Balance As of Date Loan Date and the Original Principal amount 10 If applicable select the Cover any pre retirement deficits created by these liability payments option 11 Under Calculation Opt
89. anagement section Assumptions category General page 6 Go to the LTC Expenses tab to enter daily long term care expenses Existing expenses that continue into the LTC period appear under Annual Expenses Any insurance premiums or loan payments payable during long term care are included on this tab and cannot be edited Page 147 of 209 NaviPlan User Manual Entering Client Data Assumptions LTC Expenses Income Adjustments During LTC Asset Availability Use this page to view currently defined annual expenses and add any additional expenses applicable to a long term care situation Annual Expenses Long term Care Survivorship Percentage of lifestyle and medical expenses to cover during 10096 85 Additional Long term Care Expenses Click the Add LTC Expense button to create a new row Set Goals section Long term Care category Client Objectives page LTC Expenses tab Level 2 Plan 7 Under Annual Expenses enter the percentage of lifestyle and medical expenses that will continue while the client is in long term care and during survivorship The percentage entered will be used as the default 8 To change the default percentage for specific expenses clear the Use Defaults option and then enter the percentage of that expense that insurance needs to cover 9 If your clients anticipate additional long term care expenses under Additional Long term Care Expenses click Add LTC Expense and then enter the expens
90. ancial information and goals These are intended for your use or to review information prior to meeting with your clients They feature a straight forward layout and focus on numbers Next Gen Reports summarize a client s plan using a modern professional design Their easy to understand content and format is intended to be shared with clients Next Gen reports are available for each category in the left navigation bar Client Reports are traditional figure focused reports that summarize a client s plan Client reports have a simple layout and focus on numbers without the contextual explanations of Next Gen reports Standalone reports and graphs After you have entered your clients financial information and goals you can verify the results by generating standalone reports and graphs The available options depend on the plan level selected To generate a standalone report or graph follow these steps 1 A A A A A A A A A A A A From the Quick Actions menu Reports menu select a report category and if applicable a subcategory and then select the report or graph you want to generate Favorite Reports Summary Net Worth Cash Flow Income Tax Goals Asset Allocation Insurance Estate Planning Fact Finder Needs vs Abilities Capital Accumulation and Redemption Monte Carlo Client Report Monitor Reports menu Level 2 Plan Detailed Tax method Depending on the report or graph type selected the Assign Settin
91. apital losses against capital gains each year Upon the death of aclient or co client a capital loss cannot be carried over to the estate to the surviving client or to the beneficiaries NaviPlan does not apply the 3 000 ordinary income offset rule When using the Detailed Tax method the capital loss carryovers from one client are used to offset capital gains incurred by the other client Also the 3 000 ordinary income offset rule applies To enter a capital loss carryover follow these steps 1 Go to the Plan Management Assumptions Capital Loss Carryovers page Capital Loss Carryovers 2013 Short Term Long Term Short Term Long Term Regular Tax Regular Tax AMT AMT David 0 0 so X so Susan 0 0 0 0 Julia 0 0 0 0 Matthew 0 0 0 0 Plan Management section Assumptions category Capital Loss Carryovers page Level 2 Plan Detailed Tax method 2 Inthe Short Term Regular Tax and Long Term Regular Tax fields enter any existing short or long term carryovers 3 D Tax i the Short Term AMT and Long Term AMT fields enter any existing short or long term alternative minimum tax AMT capital loss carryovers Page 13 of 209 NaviPlan User Manual Entering Client Data Entering AMT carryforward credits Level 2 Note This procedure only applies if you are using the Detailed Tax method If your clients paid alternative minimum tax AMT in a prior year they may be
92. are to be reserved m To have NaviPlan reserve the assets for emergency use only until retirement select Retirement At retirement NaviPlan transfers use of these assets to the retirement goal m To have NaviPlan reserve the assets for emergency use for the duration of the plan select End of Plan These assets are not available for deficit coverage or to fund any other goal 6 To edit the accounts funding this goal click Goal Funding For more information Allocating accounts to goals on the next page Note Qualified accounts cannot fund an emergency fund All accounts allocated toward the emergency fund goal appear on the Emergency Fund page under Emergency Fund Accounts The market value of each account displayed reflects the market value for the account and not the actual amount allocated to the major purchase goal Any accounts not allocated to a goal appear under Unassigned Accounts Page 116 of 209 NaviPlan User Manual Entering Client Data Allocating accounts to goals To assign accounts to fund specific goals or to view account distribution for all goals follow these steps 1 On the lt Retirement Education Major Purchase Emergency Fund page click Goal Funding Your clients qualified accounts and annuities with the exception of 529 plans are automatically assigned to fund the retirement goal but can also fund education and major expense goals Non qualified accounts can fund any goal and can also be allocate
93. ary recommended plan has been finalized as the final presentation to the clients This report is useful to clients who are nearing or at retirement and provides an in depth review of the plan retirement period and the distribution of income the Retirement 3 bz Distributi clients may expect in retirement The report focuses on the apparent risks in the istribution s clients current plan and how those risks have been reduced by strategies ummar y implemented in the proposed plan It also shows a review of the fixed and total incomes as well as expenses during retirement This report provides a comprehensive view of the entire plan including a Financial summary of the clients needs and objectives the financial assumptions used in Needs preparing the financial analysis as well as additional strategies that could be n implemented to achieve the objectives The report includes summaries of the Analysis 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 clien
94. ata Disability Income Income Coverage Analysis method The Income Coverage Analysis option must first be selected on the Set Goals section Disability Income category Client Co client Objectives page To use the Income Coverage Analysis method follow these steps 1 Goto the Lump Sum Needs tab Assumptions OngoingExpenses Additional Annual Income Lump Sum Needs Asset Availability Select outstanding liabilities to be paid in full at disability If items listed under Pay Of Outstanding Liabilities are not selected the assumption is that the regular payments continue and will be part ofthe client s cash flow needs Adjust the to Coverfor major purchase goals to be retained in the analysis If 0 is entered for items listed under Major Purchase Goals the assumption is that the savings and needs required for those goals are not included as part of the survivor s cash flow needs Under Additional Lump Sum Needs enter additional needs that may occur in the event of disability Pay Off Outstanding Liabilities Outstanding Description Principal Major Purchase Goals 96 to Description Amount Target Date Cover Vehicle 0 Feb12014 10096 Additional Lump Sum Needs ADD LUMP SUM NEED Click the Add Lump Sum Need button to create a new row Set Goals section Disability Income category Client Co client Objectives page Lump Sum Needs tab Level 2 Plan Income Coverage Analysis method selected 2 Under Pay Off Outstanding L
95. aviPlan User Manual Entering Client Data Account Details 2 Distributions Description 3 Account Type Beneficiary New account 529 Plan i v Julia haa Market Qualified Withdrawals are Exempt from Goal Funding Value Basis State Income Taxes Unallocated 0 0 LJ Holdings Savings Strategy Redemptions Return Rates Account Fee Setup ADD SAVINGS STRATEGY Savings Strategy Click the Add Savings Strategy button to create a new row Celine 70070 ES CANCEL Account Details dialog box showing fields for a 529 plan Note If the donor and the distributions beneficiary are the same person assets from the 529 plan are included with the donor s estate 6 Complete the remaining fields as required Entering an UTMA or UGMA account UTMA Uniform Transfers to Minors Act and UGMA Uniform Gifts to Minors Act accounts allow your clients to gift money to their dependent s NaviPlan considers UTMA and UGMA accounts to be non qualified accounts These non qualified accounts can fund future education costs You must assign a dependent as the owner of the account and then you can designate a client as the account custodian To set up an UTMA account follow these steps Go to the Enter Financial Data Net Worth Accounts page Click Add Account From the Account Type menu select Non Qualified 1 2 3 4 From the Owner menu select the dependent 5 Click for the appropriate n
96. aviPlan User Manual Entering Client Data Assumptions Lump Sum Needs Annual Income Needs Income Available Asset Availability Enter any incomes that the clients will receive if either of them is disabled or any additional income the clients will receive for example if one must return to work to support the disabled person If the disability occurs during the retirement period any pension benefits entered on the Financial Picture Cash Flowpage will flow through to the current page Click Reset to delete any changes and refresh the income list with the regular incomes entered on the Financial Picture Cash Flowpage Income Available During Disability Reset EIDEM Click the Add Disability Income button to create a new row Set Goals section Disability Income category Client Co client Objectives page Income Available tab Income Coverage Analysis method selected 9 Enter any additional incomes that the client or co client will receive during disability 10 To add a new row click Add Disability Income 11 To indicate when assets are to be made available during the disability period complete the procedure Indicating when accounts are to be made available below Note To delete any changes and revert to the disability incomes that were created on the Enter Financial Data Cash Flow page click Reset Indicating when accounts are to be made available On the Set Goals section Disability Income category Clien
97. aviPlan creates an annuity where annuity type Fixed Interest rates are fixed Variable a Geach Tie aniuloylsln tne dlablbulton phase andtheipayimentebediihetoie January 1 of the current plan year 2 To enter a deferred annuity under Deferred Annuities click Add Deferred Annuity and then select the type of annuity you want to enter 3 To enter an annuitized annuity click Add Annuitized Annuity 4 Enter a unique Description to identify this annuity and then select an Account Type Owner Annuitant and Beneficiary m When Joint is selected from the Annuitant menu and one client dies the surviving client receives the payouts until the second death When the surviving client dies the selected beneficiary receives the remaining payments Page 50 of 209 NaviPlan User Manual Entering Client Data 5 Select an income option method for receiving annuity payments Income option Amount Certain Term Certain Withdrawals as Needed Guaranteed Withdrawal Benefit For a fixed annuity enter the Market Value of the annuity the Cost Basis or Qualified Basis as applicable Calculation NaviPlan calculates the duration of annuity payments based on the payment amount NaviPlan calculates the payment per 1 000 based on the number of years the annuity is set to pay out NaviPlan calculates the payment per 1 000 based on the annuitant s life expectancy and the guaranteed number of years
98. avoid re entering data You can view or edit other long term care insurance policies by clicking Previous Entry or Next Entry Page 100 of 209 NaviPlan User Manual Entering Client Data Generating the Insurance report The Insurance report provides a summary of all the insurance coverage entered in the clients plan and can be used to verify data entry or quickly view all coverage To generate the nsurance report follow these steps 1 Go to the Enter Financial Data Insurance Coverage page 2 Click Insurance Coverage Report Page 101 of 209 NaviPlan User Manual Entering Client Data Chapter 7 Entering accumulation goals When you create a plan you must select the modules you want to use The selected modules determine the types of goals you can enter in the plan In each plan you can only use the financial planning modules that are selected on the Plan Management Modules page In this chapter Retirement goal assumptions __ 2 2 22 2 202 cece cece ee cee cece cece cee c ec eeceeceececeeeeeseeseees 103 Retirement date assumptions 2 2 225 sscecccececcchhsteeciccdecsacsceseciceacesssesecdassiedeteieseesese 103 Retirement goal reporting _ 2 2 2 2 cece cece cece sls e cence cence eee ceeseeceeeeseeseeeeeees 103 Defining retirement goals _ 2 2 0 2 o oo ee cee cee cee cece cece cece ccc eee cece ceeccecseeeseeeceeseeees 104 Defining liquidation order in retirement Level 2 Plans
99. ay be edited upon opening a plan A B c D A Large Cap Equity 1 0000 0 3200 0 4500 1 0000 B Small Cap Equity 0 3200 1 0000 0 2300 1 0000 C International Equity 0 4500 0 2300 1 0000 1 0000 D Aggregate Bonds 1 0000 1 0000 1 0000 1 0000 E Cash 1 0000 1 0000 1 0000 1 0000 Asset Allocation Settings dialog box Correlations tab 6 Tochange the correlation between two asset classes enter the new correlation value at the intersection of a row and column for the two asset classes 7 Goto the Investor Profiles tab The investor profiles entered on the Asset Allocation Settings dialog box Investor Profiles tab accessed from the User Preferences menu Asset Allocation Settings appear under nvestor Profiles Asset Allocation Settings 7 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 Conservative Moderate Conservative Moderate Aggressive xxxx x Moderate Aggressive OK CANCEL Asset Allocation Settings dialog box Investor P
100. box the Payoff Options at Death selection is Transfer to survivor or Payoff at first death from estate This option is only available if liabilities exist in the plan 9 Enter the percentage of any future major purchase goals that will be paid for in the event of death Note This option is only available if major purchase goals exist in the plan 10 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 11 Go to the Survivor s Income tab Page 129 of 209 NaviPlan User Manual Entering Client Data Assumptions Lump Sum Needs Annual Income Needs Survivor s Income Asset Availability Enter any incomes the survivor will receive after the partner dies Defined benefit and defined contribution pensions entered in the plan that include survivor benefits will flow through to this page Survivor s Income Al VIVOR INCOME Description Member Income Type Amount Frequency Start Date End Date Infl Add Actions Salary Susan Salary jx 0 Annual v jan12014 Ret Owner aa ivj 0 00 x Set Goals section Survivor Income category Client Co client Objectives page Survivor s Income tab Level 2 Plan Income Coverage Analysis method selected 12 Toenter a new income click Add Survivor Income and then enter all appropriate data 13 To indicate when accounts are to be made available during the
101. ce ccc c ee cee cece eee e cee ceeceececeeseeceeseeees 177 Viewing and or printing the Planning Assistant reports 022 2 202 e eee e ccc ceeeccceeccceeecseeeeces 178 Using reporting options in NaviPlan Luuuuuuu uusulllllI II IRR ee cecceececeeseeseeeees 179 Standalone reports and graphs _ 2 2 2 22 e cece cece ce cece cece ec ss cee ceceeseceeceeceeseeeees 179 Next Gen Client Reports 22 22 0202 0 o cece cece cece cece cence cece eee e cece ce ceeseececeeseeseeseeees 183 Traditional client and progress reports 22 2 2 cee cece cee cence cee cece cece eececseseeseeeeeeeees 186 Preparing custom text for reports 22 22 2 2 c oe cece cece eee cee cece eee eee e eect eee c eee ee raaa 189 Using the Client Report Monitor _ 2 2 22 2 cece eee nce RII cece cece ee ceeceececeeceeseeseees 191 Adding notes for your own personal use _ 2 2 22 2 eee cece cece eee sss AADAL aLaaa onaran 192 Page 175 of 209 NaviPlan User Manual Entering Client Data Viewing goal coverage progress NaviPlan allows you to quickly view Current Results for clients projected net worth cash flow and goal coverage progress based on the information you have entered in the analysis so far It also recommends steps that clients could take to achieve 100 goal coverage Current Results are available for the following goal types m Retirement m Education m Major Purchase m Survivor Income m Disability Incom
102. ceccecceceecceceecuceeseeseneees 89 Entering a substantially equal periodic payments SEPP strategy _ 22 22 22 eee e eee eee ee cee eee eee 90 Setting the deficit coverage order Detailed Tax method _ 2 22 22 2 eee cece eee eee ec nanana 91 Entering surplus strategies _ 22 22 2222 ccc nce cece ence cece cence cece ee ceeceeseeeeseeseeeees 92 Assumptions when entering multiple strategies of the same type 0 cece cece ccc cecceecceccceceees 92 Assumptions when entering multiple strategies of different types 2 22 22 e eee eee eee eee ee eeeee 92 Page 86 of 209 NaviPlan User Manual Entering Client Data Entering a regular savings strategy With all savings strategies you must save to an existing account you cannot save to a lifestyle asset If you haven t entered an appropriate account go to the Enter Financial Data Net Worth Accounts page to do so For more information see Creating accounts on page 41 To enter a regular savings strategy follow these steps 1 Go to the Enter Financial Data Strategies Savings page All existing savings strategies implemented in the plan appear Savings Debt Modification Redemptions Deficit Coverage Surplus Model savings strategies for qualified and non qualified accounts Multiple savings strategies can be entered to reflect changes to savings amounts over time Non Qualified New account Join Non Qu I
103. cecceceeceeseees 18 Editing Asset Class Weightings 2 2 2 22 02 2 ccc e eee cee cee cece ccc eccecceceeceeceeeeeeeseeseees 19 Using the Optimize caleulatiom oos Dr rea A i anole Unc secet DO ddan ss chests 20 Upgrading asset allocation 2 22 22 oo cece ce nee ee eee ence e cee c ees eececeeceeseeseceeseees 23 Page i of 7 NaviPlan User Manual Entering Client Data Overview of User Defined Asset Allocation _ 2 022200222 ccc 23 Setting up user defined asset allocation 0022022 e ee cece cece eee eeeeeees 23 Determining the clients investor profile with user defined asset allocation 2 2 2 28 Chapter 3 Entering net worth information _ 00 00000022 cco cee cece cece cece ses cece eeeeees 29 Enteringlitestyle assets lt gt oct e v IIIS PX RB a eye ce ood ben fol Aid lores eee 31 Entering liabilities a xt eeu fre eA ti pA Cond bth ees eA Cl RR Lp Ce 33 Entering fixed rate Mortgages 2 s cresce tLnicA educ eR ele ease eee M a ead aier 34 Entering variable rate mortgages 22 c nitet liec DL MORIA ItAUS bis 35 Entering real estate assets Level 2 00 002 o ole o cece cece cece ccc eee cece ceeceeeceeceeeeteeceeeseeeeees 36 Entering business entities Level 2 2 ace eee geet oe in odes See ged dee oe ee 38 Entering BUSINESS ACTIVITY osooooecterca ute eh Me Lots ah nad Benen Sa ane ee CD e E LUE 39 Entering the sale of a business entity 0 2 2 0 0 2 occ
104. cece cece ene e eee c cece ec ceceeseeceseeseesees 40 Modiine return rates i eos ELE co A ho eA Cet pit Aer CE th Etpe ere 40 Entering ac COU MES sic cennsthecrcars n ed e PIU PIRA dhs eo aaa VE PEN Bases ea SU V EMED E REPORT O 41 Creating accounts eii i ahia liu gods ex A e sede ERIRRGRRIUG IE 2 DERMEPR RE DR OPI UXOR RR e RRei ri 41 Entering holdll8ss store od tetro he pees se taies ELE dtt rose Roh aie Ef sou E Ad om 42 Entering a hold on a holding within an account ussuuusuuusssussesslesseesssss cee essere 43 Entering savings strategies for accounts _ 2 2 22 2 2 cece e cee cece cece ccc eccecceceeceeseeeeseeseesees 43 Setting up a redemption strategy for an account Level 2 Detailed Tax sLuuuuuueeueeesee 44 Setting up a SEPP strategy for an account Level 2 Detailed Tax ssuuuuuueeuueeeeeeeeeeeuue 45 Overriding calculated return rates for accounts 0 2 2 22 eee cece c eee cece cece cece ss ls sl llli 45 Setting up beneficiaries for a non qualified account 0 2 c cece cee eee eee cece ccc e cece eeeeeee 46 Setting up a qualified account Somn YR ENS i ois Bd BE SEs BN AS obs BEE EE PE 47 Setting the account fee for an account 2 22 22 cee eee cee eee eee cece cee erre elle 48 Setting up a 529 plan or Coverdell account 0 0 0 0 o eee cece eee cece ee s Iss rene 48 Entering an UTMA Or UGMA account eccesso Ir url e MALIS sdeeSpesicacseba
105. ct the Infl option and then if applicable enter a percentage The inflation rate applies to all fields on the Activity tab Page 39 of 209 NaviPlan User Manual Entering Client Data Entering the sale of a business entity To enter the sale of a business entity go to the Sale Information tab and follow these steps 1 From the Sale Option menu select the appropriate option 2 Ifselling enter the Sale Date You can enter a specific date or you can specify that the sale will be triggered by an event such as retirement or death You can also offset the sale from the triggering event by a given number of years For example you can specify that the business entity will be sold two years before the owner s retirement by entering ret 2 3 Enter the cost of selling the business entity as a percentage of the market value 4 If you plan to sell the business entity in installments enter the details under Installment Sale Details Activity Sale Information Return Rates Sale Option Sale Date Selling Cost Do not sell entity v N A Z 0 000096 Installment Sale Details Seller Installment Annual 96 of Sale Amount Interest Rate 0 0096 0 000096 Payment Compound Payment Frequency Frequency Type Monthly Annual Amortized Length of Installment Sale Length of Amortization Years Months End Date Years Months End Date 0 Dec 31 3004 5 0 Dec31 3004 Business Entity Details dialog box Sale Information tab Modifyi
106. ctenseseses see 49 Entering annuities iore A E tu p Ane LA E CR ues Piet e E T Cv eere 50 Entenne annlties see ene core ere ha AS dU A E EL UAE 50 Entering annuity subaccounts 22 22 2222 cece cee cece cece cence eee ee cece seeeeeeeseeceeseeseseeees 51 Page ii of 7 NaviPlan User Manual Entering Client Data Entering payout options for fixed and variable annuities 0 00 02000 e cece eee cee eee eee ee ee 52 Entering savings strategies for annuities _ 2 22 2 cece cece cece cee cece cece ceceeseeeecseseeees 54 Setting up redemption strategies for annuities Level 2 Detailed Tax 2 222 2222 222 55 Setting up a SEPP strategy for an annuity Level 2 Detailed Tax 2 22 202 0 e eee eee cece eee ee eee eee 56 Overriding calculated return rates for variable annuities 22 0022 2 0222 c cece eee eee eee eee eee 57 Setting ip aiqualifiedannulty gt s 3 tA eth Anno oo EA Bi Eom Ce alla tee he Ara t eU Cod hel 58 Entering equity COMPENSATION unito here ne ede cbr sole i Gide She SU I EI eases Raine ded veh OD 60 Entering stockoptions EEVEl 2 gt unite te RIDERE adeaee E EA taaeenee este rl 60 Entering restricted stock awards Level 2 2 22 o ooo cee cece cee cence cece cece LLALLA L a aa onon 62 Defining asset class weightings oe pU ED iE Unc ed 63 Searching the asset classifier database 2 22 22 cece cece cece cece eee e cece ecceceesecseeeeseeseees 63
107. d Compensation Plan i e no RMDs option These account types do not require minimum distributions Subaccounts Payout Options Savings Strategy Redemptions Return Rates Qualified Account Setup Primary Beneficiary Susan v Contingent Beneficiary Estate v Multi Generational Waive early withdrawal penalties GJ Delay RMDs LJ RMD Payment Frequency Monthly lv Make Annual Payments In January End of Year Market Value as of 2012 LJ 0 Annuity Details dialog box Qualified Account Setup tab Level 2 Plan Average Tax method fixed annuity Other Salary Deferral account type Page 58 of 209 10 11 12 NaviPlan User Manual Entering Client Data To apply state taxes to the taxable portion of distributions from this account select the State taxable option Note The State taxable option does not appear for 457 and Roth accounts From the RMD Payment Frequency menu select the desired frequency If Annual is selected select the month in which the annual payment will be made To change the market value used to calculate the minimum payout select the End of Year Market Value option and then enter a new value in the field to the right Page 59 of 209 NaviPlan User Manual Entering Client Data Entering equity compensation The Equity Compensation module is only available in Level 2 Plans that use the Detailed Tax method On the Equity Compensation page you can enter stock options and restricted stock awards
108. d to more than one goal Note You can also allocate accounts to goals or view account distribution for all plan goals on the Set Goals Goal Funding page 2 For each applicable account enter any combination of dollar amounts percentages or the keyword Balance to allocate funds to the applicable goals Note In Detailed Tax method you can allocate qualified accounts to goals other than retirement In Average Tax method only non qualified accounts can be allocated to goals other than retirement In NaviPlan you can fund goals in three ways Fixed amount Enter a fixed dollar value When a fixed amount is entered NaviPlan uses only that amount to fund the goal even when additional funds are available in the account Percentage Enter a percentage Balance Enter the keyword balance All remaining unallocated funds in the account are directed to the goal If entered for multiple goals the remaining balance is distributed equally among those goals When allocating an account across multiple goals and using any of the funding options NaviPlan divides the account into portions for each goal This split is reflected in stand alone reports and eliminates the need to manually divide an account Any account savings are then appropriately distributed among the account s goals If accounts are assigned to multiple goals and the combined funding amounts exceed the value of the account fixed amounts are funded first and the remai
109. dded to net worth and appears in the Enter Financial Data Net Worth category in the year the purchase occurs For example a new vehicle or second residence can increase net worth whereas a wedding or vacation cannot 3 Enter a unique description for the goal and then complete the required fields 4 Specify whether the cost will be indexed to meet inflation Major Purchase Use this page to define major purchase goals Major Purchase Objectives ADD MAJOR PURCHASE OBJECTIVE v Target Projected Description E Type Member Date __ Amount Infl Add l Amount Actions Vehicle Vehicle Joint v Feb12014 0 v 0 005 s0 2 X Goal Funding Unassigned Accounts 50 000 Unassigned Asset Class Description Account Type Owner Market Value Basis Unassigned Amount Weightings ROR Savings New account Non Qualified Joint 50 000 50 000 100 50 000 Unclassified 0 00 1 Set Goals section Major Purchase category Major Purchase page Level 2 Plan 5 To change the clients investor profile for a specific major purchase goal under Investment Profile select the Override option for the major purchase goal and then select another investment profile Note The Asset Allocation module must be selected on the Plan Management Modules page 6 If you want to override the proposed portfolio for the major purchase goal and the answers on the Plan Management Asset Allocation Questionnaire page do not accurately
110. deemed select View Modify the deficit coverage order and then adjust the liquidation order by moving accounts up or down in the list using the Move Up or Move Down buttons Page 91 of 209 NaviPlan User Manual Entering Client Data Entering surplus strategies In NaviPlan a cash flow surplus occurs when total cash inflows exceed total cash outflows as of December 31 of a particular year In years when a surplus exists savings and expense strategies are available By default NaviPlan allocates to surplus savings strategies before allocating to surplus expense strategies Note You can only create surplus savings strategies for non qualified assets Assumptions when entering multiple strategies of the same type When entering multiple strategies of the same type for example two surplus savings strategies for each strategy NaviPlan saves or spends a percentage of the total surplus available on December 31 m For example if a client has a 100 000 surplus and 50 is saved to Account A and 50 is saved to Account B both accounts receive 50 000 thus saving the full amount of the surplus Assumptions when entering multiple strategies of different types In contrast when entering multiple strategies of different types for example one surplus savings strategy and one surplus expense strategy NaviPlan first allocates a percentage of the total surplus toward the savings strategy and then allocates a percentage of the remaining sur
111. der beneficiaries from the Grantor menu select Other For example if fren ee M 0 both the client and co client are befeficiaries of a trust originally CESE Bj years established by the client s mother the selected grantor should be Other Details Start of Year Start of Year Market Value Cost Basis so 0 Beneficiaries Return Rates Enter the income and remainder beneficiaries of the trust and the corresponding percentages Remainder Beneficiaries Pes EnEdidisun d Income Beneficiaries Percent 3 Click the Add Beneficiary button to create a new row Surviving Client 0 Income Beneficiaries Provere ENDE Click the Add Beneficiary button to create a new row ADD TRUST v ff Previous Entry Next Enny gt CANCEL Trust Details dialog box showing funded irrevocable trust details Page 157 of 209 NaviPlan User Manual Entering Client Data Funded irrevocable life insurance trust details As well as the usual trust funding details for the ILIT you must also enter the details of the life insurance benefits and premiums Trust Details 7 Funded ILIT Description Grantor Trust Tax Rate Crummey Trust iiy David 40 00 vi Transfer Gifts to Trust Gifts to Trust To permit the transfer of funds to pay for life Year in 2012 in 2011 insurance premiums while using the annual gift exclusion select the Crum Trust option 2012 0 0 P Fr
112. ding 108 summary reports 181 surplus strategies surplus expenses 92 93 surplus savings 92 survivor income insurance goals Level 1 119 insurance goals Level 2 123 survivor income analysis Level 1 119 survivor income analysis Level 2 ongoing income needs 137 survivor income goals Level 2 123 135 annual income needs 128 NaviPlan User Manual Entering Client Data Page 208 of 209 asset availability 131 139 assumptions 124 135 Goal and Expense Analysis 125 136 Income Coverage Analysis 128 137 lump sum needs 129 136 137 ongoing expenses 125 136 survivor s income 130 survivor income insurance goals Level 2 123 T tax credits entering Level 2 11 tax deductions entering Level 2 11 tax details 94 tax filing status overriding 10 trust reports generating 169 U upgrading asset allocation 23 user manual conventions 3 series 2 UTMA account entering 49 V variable life insurance policy 96 NaviPlan User Manual Entering Client Data Page 209 of 209
113. ditional needs that may occur in the event of disability Pay Off Outstanding Liabilities Outstanding Description Principal Major Purchase Goals to Description Amount Target Date Cover Vehicle 0 Feb12014 100 Additional Lump Sum Needs Click the Add Lump Sum Need button to create a new row Set Goals section Disability Income category Client Co client Objectives page Lump Sum Needs tab Level 2 Plan Goal and Expense Analysis method selected 9 Under Pay Off Outstanding Liabilities select any existing loans that will be paid off in the event of disability Note This option is only available if liabilities exist in the plan and if on the Enter Financial Data section Net Worth category Assets Liabilities page Liability Details dialog box Details tab the Payoff Options at Death selection is Transfer to survivor or Payoff at first death from estate 10 Under Major Purchase Goals select any goals that will be paid for in the event of disability Note This option is only available if major purchase goals exist in the plan 11 Ifyou expect any other lump sum needs during disability under Additional Lump Sum Needs click Add Lump Sum Need and then enter the details of the need in the fields that appear 12 To indicate when assets are to be made available complete the procedure Indicating when accounts are to be made available on page 145 Page 143 of 209 NaviPlan User Manual Entering Client D
114. drawals B EOY Capital Ml Shortfall Current Results dialog box Education tab Page 176 of 209 NaviPlan User Manual Entering Client Data 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 You can open the Planning Assistant from the Quick Actions menu while working in any plan Opening the Planning Assistant To open the Planning Assistant follow these steps 1 From the Quick Actions menu select Planning Assistant Planning Assistant e m PDF i WORD Settings Current v Overview Problems Questions Opportunities Reports The Planning Assistant is designed to assist you in analyzing the clients plan It contains information the system has generated by projecting the plan into the future and extracting relevant details This information is dynamically generated and may vary from plan
115. e Liquidation Order Redemptions Bucketing Click the Substantially Equal Periodic Payments SEPP link Redemptions Choose Account ADD REDEMPTION STRATEGY To create a new strategy select an account from the Choose Account list and then click Add Redemption Strategy Substantially Equal Periodic Payments SEPP Choose Account v Ca Pro Rate Account First Last Description Start Date Frequency Distribution Method Payments Actions New account Jul 23 2013 Annual v Required Minimum Distribution v 5x Principal Distributions from Trusts Choose Trust v ADD TRUST STRATEGY To create a new strategy select a trust from the Choose Trust list and then click Add Trust Strategy cc Liquidation Strategies dialog box Redemptions tab Level 2 Plan Substantially Equal Periodic Payments SEPP section 2 Select an account and then click Add SEPP Strategy 3 Enter the remaining details of the redemption strategy Note For more information about entering redemptions and SEPPs see Entering redemptions on page 89 Page 108 of 209 NaviPlan User Manual Entering Client Data Overriding the proposed investor profile for a goal Level 2 Plans You can review the proposed investor profile for the plan on the Plan Management Asset Allocation Profile page to see if it is appropriate for the goal If not to override the proposed portfolio follow these
116. e Note The actual goals that appear your screen will depend on the modules you selected on the Modules screen during goal creation Tracking net worth and cash flow projections Viewing goal coverage progress To track projections of clients net worth and cash flow or to view their goal coverage progress follow these steps 1 Goto the Quick Actions menu and select Current Results 2 Selecteither the Net Worth or Cash Flow tab to view projections of the clients financial situation 3 Select a tab for one of the goals for which you would like to view the coverage m The goal coverage graphs are interactive hover over a bar to the view the details for that particular year m You can click on labels in the graph key to hide or display the associated category from the graph 4 View suggested methods to achieve 10096 goal coverage under Options to Increase Goal Coverage 5 Once you ve reviewed your clients progress and the suggested options to increase coverage click Close to return to where you left off Current Results e Results based on data entered up to the point of generating these result NetWorth Cash Flaw Retirement Education Survivor Income Disability Income Education Urner Eason Ja 520 000 so d Save Monthly 31 118 520 000 Save a Lump Sum 542418 2014 2016 2018 Goal Coverage 2696 restments at End of Goal 0 c Options to Increase Goal Coverage Cover of Expenses 25 3 182 88 Net With
117. e Level 2 Plan Detailed Tax method 2 From the Choose Liability menu select the loan you want to modify 3 Click Add Debt Modification 4 Enter the Amount to add to the existing payment 5 Enter the Frequency time frame and the Inflation Rate for the strategy m lf you select the Increase Principal option the value in the Amount field will be used to increase the principal of the loan This option can only be used with interest only and last period payment loans m If you do not select the Increase Principal option the value in the Amount field will be used to reduce the principal of the loan Page 88 of 209 NaviPlan User Manual Entering Client Data Entering redemptions Redemptions and substantially equal periodic payment SEPP strategies previously entered for accounts appear on the Redemptions page You can modify existing strategies and add new ones You can enter a redemption strategy for any account deferred annuity or stock option to redeem the asset over a period of time or you can redeem an asset in full as alump sum To set up aredemption strategy follow these steps 1 Go to the Enter Financial Data Strategies Redemptions page 2 Under Redemptions from the Choose Account menu select the account to which you want to add a redemption strategy and then click Add Redemption Strategy Savings Debt Modification Redemptions Deficit Coverage Surplus Use this page to enter SEPP trust or redemption s
118. e NaviPlan displays the investor profile and suggested asset mix based on the responses to the questionnaire Page 18 of 209 NaviPlan User Manual Entering Client Data Questionnaire Profile Investor Profile C Override Investor Profile Moderate Select an investor profile Suggested Asset Mix Plan Management section Asset Allocation category Profile page 5 To override the default profile select the Override Investor Profile option and then select a different investor profile from the menu 6 You can modify the asset mix in the proposed portfolio by clicking Customize Asset Mix and then selecting either the Weightings option or the Optimize option Select the Weightings option to manually adjust the asset class weightings of the portfolio Select the Optimize option if you want to generate a new portfolio based on an efficient frontier graph Editing Asset Class Weightings The Weightings option is only available on the Profile page Note If you do not have the user permission to override the asset class weightings this option is not available To edit asset class weightings follow these steps 1 If applicable scroll to the bottom of the Profile page 2 Click Customize Asset Mix and then select Weightings Page 19 of 209 NaviPlan User Manual Entering Client Data Class Name Large Cap Growth Equity Mid Cap Equity US REITs Emerging Markets Equity Intermediate Term Bonds H
119. e Enter Financial Data Net Worth Accounts page Under Qualified and Non Qualified Accounts click for the appropriate account Go to the Savings Strategy tab pee qe Click Add Savings Strategy Holdings Savings Strategy Redemptions Return Rates Beneficiaries Account Fee Setup Savings Strategy ADD SAVINGS STRATEGY Amount S or of Salary Frequency Start Date End Date Infl Add l Actions 0 00 Monthly v Jan12013 m Re s m 0 00 x Account Details dialog box Savings Strategy tab showing an IRA 5 Enter either the dollar amount or percentage of salary to be contributed and the frequency of the savings contribution Ensure dollar values under 25 are entered with a dollar sign or they are assumed to be percentages For certain qualified accounts to have the employee contribute the maximum amount as the federal limit increases type max in the appropriate Amount field 6 Enter the Start Date and End Dates of the strategy 7 Toindex the strategy for inflation select the Infl option To index by an amount greater or less than the default inflation rate enter a different percentage in the Add l field Note The Infl option is not accessible when a percentage of salary is entered Page 43 of 209 NaviPlan User Manual Entering Client Data Setting up a redemption strategy for an account Level 2 Detailed Tax You can enter a redemption strategy for any account type to redeem an account over a
120. e cece ence cece eee e cece ee ceceeceeseesereeseeseeeees 50 Entering annuities 22052220 5eee Soon maueneey qe deeded eaedeued es daaeeeneads eek Jeathe docaseeaesdeuew deed ees 50 Page 29 of 209 NaviPlan User Manual Entering Client Data Entering equity compensation _ 22 22 2202 cece cece cece cece cece cece e cee LDLo aaoo annan 60 Entering stock options Level 2 0 2 02 ecco c cece cece cece e ec cece cee ceeeceeececeterscecceeetseeteeeeees 60 Entering restricted stock awards Level 2 02 ooo e cece cece cece cece ccc eeceeececeseeeceeseeeeeeeeees 62 Defining asset class weightings 2 02 0 ccc cece ccc ccc ccc cecceccececcecceccececceccecceccececcesceses 63 Searching the asset classifier database 0 2 22 eee ce cece eee cee cee eee s essere ei 63 Editing asset class weightings Level 2 22 22 o eco c eee cece cece cece cece cee er Ea i EEOSE aE EIES 64 Generating the Asset Liabilities report _ 2 22 002 o cece ccc cee cece eee cece cceeescceeesseeeeseeeeeees 65 Funding goals Mx EE 66 Overriding previously accrued investment income 2 2002 22 e cece cee cee cee cee cece cee cues 67 Page 30 of 209 NaviPlan User Manual Entering Client Data Entering lifestyle assets Lifestyle assets are purchased for the owners personal use and enjoyment and not for the purpose of funding goals or producing income Examples include a house vacation home car or boat
121. e details in the fields that appear 10 For expenses that occur when long term care begins the Start Date field displays LTC You can enter a later start date if necessary 11 You can change the end date by editing the Number of Years or the End Date fields 12 Goto the Income Adjustments During LTC tab All incomes entered into NaviPlan for this client and received by the client during the long term care period appear on this tab Assumptions LTC Expenses Income Adjustments During LTC Asset Availability Modify the percentage of income in the Owner in LTCfield if the client expects to receive regular income during LTC Existing Incomes Description Income Type Frequency Amount Start Date End Date Infl Add l Owner in LTC Other Taxable Other Taxable Monthly 0 Ret Ow m Death 0 m 0 00 100 Set Goals section Long term Care category Client Objectives page Income Adjustments During LTC tab Level 2 Plan 13 In the Owner in LTC field specify the percentage of the income available to the client or co client during long term care 14 Go to the Asset Availability tab Page 148 of 209 NaviPlan User Manual Entering Client Data Assumptions LTCExpenses Income Adjustments During LTC Asset Availability Use this page to control asset availability for long term care needs Investment Accounts Available During Account Name LTC Not Available New account Joint Non Qualified O Non Qualified Deferred Comp
122. e of the redemption Note The End Date field is not accessible if Redeem All or Lump Sum is selected 7 Toindex the strategy for inflation select the Infl option To index by an amount greater or less than the default inflation rate enter a different percentage in the Add l field Note The nfl option is not accessible when Redeem All or Lump Sum is selected or a percentage of the account is entered Page 89 of 209 NaviPlan User Manual Entering Client Data Entering a substantially equal periodic payments SEPP strategy You can enter a substantially equal periodic payments SEPP strategy for certain qualified accounts and variable annuities If an asset does not qualify for SEPP redemptions it will not appear in the Choose Account under Substantially Equal Periodic Payments SEPP on the Redemptions page Note Only one SEPP strategy can be added to an account or annuity To set up a SEPP strategy follow these steps 1 Go to the Enter Financial Data Strategies Redemptions page 2 Under Substantially Equal Periodic Payments SEPP from the Choose Account menu select the account to which you want to add a SEPP strategy and then click Add SEPP Strategy Substantially Equal Periodic Payments SEPP Choose Account v AD0 SEPP STRATEGY Pro Rate Account First Last Description Start Date Frequency Distribution Method Payments Actions New account Jul 22 2013 Annual Required Minimum Distribution v 5x
123. e this method to enter benefit amounts that the client is currently receiving i Social Security Benefits Estimate Monthly Eligible for Spousal Retirement Benefit Benefits if applicable v David 0 ivi OK CANCEL Social Security Details dialog box Level 1 Plan Benefit Formula selected 3 Go to the Client or Co Client tab 4 Selecta benefit method to use for Social Security calculations m Benefit Formula Benefits are calculated automatically based on the clients incomes m Estimate Benefit Benefit amounts taken from the clients Social Security Statements are entered into NaviPlan Currently Receiving Benefits If the client is age 62 on or before the plan date or is disabled select to enter the amount the client is currently receiving The default method in NaviPlan is Benefit Formula 5 If the client is eligible to receive spousal Social Security benefits select the Eligible for Spousal Benefits option 6 If you want to switch to the Estimate Benefit method select the Estimate Benefit option and then enter the benefit amounts and the starting age If applicable NaviPlan automatically calculates the values under Survivor with eligible children based on the values entered 7 Repeat steps 4 to 6 for the other client 8 Click OK Page 74 of 209 NaviPlan User Manual Entering Client Data Entering Social Security benefits Level 2 In NaviPlan you can either calculate the clients
124. each loan that is not selected NaviPlan assumes that the payments continue and will be included as part of the survivor s cash flow Note This option is only available if liabilities exist in the plan and if on the Enter Financial Data section Net Worth Assets Liabilities Liability Details dialog box Details tab the Payoff Options at Death selection is Transfer to survivor or Payoff at first death from estate Select any future major purchase goals that will be paid for in the event of death This option is only available if major purchase goals exist in the plan 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 To indicate when accounts are to be made available during the survivorship period complete the procedure Assigning asset availability if one client dies on page 131 Page 127 of 209 NaviPlan User Manual Entering Client Data Income Coverage Analysis method if one client dies The Income Coverage Analysis option must first be selected on the Set Goals Survivor Income Client Co client Objectives page See Entering insurance goals for Level 2 Plans on page 123 To use the ncome Coverage Analysis method follow these steps 1 Goto the Annual Income Needs tab 2 To calculate a percentage of current income needed during survivorship under Current Income Level Calculator enter a percenta
125. eceeceeceeseceeseeeees 101 Page 94 of 209 NaviPlan User Manual Entering Client Data Entering life insurance policies To enter your clients existing life insurance policies follow these steps 1 Go to the Enter Financial Data Insurance Coverage page Insurance Coverage Enter your clients life disability and long term care insurance policy information Life Insurance ADD LIFE INSURANCE v Description Insured Policy Type Benefit Beneficiary Premium Actions Life Insurance David v Term 10 Life v il 80 Susan v 0 m 2 R Life Insurance Susan v Term 10 Life v 0 David 25 il 0 im f X Disability Insurance ADD DISABILITY INSURANCE Description E Insured Policy Type Benefit Premium Actions Group STD David v Group STD v 0 mo 0 imo X Group STD Susan v Group STD v 0 mo 0 mo X Group LTD David y Group LTD J 0 e SO X Group LTD Susan v Group LTD v 0 mo 0 mo X Long term Care Insurance ADD LTC INSURANCE Description Insured Benefit Premium Actions LTC Insurance David v 0 j 0 mo X LTC Insurance Susan v 0 ju 0 mo 5x B Insurance Coverage Report Enter Financial Data section Insurance Coverage category Insurance Coverage page Level 2 Plan 2 To add a new life insurance policy click Add Life Insurance and then select a policy type Select the person insur
126. ed by the policy 3 4 Tochange the policy type from the Policy Type menu select another option 5 Enter the Death Benefit Beneficiary and Monthly Premium for the listed insurance policies 6 To enter additional details for an existing life insurance policy click for that policy The fields in the Life Insurance Details dialog box vary depending on the selected Policy Type and the plan level Page 95 of 209 NaviPlan User Manual Entering Client Data Life Insurance Details Future Values Details Description Policy Type Insured Beneficiary Policy Owner Life Insurance Term 10 Life v David v Susan v David Benefit Details Death Benefit Cash Surrender Direct Residual Value Proceeds To 0 0 Premiums Payer Amount Frequency Cash Flow At Age CSV Payable h Cease Coverage On Date Account Detsss Death Benefit At Age umm o Tfr to Cost Basis Survivor 0 Community Property Never vi m dw Cease Premiums On Date Waived at Disability David v 0 Monthly v Never m w ADD LIFE INSURANCE v 4 Previous Enay B NextEnty P Life Insurance Details dialog box Details tab Level 2 Plan m If you selected a variable life or variable universal life policy under Variable Subaccounts enter details of the various subaccounts within the policy as follows 1 Enter a general account mark
127. ee eee eee ec eee cee ceecceeceeeees 91 Entering surplusistrategiesr 5 22255 x cceli nob ok ne Sosa hee EK D ATO SU heated M 92 Assumptions when entering multiple strategies of the same type uuuuuuuleeeseeeeennns 92 Assumptions when entering multiple strategies of different types 0 2 2222 e eee eee eee 92 Chapter 6 Entering insurance coverage and tax details _ 2 22 02 e cece cee cee cence eee 94 Entering life insurance policies 2 02 2 c cece cece ccc cece cence eee e cece ee ceeeeceeceeseececeeseeeees 95 Modifying future values and premiums of a life insurance policy Level 2 LLsuuuuuuuuuuuusuus 97 Entering disability insurance policies 2 22 2 co cece cece ene c cece cece ceceeceeceeseececseseesees 99 Entering long term care insurance policies 0 2 2 2 2 cece cece ence cc eee e cee ceececseseeseeseeeee 100 Generating the Insurance report _ 2 22 2 eee ececee cece cece cece cence eceeceeseeeeseeseeseeeees 101 Chapter 7 Entering accumulation goals _ 2 22 2 2 cece eee cence cence s eeceeeeseeseeseeeeees 102 Retirementgoalass tmptions 2 eencd cnet bessere UEM LUI ger ve EE Eibbiem alode eT nios 103 Retirement date assumptions _ 2 2 22 eee ecen ence cece cece ee cee ceceeseeseeseceeseesees 103 Retirement goal reporting Jo rici ers Seek GB Y a cn Bk fo aae e E LE 103 Defining retirement gedal Sms isase 0 27 sa sone IAEA IRI IND
128. eee ee cece eee eeeeee 162 Funded family limited partnership trust details _ 2 22 2 o cece ce eee eee eee cece cece eceeseeees 163 Funded grantor retained trust details 2 22 0 o eee cece cence e cece cee eeceesecseceesees 164 Funded rolling grantor retained annuity trust details 2 22 22 2 eee ce cece ce cece eee cceceeeees 165 Funded charitable remainder trust details 1 202222022 e eee eee ee 166 Funded charitable lead trust details 20 2 02222 167 Enter beneficiary details for a funded trust _ 2 22 22 02 oe eee eee ee cece eee cece cece L22222 22222 168 Generate trust reports 0 0002 169 Entering gifting growth and history _ 2222 22 e eee eee eee ce ec cece cece cece ceeceeeseeceeeceeeeeees 170 Entering estate expenses ___ 6 22 2 e eee cece cece eee eee ceeeeeseeeereeseeseesees 171 Entering estate strategies 20 22 22 cece cece eee cece cece ee cecceececeeseeseeeees 172 Page 150 of 209 NaviPlan User Manual Entering Client Data Entering estate planning assumptions You can enter estate planning assumptions regarding your clients life expectancy estate distribution death taxes fees and wills Using the Estate Questionnaire you can enter additional assumptions to save in the plan Assumptions entered in the Estate Questionnaire do not affect plan results but will be included in client reports To enter estate planning assumptions follow these steps
129. eficit Calculates the clients current year net cash flow cash inflows minus cash outflows If the cash flow is positive surplus cash exists If the cash flow is negative a cash flow deficit exists Page 70 of 209 NaviPlan User Manual Entering Client Data Manages cash flow surpluses and deficits 1 Allocates any cash surplus according to the clients surplus savings strategies Each strategy is fully funded before any surplus cash is allocated to the next one entered You can view the clients cash flow surpluses deficits and asset redemptions in the Itemized Cash Flow Projection report Quick Actions Reports Cash Flow and the Accumulation and Redemption of Retirement Capital graph Quick Actions Reports Capital Accumulation and Redemption Retirement 2 Keeps track of any pre retirement cash flow deficits 3 During retirement redeems assets at the end of the year to cover the retirement goal By default funds are used in the following order a Anyreinvestment of income from non qualified assets that would be made at year end b Non qualified assets in the following order i Ratio of adjusted cost basis to market value as of the end of the year from the highest to lowest ii Return rate from lowest to highest iii Market value from smallest to largest iv Asset category in the order of cash accounts mutual funds and investment portfolios v Alphabetically based on the Description fi
130. eld c Non qualified annuities that are not paying out ordered by annuities with the Withdrawals as Needed income options and then by their ratio of adjusted cost basis to market value as of the end of the year with the assets containing the highest ratio used first d Roth and Roth annuities that are not paying out ordered by their total return rates from lowest to highest with accounts with the same total return rates used in alphabetical order e Qualified accounts and annuities that are not paying out in the following order i Ratio of qualified basis to market value as of the end of the year from highest to lowest ii Total return rate from lowest to highest iii Alphabetically based on the Description field f Stock options and restricted stock entered on the Enter Financial Data Net Worth Equity Compensation page Note If needed you can revise the liquidation order of assets used for the retirement goal in a Level 2 Plan by clicking the Liquidation Strategies button on the Set Goals Retirement page Page 71 of 209 NaviPlan User Manual Entering Client Data Entering regular or lump sum incomes Use the following procedure to enter the clients annual pre retirement income If the clients are already retired their income should be entered on the Set Goals Retirement page To enter a regular or lump sum pre retirement income follow these steps 1 Go to the Enter Financial Data Cash Flow
131. elect the asset that is linked to the liability Note An asset can be linked to more than one liability but a liability can be linked to only one asset 5 To enter additional details for the liability click the corresponding button and enter the additional information Liability Details dialog box Level 2 Plan From the Liability Details dialog box you can m Create anew liability or a copy of an existing liability by clicking Add Liability and then selecting an option from the menu new liabilities appear on the Assets Liabilities page under Liabilities m View or edit an existing liability by clicking Next Entry or Previous Entry To change the liability calculation under Calculation Options select an option from the Field to Calculate menu and then modify the remaining calculation details The calculated field updates Note NaviPlan does not allow the original principal to be lower than the outstanding balance To exclude a liability from the disability analysis select the Insured for Disability option The liability will be paid in full from disability insurance proceeds To indicate that the unpaid loan balance will be transferred to the survivor select Transfer to survivor from the Payoff Options at Death menu OR To indicate that the liability will be paid from the clients estate select Payoff at first death from estate from the Payoff Options at Death menu OR To model loans that are forgivable at death for ex
132. elow Scenario Current Recommended Proposed Scenario Name Current Plan Alternative 1 Alternative A Alternative B Include Alternatives In Reports dialog box 3 If applicable select a template to use for the report 4 Click Select Document Sections for the report you want to generate Page 187 of 209 NaviPlan User Manual Entering Client Data Select Document Sections Current 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 Overview Current Financial Position Asset Allocation Retirement Attainable Retirement Emergency Fund Disability Insurance Life Insurance Long Term Care Estate Planning Goal Attainability Conclusion Appendix Scenario Probability Assumptions E E E El EJ 8 8 S S S S S S S amp S S S J Tax Considerations Important Terminology Disclaimer Asset Allocation Rate Approval Delivery Acknowledgement Select All Select None Meirisuidiieru Select Document Sections dialog box 5 Selectthe sections you want included in the report 6 To view the subsections for a section click the beside that section The menu expands and subsections appear Select or clear the options for the appropriate subsections 7 To
133. emaining GSTT exemption of the donor is applied against any GSTT that results fromthe trust IF this option is not selected GSTT implication on the death of the member selected will be Qualified considered Start of Year Start of Year Market Value Cost Basis so 0 Beneficiaries Return Rates Enter the income and remainder beneficiaries of the trust and the corresponding percentages Remainder Beneficiaries Pro rata Income Beneficiaries Percent 3 Click the Add Beneficiary button to create a new row David 10056 ADD TRUST v Previous Entry NextEnty gt Trust Details dialog box showing qualified terminable interest property trust details Page 159 of 209 NaviPlan User Manual Entering Client Data Funded marital trust details Trust Details e Funded Marital Trust Trust Start of Year Start of Year GSTT Description Tax Rate Market Value Cost Basis Inclusion Ratio Marital Trust 40 00 0 0 1 000 Income Member Dad v Beneficiaries Return Rates The GSTT Inclusion Ratio is multiplied by the maximum estate tax rate to determine the GSTT rate Enter the income and remainder beneficiaries ofthe trust and the corresponding percentages Remainder Beneficiaries Pes EO aAA Income Beneficiaries Percent 3 Click the Add Beneficiary button to create a new row 100x David PETI NextEnty gt CANCEL Trust Det
134. en click Fill 11 Click OK Entering Social Security benefit amounts using the Estimate Benefit method To enter Social Security benefit amounts from the clients Social Security Statements follow these steps Go to the Enter Financial Data section Cash Flow category Cash Flow page Under Social Security click the Social Security Details link Go to the Client or Co Client tab and then select Estimate Benefit PY gt E Go to the Details tab and then enter the applicable benefit amounts Page 76 of 209 NaviPlan User Manual Entering Client Data Select the Eligible for Spousal Benefits option if the client is eligible to receive spousal Social Security benefits Enter the starting date for retirement benefits The table updates to display the benefits that will be paid to the client s surviving family members after the client s death If the client has any dependent children go to the Eligible Dependents tab Select the appropriate option s to link each dependent to the client for Social Security purposes Click OK Entering current Social Security benefits Note This option is only accessible when the client reaches age 62 on or before the plan date or the client is currently disabled option selected on the Milestones page If the client is receiving a Social Security benefit based on a deceased spouse do not enter the benefit in the Social Security Details dialog box Instead enter it under Incomes b
135. eneral tab and for a plan on the Plan Management section Assumptions General You can also set the account fee for an individual account in the Account Details dialog box To set the account fee for an account follow these steps 1 Go to the Enter Financial Data Net Worth Accounts page 2 Under Qualified and Non Qualified Accounts click for the appropriate account 3 Go to the Account Fee Setup tab Holdings Savings Strategy Redemptions Return Rates Qualified Account Setup Account Fee Setup i Override Annual Fee Tax Amount Frequency Pay Fees From Deductible 0 00 Quarterly New account Account Details dialog box Account Fee Setup tab Detailed Tax method 4 Select Override 5 Adjust the account fee details as required Note The Tax Deductible option is available only when using the Detailed Tax method Setting up a 529 plan or Coverdell account To set up a 529 plan or Coverdell account follow these steps Go to the Enter Financial Data Net Worth Accounts page Click Add Account From the Account Type menu select 529 Plan or Coverdell Under Qualified and Non Qualified Accounts click for the new account Ur de Ye mo oe Select the Owner Donor and the Distributions Beneficiary of the plan The applicable dependent should be selected as the distributions beneficiary Note For a Coverdell account the Distributions Beneficiary must be a dependent Page 48 of 209 N
136. ensation Accounts The current plan does not have any NQDC assets applicable to this module Lifestyle Assets Asset Name Liquidate at LTC Not Available Family Home Joint Lifestyle o Real Estate Assets Asset Name Liquidate at LTC Not Available Apartment Building Joint Real Estate o Business Entity Assets Asset Name Liquidate at LTC Not Available LLC Joint o Education Specific Accounts The current plan does not have any education specific accounts defined Principal Distributions from Trusts Available During Annual Maximum Trust Name LTC Not Available S or Qualified Terminable Interest Property o 0 yr Set Goals section Long term Care category Client Objectives page Asset Availability tab Level 2 Plan 15 Under nvestment Accounts select one of the following options for each account m Available During LTC if the account is available for long term care needs immediately when the client enters long term care m Not Available if the account is not available for long term care needs 16 Under Lifestyle Assets Real Estate Assets and Business Entity Assets select one of the following options for each asset m Liquidate at LTC to sell the asset if a client enters long term care m Not Available to hold the asset during the client s long term care period The Education Specific Accounts section is for information purposes only and cannot be modified The list includes 529 plans Coverdel
137. enses Do not use this procedure to enter loan or mortgage payments insurance premiums property taxes savings contributions estate planning gifts or trust transfers Expenses that only apply to retirement should be entered on the Set Goals Retirement page To enter an expense follow these steps 1 Go to the Enter Financial Data Cash Flow page When you create a new plan NaviPlan creates default entries for housing food transportation entertainment personal and other expenses Any expenses that were entered on the Set Goals Retirement page also appear Under Other Expenses NaviPlan lists expenses that have already been entered into the plan Description Amount Actions Housing e g utilities repairs 0 ymo 5 x Food 0 Ymo 5 R Transportation e g ges insurance A 0 ymo X Entertainment e g restaurants movies 0 mo X Personal e g clothing hobbies 0 ym X Other e g child care travel 0 ym X Enter Financial Data section Cash Flow category Cash Flow page Level 2 Plan 2 To add a new expense click Add Expense and then select an expense type 3 Toenter additional details for an existing expense on the Cash Flow page click for that expense Expense Details 2 Description Member Type Housing e g utilities repa Joint v Lifestyle v Every x Frequency Years Amount Start Date End Date Infl Add
138. ent Data Entering long term care insurance policies To enter your clients existing long term care insurance policies follow these steps 1 Go to the Enter Financial Data Insurance Coverage page 2 To add a long term care insurance policy click Add LTC Insurance 3 Selectthe person insured by the policies 4 Ifapplicable enter the benefit amount and monthly premium of the listed insurance policies 5 Toenter additional details for an existing long term care insurance policy click for that policy Long term Care Insurance Details e Description Company Policy Number LTC Insurance Insured Effective Date David v jan12013 m Benefits Payable Benefit Before Benefit During LTC Indexed LTC Indexed Amount Frequency Infl Add l Infl Add l s0 Weeky v 200 2 00 Applicable Period Waiting Period Benefit Period after starting LTC after starting LTC 90 Days x 4 Years xj Premiums Cease Premiums Payer Amount Frequency Infl Add l At Age On Date David x 0 Monthy vw J 0 00 90 Death Owner ADD LTCINSURANCE v Previous Enuy NextEnny gt cance Long term Care Insurance Details dialog box Level 2 Plan Note Clicking Add LTC Insurance opens a menu where you can select New LTC Insurance or Copy of Current f you select Copy of Current NaviPlan creates a copy of the current policy Use this when you have similar items to add to
139. er sadi p Annual Payment Amount is only accessible when Annuity is Term Certain mA 10 selected fromthe Type menu Beneficiaries Return Rates Enter the payment and remainder beneficiaries of the trust and the corresponding percentages Remainder Beneficiaries Pro rata Payment Beneficiaries Percent Grantor 100 Payment Beneficiaries Pro rata Click the Add Beneficiary button to create a new row Click the Add Beneficiary button to create a new row ADD TRUST v f Previous Enny mu CANCEL Trust Details dialog box showing qualified charitable remainder trust details Page 166 of 209 NaviPlan User Manual Entering Client Data Funded charitable lead trust details Trust Details 0 Funded CLT Trust Tax Description E3 m Grantor Non Grantor Rate Payment Distribution Charitable Lead Trust Joint x 40009 Annuity Ly Trust Annual Payment Payment Amount Payment Frequency Payment Period Term in Years N A 0 Monthly Y Term Certain x 10 Indicates that the grantor will not recieve a charitable deduction for the donation Start of Year Start of Year Present Value Of Market Value Cost Basis Remainder Interest gift Created On so sol so Dec 31 2013 Beneficiaries Return Rates Enter the income and remainder beneficiaries of the trust and the corresponding percentages Remainder Beneficiaries Pro rata Payment Beneficiaries Pes BUDEENG
140. erated m To edit the position of report pages drag and drop the page titles into the order you would like 6 When you are satisfied with these options select Save m f you have not yet entered a name for your template you will be prompted to do so now Using a template to create a report Follow these steps to generate a report using an existing template 1 From the Select Report page find the template you want to use to create a report and select Use 2 When you are satisfied with these options select Build Report Page 185 of 209 NaviPlan User Manual Entering Client Data Traditional client and progress reports The following client reports are available in NaviPlan for Level 1 and Level 2 Plans and are accessible from the Results Client Report page Client ean Description report Financial Say ak Need This report provides an overview of the clients current financial situation and eeds indicates whether the clients goals are attainable Assessment pon This report demonstrates the effects that the clients time horizon risk tolerance sse F i WP Aliocati and asset allocation have on their portfolio returns The clients portfolio is calculated ocation NAR based on their existing accounts and related holdings Financial This report provides an overview of your clients current financial situation with Needs special emphasis on their retirement goal Typically this report is used when the Summ
141. ercentages to various asset classes to equal 100 and then click OK Note If you are using predefined asset allocation you can search for asset class weightings Searching the asset classifier database on page 63 5 Ifyou will not be using return rate associated with the selected asset class weighting select the Override option and then enter the return rate values 6 When you ve finished entering the applicable details of the stock option go to the Vesting and Expiry tab Page 60 of 209 Stock Option Details dialog box Exercise Schedule tab NaviPlan User Manual Entering Client Data Return Rates Vesting and Expiry Exercise Schedule Vesting Dec 31 2012 0 0096 After 6 years 0 0096 After 1 year 20 0096 After 7 years 0 0096 After 2 years 20 0096 After 8 years 0 0096 After 3 years 20 0096 After 9 years 0 0096 After 4 years 20 0096 After 10 years 0 0096 After 5 years 20 0096 Total 100 0096 v Auto vest on retirement C If retirementis on or after age 65 v Auto vest on death Expiry No expiry All options expire 0 years and 0 months after granting Stock Option Details dialog box Vesting and Expiry tab 7 Define when the stock options will vest and when they will expire 8 Go to the Exercise Schedule tab Return Rates Vesting and Expiry Exercise Schedule Sell All Exercised Options Sale Date GJ Excercise Schedule ADD EXERCISE Market Value per Unit Exercise On Number of Options to Exe
142. ersonal residence trust details Trust Details E Funded QPRT Description E3 Grantor Created On Qualified Personal Residence Trust Joint Sa Dec 31 2013 Start of Year Start of Year Present Value Of Market Value Cost Basis Remainder Interest gift se se s i Enter the present value of the remainder e j ah h interest in the trust at the time the trust was created 10 0 00 Beneficiaries Enter the remainder beneficiaries of the trust and the corresponding percentages Remainder Beneficiaries Provete AME isa d Click the Add Beneficiary button to create a new row E CETT one Trust Details dialog box showing funded qualified personal residence trust details Page 162 of 209 NaviPlan User Manual Entering Client Data Funded family limited partnership trust details As well as the usual funding details for a funded FLP you must also enter partner distribution gifting and return rate information Trust Details Q Funded FLP Marketability Minority Interest Description E Created On Discount Rate Discount Rate Family Limited Partnership Dec312013 0 009 0 00 Details StartofYear Start of Year Market Value Cost Basis 0 0 Note the available tabs Partners Income Distributions Giting and Return Rates Partners Income Distributions Gifting Return Rates Partners ADD PARTNER Click the Add Partner button to create a new r
143. es Plan Settings dialog box Current Portfolio Setting tab Settings menu Plan Settings To change the portfolio balancing method for the plan follow these steps 1 Go to the Plan Management Assumptions Current Portfolio Setting page Current Portfolio Setting Current Rebalanced This option rebalances the accounts linked to a goal and uses the weighted average rate of return of the linked assets C Current Not Rebalanced This option does not rebalance the accounts linked to a goal Each account linked to a goal maintains a separate rate of return Plan Management section Assumptions category Current Portfolio Setting page 2 Do one of the following Select To do this Current Rebalance the accounts linked to a goal a weighted average is applied to all Rebalanced accounts linked to the goal as per their investor profile Current Not Prevent accounts linked to a goal from rebalancing accounts linked to a goal Rebalanced maintain a separate rate of return Page 12 of 209 NaviPlan User Manual Entering Client Data Entering capital loss carryovers Level 2 A capital loss occurs when an asset is sold for less than its cost basis If losses in a particular year exceed the allowable capital loss deductions for that year they can be carried forward to later years until completely used This planning strategy can help reduce taxes When using the Average Tax method clients can offset c
144. es After you have added each of the report pages you wish to present to your clients on the Build Report page the output is called a report A template is a report that has been saved for multiple uses By saving reports as a template Template you can present the same set of report pages to all of your clients saving you time and ensuring consistency Report Pages can be viewed as tiles or panels by selecting either ZZ or iii at the top of the page Cover Page Table of Contents a This is a general cover page It This report generates a table of Bes includes the client s name s contents showing each report page iz advisor s name s as well as the date you have included in your report or of report creation template a Remove ADD Tile View zz Financial Snapshot T This report displays a high level m overview ofthe current plan on a single page ADD Cover Page Table of Contents Financial Snapshot Panel view i Page 183 of 209 NaviPlan User Manual Entering Client Data Creating a new report For a guided walkthrough to help you get started on the Build Report page click Getting Started above the Selected Pages panel You re also welcome to send us your suggestions by clicking Feedback Feedback Getting Started Follow these steps to create a new report 1 From the Select Report page select Start a New Report 2 Use the Select a category menu to display a list of repo
145. es of the report side by side click Duplicate To access the Reports menu click Reports Page 85 of 209 NaviPlan User Manual Entering Client Data Chapter 5 Entering strategies Level 2 Strategies can be used to accumulate assets or to pay down debt either by deducting from regular income or from surplus cash On the Savings page you can save a specific amount on a regular basis or as alump sum On the Debt Modification page you can enter additional principal payments or if your clients have interest only or last period payment loans enter increases to the principal of aloan You can also change the order in which cash surpluses are used On the Redemptions page you can enter regular and lump sum redemption strategies and substantially equal periodic payments SEPP strategies On the Deficit Coverage page you can specify the order in which account types are redeemed when covering pre retirement deficits or specify the order in which individual accounts are redeemed On the Surplus page you can specify additional savings and expenses that will apply every time the clients have sufficient surplus cash flow In this chapter Entering a regular savings strategy _ 222 2222 2 cece cece cece cece ec ee cece eee e cece eeceecesceceeseeeees 87 Moditying a loan sere cece a Bo ce ee ns a Se is Se ciel she Se E ec a nas Sota ee 88 Entering redemptions __ 2 2 2 0 2 0 cece cece cece cece cece ec ceceececceccecce
146. es that are to be paid in full upon death If items listed under Pay Off Outstanding Liabilities are not selected those regular payments will continue and be part of the survivor s cash flow needs Adjust the to Coverfor major purchase goals to be retained in the analysis If 0 is entered for items listed under Major Purchase Goals the assumption is that the savings and needs required for those goals are not included as part of the survivor s cash flow needs Use this page to enter lump sum needs in the event of a survivorship situation such as a funeral cost Pay Off Outstanding Liabilities Outstanding Description Principal iVi Mortgage 108 046 Major Purchase Goals to Description Amount Target Date Cover Vehicle 0 Feb1 2014 0 Additional Lump Sum Needs Description 3 Amount Infl Add l Actions Lump Sum Need sO vj 0 00 sx Set Goals section Survivor Income category Client Co client Objectives page Lump Sum Needs tab Level 2 Plan Income Coverage Analysis method selected 8 Under Pay Off Outstanding Liabilities select any existing loans that will be paid off by insurance proceeds For each loan that is not selected NaviPlan assumes that the payments continue and will be included as part of the survivor s cash flow Note This option is only available if liabilities exist in the plan and if on the Enter Financial Data section Net Worth category Assets Liabilities Liability Details dialog
147. ess of the selected Ibbotson model Page 16 of 209 Viewing predefined asset allocation assumptions There are two aspects to predefined asset allocation in NaviPlan NaviPlan User Manual Entering Client Data 1 The asset allocation questionnaire is used to determine your clients investor profile Once the investor profile is determined the expected rate of return is calculated as a weighted average of the underlying asset classes recommended in the suggested asset mix 2 Then you can compare the asset mix of your clients existing portfolio to NaviPlan s suggested asset mix You can also see the differences in expected rates of return expected standard deviation efficient frontier etc and make appropriate recommendations Asset allocation assumptions asset classes investor profiles and model portfolios are already set up for you You can view but not edit these assumptions Note Before you can view asset allocation assumptions for the plan you must complete the questionnaire Plan Management Asset Allocation Questionnaire page To view asset allocation assumptions for the plan follow these steps 1 Goto the Plan Management Asset Allocation Profile page 2 Onthe Profile page click Settings Asset Allocation Settings AssetClasses Investor Profiles editable Asset Classes Large Cap Growth Equity Large Cap Value Equity Mid Cap Equity Small Cap Equity US REITs
148. 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 Estate Planning Compare goal type needs with abilities to meet those goals all goals of the same type are grouped together in the same graph Page 181 of 209 NaviPlan User Manual Entering Client Data Report categories Examples of the tasks you can perform Capital p Analyze the accumulation and redemption of capital used to fund a goal Accumulation and type or all goals Redemption 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 Page 182 of 209 NaviPlan User Manual Entering Client Data Next Gen Client Reports Client reports can be accessed from the Results Client Reports section Select Report Select a Template or Start a New Report cunc START A NEW REPORT START A NEW TEMPLATE Custom Templates Prospecting Template Use this report to provide a quick retirement assessment to prospects Ud More v Results category Client Reports Select Reports page Term Definition Report Page A report page is a single topic Each tile on the Build Report page adds pages to your report A report is a collection of report pag
149. et value if applicable 2 Click the Add Variable Subaccount button Enter the subaccount details in the row that appears 3 Enter a description of the various subaccounts and their market values on the valuation date m Inthe Symbol field enter a symbol for the holding and then click Classify NaviPlan enters the description and asset class weighting for the symbol You can also search the database for a symbol as explained in Searching the asset classifier database on page 63 OR If the holding is fully weighted in one asset class select the asset 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 Note Clicking Add Life Insurance opens a menu where you can select New Life Insurance or Copy of Current If you select Copy of Current NaviPlan creates a copy of the existing life insurance policy Use this when you have similar items to add to avoid re entering data You can view or edit other life insurance policies by clicking Previous Entry or Next Entry Page 96 of 209 NaviPlan User Manual Entering Client Data Modifying future values and premiums of a life insurance policy Level 2 To view and define the premium schedule the future value of any death benefits and the prospective cash surrender value of an insurance polic
150. et value and rental income net of property taxes for the real estate asset 4 To enter additional details for an existing real estate asset click a gp Real Estate Details L2 Community Description E3 Owner Property Real Estate Joint v Portion not Daprecidiln Depreciation Purchase Purchase S or of Amount per Number of Date Amount Purchase Amount Year Years Dec 31 2012 0 0 0 0 Current Current Start of Year Start of Year Market Value Value As Of Market Value Cost Basis 0 Jul 222013 0 0 Rental Information Additions Sale Information Return Rates Rental Information ADD INCOME EXPENSE Rental Expenses Rental S or of Net Rental Annual Rental Income Rental Income Frequency Income Growth Rate Start Date End Date Actions 0 0 Monthly v 0 0 00 Jan12013 Death 2nd m ADD REALESTATE v ff Previous Entry NextEnty gt CANCEL Real Estate Details dialog box Page 36 of 209 NaviPlan User Manual Entering Client Data 5 Enter the purchase and valuation details of the real estate asset 6 Go to the Rental Information tab and then enter the rental income net of property taxes expenses frequency growth rate etc For properties that have rental income from multiple sources click Add Income Expense to add another data entry row 7 To enter the cost of additions made to the property prior to the current year
151. event of disability 4 Under Surplus Strategy enter the percentage of the clients surplus cash flow you assume will be spent in future years and the percentage you assume will be saved These fields are especially useful if the clients expenses are understated m For example in one of the years after disability occurs you expect the clients to incur a cash flow surplus of 10 000 You also expect the clients to spend 2596 of this surplus on miscellaneous expenses and to invest the remaining amount For this example you would enter 25 in the Percent surplus spent field NaviPlan automatically saves the remaining 7596 into a non qualified account 5 If you want surpluses in the plan to be removed before performing the insurance analysis select the Assume surplus is spent option This assumption adjusts for account expenses that have not been entered into the plan or when expenses are understated m When the Assume surplus is spent option is selected NaviPlan projects the cash flow that would have occurred in pre retirement if neither client had become disabled Any pre retirement surpluses resulting from that projection become additional pre retirement disability expenses in the years they are projected to occur The Percentage of lifestyle and medical expenses to cover value also applies to these expenses 6 If you anticipate additional annual expenses under Additional Annual Expenses click Add Additional Expense and then e
152. fits to Spouse and Survivor Benefits to Spouse s Revised Start Date for Eligible Dependents Spouse at Retirement Benefits During Retirement of monthly benefit of monthly benefit Event Age Date Infl Add Total v David 0 0 0 0 Retiremei v O 65 Jun2037 0 00 3 00 Monthly Disability Benefits Spouse s Revised Start Date for Benefits During Retirement Est Benefit of monthly benefit today s Event Age Date Infl Add Total O David 0 0 Oo 0 Retiremei v O 65 un2037 0 00 3 009 OK CANCEL Social Security Details dialog box Details tab Level 2 Plan Benefit Formula selected Page 75 of 209 NaviPlan User Manual Entering Client Data 4 To calculate retirement benefits under Monthly Retirement Benefits do the following a To enter the client s percentage eligibility for monthly retirement benefits select of monthly benefit and then enter the percentage eligibility OR To specify the monthly retirement benefits that the client will receive select Est Benefit today s and then enter the amount in today s dollars b Selecta start date and then define the inflation rate C Selectthe Eligible for Spousal Benefits option if the client is eligible to receive spousal Social Security benefits 5 Tocalculate survivor benefits under Monthly Survivor Benefits enter a percentage of monthly benefits and then define the inflation rate tha
153. ge and resume planning To use the new asset allocation settings for this plan follow these steps 1 Go to the Plan Management section Modules category Modules page 2 Click Upgrade Asset Allocation 3 Click OK NaviPlan upgrades the asset allocation The upgrade is permanent and plan results may change Overview of User Defined Asset Allocation There are two aspects to user defined asset allocation in NaviPlan 1 NaviPlan uses the return rates assigned to asset classes and the asset class weightings assigned to individual assets to calculate return rates for individual assets 2 NaviPlan compares the mix of asset classes in your clients current portfolios the assets your clients actually own with hypothetical asset mixes suited to your clients investor profiles The comparison is designed to demonstrate how the current portfolios can be changed to make it more likely that the clients will achieve their financial goals Throughout NaviPlan these hypothetical asset mixes are referred to as suggested asset mixes proposed portfolios and model portfolios Setting up user defined asset allocation Using NaviPlan s asset allocation you can override any asset allocation defaults set in the Asset Allocation Settings dialog box User Preferences menu Asset Allocation Settings for an individual plan You can also select different model portfolios suggested asset mixes for individual goals within a plan Since time
154. ge in the 26 to cover field and then click Add to Annual Income Needs The income need now appears under Annual Income Needs 3 To define a new annual income need that will apply during survivorship under Annual Income Needs click Add Annual Income Need and then enter all applicable data Assumptions Lump Sum Needs Annual Income Needs Survivor s Income Asset Availability Define the income requirements ifthe client dies Only annual needs entered on this page will be taken into consideration in the analysis Any expenses or needs for retirement entered in the plan s regular cash flow will be included when using the Income Coverage Analysis method Choose whether education goals will be included in the analysis Including education goals will increase the cash flow needs Current Income Level Calculator Household Pre tax Income 96tocover Amount 0 x 096 0 ADD TO ANNUAL INCOME NEEDS Annual Income Needs ADD ANNUAL INCOME NEED Income Need Description Ed Member pre tax Frequency Start Date End Date Infl Add l Actions Lifestyle Expenses Susan SO Annua v jan12015 Death Owner m ivj 0 00 s Support for Dependents ADD SUPPORT FOR DEPENDENT Description Ed Dependent Amount Frequency End Age Start Date EndDate Infl Add Actions Ongoing Expenses Julia 0 Annual v 21 Jeni2015 Jan12019 0 00 3 Scenario Surplus Percent Surplus Spent 0 Percent Surp
155. gested asset mix is used as an asset allocation target a model to achieve throughout the plan If you do not agree with the investor profile determined by the questionnaire results you can select an investor profile manually but you still must fill out the questionnaire first You can also modify the suggested asset mix To determine the clients investor profile follow these steps 1 Go to the Plan Management section Asset Allocation category Questionnaire page 2 Enter your clients responses to all the questions Questionnaire Profile SCORING SETTIN Different investors have different risk tolerances Much of the difference stems from time horizon That is someone with a short investment time horizon is less able to withstand losses The remainder of the difference is attributable to the individual s appetite for risk Volatility can be nerve wracking for many people and they are more comfortable when they can avoid it However there is a definite relationship between risk and return Investors need to recognize this risk return trade off The following risk tolerance questionnaire has been designed to measure an individual s ability time horizon and willingness risk tolerance to accept uncertainties in their investment s performance The total score recommends which of the five risk profiles is most appropriate for the investor 1 When do you expect to begin withdrawing money from your investment account
156. go to the Additions tab Enter the cost of the additions the depreciation so far the dollar amount that the addition will depreciate annually and the number of years until the addition will be fully depreciated 8 If you know the clients will be selling the real estate asset go to the Sale Information tab and then select a sell option from the Sale Option menu Enter a sale date a selling cost rate and then select an option from the Direct After Tax Proceeds To menu If you select New Non Qualified NaviPlan creates anew account and opens the Account Details dialog box NaviPlan uses the selected destination for after tax proceeds from the sale of the asset 9 If you do not want to use the default return rates and standard deviations associated with the asset go to the Return Rates tab select the Override option and then make your changes From the Real Estate Details dialog box you can m Create anew real estate asset by clicking Add Real Estate and then selecting an option new real estate assets appear on the Assets Liabilities page under Real Estate m View or edit another real estate asset by clicking Next Entry or Previous Entry To generate the Assets Liabilities report click Assets Liabilities Report on the Assets Liabilities page Page 37 of 209 NaviPlan User Manual Entering Client Data Entering business entities Level 2 Business entities can only be entered in plans using the Detailed Tax method that also inc
157. gs dialog box may open The contents of this dialog box varies depending on the report selected 2 3 If applicable enter the settings details and then click OK If a 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 Previous Year or Next Year NaviPlan redisplays the report based on the applicable year Page 179 of 209 NaviPlan User Manual Entering Client Data To redisplay the report settings click Report Settings at the bottom of the report window To hide the settings again click Report Settings To generate a report or graph that you can print or distribute beside the PDF or Word button click the d 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 If you made changes to the plan and the report window is still open click Refresh to update the report To duplicate the report or graph click Duplicate NaviPlan creates a duplicate and displays it next to the original in the same window To generate a report or graph from within an open stand alone report or graph window click Report Page 180 of 209 Report categories Favourite Reports NaviPlan User Manual Entering Client Data Examples of the
158. gs option or the Optimize option 8 Use the Weightings option to manually adjust the asset class weightings of the portfolio for all or selected accounts For more detailed instructions see Editing asset class weightings Level 2 on page 64 9 Use the Optimize option to use the Ibbotson Mean Variance Optimizer to generate a new portfolio based on an efficient frontier graph For more detailed instructions see Using the Optimize calculation on page T Note The proposed portfolio is only modified for the goal not for the entire plan Also for a retirement goal the proposed portfolio is only modified for the selected period To identify the accounts that will fund the clients goal see Allocating accounts to goals on page 117 Page 110 of 209 NaviPlan User Manual Entering Client Data Defining education goals To define an education goal follow these steps 1 Go to the Set Goals Education page Education Use this page to define education goals for each family member Education Objectives ADD EDUCATION OBJECTIVE Description Name Start Age Year Infl Add l Annual Cost Years Projected Cost Actions College Education Julia v 18 2016 0 00 go o 4 s0 x Goal Funding Unassigned Accounts 50 000 Unassigned Asset Class Description Account Type Owner Market Value Basis Unassigned Amount Weightings ROR New account Non Qualified Joint 50 000 50 000 100 50 000 Unclassified 0 00 Savi
159. h Accounts page click Goal Funding OR Go to the Set Goals Goal Funding page Goal Funding e Goal Funding University Emergency Account Name Owner Account Type Total Retirement Education Vehicle Fund Unallocated New account Joint Non Reg 0 0 0 0 0 100 0 0 0 0 0 0 OK CANCEL Goal Funding dialog box 2 For each account and goal enter any combination of percentages dollar amounts or the keyword balance to allocate funds to applicable goals Page 66 of 209 NaviPlan User Manual Entering Client Data Overriding previously accrued investment income NaviPlan calculates the clients accrued investment income on non qualified accounts for tax purposes automatically based on the valuation date of the clients accounts To override the accrued investment income amounts follow these steps 1 Go to the Enter Financial Data Net Worth Accounts page 2 Click Previously Incurred Investment Activity Previously Incurred Investment Activity eG Enter the estimated investment income accrued before the valuation date on all non qualified accounts Previously Accrued Investment Income C Override Interest 0 Dividends 0 Short Term Capital Gains 0 Long Term Capital Gains 0 Tax Free 0 Qualified Proceeds 0 E Include income above in cash flow Previously Paid Account Fees C Override Client Co Client Deductible Account Fees Paid from Cash Flow 0 0 Paid from Accou
160. h year Note For some states the or field is not an option but a required field NaviPlan automatically calculates the selected state death tax appropriate for the selected state The calculation method used for the state defaults accordingly to either Current Maximum Federal Amount or 2001 Credit Amount For states where inheritance taxes exist NaviPlan calculates inheritance taxes Page 152 of 209 10 11 NaviPlan User Manual Entering Client Data Under Will Details select Yes for each client who has a will and then enter the date when the will was last updated Under Additional Fees enter any additional fees such as probate and administration fees that will apply to the estate If you want to gather additional estate details to include in the client report click the Estate Questionnaire button The Estate Questionnaire dialog box opens The answers you provide here are used for informational purposes only and do not affect the plan but will be included in client reports Enter your clients responses to the questionnaire and then click OK Page 153 of 209 Entering funded trusts NaviPlan User Manual Entering Client Data Funded trusts are trusts that are currently in place and funded For example if your clients have established a credit shelter trust but both spouses are still living the trust has not been funded and would not be entered here In the case of an irrevocable life insurance trust ILIT
161. he Help amp Resources menu Help includes a glossary of terms Functional documents explain NaviPlan functionality underlying assumptions Functional and results calculations You can access functional documents on specific topics Documents on the related page in the NaviPlan Learning Center or a list of all available functional documents on the Functional Documents page Quick Reference Guides are designed to get you started with a particular Quick Reference workflow in NaviPlan You can access QRGs on specific topics on the related Guides QRGs page in the NaviPlan Learning Center or a list of all available QRGs on the Quick Reference Guides page You can also access other user guides in this series You can access user guides on the User Guides page in the NaviPlan Learning Center Training videos are designed to give you an overview of completing a specific task in NaviPlan You can access videos on specific topics on the related page in the NaviPlan Learning Center or a list of all available functional documents on the Videos page The Take Action webinar series helps you get the best return on your investment in NaviPlan by showing you how to apply the software to real world Take Action m situations You can access webinars on specific topics on the related page in the Webinars A NaviPlan Learning Center or a list of all available functional documents on the Take Action Webinars page Partner Support Co
162. he fields for those years OR To change future values for multiple years use the expanded Fill Values section where you can quickly assign future values to multiple years as follows a Select a column type that you want to modify from the Column to Fill menu b Enter the Start Year and End Year dates to set the range of years that will include modifications c Inthe Start Value field enter an amount that corresponds with the Start Year d In the Base Rate field enter the rate at which the selected column values will increase annually e If the base rate is expected to increase in the Increase Rate By field enter the rate at which to index the future value f In the Period years field enter how often the future values change g Click Fill The future values that you specified are modified automatically Page 98 of 209 NaviPlan User Manual Entering Client Data Entering disability insurance policies To enter your clients existing disability insurance policies follow these steps 1 Go to the Enter Financial Data Insurance Coverage page 2 To add a disability insurance policy click Add Disability Insurance and then select a policy type 3 Selectthe person insured by the policy 4 Tochange the policy type from the Policy Type menu select another option 5 If applicable enter the monthly benefit amount and premium of the listed insurance policies 6 Toenter additional details for an existing dis
163. horizon and risk tolerance are major components of asset allocation goals with different time horizons or objectives may require different investment profiles For example the clients retirement goal might not begin for 20 years or more but they may have education goals for their children starting in five years To set asset allocation assumptions for an individual plan follow these steps 1 Go to the Plan Management section Asset Allocation category Profile page 2 Click Settings Any default asset classes that were entered on the Asset Allocation Settings dialog box Asset Classes tab accessed from the Settings menu Asset Allocation Settings option appear under Asset Classes Page 23 of 209 NaviPlan User Manual Entering Client Data 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 Capital Deferred Standard Description 3 Interest Dividends Gains Growth Total Deviation Actions Large Cap Equity 0 000 2 400 3 010 5 250 10 660 19 6105 3 Small Cap Equity 0 000 1 470 5 060 7 8409 14 370 28 900 3 International Equity
164. iabilities select any existing loans that will be paid off in the event of disability Note This option is only available if liabilities exist in the plan and if on the Enter Financial Data Net Worth Assets Liabilities page Liability Details dialog box Details tab the Payoff Options at Death selection is Transfer to survivor or Payoff at first death from estate 3 Under Major Purchase Goals enter the percentage of any goals that will be paid for in the event of disability This section is only available if major purchase goals are entered in the plan with a start date after January 1 of the following year 4 If you expect lump sum needs under Additional Lump Sum Needs click Add Lump Sum Need and then enter the details of the need in the fields that appear 5 Once all lump sum needs are entered go to the Annual Income Needs tab 6 If you anticipate annual income needs under Annual Income Needs click Add Annual Income Need and then enter the pre tax income need details in the fields that appear 7 Under Education Goals enter the percentage of education goals the disability income will need to cover This section is only available if education goals are entered in the plan 8 Once all annual income needs are entered go to the Income Available tab Disability insurance policy benefits Social Security benefits salaries rental income and pensions from the non disabled client are listed Page 144 of 209 N
165. icks ly amp a BAB 7 u 2 BS m E jal E m J Save to my Quick Picks for future use ADD TEXT ENTRY v Previous Entry Next Entry gt CANCEL User Defined Text Entry dialog box 4 Enter the text in the dialog box and then use the formatting buttons where applicable Note A spelling checker is not available Use your browser s spell check or copy and paste plain text from Microsoft Word Graphics are not supported 5 If you would like to use this text across multiple plans or with multiple clients select the Save to my Quick Picks for future use option When you are finished click OK To edit an existing entry click PF to reopen the User Defined Text Entry dialog box for that entry To reorder entries within a category click Move Up or Move Down o p x o Repeat steps 2 8 until all your entries are complete Page 189 of 209 NaviPlan User Manual Entering Client Data Managing quick picks for user defined text To access and manage any existing quick picks follow these steps 1 On the User Defined Text page select a goal or category from the User Defined Text Summary menu 2 Click Manage My Quick Picks 3 A list of all quick picks saved for the goal or category will appear m To add anew quick pick click Add m To edit the content of an existing quick pick click P m To delete a quick pick click x 4 Once you ve finished managing your quick picks click OK Adding user defined text
166. ields 4 From the Asset Class Weightings menu on the Return Rates tab select an asset class if the account is fully weighted in one asset class OR If the account is weighted in multiple asset classes select Manual Classification from the Asset Class Weightings menu The Asset Class Weightings Details dialog box opens Assign percentages to various asset classes to equal 10096 and then click OK Note If you are using predefined Asset Allocation option you can search for asset class weightings Searching the asset classifier database on the next page 5 If you will not be using return rate associated with the selected asset class weighting select the Override option and then enter the return rate values 6 When you ve finished entering the applicable details of the stock option go to the Vesting and Release tab 7 Define when the stock will vest and a release strategy and then enter any other related details Page 62 of 209 NaviPlan User Manual Entering Client Data Defining asset class weightings You can define asset class weightings for the following asset types m Accounts on the Accounts page and in the Account Details dialog box m Variable annuities on the Annuities page and in the Annuities Details dialog box Stock options in the Stock Option Details dialog box m Restricted stock in the Restricted Stock Details dialog box To define asset class weightings for any of the above asset types do one of the follo
167. ies cae Income Details dialog box Level 2 Plan Page 72 of 209 NaviPlan User Manual Entering Client Data If you are entering a salary bonus or self employed income type that is linked to a defined benefit pension or is excluded from either group disability insurance Social Security or Medicare tax calculations or savings strategies you can make the appropriate selections under Other Options m From the Income Details dialog box you can add another income by clicking Add Income and then selecting New Income or Copy of Current if you select Copy of Current NaviPlan creates a copy of the existing income You can view or edit other incomes by clicking Previous Entry or Next Entry Page 73 of 209 NaviPlan User Manual Entering Client Data Entering Social Security benefits Level 1 To enter Social Security benefits into the plan follow these steps 1 Go to the Enter Financial Data section Cash Flow page 2 Click the Social Security Details link Social Security Details e Use this dialog box to define Social Security assumptions for the plan Client Co Client Benefit Method Select a Social Security method 38i Benefit Formula Use this method to automatically calculate Social Security benefits based on the annual income entered on the Cash Flowpage C Estimate Benefit Use this method to enter benefit amounts directly from a Social Security Statement Currently Receiving Benefits Us
168. ies click for the appropriate annuity 3 Go to the Redemptions tab and then click Substantially Equal Periodic Payments SEPP Substantially Equal Periodic Payments SEPP ADD SEPP STRATEGY Pro Rate Account First Last Description Start Date Frequency Distribution Method Payments Actions New annuity Jul 22 2013 Annual EZ Required Minimum Distribution v 5x Annuity Details dialog box Redemptions tab Substantially Equal Period Payments SEPP details Level 2 Plan Detailed Tax method 4 Enter the Start Date of the SEPP 5 Select the payment Frequency 6 From the Distribution Method menu select the method of payment 7 If applicable select Pro Rate First Last Payments 8 To specify the life expectancy table to use for calculating payments and an interest rate click 2P L SEPP Strategy Details e Annual Account Distribution Description Amount Start Date Frequency Distribution Method New annuity N A 0 Annual v Required Minimum Distribut v Pro Rate First Last Beneficiary 72 t Interest Payments Life Expectancy Table Date of Birth Rate Single Life Expectancy v NAO N A j OK CANCEL SEPP Strategy Details dialog box 9 To save the SEPP details click OK 10 In the Annuity Details dialog box click OK to save the SEPP strategy Page 56 of 209 NaviPlan User Manual Entering Client Data Overriding calculated return rates for variable annuities NaviPlan calcula
169. if a life insurance policy was transferred to the trust in a previous year then the trust is considered funded and should be entered on the Set Goals Estate Planning Funded Trusts page If the life insurance policy will be transferred in the current plan year or in a future year the trust is not considered funded and should not be entered here You can enter the following types of funded trusts Credit shelter trusts CST Irrevocable trusts Irrevocable life insurance trusts ILIT Qualified terminable interest property trusts QTIP Qualified personal residence trusts QPRT Marital trusts Generic testamentary trusts Family limited partnerships FLP Grantor retained annuity trusts GRAT Grantor retained trusts GRT Charitable remainder trusts CRT Charitable lead trusts CLT These trusts can only be entered in plans created using the Detailed Tax method that include the optional Advanced Estate module To enter a funded trust of any kind follow these steps 1 Goto the Set Goals Estate Planning Funded Trusts page Page 154 of 209 Assumptions Funded Trusts Gifting Growth amp History Estate Expenses Funded Trusts Click the Add Trust button to create a new row Set Goals section Estate Planning category Funded Trusts page 2 Under Funded Trusts click Add Trust and then select the applicable trust type NaviPlan User Manual Entering Client Data Estate Strategy AD
170. ife insurance needs in the event that both clients die follow these steps 1 Go to the Set Goals Survivor Income Both Objectives page Assumptions Lump Sum Needs Ongoing Income Needs Asset Availability ROR on Cash Flow Surpluses amp Liquidations Capital Deferred Total Interest Dividends Gains Tax Free Growth Pre Retirement 6 00 1 5096 1 50 1 50 0 00 1 50 Retirement 600 1 50 1 50 150x 0 00 1 50 Tax Rates Dependents Federal Long Term Tax Bracket State Average Marginal Capital Gains 0 8 925 v c 5 00 10 00 10 00 0 00 Rate has been overridden Note The average marginal and long term capital gains tax rates shown represent federal rates The corresponding state tax rate and the federal deduction for state taxes are accounted for in the income tax calculations Set Goals section Survivor Income category Both Objectives page Assumptions tab Level 2 Plan Detailed Tax method and Goal and Expense Analysis method selected 2 Under Objectives select If lt client gt and lt co client gt die 3 Select an insurance analysis method m Goal and Expense Analysis assesses the life insurance needed to cover the survivor s goals and expenses Goals and expenses at the plan level as well as additional expenses entered for the life insurance scenario are considered This analysis is integrated into the rest of the plan m
171. ified asset change the primary beneficiary to someone other than the client or co client and then select the Multi Generational option When the asset owner dies the asset will pass to the beneficiary and IRD taxes will be avoided 5 Toenter gifting strategies that exist in the clients existing estate scenario go to the Gifting tab and then enter the gifting details Page 173 of 209 NaviPlan User Manual Entering Client Data Estate Distribution Asset Estate Details Gifting Trusts Regular Cash Gifts Split Max Annual Annual Description 3 Gifted By Gifted To Gift Gift Exclusion Amount Start Date End Date Infl Add Actions ReguerCesh it Dei x x O so n12013 m Demhime m 0 00 x Lump Sum Cash Gifts Click the Add Lump Sum Cash Gift button to create a new row Asset Gifts Note Only the portion of each asset that is not allocated to a goal is available for gifting To see what portion of each asset is unallocated go to the Goa s section Goa Funding page Click the Add Asset Gift button to create a new row Set Goals section Estate Planning category Estate Strategy page Gifting tab m Toenter the details of cash gifts that occur on a regular basis click Regular Cash Gifts Click Add Regular Cash Gift and then enter the gift details m Toenter cash gifts that occur on a one time basis click Lump Sum Cash Gifts Click Add Lump Sum Cash Gift and then enter the gift detai
172. ify the Calculated Values and then enter the benefits you want to use Instead of entering an amount for each year on the tab you can use the Fill Values feature to fill in the amounts automatically To use this feature follow these steps Click the Fill Values link From the Column to Fill menu select the column of values you want to fill Enter the criteria you want NaviPlan to use to calculate the amounts Click Fill Beer a Entering a benefit formula pension To enter a Benefit Formula pension income follow these steps 1 Go to the Enter Financial Data Cash Flow page Defined Benefit Pensions Amount Description Member Type S or Actions Defined Benefit Pei David v Estimate Benefit 0 lyr 5x Defined Benefit Pei Susan v Estimate Benefit 0 x Enter Financial Data section Cash Flow category Cash Flow page Level 2 Plan Defined Benefit Pensions Page 79 of 209 NaviPlan User Manual Entering Client Data 2 To add a new pension click Add Benefit Pension under Defined Benefit Pensions and then select Add Benefit Formula Defined Benefit Pension Details e Estimate or calculate the client s defined benefit pension If the client is already retired and the pension amount is known enter the defined benefit income under Jncomes on the Cash Flowpage Details Future Benefits Pension Details Estimate Benefit Payable Description 3 Member StartAge Start Date to
173. igh Yield Bonds Cash Asset Class Weightings dialog box Asset Class Weightings Asset Class Weightings 4 00 4 00 0 00 0 00 19 00 8 00 10 00 I Override default asset class weightings Class Percentage Class Name Large Cap Value Equity Small Cap Equity International Equity Long Term Bonds Short Term Bonds International Bonds Total Class Percentage 7 00 0 00 5 00 8 00 8 00 100 0096 ona 3 Select the Override default asset class weightings option and then enter the desired weightings The total must equal 100 4 Click OK To revert to the original asset class weightings click Customize Asset Mix and then select Revert to Defaults Using the Optimize calculation The Optimize option is only available on the Profile page To constrain the recommended asset classes but still generate an optimal recommended asset mix follow these steps 1 Ifapplicable scroll to the bottom of the Profile page 2 Click Customize Asset Mix and then select Optimize Page 20 of 209 NaviPlan User Manual Entering Client Data Optimize Portfolio Statistics _ Override Standard Deviation Similar Return Return 31 Risk 8 7296 4 8096 Rake of Return 16 14 Similar Risk Current to Current to Current Suggested Assumed 43196 4 6 83 6 69 49 6 69 8 49 Efficient Frontier 4 Current Rebalanced
174. iling jointly Federal Long Term Tax Bracket Average Marginal Capital Gains Pre Retirement 72 501 146 400 19 44 25 00 15 00 Retirement 72 501 146 400 19 44 25 00 15 00 Dependents Federal Long Term Tax Bracket Marginal Capital Gains In All Years 0 8 925 1000 0 00 Plan Management section Assumptions category Income Tax page Level 2 Plan Average Tax method Note The above figure shows how the Income Tax page appears for clients with the Married filing jointly tax status The page appears differently for clients with other tax statuses 2 Under Tax Rates set income tax rates for the different time periods for the clients and their dependents m NaviPlan automatically calculates tax rates for the defined income You can override the calculated tax rates by entering the desired rates into the appropriate fields m The state tax rate is added to the displayed average marginal and long term capital gains income tax calculations and the deduction for state taxes at the federal level is taken into account m If any of the tax rates are overridden a note appears on the page and an arrow appears beside each edited tax rate 3 If the client intends to become a resident of a different state once they retire select Override under Future State of Residence m Selectthe State in which the clients will reside m If applicable change
175. imple comparison of their lump sum and ongoing needs to their assets available to offset those needs This assessment is designed to quickly assess your clients need and provide you with an accurate amount of additional life insurance they will require 4 Tochange the survivor s retirement age for the life insurance calculation go to the Assumptions tab select the Override the Retirement Age for the Survivor option and then enter the retirement age or date The default values originate from the Plan Management Assumptions Milestones page 5 Tochange the survivor s life expectancy for the life insurance calculation select the Override the Survivor Life Expectancy option and then enter the life expectancy age or year The default values originate from the Plan Management Assumptions Milestones page 6 Under ROR on Cash Flow Surpluses amp Liquidations enter return rates 7 To override the tax rates shown select the Override Tax Rates option and then enter the tax rates you wish to use Changing the tax rate here only affects the survivor s tax rates for life insurance calculations It does not affect rates used in the rest of the plan The default values on this page originate from the Plan Management Assumptions General page Note The state tax rate is added to the displayed average marginal and long term capital gains tax in income tax calculations State tax deductions at the federal level are considered 8
176. ing NaviPlan has detailed retirement reports for both the current and proposed plans The current plan reports are based on the clients current financial information entered primarily in the Enter Financial Data and Set Goals sections and show the clients their current progress towards their retirement goal All information in the plan except for What if scenarios is reported as part of the current plan in additional reports graphs and client reports In contrast the recommended or proposed plan reports reflect both the current plan information and the Recommended scenario information Page 103 of 209 NaviPlan User Manual Entering Client Data Defining retirement goals To define your clients retirement goals follow these steps 1 Go to the Set Goals Retirement page Retirement Use this page to define the retirement goal This includes setting retirement objectives expenses and incomes To view and modify the order in which accounts are used for the retirement goal click Liquidation Strategies Objectives Calculate Retirement Expenses A Enter the annual retirement expenses as a David Susan Age Date Age Date percentage of the current estimated after tax income Retire At 59 Jan2030 57 Jan2030 Su xX aay Ud f T 4 f percentage of the current lifestyle expenses Life Expectancy 85 2055 83 2055 ias i M E O specific amount Myr mo ADD TO RETIREMENT EXPENSES Retirement Expenses
177. ions select a Field to Calculate a Amortization Enter the Balance and the Payment NaviPlan determines the number of Years and Months remaining b Payment Enter the Balance and the number of Years and Months remaining NaviPlan determines the Payment amount c Balance Enter the Payment amount and the number of Years and Months remaining NaviPlan determines the remaining Balance 12 When you are satisfied with these options click OK Liability Details e Liability Mortgage Interest Compound Description E Owner Type Type Rate Frequency Fixed Mortgage Joint v Mortgage Pm Fixed x 5 000 Semi annuat v Payment Interest is Payment Type Frequency Link to Asset Tax Deductible Principal and Interest v Monthly v None ly Balance Original AsofDate LoanDate Renegotiate Principal Nov 13 2014 Dec 31 2013 Refinanced s0 Cover any pre retirement deficits created by these liability payments Calculation Options Remaining Amortization Field to Calculate Balance Years Months Payment s0 0 00 Amortization v 25 End Date 0 Nov 12 2039 Liability Details dialog box for a Fixed Rate Mortgage Level 2 Plan Page 34 of 209 NaviPlan User Manual Entering Client Data Entering variable rate mortgages Mortgages can be entered in NaviPlan with either fixed interest rates or variable interest rate periods To enter a variable rate mortgage follow these steps sow x W Ne 10 11
178. irement Under Profile the investor profile used by the plan is shown Select the Override option and then select the alternative investor profile you want to apply to the retirement goal If the Asset Allocation module is selected on the Plan Management section Modules category Modules page click Asset Allocation For more information see Overriding the proposed investor profile for a goal Level 2 Plans on page 109 Note If you are using user defined asset allocation default asset classes and investment profiles must first be created for all future plans in Settings or for the individual plan in the Plan Management Asset Allocation category Page 104 of 209 To model retirement expenses follow these steps NaviPlan User Manual Entering Client Data 1 Under Calculate Retirement Expenses do one of the following To calculate the retirement expense based on Total annual after tax salaries Do this Select the percentage of the current estimated after tax salary option and then enter the percentage of the current estimated after tax salary the clients will want to receive during retirement Current annual lifestyle expenses Select the percentage of the current lifestyle expenses option and then enter the percentage of current lifestyle expenses you expect the clients to have during retirement A specific annual amount Select the specific amount option and then enter the amount the client
179. isability Income Client Co client Objectives page To enter data and assess disability insurance needs for the client or co client follow these steps 1 Goto the Set Goals section Disability Income Client Co client Objectives page 2 Toassess insurance needs under Objectives select If client co client is disabled Assumptions Ongoing Expenses Additional Annual Income Lump Sum Needs Asset Availability Adjust Milestones David Susan Overnde Age Date Age Date Disability Retirement Age ln 59 Jan 2030 57 Jan 2030 Disability Life Expectancy LJ 85 2055 83 2055 Analyze Disability To 60 2030 ROR on Disability Insurance Proceeds Surpluses amp Liquidations Capital Deferred Total Interest Dividends Gains Tax Free Growth Pre Retirement 6 0096 1 5096 1 5096 1 5096 0 0096 1 50 Retirement 6 00 1 505 1 5096 1 50 0 0096 1 50 Set Goals section Disability Income category Client Co client Objectives page Assumptions tab Level 2 Plan Detailed Tax method and Income Coverage Analysis method selected 3 Select a method for analyzing disability insurance needs m Goaland Expense Analysis assesses disability insurance needs to cover the clients goals and expenses Goals and expenses at the plan level and additional expenses entered for the disability insurance scenario are considered This method is integrated into the rest of the plan m Income Cove
180. ities entering 50 Page 193 of 209 entering payout options 52 53 entering savings strategies 54 entering subaccounts 51 overriding calculated return rates 57 payout options fixed annuities 52 variable annuities 52 payout options for fixed annuites 52 53 setting up qualified 58 setting up SEPP strategies 56 asset allocation user defined 23 Asset Allocation client report 186 asset allocation upgrading 23 asset availability disability income 145 survivor income 131 139 asset class weightings classifying 42 63 96 editing 64 searching 63 asset classes setting up 23 Asset Liabilities report 31 65 assumptions AMT carryforward credits 14 asset allocation 16 23 capital loss carryovers 13 changing state of residence 9 NaviPlan User Manual Entering Client Data Page 194 of 209 economic factors 6 general 6 income tax 9 inflation rate 6 milestones Level 1 7 portfolio balancing method 12 retirement date 103 retirement goal 103 Average Tax method 3 entering income tax rates 9 B base inflation rate changing 6 beneficiaries funded trust 168 non qualified account 46 benefit formula pension 79 future benefits 81 C Capital Accumulation and Redemption report 182 capital loss carryovers 13 cash flow calculations 69 entering 68 reports 71 181 Cash Flow report 85 charitable remainder trust 166 classifying asset class weightings accounts 63 NaviPlan User Manual Entering Client Data P
181. iv Business Entity Assets Survivor Needs Estate Needs Not Available Asset Name Available Not Available at Death LLC Joint o ivi Education Specific Accounts The current plan does not have any education specific accounts defined Set Goals section Survivor Income category Both Objectives page Asset Availability tab Level 2 Plan Detailed Tax method 2 Under Investment Accounts Lifestyle Assets Real Estate Assets and Business Entity Assets Survivor Needs select one of the following options for each account or asset m Available if the account is available for survivor needs immediately following the death of both clients The account is redeemed as required to cover the survivor s income needs m Not Available if the account is not available for survivor needs 3 If an account or asset should not be used to settle the deceased s estate under Investment Accounts Estate Needs select the Not Available at Death option The Education Specific Accounts section is for information purposes only and cannot be modified The list includes 529 plans Coverdell accounts and UTMAs UGMAs Page 139 of 209 NaviPlan User Manual Entering Client Data Disability income goals Level 2 When a client is currently disabled if you are using the Detailed Tax method you can indicate this on the Plan Management Assumptions Milestones page In this case a link to the Milestones page appears on the Set Goals D
182. l Benefit when Benefits Begin Click the Benefit Payout Options link Additional fields appear From the Method of Payout menu select Life Income or Lump Sum m If you select Lump Sum you must also select a Transfer Payout to destination To transfer the lump sum payment to an IRA select an IRA from the menu or select New IRA The default name for the new IRA asset is Transfer From description of pension The newly created asset can be further defined by clicking Account Details To transfer the lump sum payment into the clients cash flow on the pension owner s benefit start date select Cash Flow Use the fields under Early Retirement to calculate how early retirement can affect the pension benefit Go to the Future Benefits tab The future pension payouts and pension adjustments appear To override the displayed items select Modify the Calculated Values and then enter the benefits you want to use Instead of entering an amount for each year on the tab you can use the Fill Values feature to fill in the amounts automatically To use this feature follow these steps A W m og Click the Fill Values link From the Column to Fill menu select the column of values you want to fill Enter the criteria you want NaviPlan to use to calculate the amounts Click Fill Page 81 of 209 NaviPlan User Manual Entering Client Data Entering expenses Use the following procedure to enter the clients lifestyle and business exp
183. l accounts and UTMAs UGMAs Page 149 of 209 NaviPlan User Manual Entering Client Data Chapter 9 Entering the clients estate plan In NaviPlan you can use the Estate Planning module to enter detailed information about the clients existing estate plan If you want to examine various estate planning scenarios that might meet the clients estate needs see Entering estate planning scenarios in the Level 1 and Level 2 Plan Analyzing client goals user manual In this chapter Entering estate planning assumptions __ 2 22 2 2 2 cee eee cee Isl cece ee ceececeeceeeeeeees 151 Entering funded trusts 2ccc 5 52022202555 sccteceucesseescdesscodetesccesssetecedshalebbiodsasesteeies 154 Funded trusts details Ncc 155 Funded credit shelter trust details _ _ lllloiiiiiiiiiiiiiiiiiiiiiiiillilllllllllllses se essere eee 156 Funded irrevocable trust details _ 2 222022 22 eee eee eee eee eee 157 Funded irrevocable life insurance trust details 22222200222 158 Funded qualified terminable interest property trust details 00000 000000 159 Funded marital trust details 2222 2 2222 s s s ler rr l cil 160 Funded generic testamentary trust details lliiiiiiiiiiiissussssssssssssl ssl RRrrmrlllll2 161 Advanced estate funded trusts details 2 022 2222 cco cece cece eee eee cece cence eee ee eeeeee 161 Funded qualified personal residence trust details 2 0 22202222 c cece eee eee
184. l of your choice and then select an expense option for example If the Asset Allocation module is selected on the Plan Management section Modules category Modules page under Investment Profile select the Override option for the education goal and then Page 112 of 209 NaviPlan User Manual Entering Client Data Search Education Costs e Select a state from the Stare list or enter the college or university name in the Schoo Namefield to filter items from the education database If the exact school name is not known use wildcards to broaden the search Click Search to view the results Education Search Criteria Use the search criteria to access the Peterson s Undergraduate Database for college specific education expenses State School Name E Use wildcards in your search Search Results There are no results to display To calculate the annual education expense for the expense type selected above click Populate Repeat the Peterson search or expense type selection for each education expense listed below Education Goal TION EXPENSE Description 9 Infl Add l College Education M 0 00 Start Start Annual Number Projected Name Age Year Cost of Years Cost Actions Julia v 18 2016 so 4 0 g Search Education Costs dialog box education expenses entered m If applicable change the Inflation Rate for the goal m Toadd an education expense click Add Education Ex
185. lanning Life Expectancy E 2023 0 2023 Susan Estate Planning Life Expectancy m 2028 1 0 2028 OK CANCEL Assign Settings dialog box 2 To model simultaneous death under Life Expectancy select Simultaneous Death in and then enter the year in which the client and co client are expected to die OR To model other life expectancies under Life Expectancy select Other Life Expectancies and then enter the year in which the client or co client is expected to die or select an option for each client 3 If you selected Other Life Expectancies under Event select the event or year that you want to view 4 Click OK Page 169 of 209 NaviPlan User Manual Entering Client Data Entering gifting growth and history On the Gifting Growth amp History page you can enter the growth and tax rates that apply to gifts given to beneficiaries To enter gifting growth and history follow these steps 1 Go to the Set Goals Estate Planning Gifting Growth amp History page Assumptions Funded Trusts Gifting Growth amp History Estate Expenses Estate Strategy Prior Gifts Prior Gifts Prior Gifts with Growth R Growth Income Beneficiary David Susan David Susan Rate Tax Rate Julia 0 0 0 0 300 0 00 Matthew 0 0 0 0 3 00 0 00 Other so 0 so 0 300 0 00 Historical Data Taxable Applicable Gift Taxes Lifetime GSTT GSTT Unused Member Lifetime
186. lculates the income tax due on asset returns based on the income tax method selected o When the Detailed Tax method is selected in the plan NaviPlan applies bracketed federal taxes that consider an extensive number of deductions and credits o When the Average Tax method is selected in the plan depending on the asset types NaviPlan uses average short term capital gains long term capital gains or marginal tax rates entered under Tax Rates on the Plan Management Assumptions General page Page 69 of 209 NaviPlan User Manual Entering Client Data m The default marginal average and capital gains tax rates displayed on the Plan Management Assumptions General page for each income range are average federal and state rates o To use a particular state s tax rates enter those rates on the General page under Tax Rates You can change the default state tax rate for all new plans on the User Preferences Plan Settings dialog box General tab accessed from the User Preferences menu Plan Settings m NaviPlan deducts amounts such as qualified contributions or tax deductible interest from the clients taxable income from other sources and then applies the average tax rate or bracketed federal tax rate if using the Detailed Tax method to calculate income tax liability generated by sources other than taxable portfolios Note Deductible amounts are calculated by NaviPlan based on the information entered in the plan You do
187. lect the calculator icon 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 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 134 of 209 NaviPlan User Manual Entering Client Data Survivor income goals if both clients die Level 2 To analyze l
188. ls m Toenter the details of gifts to be made from specific assets click Asset Gifts Click Add Asset Gift and then enter the gift details 6 Toenter trusts that exist in the clients existing estate scenario go to the Trusts tab click Add Trust and then select the type of trust Estate Distribution Asset Estate Details Gifting Trusts Inter Vivos Trusts Lifetime Description Type Actions ILT ILIT Existing Insurance 5 B 3X Set Goals section Estate Planning category Estate Strategy page Trusts tab showing trust selection options The appropriate dialog box opens The fields will vary depending on the type of trust you selected Page 174 of 209 NaviPlan User Manual Entering Client Data Chapter 10 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 Viewing goal coverage progress __ 2 2 2 2 2 e eee cece eee cece cence cece cece cence eceeseeceeeeseeseeserees 176 Tracking net worth and cash flow projections Viewing goal coverage progress 222 222 e 176 Using the Planning Assistant suuuuuuuuu uuuussllsllllls I IRR e cece eee e cece eeceeeeeeeseeseesees 177 Opening the Planning Assistant 2 2 2 2 2 2222 e cece ce
189. ls Manages cash flow surpluses and deficits 00200 02000 e ee cee s sse cece Entering regular or lump sum incomes 2 22 22 02 cece eee eee ccc ec cece ceceeceeceeceteeseeceesees Entering Social Security benefits Level 1 222 2202 o eee e eee e cee eeceeeceeseeeeeees Entering Social Security benefits Level 2 _ 2 22 22 ooo cece eee cece cece cece ceeceeeceeeseeeseees Calculating benefits using the Benefit Formula method 022 00022 cc cece c cece cece cece cece ceeeee Entering Social Security benefit amounts using the Estimate Benefit method uuuuuu Entering current Social Security benefits 00000 0002 o cece cece cee cee cee cece s cece cee eeeeeee Entering pension income _ _ 2 222 2222 cece cence cence cece cece DDD DDALL oaan aan Entering an estimated benefit pension _ 22 20 20 o cee eee cece nee lI cee ceeceececeeceeeees Entering a benefit formula pension _ 22 2222 eee eee eee eee cence cece ee ceecceeteeeeeecseeceeeeeeeee Entering expenses _ 2 2222 22 eee eee eee eee tees Entering surplus expenses _ 2 22 22 22 eee nce cece ec ec cece cece cece ec eeceeceececeereeceeseesereeseeees Generating the Cash Flow report __ 2 2 22 2 22 2 e cece eee eee cece eee c eee eee e ces eeceeceeeeceeseeseees Page 68 of 2 09 NaviPlan User Manual Entering Client Data Cash flow calculations These calculation
190. lude the optional Business Planning module Business entities are organizations that are separate entities for legal and financial purposes You can add limited liability companies LLC partnerships S corporations or C corporations that the clients hold as flow through assets Business entity assets are excluded from asset allocation To enter a business entity follow these steps 1 Go to the Enter Financial Data Net Worth Assets Liabilities page 2 Under Business Entities click Add Business Entity and then select the business entity type from the menu A new data entry row appears 3 Enter a description and the start of year market value 4 Toenter additional information click s Business Entity Details e Purchase Information Community Number Description Type Owner Property Date Amount of Units LLC Luc v em v Dec 31 2012 0 0 000 Current Information Start of Year Value Current Value Current Value Market Cost Number AMT As Of per unit Value Basis of Units Basis Jan 12013 0 00 0 0 0 000 0 Activity Sale Information Return Rates Activity ADD INCOME EXPENSE AMT NetIncome Distributions Adjustments Frequency _ Start Date End Date Infl Add l Actions Income i Expenses C of so so s0 s0 Annual w en12013 Death 2nd a J 0 00 ADD BUSINESS ENTITY v 4 Previous Entry B NextEntry gt CANCEL Business Entity Details dialog
191. lus Saved 100 Education Goals Number Annual to Description Name StartAge of Years Amount Cover College Education Julia 18 4 0 100 Set Goals section Survivor Income category Client Co client Objectives page Annual Income Needs tab Level 2 Plan Income Coverage Analysis method selected Page 128 of 209 NaviPlan User Manual Entering Client Data 4 To enter annual child support needed for each child that will be provided in the event of death click Add Support for Dependent and then enter the support details This section does not appear if dependents have not been entered 5 To determine how much of any cash flow surplus is assumed to be spent or saved under Scenario Surplus enter the percentage values For example when one client dies you expect the survivor to incur a cash flow surplus of 10 000 You also expect the survivor to spend 25 of this surplus on miscellaneous costs and invest the remaining amount For this example you would enter 25 in the Percent surplus spent field NaviPlan automatically saves the remaining 75 into a non qualified account when survivorship occurs 6 To define how much of an education goal is to be funded during survivorship under Education Goals enter a percentage value in the to Cover field 7 Once income needs are entered go to the Lump Sum Needs tab Assumptions Lump Sum Needs Annual Income Needs Survivor s Income Asset Availability Select the outstanding liabiliti
192. m care Level 1 122 long term care needs 147 survivor income Level 1 119 survivor income Level 2 123 insurance policies disability 99 life insurance 95 long term care 100 insurance reports 101 181 Page 201 of 209 investor profiles overriding 109 selecting 28 setting up 25 irrevocable life insurance trust 158 irrevocable trust 157 L liabilities credit cards 33 fixed rate mortgage 34 fixed mortages 33 loans 33 variable rate mortgage 35 liability details entering 33 35 life expectancy age 8 graph 7 8 milestones Level 1 7 life insurance adding variable subaccounts 96 insurance goals Level 1 119 insurance goals Level 2 123 survivor income 135 life insurance goals Level 1 119 life insurance policies entering 95 future values and premiums Level 2 97 Life Insurance Quick Assessment 124 NaviPlan User Manual Entering Client Data Page 202 of 209 lifestyle assets entering 31 return rates 32 liquidation order defining 106 long term care insurance goals Level 1 119 insurance goals Level 2 123 long term care insurance entering policies 100 goals Level 1 122 goals Level 2 147 lump sum income entering 72 M major purchase goals 114 marital trusts 160 milestones entering Level 1 7 entering Level 2 8 Monte Carlo reports 182 mortgage fixed rate 34 mortgages fixed 33 variable rate 35 N Needs vs Abilities report 181 net worth entering 29 NaviPlan User Manual Enteri
193. ng Client Data Page 203 of 209 reports 181 notes adding personal 192 P payout options fixed annuites 52 53 variable annuites 52 53 pension income Benefit Formula 79 entering 78 Estimate Benefit 78 Peterson s Undergraduate Database 111 phone support 4 plan assumptions entering 5 Planning Assistant opening 177 reports 178 using 177 portfolio balancing preferences setting 12 current not rebalanced 12 current rebalanced 12 portfolios setting up 26 proposed portfolio overriding for goal Level 2 109 Q QTIPs 159 qualified accounts setting up 47 NaviPlan User Manual Entering Client Data Page 204 of 209 qualified annuities setting up 58 qualified personal residence trust 162 qualified terminable interest property trusts entering 159 R redemption strategies adding 106 setting up 44 55 89 refresh report 180 regular income entering 72 report settings assigning 179 duplicating 180 hiding 180 redisplaying 180 refresh 180 report types stand alone Asset Allocation 181 Capital Accumulation and Redemption 182 Cash Flow 71 181 Deficit Coverage 182 Estate 181 Favorite Reports 181 Goals 181 Income Tax 181 Insurance 181 Monte Carlo 182 Needs vs Abilities 181 NaviPlan User Manual Entering Client Data Page 205 of 209 NaviPlan User Manual Entering Client Data Net Worth 181 Summary 181 reports assigning settings 179 duplicating 180 generating 179 Planning Assistant 178 Progress repo
194. ng return rates To modify return rates go to the Return Rates tab and then enter the Growth Rate and Standard Deviation Activity Sale Information Return Rates Standard Deviation 0 0000 Return Rates ADD GROWTH RATE RANGE Start End Year Year Growth Rate Actions 2013 Death 0 000096 Business Entity Details dialog box Return Rates tab Page 40 of 209 Entering accounts NaviPlan User Manual Entering Client Data You can manually enter investment accounts and holdings directly into NaviPlan Level 1 or Level 2 Plans Creating accounts You can enter separate accounts for each of your clients investment holdings or you can group holdings together within one account You cannot combine qualified and non qualified holdings within the same account Also you cannot combine holdings that have different ownerships within the same account To enter an investment account follow these steps 1 Go to the Enter Financial Data Net Worth Accounts page Qualified and Non Qualified Accounts Account Description 3 Type 7 Non Qualified Owner New account v Joint v 0 Market Value Basis ADD ACCOUNT v Simple Account Asset Class Return Savings Weightings Rates Strategies Holdings Act Investment Portfolio 0 v 0 00 o Addi g Mutual Fund Enter Financial Data section Net Worth category Accounts page Cash Account 2 Under Qualified and Non Qualified Accounts click Add
195. ng term care insurance Level 1 1 Go to the Set Goals Long term Care page Long term Care Select the appropriate check boxes below to activate the insurance analysis Enter details for the applicable insurance objectives Long term Care Insurance Analysis to Include ivi If David enters LTC v If Susan enters LTC Objectives Percentage of lifestyle and medical 100 expenses to cover during pd David Susan Frequency Additional LTC Expenses 0 0 Weekly v Set Goals section Long term Care category Long term Care page Level 1 Plan 2 Under Long term Care Insurance Analysis to Include select the appropriate If client co client enters LTC option to model the scenario for the client or co client m The age at which long term care begins is based on the age of death set on the Set Goals section Retirement category Retirement page By default the client is assumed to require long term care for a period of four years starting on January 1 of the year in which the client turns age 80 and the client is assumed to die at the end of this period 2 Under Objectives enter the percentage of lifestyle and medical expenses that is expected to continue when the period of long term care begins The default is 10096 but the percentage can be changed 3 Enter the amount of any additional daily long term care expenses for the client or the co client For long term care insurance non qualified and q
196. ngs Set Goals section Education category Education page Level 2 Plan 2 Tocreate a new goal under Education Objectives click Add Education Objective and then enter the details of the goal To search the Peterson s Undergraduate Database Data source Peterson s Databases copyright 2011 Peterson s a division of Thomson Learning All rights reserved for college specific education expenses click Education Calculator 4 Under Education Search Criteria select the state in which the school is located and or enter the school name and then click Search Page 111 of 209 NaviPlan User Manual Entering Client Data Search Education Costs e Select a state from the Stare list or enter the college or university name in the Schoo Namefield to filter items from the education database If the exact school name is not known use wildcards to broaden the search Click Search to view the results Education Search Criteria Use the search criteria to access the Peterson s Undergraduate Database for college specific education expenses State School Name California vj san Use wildcards in your search Search Results Select a college or university from the list below and then select one of the expense option radio buttons San Bernardino Valley College San Bernardino CA 4 Expense Options 7 San Diego Christian College El Cajon CA In State Tuition San Diego City College San Diego
197. ning funds are automatically distributed on a pro rata basis Use this page to allocate accounts towards goals Enter any mix of percentages dollar amounts or the word Balance however all accounts must be 10096 allocated Accounts not assigned to a goal can represent emergency funds or funds allocated for estate planning transfers Goal Funding College Emergency Account Name Owner Account Type Total Retirement Education Vehicle Fund Unallocated New account David 401 k 50 000 100 0 0 0 0 New account Join Non Qualified 50 000 0 0 0 0 50 000 John s Annuity Joint Non Qualified 10 000 100 0 0 0 0 Nebulous other account David IRA 25 000 100 0 0 0 0 135 000 85 000 0 0 0 50 000 OK CANCEL Goal Funding dialog box All accounts allocated toward the goal appear on the Retirement Education Major Purchase or Emergency Fund pages under Accounts To expand or collapse this information click the Accounts link The market value of each account displayed under lt goal gt Accounts reflects the market value for the account and not the actual amount allocated to the goal Any accounts not allocated to a goal appear under Unassigned Accounts Page 117 of 209 NaviPlan User Manual Entering Client Data Chapter 8 Entering insurance goals This chapter explains how to enter insurance goals in Level 1 and Level 2 Plans Insurance goals are entered on separate pages depending on the ty
198. nt m Not Available if the asset will not be sold until both the client and co client die To ensure an asset is not liquidated to cover estate needs when the first client dies select the Not Available at lt client s co client s gt Death option Note If you select Liguidate Immediately or Liquidate At Retirement the entire lifestyle or real estate asset is liquidated and the proceeds remaining at the end of the year are reinvested at the rate set on the Set Goals Survivor Income Client Co client Objectives page Assumptions tab Page 132 of 209 Life Insurance Analysis NaviPlan User Manual Entering Client Data The need for additional life insurance can be determined quickly using NaviPlan On the Insurance 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 To analyze your clients need for additional insurance follow these steps 1 Gotothe nsurance Analysis page FJim dies FM v Include in Analysis Lump Sum Needs Lump Sum Needs Override ia Copy Lump Sum Needs from Sarah s Assessment Mortgage Principal 0 All Other Loans 0 Education Goals Emergency Fund 0 Fin
199. nt 0 0 Non Deductible Account Fees 0 0 ova Previously Incurred Investment Activity dialog box Level 2 Plan 3 Under Previously Accrued Investment Income select the Override option and then edit the values as required Note The estimate of investment income before the valuation date applies only to non qualified accounts 4 To include qualified proceeds that have been received by the clients before the Plan Analysis Date and are subject to tax select the Include income above in cash flow option and then enter an amount in the Qualified Proceeds field Page 67 of 209 NaviPlan User Manual Entering Client Data Chapter 4 Entering cash flow information This chapter explains how to enter your clients cash flow You can enter incomes Social Security assumptions government pensions defined benefit pensions regular expenses and surplus expenses Additional cash flow options are available when the optional Detailed Cash Flow module is selected on the Modules page In this chapter Cash flow calculations _ 2 02 2 0 222 c cece ccc cece eee ce ee eee eee cence eee cece eee eeeeeeeees Clients cash inflows for the year _ 22 22 02 ooo cece eee eee ee ce cece cece ec ee cece cceeeceecseeeececeeeteeseeees Clients scheduled cash outflows for the year 2 22 22 eee cece eee eee cece aoaaa oaaao oranana Clients current year cash flow surplus or deficit 2 00 0000 o cece cee cee cee eee s
200. ntact 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 4 of 209 NaviPlan User Manual Entering Client Data Chapter 2 Entering plan assumptions You must enter your clients financial information into NaviPlan and set your plan assumptions before you can analyze the information and make recommendations Note This guide assumes that you have already used NaviPlan to create a client file and to open a Level 1 or Level 2 Plan For information about creating and managing client files see the NaviPlan User Manual Introduction NaviPlan bases its calculations on specific assumptions you define In this chapter Entering general assumptions uuuuuuuuuussusssssssslls sess cece cece cee eeceeceeseeceeeeseeeeees 6 Changing economic factors 2 2222 oe cece cece ene cece cece nec e eee c eee ee cee eeeeeceeceeceeeeseeseees 6 Setting annual account fees _ 22 2222 eee ec eee cece cece cece eee ee cee eeceeceeserceseeseeeees 7 Setting milestones Level 1 sssuuuuuususilsslllsslsls s RR cece cece cece eens ceeteeeseesteeeseeseees 7 Setting milestones Level 2 2 02 oo lee eee eee sls IR cece eect eee ceecceecereteeeseeseeeeees 8 Entering income tax rate assumptions Average Tax method 2 2 22 22 eee eee eee eee ec ceecceeeeeeeee 9 Overriding tax filing s
201. nter any anticipated expenses during disability in the fields that appear 7 If you anticipate additional annual incomes go to the Additional Annual Income tab click Add Annual Income and then enter any anticipated incomes in the fields that appear Assumptions OngoingExpenses Additional Annual Income Lump Sum Needs Asset Availability Enter additional annual income that applies during disability Additional Annual Income ADD ANNUAL INCOME Click the Add Annual Income button to create a new row Set Goals section Disability Income category Client Co client Objectives page Additional Annual Income tab Level 2 Plan Goal and Expense Analysis method selected 8 Once all ongoing incomes are entered go to the Lump Sum Needs tab Page 142 of 209 NaviPlan User Manual Entering Client Data Assumptions Ongoing Expenses Additional Annual Income Lump Sum Needs Asset Availability Select outstanding liabilities to be paid in full at disability If items listed under Pay Off Outstanding Liabilities are not selected the assumption is that the regular payments continue and will be part of the client s cash flow needs Adjust the to Coverfor major purchase goals to be retained in the analysis If 0 is entered for items listed under Major Purchase Goals the assumption is that the savings and needs required for those goals are not included as part of the survivor s cash flow needs Under Additional Lump Sum Needs enter ad
202. nts click Add Support for Dependent and then enter annual child support needed for each child that will be provided in the event of death This section does not appear if dependents have not been entered 3 Under Education Expenses define the percentage of previously entered education expenses that will be covered by life insurance This option is only available if an education goal exists in the plan 4 Goto the Lump Sum Needs tab Assumptions Ongoing Expenses Lump Sum Needs Asset Availability Use this tab to enter and edit lump sum cash flow needs after the death of the primary family member s Under Adgitiona Lump Sum Needs enter items such as funeral expenses Additional Lump Sum Needs Description E Amount Infl Add l Actions Lump Sum Need so 0 00 x Set Goals section Survivor Income category Both Objectives page Lump Sum Needs tab Level 2 Plan Goal and Expense Analysis method selected 5 Under Additional Lump Sum Needs enter one time expenses that will be covered in the event of death Enter a unique description for each expense and then enter all appropriate data Note Lump sum needs entered on the Client Co client Objectives page are also listed here 6 Under Estate Expenses NaviPlan lists estate expenses previously entered on the Set Goals section Estate Planning category Estate Expenses page 7 Toindicate when accounts are to be made available for survivor and estate needs comple
203. nuity as a lump sum select the Redeem All option 5 From the Frequency menu select how often the redemptions will occur 6 If applicable for qualified annuities select the Waive Early Withdrawal Penalties option to exclude penalties due if the asset is withdrawn early 7 Inthe Start Date field enter the date the redemption should start 8 In the End Date field enter the date the redemptions should end Note The End Date field is not accessible if Redeem All or Lump Sum is selected 9 Toindex the strategy for inflation select the Infl option To index by an amount greater or less than the default inflation rate enter a different percentage in the Add l field Note The nfl option is not accessible when Redeem All or Lump Sum is selected or a percentage of the annuity is entered in the Amount field 10 Click OK to save the redemption strategy Page 55 of 209 NaviPlan User Manual Entering Client Data Setting up a SEPP strategy for an annuity Level 2 Detailed Tax You can enter a substantially equal periodic payments SEPP strategy for certain qualified annuities If an annuity does not qualify for SEPP redemptions the Substantially Equal Periodic Payments SEPP section of the Annuity Details dialog box does not appear Note Only one SEPP strategy can be added to an annuity To set up a SEPP strategy follow these steps 1 Go to the Enter Financial Data Net Worth Annuities page 2 Under Deferred Annuit
204. nused Charitable Donations for David and Susan 50 Charities Non 50 Charities Non Capital Gain Capital Gain Non Capital Gain Capital Gain Property Pro Property Property Year line 10 1 line 19 1 line 16 1 line 24 1 2012 0 0 0 0 2011 0 0 0 0 2010 0 0 0 0 2009 0 0 0 0 2008 0 0 0 0 1 Line references are from Table 4 of IRS Publication 526 Plan Management section Assumptions category Unused Charitable Donations page Level 2 Plan Detailed Tax method 2 If your clients have made any charitable donations for which they have not claimed deductions in past years enter the portion that is eligible to be carried forward according to the Internal Revenue Code enter this information from your clients tax returns from last year Page 15 of 209 NaviPlan User Manual Entering Client Data Setting asset allocation assumptions You can choose whether or not to use asset allocation in individual plans in NaviPlan To use asset allocation in a plan the Asset Allocation module on the Plan Management Modules page must be selected There are three methods for determining your clients ideal asset allocation in NaviPlan m Standard Ibbotson model o o Utilize 13 asset classes to generate a suggested portfolio based on the completed asset allocation questionnaire Automatic quarterly database updates to ensure investment accuracy
205. of Surplus Start Year End Year Actions New account Joint Non Qualified 100 0096 2013 m Ret 1st m x Surplus Expenses ADD SURPLUS EXPENSE 96 of Start Description 3 Owner Surplus Year EndYear Actions Surplus Expense Joint v 0 00 2013 Death 2nd X To view or edit how surplus funds are directed click Surplus Cash Usage Surplus Cash Usage Enter Financial Data section Strategies category Surplus page Level 2 Plan Detailed Tax method 3 Enter the percentage of surplus income the clients will save to the selected account and then enter the time frame for the strategy 4 Repeat steps 2 3 until all surplus savings strategies are entered Note Ensure that the total percentage of surplus savings entered for the same year is not greater than 100 5 Ifthe clients will be spending some or all of the remaining cash flow surplus under Surplus Expenses edit the data entry line created by NaviPlan If additional surplus expense strategies are needed click Add Surplus Expense 6 Enter a description of the expense the percentage of surplus income your clients will spend the time frame for the strategy and then select the owner of the expense 7 Repeat steps 5 6 until all surplus expense strategies are entered If any surplus remains after all applicable surplus strategies have been implemented in a given year NaviPlan will assume that the surplus has been spent and eliminate any
206. olicies 99 goals Level 1 121 NaviPlan User Manual Entering Client Data Page 197 of 209 insurance goals Level 1 119 insurance goals Level 2 123 objectives Level 2 141 duplicating reports 180 E economic factors 6 editing asset class weightings Level 2 64 education accounts entering 48 education costs searching 111 education goals defining 111 determining costs 111 emergency fund goals defining 115 116 estate expenses 171 estate planning assumptions 151 estate expenses 171 estate strategies 172 funded trusts 155 gifting growth and history 170 questionnaire 153 state death taxes 152 trusts reports 169 estate reports 181 estate strategies 172 estimate benefit pension 78 future benefits 79 NaviPlan User Manual Entering Client Data Page 198 of 209 expenses entering 82 retirement 105 surplus entering 84 family limited partnership trust 163 favorite reports 181 financial goals current results 176 options to increase goal coverage 176 Financial Needs Analysis client report 186 Financial Needs Assessment client report 186 Financial Needs Summary client report 186 funded trusts G beneficiary details 168 charitable lead trust 167 charitable remainder trust 166 credit shelter trust 156 family limited partnership trust 163 generic testamentary trust 161 grantor retained trust 164 165 irrevocable life insurance trust 158 irrevocable trust 157 marital trust 160
207. om the Policy Type menu select the type of canes insurnace used to fund the trust The fields di usd iae under Benefit Detailsand Premiumsvary 100 00 depending on the policytype selected Policy Beneficiaries Return Ragg Future Values Policy Type Insured Cost Basis Effective Date Whole Life v David xj 0 Dec 31 2012 Benefit Details CSV Payable Death Cash Surrender with See Nee Community Benefit Value Death Benefit At Age On Date Property 0 0 o Never ja a Premiums Cease Premiums Waived Payer Amount Frequency At Age On Date at Disability David v 0 Annual v Never m v 4 Previous Entry Next Enty gt Trust Details dialog box showing irrevocable life insurance trust details Page 158 of 209 NaviPlan User Manual Entering Client Data Funded qualified terminable interest property trust details Trust Details Q Funded QTIP Trust GSTT Description Tax Rate Inclusion Ratio State Qualified Terminable Interest Property 40 00 1 000 Income Reverse QTIP Member Election David M a Non Qualified StartofYear Start of Year Market Value Cost Basis f Select the Reverse QTIP Election otpion to treat the trust property as if the QTIP election had not been made that is the assets are considered transferred fromthe donor spouse to the remainder beneficiaries for 0 0 GSTT purposes Any r
208. on page 122 Survivor income Level 1 The need for additional life insurance can be determined quickly using NaviPlan On the Survivor Income 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 To analyze your clients need for additional insurance follow these steps 1 Gotothe Set Goals section Survivor Income Survivor Income Use this page to quickly assess your clients need for additional life insurance Once data has been entered on this page your clients additional need will appear under the Resu ts heading F David dies IfSusandies If Both Die v Include in Analysis Lump Sum Needs C Lump Sum Needs Override Assumptions fm Copy Lump Sum Needs from Susan s Assessment Inflation Rate 3 00 Mortgage Principal 0 Assumed Return Rate 5 00 All Other Loans 0 Survivor s Tax Rate 30 00 Education Goals 0 Emergency Fund 0 Results Final Expenses burial probate etc s0 Total Lump Sum Needs 0 Any Additional Needs 0 plus Total Ongoing Needs 0 Total Lump Sum Needs s0 less Total Available Assets 0 Additional Life Insurance Needed so Ongoing Needs Annual Ongoing Needs are 0 for 0 years
209. on qualified account 6 Go to the UTMA tab Note The UTMA tab is available only if the account is non qualified and the owner is a dependent 7 Select the UTMA Account option and then from the UTMA Custodian and UTMA Donor lists select the custodian and donor 8 Enter the age at which the dependent takes control of the account from the owner Page 49 of 209 NaviPlan User Manual Entering Client Data Entering annuities You can enter deferred and annuitized annuities directly in NaviPlan Level 1 or Level 2 Plans Entering annuities You can enter separate annuities for each of your clients investment holdings or you can group holdings together within one annuity You cannot combine qualified and non qualified holdings within the same annuity Also you cannot combine holdings owned by different people within the same annuity To enter an annuity follow these steps 1 Go to the Enter Financial Data Net Worth Annuities page Assets Liabilities Accounts Annuities Equity Compensation Asset Class Weightings B Enter any deferred or annuitized annuities Deferred Annuities ADD DEFERRED ANNUITY v Fixed Annuity Click the Add Deferred Annuity button to create a new row Variable Annuity ADD ANNUITIZED ANNUITY Annuitized Annuities Click the Add Annuitized Annuity button to create a new row Goal Funding Enter Financial Data section Net Worth category Annuities page If you select this N
210. onal advice and if any such advice is required the services of acompetent professional person should be obtained Advicent has engaged Ibbotson Associates Inc awholly 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 24 2014 NaviPlan User Manual Entering Client Data Contents CONTENTS eesin ree i Chapter 1 Using this manual 0a0000000000a eee cece cee cee cee cee eee aoaaa oaaao anaana 1 NaviPlan User Guide Series 2 22 2 002 oon eee eee eee cece eee e eee eeeeee 2 CONVENTIONS etsede oc ent trae oe Sei tale ere erin cee oe tees See dates ct eee eat 3 NaviPlan RESOUrCE mee 4 Chapter 2 Entering plan assumptions 0000000000000000 0000000000000000 s cence cece eeceececeeseeseeseees 5 Entering general assumptions 2 22 22 2 eee eee ee eee sss lI ees ee cee ceceeceeceececseeeeseeseees 6 Changing economic factors 22 2 2 cece cece eee ee eee eee c teen eee e cee eeseeceeeeeceseeseeeeeees 6 Setting annual account fees 2 22 o eee eee cee eee cece cece cece ceecceeceeceeeeteeceeeesteeeetees 7 Setting milestones Level 1 ee bieri oe Ser ec ne m idap LER I Sosa neGlfjee cere iircerbter ii 7 Setting milestones Level 2 2 2 2
211. ort Term Bonds 0 0056 High Yield Bonds 0 00 International Bonds E 0 00 Cash 0 0096 Total 0 0096 Enter Financial Data section Net Worth category Asset Class Weightings page Level 2 Plan 2 Under Assets select the desired asset 3 If the asset contains holdings select a holding 4 Under Asset Class Weightings enter the appropriate weightings of the asset classes Page 64 of 209 NaviPlan User Manual Entering Client Data Generating the Asset Liabilities report The Asset Liabilities report provides a summary of all the assets liabilities accounts annuities stock options and restricted stock awards entered in the plan To generate the Asset Liabilities report follow these steps 1 Go to the Enter Financial Data section Net Worth category Assets Liabilities page 2 Click Assets Liabilities Report 3 To generate a printer friendly report click PDF or Word NaviPlan generates and opens the report in the selected format Page 65 of 209 NaviPlan User Manual Entering Client Data Funding goals You can allocate all or a portion of an account to fund specific goals By default annuities fund the retirement goal and the funding cannot be adjusted Qualified retirement accounts fund the retirement goal by default but can be modified to fund education and major purchase goals as well Qualified education accounts can fund only education goals 1 On the Enter Financial Data Net Wort
212. ose reports with a Completed status can be opened The Client Report Monitor is available from all the following areas m Quick Actions menu Reports m Results Client Report page m Results Progress Report page m Workflow Status page To use the Client Report Monitor follow these steps 1 Generate a client or progress report OR From the Quick Actions Reports menu select Client Report Monitor 2 Doone ofthe following To Do this List all reports for which you have Clear the Show only reports for this plan option access i Click the link for a report with the Completed status The report View a complete E j i opens in the format specified under System Settings Report repor d Format Click for the applicable report or click Delete All to delete all listed reports and then click OK Note If you close the Client Report Monitor while a report is generating the report 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 191 of 209 NaviPlan User Manual Entering Client Data Adding notes for your own personal use In NaviPlan 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 Quick Actions menu Notes and then select Add Note
213. ou do not want to use the default return rates and standard deviations associated with the asset under Return Rates select the Override option and then make your changes m If you do not want to use the default return rates and standard deviations associated with the asset under Return Rates select the Override option and then make your changes From the Lifestyle Asset Details dialog box you can m Create anew lifestyle asset by clicking Add Lifestyle Asset and selecting an option from the menu New lifestyle assets appear on the Assets Liabilities page under Lifestyle Assets m View or edit another lifestyle asset by clicking Next Entry or Previous Entry To generate the Assets Liabilities report go to the Assets Liabilities page and then click Assets Liabilities Report Page 32 of 209 NaviPlan User Manual Entering Client Data Entering liabilities You can enter many types of liabilities including mortgages loans credit cards and other debts Once entered you can link a liability to a lifestyle asset To enter liabilities follow these steps 1 Go to the Enter Financial Data section Net Worth Assets Liabilities 2 To add anew liability click Add Liability and then select a liability type from the menu The new liability item appears at the bottom of the liabilities menu 3 If applicable enter the liability s description balance interest rate and payment 4 If applicable from the Link to Asset menu s
214. ow 4 Previous Entry NextEnty gt CANCEL Trust Details dialog box showing family limited partnership trust details Page 163 of 209 NaviPlan User Manual Entering Client Data Funded grantor retained trust details As well as the usual funding details for the funded GRT you must also enter income distribution details Trust Details 2 Funded GRT Description 3 Grantor _ Created On Grantor Retained Trust David v Dec 31 2013 Ifthe In Kind option is selected and the income earned by the trust assets is not enough to cover the trust payments an in kind transfer makes up the balance of the payment If it is Start of Year Start of Year Present Value of Market Value Cost Basis Remainder Interest gift 0 0 0 not selected trust assets may be sold to cover trust payments resulting in tax consequences Income Distribution Transfer Annual Payment Trust Payment funt Type Amount Payment Frequency In Kind To Account Details Annuity v 0 N A Monthly m LJ a Payment Period Term in Years Term Certain v 10 Beneficiaries Return Rates Enter the remainder beneficiaries of the trust and the corresponding percentages Press Ze aster aa Click the Add Beneficiary button to create a new row Remainder Beneficiaries ADD TRUST v Previous Entry B Next Entuy gt OK CANCEL Trust Details dialog box showing grantor retained trust details
215. ox Level 2 Plan retirement goal 3 If you are using predefined asset allocation you can override the asset allocation questionnaire your clients answered click Modify Questionnaire m Review the questionnaire and consider whether the responses are true for the goal If a different response to any of the questions would better reflect the goal select the option next to the question and then change the response Responses you enter on this page only apply to the goal and not to the rest of the plan Page 109 of 209 NaviPlan User Manual Entering Client Data 4 For the Retirement goal under Investor Profile select the period for which you want to override the profile 5 To override the selected Investment Profile select the Override option and then select the alternative investor profile you want to use for the selected period Retirement goal only You must select an asset mix other than All Retirement Accounts if you want to override the clients investment profile or customize the asset mix 6 Select the asset mix you would like to review or override The current asset mix graph changes depending on the selected asset mix The suggested asset mix graph is based on your clients goal investment profile 7 Scroll down to the bottom of the profile If applicable you can modify the asset mix in this proposed portfolio for the selected retirement goal by clicking Customize Asset Mix and then selecting either the Weightin
216. page When you create a new plan NaviPlan creates default entries for salaries and bonuses that appear under Incomes Any incomes that are entered on the Retirement page will also appear under Incomes The clients sources of income such as employment income bonuses and inheritances can be entered here Do not include investment income from assets as NaviPlan calculates this income based on the data entered on the Enter Financial Data Net Worth Accounts and Annuities pages Incomes Description Member Amount Actions Salary Susan v 0 lyr 5x Bonus Susan v 0 yr 5x Enter Financial Data section Cash Flow category Cash Flow page 3 If applicable select the family member receiving the income and then enter the annual income amount Incomes that continue into retirement years appear on the Set Goals Retirement page 4 Toenter additional details for or to change the frequency of an existing income click for that income Income Details e Description Member Income Type Susen v Salary lal Annual Amount Frequency Amount per Period s0 Monthy v s0 Start Date End Date Infl Add l Jan 1 2013 m Ret Owner m w 0 00 Other Options Linked Defined Benefit Pension No Defined Benefit Y _ Exclude from group disability insurance _ Exclude from Social Security tax Exclude from Medicare tax _ Exclude from savings strateg
217. pe of insurance In this chapter Entering insurance goals for Level 1 Plans _ 2 22 02 2 eco eee eee cee eee cee cc eecceeceeeeeeeseeeeees 119 Survivor income Level T s v s2 2 AAAs el unter ca cesta ULL DU Ea REA Siete Riah 119 Disability insurance Level 1 2 22 22 eee eee cee cee cee I I cee cece cece cece ceeeterecerseesseeeeees 121 Long term care insurance Level 1 2 2 2 2 eee eee ce eee eee ec cee cece cece cece ceecceecceescetseeeees 122 Entering insurance goals for Level 2 Plans _ 2 22 22 2 2 ooo eee eee eee e cece cece ceecceeceecseeseees 123 Survivor income goals if one client dies Level 2 2 002 222 c oe ee eee eee cee cece cece ceeeceeeceeteees 123 Survivor income goals if both clients die Level 2 02 0220 2 cee cee eee cece aoaaa aooaa aooaa nanan 135 Disability income goals Level 2 1 2 02 o cece ccc cece ee cece oDDD DDPA LDL Loana 140 Long term care insurance goals Level 2 _ 2 22 0 2 eee cece eee ee eee cece cece ceeceeeceeeseeteeeeees 147 Page 118 of 209 NaviPlan User Manual Entering Client Data Entering insurance goals for Level 1 Plans In Level 1 Plans insurance goals consist of life insurance disability insurance and long term care insurance Enter the applicable insurance information as described in the following procedures m Survivor income Level 1 below m Disability insurance Level 1 on page 121 m Long term care insurance Level 1
218. pense m If you selected an expense option using the Peterson s Undergraduate Database enter the expense details and then click Populate 9 When you have finished entering details click OK m f multiple expenses were entered for the goal the total projected cost of the objective appears under Education Objectives 10 To allocate an account to the education goal or to view or edit account distribution for all plan goals click Goal Funding For more information see Allocating accounts to goals on page 117 All accounts allocated toward the education goal appear on the Education page under Education Accounts The market value of each account displayed reflects the market value for the account and not the actual amount allocated to the education goal Any accounts not allocated to a goal appear under Unassigned Accounts Clicking the links expands or collapses the information Page 113 of 209 NaviPlan User Manual Entering Client Data Defining major purchase goals A major purchase is any large expense for which your clients need to save money For example a sailboat a new roof for the house or a wedding are all major purchases To define a major purchase goal follow these steps 1 Go to the Set Goals Major Purchase page 2 Tocreate a new major purchase goal click Add Major Purchase Objective and then select an objective type Note For all major purchase objective types other than the Expense type the new asset is a
219. plus toward the surplus expense m For example a client has an 80 000 surplus a 5096 savings strategy toward Account A and a 5096 surplus expense strategy In this case NaviPlan saves 5096 or 40 000 of the total surplus to Account A and then spends 5096 of the remaining surplus or 20 000 on a surplus lifestyle expense After these strategies have been implemented NaviPlan assumes that the final 20 000 will be spent as part of the clients yearly cash flow Note NaviPlan automatically eliminates any remaining surplus or deficit as of December 31st in a given year If the clients do not intend to spend their surplus make sure to transfer any remaining cash flow surplus into an account To enter surplus strategies follow these steps 1 Go to the Enter Financial Data Strategies Surplus page 2 If the clients will be saving some or all of the cash flow surplus from the Choose Account menu under Surplus Savings select the account or annuity to which you want to save surplus funds and then click Add Surplus Savings Strategy Page 92 of 209 NaviPlan User Manual Entering Client Data Savings Debt Modification Redemptions Deficit Coverage Surplus Define surplus savings and expense strategies By default NaviPlan will allocate surplus funds to savings before using them to pay off surplus expenses Surplus Savings New account Joint Non Qualified EGRET CCIE nesta sor Direct Surplus To
220. r Dependent Status select the applicable Override option and then choose an option from the Dependent of menu Dependent Status Override Dependent of C Julia David Matthew Both Plan Management category Assumptions category Income Tax page Page 10 of 209 NaviPlan User Manual Entering Client Data Entering tax credits and deductions Level 2 Detailed Tax method NaviPlan automatically calculates many tax credits and deductions based on the information you enter in client files and plans You can enter any applicable credits or deductions that are not automatically calculated by NaviPlan on the Enter Financial Data Tax Details page The clients cash flow funds these transactions Unused charitable donations alternative minimum tax carryforward credits and capital loss carryovers are entered in the Plan Management Assumptions category To avoid entering tax credits or deductions more than once review the income tax reports available from the Reports menu To enter tax deductions follow these steps 1 Go to the Enter Financial Data Tax Details page Tax Details Use this page to enter above the line or below the line deductions and refundable or non refundable credits not previously defined e g adoption credit Misc Tax Deductions Description Owner Type Amount Start Date End Date Actions Below the Line Deduction David Belowthe Line Deduction v 0 Jan 12013 m Death Owna m X
221. rage Analysis assesses disability insurance needs to replace the clients income This method is independent of the rest of the plan 4 Tooverride the client s or co client s default retirement age go to the Assumptions tab select Override the Retirement Age for Disability Analysis and then enter the age or date of retirement 5 Tooverride the client s or co client s default life expectancy select Override the Disability Life Expectancy and then enter the age or year of death Page 140 of 209 NaviPlan User Manual Entering Client Data 6 Inthe Analyze Disability Through fields enter the last age or year you want to include in reports for the clients disability analysis The adjacent date field updates automatically m Benefit payments pay into the plan from the time the policy begins and end on the end date of the disability insurance policy 7 Under ROR on Disability Insurance Proceeds Surpluses amp Liquidations enter return rates if needed 8 To override tax rates select Override Tax Rates and then enter the tax rates you wish to use Changing the tax rates here only affects the tax rates for disability insurance calculations It does not affect rates used in the rest of the plan The default values on this page originate from the Plan Management section Assumptions category General page 9 Complete one of the following procedures m Disability Income Goal and Expense Analysis method below m Disability
222. ration skipping transfers that are above the GSTT exemption amount are taxed 10 Ifthe client has a deceased spouse who died after January 1 2011 and the client has filed an estate tax return under Unused Spousal Exclusion enter the additional exclusion amount to be used in estate planning calculations NaviPlan assumes that an estate tax return is properly filed following each client s death Page 170 of 209 NaviPlan User Manual Entering Client Data Entering estate expenses On the Estate Expenses page you can enter estate expenses associated with the clients deaths Only those expenses that qualify for a deduction against the gross estate such as medical expenses in the year of death and burial expenses should be entered here Administration and probate fees are calculated separately on the Assumptions page To enter an estate expense follow these steps 1 Go to the Set Goals Estate Planning Estate Expenses page Assumptions Funded Trusts Gifting Growth amp History Estate Expenses Estate Strategy Estate Expenses ADD ESTATE EXPENSE Expense Name E Owner Amount Infl Add l Actions Estate Expense David v 0 0 006 3 Set Goals section Estate Planning category Estate Expenses page 2 To add a new expense under Estate Expenses click Add Estate Expense 3 Enter a unique name for the expense that will distinguish it from other similar expenses 4 Assign the expense to a famil
223. rcise when Exercised Autoredemption Number of Sold Prior Market Value Estimated Direct Account Expiry Date All Vested Options to 2013 Calculate per Unit Type Tax Rate Proceeds To Dersss Actions e m z None ly 0 00 lx 2 x C Death Client e None Ly J 0 00 IE ox 9 Specify when the stock options will be exercised by entering an event or date and then enter any related details regarding the exercise Page 61 of 209 NaviPlan User Manual Entering Client Data Entering restricted stock awards Level 2 The term restricted stock refers to the awarding of actual stock or shares in a company as opposed to the right to buy stock in the future Clients can own stock options individually or jointly but dependents cannot You can enter all your clients restricted stock on the Financial Picture section Net Worth category Equity Compensation page To enter a new restricted stock award follow these steps 1 Go to the Enter Financial Data section Net Worth category Equity Compensation page 2 To enter a new restricted stock award click Add Restricted Stock Return Rates Vesting and Release Asset Class Annual Dividend Growth Standard Weightings Override per Unit Rate Deviation Large Cap Value Equity v J LJ 0 0000 7 0996 17 3596 Restricted Stock Details dialog box Return Rates tab 3 In the Description field enter a unique name for the stock and then complete all the required f
224. re made up of one general account and multiple subaccounts The total of all subaccounts appear in the Market Value field under Subaccounts To enter an annuity subaccount follow these steps Page 51 of 209 NaviPlan User Manual Entering Client Data Go to the Enter Financial Data Net Worth Annuities page Click amp for the appropriate variable annuity On the Subaccounts tab enter a unique Description of the subaccount and all relevant information T ge dg If you are using asset class weightings classify the asset class weightings for each subaccount as explained in Setting asset allocation assumptions on page 16 Entering payout options for fixed and variable annuities Variable and fixed annuities with the Withdrawals as Needed income type do not have payout options For information about entering payout options for annuities with the Guaranteed Withdrawal Benefit income option Entering payout options for fixed and variable annuities above To specify payout options for a variable or fixed annuity follow these steps 1 Go to the Enter Financial Data Net Worth Annuities page 2 Click 4 for the appropriate variable or fixed annuity 3 Go to the Payout Options tab Note Variable annuities have separate sections for the annuity s general account and variable subaccounts Annuity Details e Description 3 Account Type Owner _ Annuitant Beneficiary Income Option New annuity Non Qualifie v
225. reflect the goal or you are not using predefined asset allocation Overriding the proposed investor profile for a goal Level 2 Plans on page 109 7 Toallocate an account to the major purchase goal or to view or edit account distribution for all plan goals click Goal Funding For more information see Overriding the proposed investor profile for a goal Level 2 Plans on page 109 All accounts allocated toward the major purchase goal appear on the Major Purchase page under Major Purchase Accounts The market value of each account displayed reflects the market value for the account and not the actual amount allocated to the major purchase goal Any accounts not allocated to a goal appear under Unassigned Accounts Page 114 of 209 NaviPlan User Manual Entering Client Data Defining an emergency fund goal For a joint analysis NaviPlan assumes that the emergency fund goal applies to both the client and co client When a client dies NaviPlan transfers the goal to the surviving client To define an emergency fund goal follow these steps 1 Go to the Set Goals Emergency Fund page Emergency Fund Define the emergency fund as a multiple of average monthly fixed expenses or as a specific dollar amount Emergency Fund Goal culate target amount Average Monthly Target Multiple Fixed Expenses Amount Infi Add l 30 x 1244 3732 0 00 Specify target amount Target Amount Infi Add l 0 0 00 Reserve
226. reorder report sections click an applicable section and then drag it to another location 8 To save your selections as a template for this type of client report click Save as Template Enter a name for the template and then click OK The templates you create can be managed on the User Preferences System Settings dialog box Templates tab Settings menu System Settings 9 Click OK NaviPlan saves your selections 10 To generate the report click Generate If you generated this report before this button appears as Regenerate If you are using NaviPlan Online the Status column updates To view the report or view the status of other reports see Using the Client Report Monitor on page 191 Note In NaviPlan Offline you may have to click Refresh to update the Status column Page 188 of 209 NaviPlan User Manual Entering Client Data Preparing custom text for reports In NaviPlan you can create and customize text that will be included in client and Next Gen reports Personalize your plans and presentations by entering text on goal progress recommendations and any specific action items you would like clients to pursue To enter personalized text for reports follow these steps 1 Go to the Results User Defined Text page 2 Under User Defined Text Summary select the goal or category for the user defined text 3 Under Objectives Recommendations or Action Plan click Add User Defined Text Entry e My Quick P
227. revert to the defaults entered on the User Preferences Plan Settings dialog box General tab click the Reset to Defaults button Setting milestones Level 1 To enter the clients retirement dates and life expectancies follow these steps 1 Go to the Plan Management Assumptions Milestones page Milestones David Susan Age Date Age Date Retire At 59 Jan2030 57 Jan2030 Life Expectancy 85 2055 83 2055 LIFE EXPECTANCY GRAPH Currently Disabled mE LJ mE LJ Plan Management section Assumptions category Milestones page Level 1 Plan 2 Inthe Retire At fields enter the age s or date s when the clients will retire 3 Inthe Life Expectancy fields enter the clients life expectancies Note To populate the life expectancy fields using actuarial data click the life expectancy calculator next to the field To view the Life Expectancy Graph click Life Expectancy Graph Page 7 of 209 NaviPlan User Manual Entering Client Data Setting milestones Level 2 On the Milestones page you can set the retirement dates and life expectancies that will be used in the plan To set milestones follow these steps 1 Go to the Plan Management Assumptions Milestones page Milestones David Susan Age i Date Age Date Dex Jj lode Life Expectancy EE 85 2055 83 2055 LIFE EXPECTANCY GRAPH Currently Disabled E o l N o Plan Management
228. riate qualified account Go to the Qualified Account Setup tab Select the Primary Beneficiary and the Contingent Beneficiary If income with respect to a decedent IRD taxes are not applicable select the Multi Generational option If this option is selected the asset will pass to the beneficiary and not to the client or co client Estate taxes may be due but IRD taxes will be avoided To waive early withdrawal penalties for an account or a fixed or variable annuity select the Waive early withdrawal penalties option If the plan type is 403 b in the Pre 1987 Account Balance field enter the value of the plan on December 31 1986 Required minimum distribution payments on the pre 1987 portion of the account will be delayed until retirement or age 75 whichever is later If the client s retirement date is after age 70 the milestone is defined on the Plan Management Assumptions Milestones page and the client is permitted to delay required minimum distributions beyond this age select the Delay RMDs to Retirement option m Ifthe Delay RMDs to Retirement option is not selected NaviPlan ensures that contributions to the plan cease no later than the year in which the client turns 70 and that RMDs will begin in the year in which the client turns 70 even if the client s retirement age has been defined as older than 70 Note If the client s retirement begins before age 70 this option does not appear This step does not apply to
229. ring Client Data Funded credit shelter trust details Trust Details e Funded CST GSTT Description Trust Tax Rate Inclusion Ratio Credit Shelter Trust 40 00 0 000 Income Member David v Non Qualified StartofYear Start of Year Market Value Cost Basis 0 0 If after tax contributions were made to a qualified asset prior to the transfer of assets to this CST enter the after tax balance as ofthe Qualified beginning of the current plan year in the Basis Qualified field Start of Year Market Value Basis Qualified s s Beneficiaries Return Rates Enter the income and remainder beneficiaries ofthe trust and the corresponding percentages Remainder Beneficiaries Prorata EESidis u id Income Beneficiaries Percent 3 Click the Add Beneficiary button to create a new row p David 0 Income Beneficiaries Prorata ENDE Click the Add Beneficiary button to create a new row FETTE Next Entry gt CANCEL Trust Details dialog box showing funded credit shelter trust details Page 156 of 209 NaviPlan User Manual Entering Client Data Funded irrevocable trust details Trust Details 7 Funded Irrevocable Description E Grantor Created On Trust Tax Rate Irrevocable Trust Joint w Dec312010 40 009 End Date Q Never years 0 0 Ifthe client and co client will become income and remain
230. rofiles tab Page 25 of 209 NaviPlan User Manual Entering Client Data 8 Investor profiles should be added from lowest to highest risk tolerance 9 Enter a name such as Conservative and then click Details Investor Profile Details e Investor Profile Description Conservative About this profile Investor Profile Details dialog box 10 Enter the details of the new profile and then click OK 11 Go to the Portfolios tab On this tab you can edit the composition of the investor profiles you created on the Investor Profiles tab AssetClasses Correlations Investor Profiles Portfolios Use this page to display the asset class weightings for any investor profile Asset Allocation Settings dialog box Portfolios tab Asset Allocation Settings 7 0 00 Portfolio Criteria Select Your Default Profile Conservative lain Investor Profiles Conservative lY Portfolios Class Name Weightings Class Name Weightings Large Cap Equity 50 00 Small Cap Equity 50 00 International Equity 0 00 Aggregate Bonds Cash 0 00 Page 26 of 209 NaviPlan User Manual Entering Client Data 12 Under Portfolio Criteria select the investor profile you want to change and then under Portfolio enter the asset class percentages for this profile 13 To revert to the default asset mix values entered on the Asset Allocation Settings dialog box
231. rt pages for each category 3 Report pages are displayed as tiles Select Add for each tile you want to include in your report To remove a tile select Remove m Report tiles are categorized by the following sections o Content Dataless pages that provide an overview of the financial topic at hand These provide context to reports and relate plans in a way that clients can understand o Summary Pages that cover clients progress toward achieving their goal based on their current situation These contain easy follow graphs and images o Current Plan Pages that summarize data for each goal in the current plan These pages are numbers oriented and often contain projection tables 4 Review the order of report pages in the Selected Pages panel The order displayed here matches the order in which reports will appear when generated m To edit the position of report pages drag and drop the page titles into the order you would like Tip You can quickly select all report pages on the Selected Pages panel by clicking the Select All link 5 When you are satisfied with these options select Build Report Tip If you run out of space on the Select Pages panel you can select Expand E enlarge the panel Adding custom content to a report Follow these steps to add your own supplementary content e g client s wills other estate planning documents etc in PDF format to a report 1 From the Build Report page select the Custom Conten
232. rts 186 refreshing the view 180 reports client Asset Allocation 186 Financial Needs Analysis 186 Financial Needs Assessment 186 Financial Needs Summary 186 Retirement Distribution Summary 186 reports stand alone Asset Liabilities 65 Cash Flow 85 Insurance 101 Single Trust 169 resources phone support 4 training 4 retirement adding expenses 105 adding incomes 106 age 8 date assumptions 103 Page 206 of 209 defining goals 104 goal assumptions 103 goal reporting 103 goals overriding proposed portfolio Level 2 109 liquidation order Level 2 106 milestones Level 1 7 Retirement Distribution Summary client report 186 return rates entering 42 overriding for accounts 45 overriding for annuities 57 revenu de placement couru 67 S savings strategies entering 87 entering for accounts 43 entering for annuities 54 surplus 92 SEPP strategies adding 108 SEPP Strategy Details dialog box 45 56 setting up 45 56 90 Single Trust report 169 Social Security Benefit Formula 75 entering Level 1 74 entering Level 2 75 entering current benefits 77 NaviPlan User Manual Entering Client Data Page 207 of 209 Estimate Benefit 76 stand alone reports 179 Asset Liabilities 65 Cash Flow 85 Insurance 101 state death taxes 152 state of residence changing 9 strategies debt modification 88 deficit coverage 91 redemptions 89 regular savings entering 87 SEPP 90 substantially equal periodic payments strategies ad
233. s want to receive annually during retirement 2 To add a calculated retirement expense to the plan click Add to Retirement Expenses 3 Under Retirement Expenses enter details for the listed expenses If necessary click Add Retirement Expense to create an additional expense that will occur during retirement Expenses can be entered for the entire retirement period or they can be entered in a staged format The second option is best used when the clients needs change during the retirement period For example a client may expect to need 65 000 annually from age 65 to age 75 but then expect to reduce or increase spending from age 76 to 80 or the clients may expect to have one time or time limited additional expenses that are over and above the amounts specified on an annual basis In joint plans NaviPlan makes the following assumptions for retirement expenses when the keyword retirement is entered in the Start Age field and the keyword death is entered in the End Age field If the retirement expense is Singly owned The expense begins on The date at which the first client is set to retire The expense ends on December 31 of the year the owner dies unless the Tfr to Survivor option is selected The date at which the first client is set to retire Retirement expenses previously entered on the Enter Financial Data Cash Flow page that continue into retirement appear on the Retirement page Changes made on either
234. s apply to all plan levels unless specific levels are mentioned NaviPlan makes the following annual calculations Clients cash inflows for the year m Annual asset returns based on how you define the assumptions for each asset such as o The asset class weightings and the return rates assigned to each asset class o The return rates entered for each specific asset o The valuation date for each account or holding m Allitemized income from other sources entered on the Enter Financial Data Cash Flow page such as salaries m Income from annuitized annuities entered on the Enter Financial Data Net Worth Annuities page Equity compensation in the form of stock options or restricted stock that has proceeds directed to cash flow as entered on the Enter Financial Data Net Worth Equity Compensation page m Special income such as the tax free proceeds of new loans redemptions from assets used to fund goals income from trusts as well as the proceeds from life disability and long term care insurance policies Special incomes are not entered on the Enter Financial Data Cash Flow page but instead are calculated by NaviPlan based on information entered in other parts of the plan For example when a loan is entered on the Enter Financial Data Net Worth Assets Liabilities page NaviPlan automatically counts the loan principal as special income Clients scheduled cash outflows for the year m NaviPlan ca
235. scenario In a simple will scenario upon first death all assets flow through to the surviving spouse under the unlimited marital deduction To allow full control of estate distribution testamentary trusts general bequests and asset bequests click one of the following buttons CONVERT TO DETAILED CONVERT AND CREATE MARITAL CST Set Goals section Estate Planning category Estate Strategy page 2 Toconvert a simple will estate distribution to a detailed estate distribution where you can enter testamentary trusts general bequests and asset bequests click Convert to Detailed Note The Convert to Detailed button does not appear if the simple will estate distribution has already been converted to a detailed estate distribution OR To convert a simple will estate distribution to a detailed estate distribution and automatically create a marital and a credit shelter trust click Convert and Create Marital QDOT CST The trusts are created automatically Note Marital only appears if one or both the clients are US citizens QDOT only appears if one or both of the clients are resident aliens Note Before setting up a general bequest asset bequest or testamentary trust go to the Assumptions page and review the estate distribution details Page 172 of 209 NaviPlan User Manual Entering Client Data 3 On the Estate Distribution tab you can set up general bequests asset bequests and testamentary trusts m Click the type of trust
236. section Assumptions category Milestones page Level 2 Plan Detailed Tax method 2 Inthe Retire At fields enter the age s or date s when the clients will retire 3 In the Life Expectancy fields enter the clients life expectancies 4 To indicate that a client is already disabled select the Currently Disabled option for that client This sets the disability status percentages for incomes and expenses to 100 NaviPlan assumes that incomes and expenses entered on the Cash Flow page already take the disability into account Note To populate the life expectancy fields using actuarial data click the life expectancy calculator next to the field To view the Life Expectancy Graph click Life Expectancy Graph Page 8 of 209 NaviPlan User Manual Entering Client Data Entering income tax rate assumptions Average Tax method Using the Average Tax method you can specify the client s and co client s income tax brackets before and during retirement and define the tax rate for dependents The inclusion rate for all Social Security benefits regardless of income level is 85 In a Level 2 Plan you can also specify an income bracket during the In Year of Death time period This rate is universally applied at the death of both the client and co client To enter income tax rate assumptions in a plan follow these steps 1 Goto the Plan Management Assumptions Income Tax page Tax Rates David and Susan Married f
237. sis method selected 10 Once all ongoing incomes are entered go to the Lump Sum Needs tab Page 126 of 209 NaviPlan User Manual Entering Client Data Assumptions Lump Sum Needs Annual Income Needs Survivor s Income Asset Availability Select the outstanding liabilities that are to be paid in full upon death If items listed under Pay Off Outstanding Liabilities are not selected those regular payments will continue and be part of the survivor s cash flow needs Adjust the to Coverfor major purchase goals to be retained in the analysis If 0 is entered for items listed under Major Purchase Goals the assumption is that the savings and needs required for those goals are not included as part of the survivor s cash flow needs Use this page to enter lump sum needs in the event of a survivorship situation such as a funeral cost Pay Off Outstanding Liabilities Outstanding Description Principal igi Mortgage 108 046 Major Purchase Goals to Description Amount Target Date Cover Vehicle 0 Feb12014 0 Additional Lump Sum Needs ADD LUMP SUM NEED Description EJ Amount Infi Add l Actions Lump Sum Need sO v 0 00 x Set Goals section Survivor Income category Client Co client Objectives page Lump Sum Needs tab Level 2 Plan Goal and Expense Analysis method selected 11 Under Pay Off Outstanding Liabilities select any existing loans that will be paid off by insurance proceeds 12 13 14 m For
238. steps 1 Go to the Set Goals Retirement Education or Major Purchase page 2 Click Asset Allocation Note This button looks different for the retirement goal than for the other goals Asset Allocation Details e The Current Asset Mix shown below reflects the weighted asset mix of all accounts funding this goal in the current plan The Suggested Asset Mixreflects the time horizon and questionnaire for this specific goal It is used for the accounts funding this goal in your proposed strategy MODIFY QUESTIONNAIRE Investor Profile Period Override Investment Profile Pre Retirement D C Retirement Select the asset mix you would like to review Current Asset Mix Suggested Asset Mix All Retirement Accounts Qualified Retirement Accounts Non Qualified Retirement Accounts Non Qualified Annuity Retirement Accounts plarge Cap Growth Equity 0 00 13 00 p Large Cap Value Equity 0 00 16 0096 Mid Cap Equity 0 00 13 00 p Small Cap Equity 0 0036 9 0096 US REITs 0 00 5 00 P International Equity 0 00 18 00 Emerging Markets Equity 0 00 6 00 along Term Bonds 0 0096 3 0096 i Intermediate Term Bonds 0 0096 9 00 a Short Term Bonds 0 00 4 0096 p International Bonds 0 00 4 00 p Unclassified 100 0096 0 0096 A hold has been placed on an account All Retirement Accounts Expected rate of return 0 0096 8 77 Expected standard deviation 0 00 15 33 Asset Allocation Details dialog b
239. survivorship period complete the procedure see Assigning asset availability if one client dies on the next page Note To delete any changes and revert the survivor incomes that were created on the Enter Financial Data section Cash Flow click Reset Page 130 of 209 Assigning asset availability if one client dies NaviPlan User Manual Entering Client Data On the Asset Availability tab for either the Goal and Expense Analysis method or the Income Coverage Analysis method you can indicate when assets are to be made available during the survivorship period 1 Go to the Asset Availability tab Assumptions Lump Sum Needs Ongoing Income Needs Asset Availability Use this page to control asset availability for survivor needs Investment Accounts Survivor Needs Account Name Available Not Available New account Joint Non Qualified o Non Qualified Deferred Compensation Accounts The current plan does not have any NQDC assets applicable to this module Lifestyle Assets Survivor Needs Asset Name Available Not Available Family Home Joint Lifestyle Oo Real Estate Assets Survivor Needs Asset Name Available Not Available Apartment Building Joint Real Estate o Business Entity Assets Survivor Needs Asset Name Available Not Available LLC Joint Oo e Education Specific Accounts The current plan does not have any education specific accounts defined Estate Needs Not Available at Death Estate Needs
240. t Co client Objectives page Asset Availability tab for either the Goal and Expense Analysis method or the Income Coverage Analysis method you can indicate when assets are to be made available 1 Go to the Asset Availability tab Assumptions LumpSumNeeds AnnualIncomeNeeds Income Available Asset Availability Use this page to control asset availability for disability needs Investment Accounts Available Available At Starting At Account Name Disabilitv Retirement Not Available New account Joint Non Qualified eo o Non Qualified Deferred Compensation Accounts The current plan does not have any NQDC assets applicable to this module Lifestyle Assets Liquidate Liquidate At Asset Name Immediately Retirement Not Available Family Home Joint Lifestyle o o Real Estate Assets Liquidate Liquidate At Asset Name Immediately Retirement Not Available Apartment Building Joint Real Estate O O Business Entity Assets Liquidate Liquidate At Asset Name Immediately Retirement Not Available LLC Joint o o e Education Specific Accounts The current plan does not have any education specific accounts defined Set Goals section Disability Income category Client Co client Objectives page Asset Availability tab Level 2 Plan Detailed Tax method Page 145 of 209 NaviPlan User Manual Entering Client Data 2 Under Investment Accounts select one of the following options for each account m Available At
241. t Data 3 Under Asset Class Weightings Options select Use Asset Classifier Search 4 Under Search enter the search criteria and then click Search The results of the search appear under Results 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 5 Under Results select the appropriate asset and then click OK Editing asset class weightings Level 2 In addition to editing asset class weightings from the asset s dialog box you can also edit asset class weightings for any account annuity stock option and restricted stock on the Asset Class Weightings page To edit the asset class weightings of an existing asset follow these steps 1 Gotothe Enter Financial Data Net Worth Asset Class Weightings page Assets Liabilities Accounts Annuities Equity Compensation Asset Class Weightings Assets New account Account v Selected Asset Summary Account Description Account Type Owner Market Value Cost Basis New account Non Qualified Joint 0 0 Asset Class Weightings Class Class Class Name Percentage Class Name Percentage Large Cap Growth Equity 0 00 Large Cap Value Equity 0 009 Mid Cap Equity 0 00 Small Cap Equity 0 009 US REITs 0 00 International Equity 0 00 Emerging Markets Equity 0 0096 Long Term Bonds 0 005 Intermediate Term Bonds 0 0096 Sh
242. t applies 6 To calculate disability benefits under Monthly Disability Benefits do the following a Select the option s for the client s for whom you want to calculate benefits b If you re not sure how much the client or co client will receive select 96 of monthly benefit and then enter the percentage eligibility OR To specify the monthly retirement benefits that the client will receive select Est Benefit today s and then enter the amount in today s dollars C Select a start date and then define the inflation rate NaviPlan estimates the monthly benefits your client will receive 7 If the client has any dependents go to Eligible Dependents tab 8 Select the appropriate option s to link each dependent to the client 9 Goto the Earnings History tab The Earnings History tab displays the earnings projected by NaviPlan from which the client s Social Security earnings are calculated The client s past earnings appear under Earnings to Date and the client s future earnings appear under Future Earnings 10 To change any of the displayed earnings select the Modify the Calculated Values option and then enter the earnings you want to use Instead of entering an amount for each year on the tab you can use the Fill Values feature to fill in the amounts automatically To use this feature click the Fill Values link enter the years you want to fill enter the criteria you want NaviPlan to use to calculate the amounts and th
243. t report tile 2 Use the Choose File button to find your custom PDF 3 Enter a Title for the custom content 4 When you are satisfied with these options click OK Note The following requirements apply m Maximum of 1 PDF per report 10MB or less Page 184 of 209 NaviPlan User Manual Entering Client Data Converting reports to Microsoft Word output Follow these steps to convert any generated report into a Microsoft Word docx export file 1 Select the pages to include in your report then click Build Report 2 Once the report is generated a blue bar appears near the top of the page From this bar click Convert to Microsoft Word to generate the report in Word format Creating a new report template Follow these steps to create a new template From the Select Report page select Start a New Template Select to enter a name and description for the template Use the Select a category menu to display a list of report pages for a category 3 0d Ne Report pages are displayed as tiles Select Add for each tile you want to include in your template To remove a tile select Remove m Reporttiles are categorized by the following sections o Current Plan Pages that summarize data for the current plan These pages are numbers oriented and often contain projection tables 5 Review the order of report pages in the Selected Pages panel The order displayed here matches the order in which reports will appear when gen
244. tanding Liabilities LJ lad Set Goals section Survivor Income category Disability Income page Level 1 Plan 2 Under Disability Insurance Analysis to Include select the appropriate If lt client co client gt becomes Disabled option to model the scenario for the client or co client Note For the purposes of the disability insurance analysis NaviPlan assumes that the client and co client do not become disabled at the same time 3 Under Objectives enter the percentage of lifestyle and medical expenses to cover This is the percentage of current expenses that are expected to continue after the disability of the client or co client This feature allows you to illustrate a change in cash flow expense needs if one of the clients becomes disabled The default is 100 but the percentage can be changed For disability insurance non qualified assets are available at the start of disability qualified assets are available at the start of retirement and lifestyle assets are available for the estate 4 Ifthe disability insurance coverage is to cover the outstanding major purchase goals in the event of the disability of one client select the Cover Major Purchase Goals option for the client and or co client If the disability insurance coverage is to pay off all outstanding liabilities select the Pay Off Outstanding Liabilities option for the client and or co client Page 121 of 209 NaviPlan User Manual Entering Client Data Lo
245. tasks you can perform Keep reports that you use frequently readily available 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 Summary 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 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 Cash Flow Monitor income tax changes 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 Goals 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 Asset Allocation i If you are using predefined asset allocation examine risk score and questionnaire results Analyze the effects of death disability long term care and insurance on cash flow Insurance Analyze the effects of asset redemptions at death during disability and for long term care Compare
246. tate This option is only available if liabilities exist in the plan 7 Under Additional Lump Sum Needs enter one time expenses that will be covered in the event of death Enter a unique description for each expense and then enter all appropriate data 8 To indicate when accounts are to be made available for survivor and estate needs complete the procedure Assigning asset availability if both clients die on the next page Page 138 of 209 NaviPlan User Manual Entering Client Data Assigning asset availability if both clients die On the Asset Availability tab for either the Goal and Expense Analysis method or the Income Coverage Analysis method you can indicate when assets are to be made available 1 Go to the Asset Availability tab Assumptions Lump Sum Needs Ongoing Income Needs Asset Availability Use this page to control asset availability for survivor needs Investment Accounts Survivor Needs Estate Needs Not Available Account Name Available Not Available at Death New account Joint Non Qualified o LJ Non Qualified Deferred Compensation Accounts The current plan does not have any NQDC assets applicable to this module Lifestyle Assets Survivor Needs Estate Needs Not Available Asset Name Available Not Available at Death Family Home Joint Lifestyle O ivi Real Estate Assets Survivor Needs Estate Needs Not Available Asset Name Available Not Available at Death Apartment Building Joint Real Estate O
247. tatuses Detailed Tax method 202222 e eee eee cee eee e cece eeeceeeceeeseees 10 Changing the Dependent of status Detailed Tax method 0222 2 222 c eee eee eee cece eee ee ee eee 10 Entering tax credits and deductions Level 2 Detailed Tax method 2 2 22222 eee eee eee cece eee 11 Selecting a portfolio balancing method _ 2 2 22 2 2 2 cece cece cece cece eee cece cee eeceeceeseesees 12 Entering capital loss carryovers Level 2 _ 2 2 2 2 o occ e cece eee eee ence cece ceecceeeceeceeeseeseeees 13 Entering AMT carryforward credits Level 2 2 222022 eee eee eee ce eee ec cece cece ceecceccceeeeeeeees 14 Entering unused charitable donations Level 2 _ 22 22 22 coe eee cee cee cece cee cece cceeceeeceeeeeees 15 Setting asset allocation assumptions _ 2 2 22 2 2 2c eee cece cece cece Is RR cecceececeeeeeseeees 16 Overview of predefined Asset Allocation 2 22 0 oe cece cece eee e cece cece cece ceeceeeceeeceeeteeeseees 16 Upgrading asset allocation _ 2 2 22 2 2 occ cece cece cee eee e cece cee cee eeceeceeseeceeseseeseee 23 Overview of User Defined Asset Allocation 23 Page 5 of 209 NaviPlan User Manual Entering Client Data Entering general assumptions The Plan Management Assumptions General page varies depending on the plan level and the income tax method selected for the plan Changing economic factors To change basic
248. te the procedure Assigning asset availability if both clients die on page 139 Page 136 of 209 NaviPlan User Manual Entering Client Data Income Coverage Analysis method if both clients die The Income Coverage Analysis option must first be selected on the Set Goals Survivor Income Both Objectives page See Survivor income goals if both clients die Level 2 on page 135 To use the Income Coverage Analysis method follow these steps 1 Go to the Ongoing Income Needs tab Assumptions Lump Sum Needs OngoingIncomeNeeds Asset Availability Current Income Level Calculator Household Pre tax Income to cover Amount Support for Dependent Click the Add Support for Dependent button to create a new row Education Goals Number Annual to Description Name Start Age of Years Amount Cover College Education Julia 18 4 0 100 Set Goals section Survivor Income category Both Objectives page Ongoing Income Needs tab Level 2 Plan Income Coverage Analysis method selected 2 To calculate a percentage of current income needed during survivorship under Current Income Level Calculator enter a percentage in the to cover field and then click Add to Support for Dependents 3 To enter annual child support needed for each child that will be provided in the event of death click Add Support for Dependent and then enter the support details This section does not appear if dependents have not been entered 4 If educa
249. tering real estate assets m Entering equity compensation Level 1 and Level 2 Plans m Entering detailed estate planning information Entering client data and goals B j e 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 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 Creating goal scenarios m Creating estate planning scenarios m Generating client reports Page 2 of 209 NaviPlan User Manual Entering Client Data Conventions This user guide 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 For example Enter Financial Data section Net Worth Accounts 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
250. tes an overall return rate for variable annuities based on the return rates and dollar value of their subaccounts To override calculated return rates follow these steps 1 Go to the Enter Financial Data Net Worth Annuities page 2 Under Deferred Annuities click for the appropriate annuity 3 Goto the Return Rates tab Holdings Payout Options Savings Strategy Redemptions Return Rates General Account Variable Subaccounts Pre annuitization Standard Return Rate Overrde Return Rate Deviation 0 00 g 0 00 0 00 Annuity Details dialog box Return Rates tab 4 Under General Account enter a value in the Pre annuitization Return Rate field 5 To override the return rates that apply to variable subaccounts under Variable Subaccounts select the Override option and then enter new Return Rate and Standard Deviation values Page 57 of 209 NaviPlan User Manual Entering Client Data Setting up a qualified annuity Note The options available on the Qualified Account Setup tab are dependent on the Account Type selected To set up a qualified annuity follow these steps T 2 9 Go to the Enter Financial Data Net Worth Annuities page Under Deferred Annuities or Annuitized Annuities click for the appropriate qualified account or annuity Go to the Qualified Account Setup tab Select the Primary Beneficiary and Contingent Beneficiary To waive early withdrawal penalties for an account or
251. the Average Tax Rate for the client and co client 4 Under Tax Options if the clients have agreed to split their pension income for tax purposes select the Joint Election to Split Pension Income option Page 9 of 209 NaviPlan User Manual Entering Client Data Overriding tax filing statuses Detailed Tax method Note This procedure does not apply if you are using the Average Tax method When using the Detailed Tax method you can override the tax filing status you selected when you created the client file only for this plan To override the tax filing status for a plan follow these steps 1 Go to the Plan Management Assumptions Income Tax page 2 Select Override and then choose the desired tax filing status from the menu s Tax Filing Status Override Tax Filing Status David Married filing jointly LJ Susan Married filing jointly Plan Management category Assumptions category Income Tax page Changing the Dependent of status Detailed Tax method Note This procedure does not apply if you are using the Average Tax method When using the Detailed Tax method you can override the dependent status that was set for the dependent when the client file was created shown on the Client Information Personal Information page with a Dependent of status specifically for this plan To change the status of dependents follow these steps 1 Go to the Plan Management Assumptions Income Tax page 2 Unde
252. tion expenses exist in the plan under Education Expenses enter the percentage of education expenses to be covered in the event of death 5 Goto the Lump Sum Needs tab Assumptions Lump Sum Needs Ongoing Income Needs Asset Availability Select outstanding liabilities to be paid in full upon death If items listed under Pay Off Outstanding Liabilities are not selected it is assumed that additional insurance is not required because the liabilities are insured separately for life Under Additional Lump Sum Needs enter items such as funeral expenses Pay Off Outstanding Liabilities Outstanding Description Principal Additional Lump Sum Needs Click the Add Lump Sum Need button to create a new row Set Goals section Survivor Income category Both Objectives page Lump Sum Needs tab Level 2 Plan Goal and Expense Analysis method selected Page 137 of 209 NaviPlan User Manual Entering Client Data 6 Under Pay Off Outstanding Liabilities select any existing loans that will be paid off by insurance proceeds For each loan that is not selected NaviPlan assumes that the payments continue and will be included as part of the survivor s cash flow Note This option is only available if liabilities exist in the plan and if on the Enter Financial Data section Net Worth category Assets Liabilities page Liability dialog box the Payoff Options at Death selection is Transfer to survivor or Payoff at first death from es
253. tion from the Goal Funding menu m Stop a portion of an account from being included in asset reallocation by entering either the percentage or the dollar value of the amount to be excluded from reallocation in the Hold 9 6 field m Create a new account by clicking Add Account and then selecting either an account type or Copy of Current if you select Copy of Current NaviPlan creates a copy of the existing account m View or edit another account by clicking Next Entry or Previous Entry Entering holdings To enter the holdings within an account follow these steps 1 Go to the Enter Financial Data Net Worth Accounts page If no holdings exist for an account an Add button appears under Holdings If holdings already exist for the account the number of holdings appears as a link 2 Under Holdings click Add or the numbered link for the appropriate account If you are creating the account s first holding the default holding New Holding appears Note If user defined holdings already exist click Add Holding for each new holding you want to add Or click gt next to Add Holding then select either Blank Holding or Classified Holding Holdings Savings Strategy Redemptions Return Rates Beneficiaries Account Fee Setup Holdings Classify ResetSymbols EUER CA Market Cost Valuation Asset Class Return Description 3 Symbol Value Hold Basis Date Weightings Rates Actions New Holding 0 0 0 Jul 222013 x 2
254. to Next Gen reports To add your user defined text to Next Gen reports follow these steps Go to the Results Next Gen Reports page On the Select Report page select either an existing template or click Start a New Report From the Select a category menu select a goal or category gw qw El Depending on the type s of user defined text you entered Objectives Recommendations or Action Plan a report page will appear under the Content section 5 Click Add to include the page s containing your user defined text in the report Objectives Recommendations This report displays any user defined text This report displays the you have provided for your clients recommendations you have entered on financial goals the User Defined Text page ADD ADD r Action Plan Tax Considerations This report displays the action plans you This report displays a list of important have entered on the User Defined Text and timely changes in tax law r Page 190 of 209 NaviPlan User Manual Entering Client Data Using the Client Report Monitor The Client Report Monitor allows you to continue using NaviPlan while generating traditional client reports and progress reports can take between a few seconds to a few minutes Each time you click the Generate button for a report NaviPlan creates a request in the Client Report Monitor and generates the report You can view all requested and generated reports only th
255. to plan These projections are organized into the following categories Problems 0 possible problems Questions 12 questionable strategies or data values Opportunities 0 possible planning opportunities 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 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 current year 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
256. trategies for the current plan Note For redemptions for non qualified accounts select an available goal funding allocation from the Redeem From list Redemptions New account ADD REDEMPTION STRATEGY Waive Early Account Redeem Amount Withdrawal Description Redeem From All S or 3 Frequency o Penalties Start Date m End Date mu Infi Add l Actions New account New account Retirement v LJ 0 00 Monthly v LJ Jul 222013 Ret Client 0 00 x Substantially Equal Periodic Payments SEPP Choose Account v ADD SEPP STRATEGY To create a new strategy select an account from the Choose Account list and then click Add SEPP Strategy Principal Distributions from Trusts Choose Trust idi To create a new strategy select a trust from the Choose Trust list and then click Add Trust Strategy Enter Financial Data section Strategies category Redemptions page Level 2 Plan Detailed Tax method showing redemptions 3 In the Amount or field enter either the percentage of the account to redeem or an amount to redeem periodically based on the selection from the Frequency menu OR To redeem the entire account as a lump sum select the Redeem AIl option 4 Selectthe Frequency at which the redemptions will occur 5 If applicable for qualified accounts select the Waive Early Withdrawal Penalties option to exclude penalties due if the asset is withdrawn early 6 Enter the Start Date and End Dat
257. ts are staying on track towards attaining their financial goals To generate a client or progress report follow these steps 1 Goto the Results Client Report page OR If you are generating a progress report go to the Results Progress Report page Page 186 of 209 NaviPlan User Manual Entering Client Data Client Report Use this page to generate client reports Alternatively to see the status of or print generated reports go to the Workflow section Status category Status page Include Alternatives In Reports Reports Report Name Template Current Template v Action GENERATE Status Submission Time Financial Needs Assessment SELECT DOCUMENT SECTIONS Asset Allocation Default Template v GENERATE To view the list of all the generated reports go to the Client Report Monitor Financial Needs Summary Default Template v GENERATE Retirement Distribution Summary Default Template v GENERATE Financial Needs Analysis Current Template v GENERATE Results section Client Reports category Client Report page 2 Toinclude 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 Select the alternative scenarios to be included in the reports from the lists b
258. ualified assets are available at the start of long term care and lifestyle assets are available for the estate Page 122 of 209 NaviPlan User Manual Entering Client Data Entering insurance goals for Level 2 Plans In Level 2 Plans insurance goals consist of life insurance disability insurance and long term care insurance Enter the applicable insurance information as described in the following procedures m Survivor income goals if one client dies Level 2 below m Survivor income goals if both clients die Level 2 on page 135 m Disability income goals Level 2 on page 140 m Long term care insurance goals Level 2 on page 147 Survivor income goals if one client dies Level 2 You can enter insurance needs and objectives for the client and co client in the Survivor Income category Data entry is the same for both To consider insurance needs when both clients die see Survivor income goals if both clients die Level 2 on page 135 To enter data and assess needs for the client or co client follow these steps 1 Goto the Set Goals Survivor Income Client Co client Objectives page Client Objectives Co client Objectives Both Objectives Select an insurance analysis method Use this page to activate the survivor income analysis for David David s death will be simulated as ofthe end ofthe current year and the plan will be projected forward to analyze the results Objectives v If David dies Select an ins
259. urance analysis method Quick Assessment O Goal and Expense Analysis Income Coverage Analysis Assumptions Lump Sum Needs AnnualIncome Needs Survivor s Income Asset Availability Adjust Milestones Susan Override Age Date Survivor Retirement Age LJ Jan 2030 Survivor Life Expectancy bd 2055 ROR on Cash Flow Surpluses amp Liquidations Capital Deferred Total Interest Dividends Gains Tax Free Growth Pre Retirement 6 0056 1 5096 1 5096 1 50 0 00 1 50 Retirement 6 00 1 50 1 50x 1 50 0 00 1 50 Set Goals section Survivor Income category Client Co client Objectives page Assumptions tab Level 2 Plan Average Tax method Page 123 of 209 NaviPlan User Manual Entering Client Data 2 To assess insurance needs under Objectives select If lt client co client gt dies 3 Select amethod for analyzing insurance needs m Goal and Expense Analysis assesses the life insurance needed to cover the survivor s goals and expenses Goals and expenses at the plan level as well as additional expenses entered for the life insurance scenario are considered This analysis is integrated into the rest of the plan m Income Coverage Analysis assesses the life insurance needed to replace income lost from the death of the client or co client This method is independent of the rest of the plan m Quick Assessment calculates your clients additional insurance needs on the basis of a s
260. viation Under Suggested the Risk field becomes editable b Enter the standard deviation in the Risk field Once a new standard deviation is entered the graph updates to show the manually entered standard deviation Note Clicking a point on the Efficient Frontier line shows the return rate and standard deviation of that point Double clicking at a certain point on the line of the Efficient Frontier graph selects that point as the new suggested asset mix Or you can click on the line which brings up a balloon message and then press the ENTER key Use this process as an alternative to overriding the standard deviation manually Page 21 of 209 NaviPlan User Manual Entering Client Data 4 When generating an efficient frontier by default NaviPlan does not restrict the asset classes or the holding percentages within each asset class To override these defaults follow these steps a Click Individual Constraints In the dialog box that opens you can set the minimum or maximum holding percentage for a single asset class Individual Constraints e Asset Class Exclusion F Minimum Maximum E Class Name Holding Holding ivi Large Cap Growth Equity 0 0096 100 0096 fe v Large Cap Value Equity o0 100 0096 Z Mid Cap Equity 0 00 100 00 P w Small Cap Equity 0 00 100 0096 v US REITs 0 00 100 0096 v International Equity 0 00 100 00 v Emerging Markets Equity 0 00 100 00 v Long
261. wing m Ifthe asset belongs to a single asset class select that asset class from the Asset Class Weightings menu m Ifthe asset is weighted in multiple asset classes select Manual Classification from the Asset Class Weightings menu assign percentages to various asset classes to equal 100 and then click OK m If you have the predefined Asset Allocation option and you know the symbol for the asset you are modifying enter it in the Symbol field and then click Classify NaviPlan enters the description and asset class weighting for the symbol m If you have the predefined Asset Allocation option and you want to classify the asset but do not know the symbol of the asset you are modifying you can search the predefined Asset Allocation database as shown in Searching the asset classifier database below Searching the asset classifier database If you have the predefined Asset Allocation option you can search for an asset classifier to use in the asset class weightings To search the asset classifier database do the following 1 Go to the page or dialog box of the asset for which you want to set the asset class weightings 2 From the Asset Class Weightings menu select Search Search Ticker Symbol CUSIP Type v Asset Class g v Description SEARCH Asset Class Weighting Details dialog box Please use wildcards in your searches Page 63 of 209 NaviPlan User Manual Entering Clien
262. worth information This chapter explains how to enter your clients net worth information In a Level 1 and a Level 2 Plan summary information can be entered for lifestyle assets liabilities simple accounts detailed accounts with holdings and deferred and annuitized annuities In a Level 2 Plan you can also enter real estate assets into the plan and business entities if you are using the Detailed Tax method In this chapter Entering lifestyle assets _ 222 0 2 o oo cece cee cee eee cece cece cnet cece eee c eee ceneceesceeceeeseeteeeesees 31 Entering liabilities cocco iu cbe ec merce t Rr lecc bees cm m lib e lire ijisrsieds 33 Entering fixed rate mortgages sssussssssssslsslssss sls cece eee cence nsec ceeceeceeeeeeesereeeeee 34 Entering variable rate mortgages _ 222 2 o cece eee cece cee cece cence eee e cee ceeeeececeeseeserseeees 35 Entering real estate assets Level2 Liuuuuiuuusuuuuuussslssllslll s eee ecceecceeseetceecseeseeees 36 Entering business entities Level 2 Luuuuuuuuuuuuuuuu ssllssslIss I eee ceecceesceesceeseeeeeeeees 38 Entering business activity 2 0 2 22 22 occ ence cece s ence cece eee e eee c cece ceeceececseseesees 39 Entering the sale of a business entity 2 22 22 22 cece eee eee sss RI eee c ec eeceececeeceeeees 40 Modityingreturnirates 2 2252 ss ecto mu m Ree ea manii eg ue ciest2e E are nini dan aaea 40 Entering accounts _
263. y clicking Add Income and then selecting Social Security from the menu Entering regular or lump sum incomes on page 72 To enter Social Security benefits that the client or co client is currently receiving because they are retired or disabled follow these steps SU gm wr dm wr gqwe EI Go to the Enter Financial Data section Cash Flow page Under Social Security click the Social Security Details link Go to the Client or Co Client tab and then select Currently Receiving Benefits Go to the Details tab and then enter the benefit start date amount and adjust for inflation Go to the Eligible Dependents tab Select the appropriate option s to link each dependent to the client for Social Security purposes Click OK Page 77 of 209 NaviPlan User Manual Entering Client Data Entering pension income NaviPlan estimates pension income using one of two pension calculations Estimate Benefit and Benefit Formula Use the Estimate Benefit pension method if the pension details are unavailable Use the Benefit Formula pension method if the pension details are available When you create a new plan NaviPlan creates a default estimate benefit pension for each client Any pensions that were entered on the Set Goals Retirement page appear under Incomes on the Cash Flow page Entering an estimated benefit pension To enter an Estimate Benefit pension income follow these steps 1 Go to the Enter Financial Data Cash Flow page
264. y member define the amount and then if applicable enter the inflation rate Page 171 of 209 NaviPlan User Manual Entering Client Data Entering estate strategies The Estate Strategy page shows the current status of the clients estate By default NaviPlan creates a simple will estate distribution assuming that all assets will pass to the surviving spouse On this tab you can enter any strategies the clients are currently using such as gifts or trusts As you add information the graph at the top of the page updates to show how the changes affect the clients existing estate plan To enter estate strategies that are in the clients existing estate plan follow these steps 1 Go to the Set Goals Estate Planning Estate Strategy page Assumptions Funded Trusts Gifting Growth amp History Estate Expenses Estate Strategy Enter the details for the clients current estate strategy W Total Taxes E Net to Heirs Bl Net to Charity 2282828 Net to Heirs and Charity Life Expectancy David 2023 Estate Planning Life Expectancy 0 Manutius Susan 2028 Estate Planning Life Expectancy 0 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 Simple Will By default NaviPlan creates a simple will estate distribution
265. y on an annual basis follow these steps 1 Go to the Enter Financial Data Insurance Coverage page 2 Click for the life insurance policy 3 Goto the Future Values tab On this tab you can view the modal premiums death benefits and estimated cash surrender values for each year Life Insurance Details 2 Details Future Values Future Benefits Modify the Calculated Values Modal Accumulated Age Year Premium Death Benefit Estimated CSV Withdrawals Liabilities Liability 43 2013 0 0 0 0 0 0 44 2014 0 0 0 0 0 0 45 2015 0 0 0 0 0 0 46 2016 0 0 0 0 0 0 47 2017 0 0 0 0 0 0 48 2018 0 0 0 0 0 0 49 2019 0 0 0 0 0 0 50 2020 0 0 0 0 0 0 51 2021 0 0 0 0 0 0 52 2022 0 0 0 0 0 0 53 2023 0 0 0 0 0 0 54 2024 0 0 0 0 0 0 55 2025 0 0 0 0 0 0 2013 2025 2026 2038 2039 2051 2052 2064 2065 2077 2078 2090 2091 2103 2104 2112 Fill Values Start End Start Base Increase Period Column to Fill Year Year Value Rate Rate By years Modal Premium 2013 2112 0 0 00 0 00 1 CLEAR COLUMN VALUES FILL ADD LIFE INSURANCE v OK CANCEL Life Insurance Details dialog box Future Values tab Level 2 Plan Detailed Tax method Page 97 of 209 NaviPlan User Manual Entering Client Data 4 Select Modify the Calculated Values and then click OK to the message that appears 5 To change future values for specific years enter updated values in t

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